General
June 20, 2025
Written by Curation
After falling sharply last week following the Iran/Israel strikes, markets have largely treaded water this week, with growing concern that the US could enter the war with Iran. While an initial market reaction would likely be negative, the long-term geopolitical implications could actually be supportive for markets. Taking a holistic view of the geopolitical landscape, considering not just Iran and Israel, but also the broader implications for Russia, China, and North Korea. China’s strong ties to Iran mean a shift in that relationship could severely weaken Beijing, especially given its struggles with the trade embargo and yuan collapse. If Iran’s regime weakens, Putin loses a critical ally, making the global geopolitical environment potentially less dangerous by diminishing these key adversaries. This moment could be a turning point, reshaping global power dynamics and reducing long-term risks.
UK inflation for May came in at 3.4% (in line with expectations), primarily driven by higher energy costs, but it is expected to fall to 2% by this autumn. Despite disinflationary pressures building up in both the US (which has seen three consecutive months of inflation coming in below expectations) and the UK, the Federal Reserve and Bank of England kept interest rates flat this week, citing ongoing geopolitical uncertainty. As we move further into the year, rate cuts from both central banks are likely to become a major focus for markets, particularly with the potential for a new US Fed Chair on the horizon.
Data accurate as at time of sending this briefing. wtd = week to date, ytd = year to date
Balfour Beatty is a UK listed infrastructure group operating primarily in the UK, US, and Hong Kong. From large-scale railways and airports to critical energy and defense projects, Balfour Beatty has built a diversified portfolio underpinned by a culture of operational excellence and safety.
Following a 10-year turnaround under CEO Leo Quinn, the company now boasts a high-quality, lower-risk £18.4 billion order book, sector-leading margins, robust cash generation, and a £1.3 billion investment portfolio. With exposure to growth markets like energy transition, defense, and US infrastructure, and a commitment to consistent shareholder returns, Balfour Beatty is positioned to drive sustainable growth for the foreseeable future.
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