Oil prices had a volatile start to the week in Asia, rising before paring gains as markets watch to see how Iran will respond to U.S. attacks on three of its nuclear sites over the weekend. Oil rose nearly 3% in the morning on news of the weekend strikes by the U.S. on three Iranian sites that represent the core of the country's nuclear infrastructure. President Trump said on Truth Social that "monumental damage" was done. By midday, oil had pared gains, as analysts assessed the likelihood of a disruption to the Strait of Hormuz, a key energy shipping lane. Front-month WTI crude oil futures were last up 1.4% at $74.88 a barrel, while the front-month Brent was also 1.4% higher at $78.07 a barrel. The steady of prices signals that much of the "war premium" has been priced in, Phillip Nova's Priyanka Sachdeva said in a research note. For oil to keep marching higher, damage to supplies needs to be evident given that OPEC+ still holds a lot of spare capacity, she added. Though seen as a drastic option, the most powerful tool Iran has to shock the global economy and hurt the U.S. is to close traffic on the strait, said Danske Bank chief analyst Minna Kuusisto. Doing so would drop world oil supplies by more than 18 million barrels a day - almost 20% - she said.

The SMI closed little changed at 11,871 points on Friday. Among the 20 SMI stocks, there were ten losers and ten gainers. A total of 70.18 (previously: 14.98) million shares were traded. Turnover was above average due to the major expiry on Friday. The market was led by Holcim (+2.1%), rising in line with shares of other European cement manufacturers. Traders also pointed to the imminent spin-off of the North American business Amrize. On Monday, Amrize shares will be traded for the first time on the New York Stock Exchange and the Swiss stock exchange SIX. UBS recovered by 0.7 per cent. Banking stocks were in demand across Europe. Insurers performed strongly in the market as well. Swiss Life, Swiss Re and Zurich improved by up to 1.5 per cent. Investors steered clear of defensive stocks such as SMI heavyweight Nestlé (-1.2%), pharmaceutical stocks Novartis (-0.3%) and Roche (-0.3%) or the shares of fragrance and flavouring manufacturer Givaudan (-0.9%).

Europe
The European stock markets closed mostly higher on Friday but remained in the red for the week as a whole, weighed down by trade and geopolitical tensions. The Stoxx Europe 600 index gained 0.1% to 536.5 points. In Paris, CAC 40 and SBF 120 were both up 0.5%. The DAX 40 in Frankfurt climbed 1.3%, while the FTSE 100 lost 0.2% in London. EUTELSAT (+30.8%): on Thursday evening, the satellite operator announced plans for a capital increase of €1.35 billion, in which the French government will participate with around 50% of the amount to be raised. The operation should enable the group to accelerate its investment in low-orbit satellite constellations, a key market currently dominated by the American group Starlink. Shares in Luxembourg-based operator SES benefited from these announcements, rising by 6.6% on Friday. SANOFI (+0.1%): the pharmaceutical group confirmed on Friday the US Food and Drug Administration's (FDA) approval of its drug Dupixent for the treatment of adult patients suffering from bullous pemphigoid (BP). Rheinmetall jumped 2.1 per cent to join the Euro-Stoxx-50.

United States
The US stock markets ended Friday's trading just about unchanged. The Dow Jones index closed 0.1 per cent higher at 42,207 points. The S&P 500 and the Nasdaq Composite fell by 0.2 and 0.5 per cent respectively. The 1,459 (Wednesday: 1,543) price gainers on the Nyse were offset by 1,322 (1,216) losers. A total of 50 (88) stocks closed unchanged. The big expiry date also contributed to increased volatility. A special feature this time was that the date immediately followed a public holiday. The US stock exchanges were closed on Thursday for Juneteenth. In the chip sector, Nvidia dropped 1.1 per cent in response to the report on planned restrictions on the export of chip equipment to China. Broadcom lost 0.3 per cent and Intel 2 per cent. A new round of job cuts is apparently on the cards at Microsoft in the coming weeks, with thousands of jobs on the line. According to people familiar with the matter, jobs are to be cut primarily in sales, but also in other teams, although the number has not yet been finalised. The share price closed 0.6 per cent lower. GMS shot up 24 per cent. Home Depot (+0.8 per cent) submitted a takeover bid for the provider of products for domestic use. Following weak fourth-quarter figures, the share price of handgun manufacturer Smith & Wesson plummeted by around 20 per cent.

Asia
Stocks in Asia reacted to the developments in the Middle East with mostly slightly lower stock prices. In Tokyo, the Nikkei just managed to hold its ground, while the stock exchanges in Shanghai and Hong Kong were mixed within narrow limits. Although the oil price rises, the increase is limited at around 2 per cent. In Tokyo, the mood is also supported by favorable economic data. The Purchasing Managers' Index for the manufacturing sector has risen significantly to 50.4, thus exceeding the threshold of 50 separating recession from economic recovery. The index for the service sector improved slightly to 51.5.

Bonds
The yield on 10-year U.S. Treasuries held roughly steady after Fed officials left interest rates unchanged and signaled that they were open to cutting rates in the second half of the year. The 10-year yield settled on Friday at 4.38%, according to Tradeweb.

Analysis
Berenberg upgrades Givaudan to CHF 4,750 (4,700) - Buy
Clariant: Goldman Sachs raises target price to CHF 11 (10.20) - Buy
Sonova: Barclays downgrades to Underweight (Equal Weight) - Target CHF 225 (275)