From June sixteenth, two thousand twenty-five to June twentieth, two thousand twenty-five

I. Foundation 

resistance to change and hence greater dependability for the results shown in the past.

A few additional points on the lagged effects of housing in CPI

Half a year ago, we discussed the issue of data lags in general terms; see Notes 241230 Inflation catch-up in macroeconomic data: consumer prices and input costs Today, I’ll add a few points on the important housing component.

Chart: The lag in housing data

Core goods account for only about CPI of the core 20% basket. Services and housing are what truly drive the inflation trend. 

Chart: Shelter carries a large weight in core CPI, with a major impact

The lag in housing works both ways. In the middle of 21, when the U.S. housing market was extremely hot, Shelter CPI also failed to reflect conditions promptly because of the lag, leading the Fed to “misread the situation” and delaying its rate-hiking pace. Today, this “lagged decline in housing inflation” is still underway—which means the Fed’s actions are likewise lagging and delaying the pace of rate cuts.

Chart: Core CPI calculated using real-time Shelter data had already returned to 2% levels 18 months ago, while lagging official housing inflation continues to push up official core CPI, limiting the Fed’s room to cut rates

Driven by the decline in the Shelter component, official core CPI will continue to fall in the foreseeable future.

2025.06.17

Who is doing EUR/USD

The U.S. dollar has depreciated by a cumulative 7% so far this year and has fallen against nearly all major currencies. At the start of the year, international investors had low hedge ratios on the dollar because, for quite a long time, holding U.S. assets had provided them with extra compensation in both underlying asset returns and foreign-exchange returns.

Take Sweden: U.S. assets held by retail investors there are down 24% year to date, and half of that decline comes from valuation changes (that is, the currency factor)... It is clear that rising foreign-exchange risk is materially affecting allocation decisions. Even if global investors continue to hold U.S. assets themselves, the dollar may still fall if they further reduce their dollar exposure.

Setting aside the geopolitical shock to EUR discussed yesterday, One key point that draws us to euro trades is the presence in the market of buyers who are clearly price-insensitive...

At the start of the year, these buyers were global HF; from the second quarter onward, Real Money accounts took over 

Chart: Who is buying

The distribution of price-insensitive buyers in the market can help, to some extent, assess how far the so-called “great transformation in the foreign-exchange market” has progressed, or how this new currency-trading mechanism for hedging the dollar is developing.

Chart: How it has changed

By region, demand for EUR/USD from European Real Money has been particularly pronounced recently, while participation by accounts in the Americas remains limited. The behavior of capital from the Americas warrants continued attention.

If we set the data cutoff at the end of last week, without taking the Iran war into account, Although the dollar gained some support among hedge funds last week, particularly against the euro, Real Money still viewed the pullback in EUR/USD as a buying opportunity:

Chart: Real Money still sees pullbacks as buying opportunities

What is more important in this chart is the official accounts, Official funds are displaying typical contrarian behavior: buying dollars when the dollar pulls back and selling euros when the euro strengthens.

This is consistent with the logic of “portfolio rebalancing” (if central banks want to keep the shares of their dollar and euro reserves unchanged after this year’s sharp foreign-exchange market swings, they have to buy dollars when the dollar weakens and sell euros when the euro strengthens).However, this also shows that the official sector has not yet made a clear decision to “reduce dollar holdings,” not even through passive reductions caused by valuation changes. Otherwise, the appreciation of EUR/USD could have been greater.

2025.06.19

Rereading The Origins of Oil

This is the section on “The Origins of Oil” from Fletcher Prouty’s final interview in 1994,

Whenever there is an “oil crisis” anywhere in the world (and there have been many),

I take this interview out and read it again:

In a previous lecture, you said that oil is not what we used to think it was: it is not a “fossil fuel” and does not come from animal fossils. So what is it, exactly? Is it simply a mineral, like other minerals? What is really going on? What do you think?

You see, oil was first discovered because engines were beginning to be built and lubricant was needed for the axles of train wheels. Remember, railways only began developing in the early 19 century, At the time, oil was originally just a lubricant, but it was later used as fuel and became valuable. Rockefeller happened to be one of the smartest people in the industry then, and he made a lot of money transporting and selling oil.

But they realized one thing: oil itself had no original cost; it was underground, and in some places at the time, it was almost like “surface oil extraction”—there was no need to drill very deep wells. So if they wanted to raise the price, they had to make people think it was “scarce.”For example: “We’re about to pump out these few barrels, and then we may have to close this well”—using language like that to create a sense of scarcity.

In 1892, a scientific conference was held in Geneva to discuss the definition of organic matter. Organic matter was defined as a substance containing “hydrogen, oxygen, and carbon,” usually derived from living things, such as a tree. Even if it is dead, if you analyze its composition, it is still hydrogen, carbon, and oxygen. The same is true of grass. Animals, too. Human beings themselves also consist of these three elements.

Rockefeller seized this opportunity and sent some scientists to attend the conference. They said, “Oil is made up of hydrogen, oxygen, and carbon, so it must come from once-decaying living organisms.”Once this argument was accepted, the conference concluded that oil was “the residue of once-living matter,” and it was thus classified as “fossil fuel.”I don’t know why they used the word “fossil,” but in any case it means the remains of “something that was once alive.”

But the key point is that no true fossils have ever been found below 16,000 feet (about 4876 meters). Of course, 16,000 is not an absolute figure; some strata may be uneven because of tectonic movements, but the scientific community generally considers that to be the limit. Yet we drill for oil every day at depths of 30,000 feet, 33,000 feet, and 28,000 feet. So, judging by depth alone, this oil cannot have come from fossils.

It is called “fossil fuel” simply to make the public think that it is an asset that is being depleted and growing increasingly scarce. That is how the so-called “depletion allowance” came about—a tax break supported by policy—but the premise behind this logic is that oil is finite But in fact, if you understand global oil reserves, you know they will not run out for a very, very long time. It is the second most abundant liquid on Earth, and we are nowhere near extracting it all.

So, it is understandable that people in the oil industry do this; like businesspeople in any industry, they want to keep prices as high as possible. Their strategy is: “We’re nearly out; the next barrel of oil may sell for 1000 dollars”—and this kind of message is repeated constantly. What troubles me most is that geology textbooks today also say “oil is a fossil fuel”; these geologists have been bought off too.

I once took part in a “Four-Year Federal Energy Seminar” organized by the U.S. government—that was during the so-called “energy crisis.” I represented the railroad industry. People from the aviation industry were there too, as were the administrative assistants of every congressman and senator; CIA was there, and the Department of Defense and the State Department were there. Sometimes Kissinger and the Secretary of Defense at the time were sitting right in front of me. They sat there listening to this federal energy course.

For four consecutive years, this course indoctrinated the leadership of the United States and even the entire world with a particular line of propaganda. Kissinger himself acknowledged in a speech that their goal was to “establish a world price for oil”—in other words, no longer 30 cents a gallon here and 90 cents there, but one unified global price.

They are now doing the same thing with wheat and other commodities. We do not understand the control logic behind all this, but in reality, the pricing logic for almost all commodities today is to push prices up to the limit people can still accept.

So calling oil “fossil fuel” is the foundation of this system.

I also remember once sitting at the same table as Arthur Kantrowitz at a seminar. He headed the Kantrowitz Laboratory (a research institute established in Boston by AFCO Company) and was highly respected in the scientific community.

That day, the people around the table were all PhD graduates in geology. I casually asked him, “Arthur, what do you think of all this nonsense people keep saying about oil being a fossil fuel?” He burst out laughing and said, “I just can’t stand it.” He said he was not trained in geology himself, but he knew enough. He made a point of addressing the young people: “Which of you are geologists?” Someone raised a hand, and he asked, “Then tell me, why do you insist on saying oil is a fossil fuel?” As a result, everyone was at a loss for words, and the room erupted.

He was someone like Einstein; no one dared argue with him. Right there, he told them: stop saying that. But the problem is that this claim has already made its way into all the textbooks and papers.

And the source of this story is that scientific conference in 1892.I have a thick German-language scientific encyclopedia at home, published more than a decade ago, that documents the entire conference—though, of course, it does not mention Rockefeller’s part. But it clearly describes the discussion of the definition of organic matter and the process by which oil was classified.

You see, none of this happened by chance; there is a dollar sign behind almost everything.

2025.06.20

II. Insights 

Our Viewpoints and ideas on market...

A rare macro trading opportunity: starting with soybeans

Last year, before Trump took office, we ran a soybean trade on Xingqiu; the main domestic proxy instrument was Soybean No. Two (which is very strongly correlated with U.S. soybeans),We entered the position in 11 7, and after that, prices fell steadily as expected...

Chart: The day after publication, a new round of price declines began

Longtime friends of Planet should remember this trade well; it was one that made a splash...

It also directly gave our performance in 24 a rather satisfying result... 

Figure: Notes 241107 Experts Look at Soybeans

This is a very typical macro trading path: cross-market asset logic produces a certain large-magnitude outcome within a single market, on the day after publication, Soybean No. Two fell all the way from its peak, setting its lowest trading price in more than two years.

Using this trade as a starting point, let’s discuss something else today, We will first provide some background on soybeans, then discuss why another trading opportunity highly linked to soybeans is emerging at this particular moment...

This trade has all of the following Long soybeans, long commodities, short the dollar, with a uniquely cushioned asymmetric trade structure..

We’ll reveal it at the end of the article.

1. In the agricultural sector, two categories have appeared frequently in USDA reports so far this year: corn and soybeans. And Compared with corn, China has a much greater influence in the global soybean market (accounting for 60% of global consumption) and is more vulnerable to tariff uncertainty.

2. China is in fact the world’s largest soybean importer, with external dependence long remaining above 80%, and its import sources are relatively concentrated.Feed grains as a source of protein, especially soybean meal, are regarded as one of the main risk points in China’s food security system.Demand for soybean meal in animal feed is one of the key factors driving soybean imports.

According to U.S. Department of Agriculture (USDA) data, in 2024 China imported 247 hundred million dollars’ worth of agricultural products from the United States, accounting for 14% of U.S. agricultural and food exports that year.

The main imported categories include soybeans, beef, cotton, coarse grains (excluding corn), nuts, dairy products, poultry meat, and poultry products.Among these, China imported 2210 ten thousand metric tons of soybeans from the United States, representing 21% of China’s total soybean imports of 1.05 hundred million tons for the full year 2024, equivalent to 19% of China’s annual soybean demand.

Chart: Soybeans stand out in China’s import dependence among major agricultural products

Another chart is actually clearer; it shows China’s soybean consumption and import dependence since 1995:

Chart: Heavy reliance on overseas supply

This makes it very clear why soybeans are considered one of the main risk points in China’s food security system.

For the full year 2024, China’s total agricultural imports from the United States amounted to 247 hundred million dollars, with soybeans accounting for 52%:

Chart: Why soybeans are the largest and most direct risk in U.S.–China agricultural trade

3. In this regard, we have also been looking for alternatives to curb excessive growth in soybean imports and overseas dependence. Where action is possible, we have indeed quietly done a lot...

As of this year, China has established a strategic reserve system for soybeans, allowing it to slow the pace of imports if a trade war potentially escalates. China imported about 1.12 hundred million tons of soybeans in 2024, and imports are expected to fall to 1.04 hundred million tons this year.This is markedly different from the market environment during the previous U.S.–China trade war, because China had not yet established a strategic soybean reserve system at that time..

That said, Any structural change necessarily has to be viewed on a decade-long basis, which naturally means this pattern of dependence will not be easy to change in either the short or medium term.

4. Beyond strategic reserves, China is also accelerating the shift of its soybean purchasing focus from the United States to Brazil. This trend continues to drive an expansion of planted acreage in relevant regions of Brazil, further weighing on U.S. soybean prices.

In 2018, when China imposed 25% in retaliatory tariffs on U.S.-grown soybeans, the landed price of U.S. soybeans (CNF China) at one point fell by nearly 100 dollars per ton, while Brazilian soybean prices remained broadly stable..

At this point, this round of retaliatory tariffs on U.S. soybeans 135% will most likely end the same way: 

Chart: Price spread structure from the perspective of tariffs

5. Now that we’ve filled in the background, Why are we bringing up soybeans again today..?

Chart: CBOT soybeans

Taking a step back to view the bigger picture, compared with the previous volatility trades, soybean futures have actually been in an extremely compressed range since the second half of 24...Between the tariff narrative, the planting debate in the U.S. Department of Agriculture survey report, and the shift toward Brazil, soybean futures’has continued to contract and prices have moved sideways. This is quite unusual; so far, the percentile for this narrow trading range is near its low for the past 20 years..

Chart: Weekly chart

Compared with the decline in the previous trading cycle, this time prices are instead starting to test the top of the trading range...

Such unusually subdued volatility often precedes most macro price breakouts..

As I keep saying, a delicate balance often signals dangerous volatility..

The U.S. government’s biofuel requirements for 26 and 27 are providing soybeans with a new narrative, under this new narrative, A larger share of domestically produced U.S. soybean oil will have to be used as feedstock for renewable diesel production in the future, while at the same time, the most severe and damaging period of the market impact from tariff issues has already passed.

This means that if trade conditions ease, there will be upside, while the downside is limited. An asymmetric risk–reward opportunity with a longer time horizon is gradually taking shape, with strong capital support underneath, an upside breakout seems the more likely direction, and our view is waiting for confirmation from capital flows...

6. We will not trade soybeans, because there are better choices..

Even so, we will not trade soybeans directly, because there are better choices in the market that can help us express this trading view and offer a more suitable risk–reward ratio.Within the same narrative, assets following the same trade path can still have different risk-reward profiles. Choosing which horse to ride is sometimes more important than getting the direction right...

In a market that few people are watching, a trade An asymmetric trade structure taking simultaneous long positions in soybeans and commodities and a short position in the dollar, with a unique margin of safety is taking shape..

Chart: Brazil equity index

Some astute readers have already guessed... After all, only three places appear throughout this article:

China, the United States and Brazil.

Brazil is a major global soybean exporter, the most important third party in the U.S.-China soybean trade, and currently China’s only alternative outside the United States. In fact, China really is piling orders into Brazil...

If soybeans themselves may be poised for a price breakout, for whatever reason, Brazil would be a direct beneficiary...

Using the Brazilian equity index as a proxy for a soybean trade can smooth out the uncertain swings in soybean trading driven by news and narratives, while capturing its upside. At the same time, Brazil’s own underlying economy provides an even more asymmetric margin-of-safety cushion for this “asymmetric” risk-reward opportunity...

For the past two years, the Bovespa index has traded in a relatively narrow range and is now approaching its all-time high (our observation level is at 140500; the core position was established long ago. This trade was actually mentioned earlier in our public account when we were selecting macro reading recommendations. Latin American assets are among the most undervalued in the world today, and the market’s 12-month forward P/E is only 8.5 times. If it breaks out, we will increase our position), while domestic fundamentals and macro conditions will also support an upside breakout to a considerable extent.

One other point to mention is that Most Brazilian companies are primarily in the business of exporting large volumes of commodities, which gives them a real advantage in the current macro environment, Going long Brazil is essentially also taking a position with commodity exposure and a position short the dollar; it is a consistent expression of our multiple macro views:

Chart: Notes250613 Three triggers for a weaker dollar

In addition, The Central Bank of Brazil had previously raised rates to 14.75%, supporting BRL’s strong performance while also suggesting that inflation may gradually come under control, opening up room for future rate cuts and equity-index gains;

From a fiscal perspective, Brazil will hold a general election in 26 10. The right-wing party favored by the market is currently leading in the polls and may ultimately take power. Incumbent President Lula will also very likely push for economic stimulus before the election...

If our observation level breaks out, we will take part in a bet on a move through the all-time high.

2025.06.16

Why FOMC may instead come across as unexpectedly dovish

With the FOMC meeting approaching, market views are sharply divided. Many expect the Dot Plot to reduce its previous expectation of two rate cuts to one... But the Fed may now deliver a fairly unexpected dovish statement。

In fact, the Fed has long had a strong desire to cut rates (it has been in its nature since its inception); it is just that conditions did not previously allow it.As noted in Notes250528, the Fed has long been pushed to the very end of the decision-making chain. Now it has its first opportunity: it can use 5-month CPI and core PCE expectations as cover, so it will naturally be more inclined to use this chance to move its stance closer to rate cuts rather than further away.

Returning to the beginning of 2019, Powell had clearly turned dovish and said in a speech that the rate-hiking cycle was over and the Fed’s focus would shift to maintaining easy financial conditions:That summer, the average month-over-month core inflation rate was 0.2%, higher than now; unemployment was 3.7%, lower than now and stable. The Fed then cut rates from 2.25% to 1.50% in the third quarter.

Today, by contrast, the average month-over-month core inflation rate over the past three months is 0.14%, services inflation is weaker, unemployment has steadily climbed to 4.24%, and rates are still 200 basis points higher than in the summer of 19...

At present, the only possible hawkish argument is that the statistical period in the latest CPI covers only half of the effective tariff adjustments, but core goods inflation remains negative month over month, indicating that U.S. companies are very cautious about passing on costs..This means we may not see such pronounced changes in the data from cost pass-through.

The market is currently pricing in a 18% chance of a July rate cut and 75% for September.

This means that, in an expectations trade, if FOMC surprises, the surprise is more likely to be “unexpectedly dovish,” and an “unexpectedly dovish” outcome would directly bring a rate cut in 7 into the expected range.making At this point, going long the probability of a rate cut in 7 ahead of the meeting offers very attractive value (the odds are good)—because even the worst case would only take it from 18% down to 10%, while a good outcome could see it jump from 18% to 60%-70%..

The structure behind it is still asymmetric.

However, summer tariffs will still have a fairly noticeable impact on monthly inflation, so in terms of actual action, FOMC is unlikely to act before 12; the earliest it might move is in 12. This time, the change in pricing is most likely to come from remarks shifting expectations.

2025.06.17

Discussing the FX positions we currently hold and the two phases of geopolitical trading

The ongoing situation in the Middle East has forced us to reassess the FX positions we currently hold In the EUR/USD options market, the call-option premium on the 1-month risk reversal suddenly disappeared, and this happened after premiums had previously been high...Such a sudden, sharp decline is rare historically and is often not a good sign.

1) Several comparable historical episodes occurred in 04, 07, 08, 09, 13, 18 and 20

2) Only three instances supported continuing to hold euro positions

3) Of the three, one In one case, the rally continued for a month; in another, it lasted for three months

4) Only in 07 was there a significant rally after a pause..

At this point, the key to the debate over whether to keep holding the position is Determine whether this pricing shift signals the end of the bullish EUR/USD narrative, or was triggered merely by rapid deleveraging amid fears over the situation in the Middle East，At present, the latter seems more likely; in other words, this is not a true bearish signal.

Still, this is also reminding us of the risk in the trade we hold.

In the first phase of geopolitical trading, the dollar’s reaction often suppresses gold’s price response. That is exactly what we have seen from the missile launch through today. In the second phase, if the situation continues or worsens, gold and the dollar shift from moving in opposite directions to trading higher together.

The U.S. Dollar Index is now very close to its downtrend line since the start of the year, and today’s FOMC dovish bets could be the key catalyst for a breakout,

Let’s wait and see.

Chart: The dollar, gold, and the two phases of geopolitical trading

We will closely monitor the co-movement of the dollar index, the dollar and gold to decide whether to keep or close the euro position.

2025.06.18

Discussing the FX positions we currently hold (continued): from persistently abnormal oil prices to a dollar short squeeze

The risk in the FX positions lies in the tail. A low-probability (or, rather, not-impossible) but high-impact outcome could occur: the market may be underestimating the risks posed by the situation in Iran...

If the risk persists unexpectedly (again, low probability but not impossible—in today’s world, nothing is impossible),energy prices surge sharply, and mentioned in Notes250618, “Discussing the FX positions we currently hold and the two phases of geopolitical trading”1) The U.S. Dollar Index breaks above its downtrend line since the start of the year. 2) Geopolitical trading enters phase two, with gold and the dollar trading in the same direction, and then the highly crowded short-dollar positions in the market could be the first to face a squeeze...

Not just the Bank of America Survey (FMS this series is now a favorite reading choice for many institutions seeking out crowded trades, which often take only a small surprise to unravel and bring them substantial returns). A fairly consistent view in institutional conversations is that the Iran conflict will have a relatively limited impact on the crude market (as we wrote in Notes a few days ago, most people are inclined to downplay the impact of shocks).

Most views hold that Iran has neither the motive nor the means to cause substantial disruption, or that the market is currently well supplied with enough of a buffer to absorb any shock quickly. The market consensus also holds that even if the dollar rebounds in the short term, it will still be sold on rallies, because most global investors plan to further reduce their long-term dollar exposure.

Yesterday, a leading European investment bank also abruptly reversed its previous view during a conference call and began discussing the long-term hedging that reduces dollar exposure. Based on feedback from its own clients, it suggested that people consider whether this reduction in exposure has already gone far enough..

It is true that previous rounds of tensions with Iran did not have a lasting impact on markets. In fact, the relatively large rise in oil prices over the past week may also reflect the market’s previously concentrated short positioning.

This rise is similar to the attack on Saudi Aramco in 2019, At the time, the impact of the event was absorbed within 10 days, and EM assets were largely unaffected. The rise in equity and interest-rate volatility is still within the range of past Iran-related events.

This time is still somewhat different. First, the timeline is being passively extended (oil prices are very sensitive to Trump’s decision to announce “wait another two weeks”/meaning Israel will continue bombing, but the Strait of Hormuz will remain open to normal shipping and trade will continue uninterrupted.), while another is that abnormal patterns continue to appear in oil trading, both in price action and market structure...

Remember?The first anomaly we noticed appeared before this bombing, and the outcome is now well known to everyone...

Once a shock trade reaches a high level, historical patterns in geopolitical shock trades suggest that positions established early would gradually be sold off, and most technically entered positions would already have reached their targets, leaving at most a free position to run. But things currently look somewhat off:

1) Bloomberg reports that Iranian crude exports are surging, although there are no specific figures, daily reports from the region confirm that loading activity is very active, among the “Most Read” stories on the Terminal, there is only one item about Iran and the war, ranked number 11 out of 40, and it says:Iran is rapidly exporting oil, filling storage tanks on Kharg Island and putting as much crude as possible onto the global market.

2) In just six weeks, the calendar spread between the 26 12 contract and the 25 12 contract rose by 28%, while expectations for spot or forward inventories barely changed in any substantive way.In fact, the market is also broadly aware that crude inventories will rise by 26 and demand may be flat or even fall (especially if a recession materializes).

3) But WTI crude is still holding above 73 dollars a barrel, while Open interest is still unchanged, and market positions continue to be locked in unusually, despite crude supplies flowing freely around the world, the market does not care.

4）Global markets actually welcome an extended Iran episode, OPEC and Russian tankers are continuing to load and sail as usual, while the war premium benefits every producer in the oil supply chain, This is a win-win trade that can keep making money simply by waiting and watching.

5) Shell’s CEO Wael Sawan continues to make the rounds in the news: “If the escalating conflict between Israel and Iran leads to a disruption in the Strait of Hormuz...could have a serious impact on global trade... Shell has contingency plans in place to deal with the possibility of crude shipments from the region being disrupted.”

Further reading: Notes250620 Re-reading The Origins of Oil (Required)

Returning to the title, this if the conflict lasts longer, its market impact could expand significantly。Because plans for a nuclear strike often take a long time, a flare-up that can be calmed in the short term means the risk of such a strike is actually 0. But this is a discontinuous process: as time passes, the market’s pricing of nuclear-strike risk will rise exponentially, and this risk pricing will most likely blow up the market’s “most crowded” trades..

In addition, as summer approaches, market liquidity weakens and investors may be inclined to reduce positions; all crowded trades face risk.

The most crowded macro trade right now? Probably shorting the dollar.

Bearish sentiment toward the dollar is extremely widespread in the market today; since 4, it has been difficult to find dollar bulls. Bearish sentiment toward the dollar can almost be said to be at a 20-year high. Although actual positioning is not yet extreme, any escalation in geopolitical tensions could quickly undermine the willingness to sell dollar rallies, and short squeezes in crowded trades often bring greater volatility.

Chart: One chart to watch closely until the crisis is fully over

A dollar rebound will also hit emerging markets through its correlation with DXY, while the most crowded currencies in EM are currently concentrated in EMEA (the three Central and Eastern European countries, Egypt and Turkey), based on the market’s broadly shared bullish view of EUR/USD(MXN is also one of the crowded currencies).

Chart: But we still lean toward the event being a repeat of last year’s 10 episode

Finally, there are many narratives about a possible closure of the Strait of Hormuz. There is no need to bet on this narrative because it is very unlikely to happen. Even if a nuclear strike is priced in, the scenario of a complete closure of Hormuz will most likely prove to be a false narrative.

1) The Strait of Hormuz is one of the most heavily defended international waterways in the world, at 21 miles wide (second only to the Strait of Malacca),The US Fifth Fleet is permanently stationed here. According to the latest deployment schedule, the aircraft carrier “Nimitz” is expected to deploy to the Mediterranean with a powerful strike group by 6 23 or earlier.

2）France and the United Kingdom also maintain a strong naval presence in the region.

3) Since the brief Strait of Hormuz closure in 1980, the relevant naval forces have been equipped with sonar and remotely operated vehicles (ROVs) to detect and clear mines. Destroyers and patrol boats are equipped with 5-inch naval guns, missile launch systems and helicopters to counter Iran’s “swarm of speedboats” tactics.

If the situation really escalates to the point where the strait can be closed despite this military deployment, oil prices doubling would not be impossible, and gold would surge straight to 4000, unobstructed.

2025.06.20

III. Market Pulse 

Our latest Comments on the economic and market environment

Note: All content in this article is for reference only and does not constitute investment advice or serve as a basis for any laws, regulations or regulatory policies. Investors should not use or rely on this information as a basis for decisions.