2025/06 Market Situational Awareness
June 2025 Market Snapshot: Policy Tightening Signals Temper Risk While Dispersion Rises
Markets absorbed firmer policy signals with increased cross-asset dispersion. Risk assets were mixed as equities digested tighter financial conditions and a more restrictive policy narrative. Growth-oriented segments showed pockets of resilience, but cyclicals and rate-sensitive areas lagged, reflecting investor caution as volatility picked up from historically compressed levels.
Rates, FX, and factors signaled late-cycle adjustment rather than dislocation. Yields edged higher and curves remained flat, reinforcing expectations for restrictive policy persistence rather than imminent easing. The U.S. dollar was broadly stable to modestly stronger, pressuring some international assets, while factor performance favored quality and balance-sheet strength over pure momentum.
