ORLANDO, Florida, June 27 (Reuters) -

- TRADING DAY

Making sense of the forces driving global markets

By Jamie McGeever, Markets Columnist

I'd love to hear from you, so please reach out to me with

comments at . You can also follow me at @ReutersJamie and

@reutersjamie.bsky.social.

Just a heads up, Trading Day will be in the capable hands of

Lewis Krauskopf next week and Alden Bentley the following week,

while I take some time off to recharge the batteries. Back on

July 13.

Another extraordinary week ended on Friday with the S&P 500 and

Nasdaq hitting all-time highs as investors ramped up bets that

U.S. interest rates will soon fall, a stunning turnaround from

the post-'Liberation Day' tariff gloom of early April.

Several developments this week fed into the rate cut

narrative - the Iran-Israel ceasefire, tumbling oil prices, soft

U.S. economic data, dovish comments from some Fed officials, and

renewed pressure from President Donald Trump on the Fed to ease.

Fed Chair Jerome Powell pushed back against suggestions

rates could be cut as soon as July, arguing that the impact of

tariffs should be assessed first, and the consensus among the

Fed's 19 rate-setters is to hold the line too. But traders are

now leaning towards three quarter-point rate cuts this year.

Progress on trade is also boosting investor sentiment. Trump

said a deal between the US and China had been signed, but did

not provide details, and Treasury Secretary Scott Bessent said

the two countries have resolved issues surrounding shipments of

rare earth minerals and magnets to the US.

That said, trade optimism was dented on Friday after Trump

abruptly cut off trade talks with Canada over its new tax on

U.S. technology firms, calling it a "blatant attack" and saying

he will set a new tariff rate on Canadian goods next week.

The most significant market move of the week, however, was

not in equities but in currencies. The dollar continued its

decline, and is now down more than 10% this year. That's its

worst first-half performance of any year in more than 50 years.

It should be remembered, however, that the dollar started

the year at extremely expensive levels, so some adjustment was

always likely. This is proving to be a pretty severe adjustment,

one which markets and policymakers appear to be relaxed about.

For now.

This Week's Key Market Moves

* World stocks at record highs. The MSCI ALl Country index

rises

3% above 900 points, boosted by a resurgent Wall Street, Asia

and EM, which offset sluggish Europe. The S&P 500 and Nasdaq

rise 3% and 4%, respectively, to new highs.

* The dollar sinks to multi-year lows vs major currencies,

especially European one. Dollar index down 1.5%, greenback falls

more vs euro, sterling, Swissie.

* Oil plunges after Israel-Iran ceasefire. Brent

crude

tumbles 12%, its biggest weekly fall since 2022.

* U.S. Treasury yields slide to their lowest in nearly two

months,

curve bull steepens on growing (but still unlikely) view the Fed

could cut rates in July.

* Platinum soars above $1,400/oz for the first time since

2014,

and is well on track for its best month since 1986.

Chart of the Week

Self-explanatory really.

When the world's reserve currency has its steepest

January-June decline since the era of free-floating exchange

rates began over half a century ago, something major is

underway. How big remains to be seen. But if the Trump

administration wanted a weaker currency, it can't complain.

Here are some of the best things I read this week:

1. Who Needs the G7?

2. Can Asia and Europe Rescue the Global Economy?

3. War and Tariffs Are a Double Shock to the World

Economy

4. Downgrading Uncle Sam, not America

5. The great trade rearrangement

What could move markets on Monday?

* China official PMIs (July)

* Japan industrial production (May, prelim)

* India current account (Q1)

* India industrial production (May)

* Germany retail sales (May)

* Germany CPI inflation (June, prelim)

* UK current account (Q1)

* US Chicago PMI (June)

* Chicago Fed President Austan Goolsbee and Atlanta Fed

President

Raphael Bostic speak (at different events)

Opinions expressed are those of the author. They do not

reflect the views of Reuters News, which, under the Trust

Principles, is committed to integrity, independence, and freedom

from bias.

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(Writing by Jamie McGeever; Editing by)