César Pérez Ruiz, Chief Investments Officer Pictet Wealth Management.

The week in review

Renewed fighting between the US and Iran pushed oil prices higher. US President Donald Trump insists the Strait of Hormuz is open; Iranian officials say it is closed.

US inflation has surged to a multi-year high due to rising energy prices linked to the Iran war. Walmart said it would cut grocery prices and Trump called on its competitors to do the same ahead of the November midterm elections.

US Federal Reserve Chairman Kevin Warsh will testify before Congress this week. Warsh appointed several prominent experts to five task forces charged with modernising the Fed.

In Europe, a French appeals court upheld Marine Le Pen's conviction for embezzling EU funds but reduced her sentence, leaving the far-right leader free to run in France’s 2027 presidential election.

In Japan, government bonds rallied after Finance Minister Satsuki Katayama urged Japanese pension funds to increase their exposure to domestic assets. She specifically cited the Government Pension Investment Fund, which holds a large share of its USD 1.8 trillion portfolio in foreign markets. The Japanese government needs to ensure the market’s trust by continuing to reduce the country’s debt to GDP ratio.

Quote of the week

Ukrainian President Volodymyr Zelenskyy told Trump he would not travel to Moscow because “It is dangerous. There are a lot of Ukrainian drones.”

Key data

SK Hynix raised USD 26.5 billion in the largest initial public offering ever by a foreign company.

The latest Institute for Supply Management survey showed that the US services sector is still expanding, albeit at a slightly slower pace. Firms reported easing price pressures and a modest improvement in employment.

This week, the US will release data for June’s consumer price index (CPI), producer price index (PPI) and retail sales. These three data points will feed into deliberations ahead of the July meeting of the Federal Open Market Committee, the body that sets US interest rates.