Geopolitical Tensions, Tariffs, and Market Implications: Key Takeaways from Bloomberg’s The Pulse

June 12, 2025

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Key Geopolitical and Market Developments:

U.S.-Iran Tensions Escalate: The U.S. ordered embassy staff to depart Baghdad and authorised military family evacuations amid Iranian threats to strike American bases if nuclear talks collapse. Oil prices spiked over 4% on supply disruption fears.
Tariff Deadline Looms: President Trump confirmed letters will be sent to trading partners ahead of the July 9 deadline for reimposing higher duties, targeting 15+ economies. Deutsche Bank warns tariffs are inflationary and may persist for years.
U.S. Domestic Unrest: Immigration raids and protests spread to cities like New York and Chicago, with federal-state power clashes intensifying.
European Defence & Competitiveness: Former Italian PM Mario Monti urged EU unity against nationalism, emphasising defence spending and single-market reforms to counter U.S. unpredictability.
Oil Market Volatility: Goldman Sachs predicts near-term price spikes due to Middle East risks but forecasts a bearish turn by autumn as OPEC production surges and demand seasonality fades.

Actionable Insights:

Energy Sector: Monitor oil for short-term geopolitical premiums (Brent above $70) but prepare for potential Q4 declines. LNG oversupply may pressure gas prices.
Portfolio Strategy: Deutsche Bank advocates sector/regional differentiation, favouring tech and gold as hedges. Fixed-income markets price in higher yields amid tariff uncertainty.
European Equities: Watch for fiscal stimulus and productivity gains, particularly in undervalued U.K. markets post-Brexit.

Notable Quotes:

Christian Nolting (Deutsche Bank): “Tariffs will likely stay higher than expected… Q3 inflation could rise, but equities remain rational by sector.”
Michele Della Vigna (Goldman Sachs): “Oil’s autumn outlook is bearish—OPEC’s production surge will hit inventories by October.”
Mario Monti: “Europe’s hypocrisy on single-market barriers must end to compete globally.”

Australian Context: ASX investors should note oil-linked stocks (e.g., ASX:BHP) may face volatility, while gold (XAUUSD) and defensives could benefit from risk-off sentiment. The AUD’s sensitivity to trade tensions warrants monitoring via

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