Barclays_The_Macro_Wrap_On_the_edge

This document is intended for institutional investors and is not subject to all of theindependence and disclosure standards applicable to debt research reports prepared for retailinvestors under U.S. FINRA Rule 2242. Barclays trades the securities covered in this report for itsown account and on a discretionary basis on behalf of certain clients. Such trading interestsmay be contrary to the recommendations offered in this report.* This individual is a member of the Product Management Group and is not a Research AnalystAll research referenced herein has been previously published. You can view the full reports,including analyst certifications and other important disclosures, by clicking the hyperlinks inthis publication or by going to our Research portal on Barclays Live.Please see analyst certifications and important disclosures beginning on page 8.The Macro WrapOn the edgeFresh policy threats and geopolitical risks continue toemerge, causing USD depreciation and big swings in oil andgoldThe Macro Wrap is your need-to-know guide to the week ahead, summarising our key macroviews and the implications for markets• Israel-Iran escalation has fanned fears of instability across the Middle East. We see risks ofhigher oil stoking inflation and depressing activity. Meantime, US CPI came in cool for a fourthtime in a row. We still think tariffs will push inflation higher but have moved back the timingof peak effects to the autumn. Bilateral trade talks continue, without deals.• This week we expect the Fed to hold (Wed) and the dot plot to show one 25bp cut this year(as we expect, in December). Risks are skewing towards delayed cuts. We expect a hold fromthe BoE (Thu) too, but soft data should allow for a change in tone. Inflation momentum iscentre-stage for the BoJ (Tue).• What does this mean for assets?° Rates: In the US, we remain long duration across the curve, as real rates look too high. InEurope, with the front end pinned, only global factors can push Bunds beyond YTD lows. Inthe UK, markets could price more easing if the BoE nods to downside risks.° FX/local rates: We see modest hawkish communication risks from the SNB this week. THBlooks particularly vulnerable to payback from export front-loading. We see plentyof headwinds for CNY. We stay light in EM rates, which do not fully reflect tariff-related risks.° Commodities: Oil markets have reacted sharply but potential drops in Iranian productionare not fully reflected — let alone a disruption of flows through the Strait of Hormuz.° Credit: Further dollar declines could raise questions over foreign demand for USD assets. InAsia, we expect HG spreads to grind tighter into the summer, while HY performance will bename-specific. Around the world, “equitification” has led to greater market resilience.FICC ResearchMacro PMG16 June 2025Ben McLannahan*+44 (0)20 3134 9586ben.mclannahan@barclays.comBarclays, UKJennifer Cardilli*+1 212 526 8351jennifer.cardilli@barclays.comBCI, USJill Nentwig*+ 1 212 526 5129jil