Sensei's Morning Forecast: Circle Stock Climbs, Markets Brace for Japan Shock

Stablecoin clarity boosts digital assets, UK retail plunges, and Europe’s high-stakes Iran diplomacy unfolds as Japan’s inflation wave triggers carry trade fears worldwide.

Sensei

and

Martyn Lucas

Jun 20, 2025

∙ Paid

🧠 One Big Thing

Japan’s inflation shock—led by soaring food and energy prices—has pushed core CPI to 3.7%, forcing the BOJ toward further tightening. With a $2–20 trillion yen carry trade hanging in the balance, even a modest rate hike could trigger cascading liquidations across global risk assets. From Bitcoin to tech stocks and emerging markets, the risk is systemic. Investors aren’t just watching Japan’s next move—they’re bracing for global impact. Today’s deep dive section breaks this down!

💰 Money Move of the Day

When central banks surprise with tightening, global markets often unwind fast—especially in trades linked to cheap funding like the yen carry. History shows it pays to understand where hidden leverage lies, so you’re not caught off guard when the tide turns.

📊 Market Snapshot

Cryptocurrencies:
Bitcoin (BTC): $105,941 (▲ +1.20%)
Ethereum (ETH): $2,546 (▲ +0.97%)
XRP: $2.17 (▲ +0.29%)

Equity Indices (Futures):
S&P 500 (SPX): 5,971 (▲ +0.53%)
NASDAQ 100: 21,904 (▼ -0.19%)
FTSE 100: 8,821 (▲ +0.17%)

Commodities & Bonds:
10-Year US Treasury Yield: 4.423% (▲ +0.73%)
Oil (WTI): $75.49 (▲ +0.07%)
Gold: $3,353 (▼ -0.52%)

🕒 Data as of UK (BST): 12:27 / US (EST): 07:27 / Asia (Tokyo): 20:27

🎥 Live Show Link – Join the Market Breakdown

Catch the full morning breakdown live with Sensei on YouTube. Watch Now:

We go deeper into today’s moves, charts, and headlines. Bring your coffee, questions, and watchlist.

✅ 5 Things to Know Today

🪙 Circle Surges to $235 After Senate Passes Stablecoin Bill

Circle Internet Financial Ltd., signage in front of the New York Stock Exchange

Circle Internet Financial (NYSE: CRCL) stock soared 34% on June 18, closing at $199.59 after hitting an all-time intraday high of $200.90. This marks a more than sixfold increase from its IPO price of $31 set on June 5. The rally followed the U.S. Senate’s 51–23 vote to advance the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act, which sets new federal standards for stablecoin issuers, including reserve requirements and regulatory oversight (CryptoSlate, Bitrue, FX Leaders).

The GENIUS Act’s progress spurred gains across crypto-related equities: Coinbase jumped 14% and Robinhood is closing in on its all-time high. Circle, issuer of the USDC stablecoin, now boasts a market capitalization above $48 billion. The bill requires payment stablecoin issuers to fully back tokens with cash or short-dated Treasuries, bars yield payments, and introduces federal and state licensing tiers based on liabilities. Circle’s business model—earning interest on USDC reserves—positions it to comply with the new rules without major changes (CryptoSlate, Bitrue).

Why it matters: The Senate’s move provides long-awaited regulatory clarity for stablecoins, accelerating institutional adoption and boosting confidence in the sector. Circle’s explosive post-IPO performance underscores investor appetite for regulated digital finance and signals that stablecoins are moving closer to mainstream integration. However, rapid gains and ongoing legislative risk mean volatility remains elevated for sector participants (CryptoSlate, Bitrue, FX Leaders).

Sensei’s Insight: Circle’s post-IPO trajectory isn’t just a crypto headline—it’s a signal flare. The GENIUS Act is doing what countless whitepapers couldn’t: laying a regulatory foundation that traditional capital understands. The market is pricing in a future where stablecoins aren’t just tolerated—they’re core infrastructure. For investors, this isn't merely a tech rally; it's the formal onboarding of digital dollars into the financial system's rulebook. But remember, clarity brings growth—and scrutiny.

🇪🇺 Europe and Iran Resume High-Level Diplomacy

Foreign ministers from the UK, France, and Germany, along with EU foreign policy chief Kaja Kallas, are holding talks today in Geneva with Iranian Foreign Minister Abbas Araqchi—the first formal engagement between Iran and Western powers since Israel’s recent strikes on Iranian nuclear sites (New York Times, Reuters, Euronews). The meeting follows discreet European diplomacy amid growing concern that the Israel-Iran air war, now entering its second week, could draw in additional global powers. European officials are pushing for de-escalation and nuclear compliance commitments from Iran, warning of possible UN Security Council measures if diplomacy stalls. Meanwhile, President Trump has indicated a U.S. decision on military involvement will come within two weeks (Reuters, Reuters, CNN).

For investors, the talks represent a critical geopolitical pivot point. Market volatility has intensified due to heightened Middle East tensions, with oil prices and defense stocks especially reactive. A diplomatic breakthrough could ease energy market pressures and lower risk premiums, while a breakdown risks igniting further disruptions across equities, commodities, and regional currencies (Reuters, CNN).

Sensei’s Insight: For investors, watch crude futures and defense sector ETFs: they’re the earliest litmus tests for whether this diplomacy delivers détente—or detonates.

🛒UK Retail Meltdown: May Sales Plunge 2.7% in Worst Drop Since 2023

UK Retail Sales See Sharpest Monthly Decline Since 2023
UK retail sales volumes dropped 2.7% in May 2025, the steepest monthly decline since December 2023 and far exceeding economists’ forecast of a 0.5% fall. The Office for National Statistics reported broad-based weakness after four months of growth, with food store sales plunging 5.0% and non-food stores down 1.4%. Supermarkets and clothing retailers were hit hardest, as consumers slashed spending on essentials, alcohol, and tobacco (Bloomberg, Yahoo Finance, Reuters).

Annual Figures and Economic Outlook Weaken
Compared to a year ago, May sales were down 1.3%, reversing April’s 5.0% growth. Excluding fuel, sales dropped 2.8% month-on-month. Despite this, sales volumes for the three months to May were still 0.8% higher than the previous three months but remain 2.7% below pre-pandemic levels (Morningstar). The decline points to renewed pressure on the UK economy, with rising expectations of Bank of England rate cuts later this year. The pound pared gains on the data, reflecting growing concerns about second-quarter growth momentum (Business Times, WSJ, BBC, Retail Times, Retail Gazette).

Sensei’s Insight: Consumers are tightening their belts—and fast. May’s 2.7% sales plunge isn't just a seasonal wobble; it’s a clear signal that inflation fatigue and economic uncertainty are finally hitting household spending. With essentials like food and clothing taking the biggest hits, the Bank of England now faces a tightening-growth trade-off that could bring rate cuts back into play sooner than expected.

🛑 Fed Holds, Eyes Two Cuts Amid Sticky Inflation and Slowing Growth

Fed Holds Rates Steady Amid Inflation Concerns
The Federal Reserve left its benchmark interest rate unchanged at 4.25%–4.50% for the fourth consecutive meeting on June 18, 2025, as officials weighed persistent inflation pressures against slowing economic growth. According to revised projections, inflation is expected to end the year at 3.0% (up from 2.7%), GDP growth is forecast to slow to 1.4% (down from 1.7%), and unemployment is projected to rise to 4.5%. The FOMC’s latest “dot plot” indicates two rate cuts—totaling 50 basis points—may come later this year, although opinions remain split: seven members see no cuts, while eight anticipate reductions. The decision was unanimous, and the Fed will continue reducing its balance sheet of Treasury and mortgage-backed securities (Fox Business, PCBB, CNBC).

Powell Highlights Inflation Risk, Cautions on Easing
Fed Chair Jerome Powell emphasized that inflation, though well off its highs, is still above the 2% target and further improvement is required before loosening monetary policy. The Fed observed that while economic uncertainty has “diminished,” it remains elevated due to volatility in net exports and trade policy shifts. Consumer spending is moderating, business sentiment has declined, and new projections reflect a cautious approach to growth and employment. The next FOMC policy review is scheduled for July, and future actions will hinge on evolving data (Federal Reserve, RS Capital).

Sensei’s Insight: While markets crave clarity, the Fed offers caution. With inflation stubbornly above target and growth losing steam, Powell’s message is clear: no rush to cut. Stay nimble—data, not dates, will drive the second-half playbook.

🟢 Robinhood’s Meteoric Rise Tests Investor Conviction

Robinhood Nears All-Time Highs on Surging Growth, Strategic Expansion
Robinhood Markets (NASDAQ: HOOD) closed at $78.35 on June 18, close to its all-time high of $84, capping a 1-year return of 242.86%. The company now boasts a $68.39 billion market cap, with platform assets hitting $255 billion in May—an 89% YoY increase. Growth has been fueled by a 59.65% rise in revenue, a 44% uptick in annual net deposits, and the $200 million acquisition of Bitstamp, which brought 500,000 funded accounts and deepened its crypto exposure. Analysts are split: Mizuho and Goldman Sachs raised price targets to $80 and $82, respectively, citing strong May metrics, while Redburn-Atlantic downgraded over sustainability and expansion risk. Market watchers continue to debate the company’s exclusion from the S&P 500.

Why it matters: Robinhood’s rapid ascent reflects accelerating user engagement, successful product diversification, and aggressive international expansion, particularly in digital assets. However, with shares trading above fair value and a P/E ratio over 43, investors face questions about valuation, execution risk, and the durability of growth as the company pushes further into crypto and new markets (Macrotrends, Investing.com, TheStreet).

Sensei’s Insight: Robinhood’s blistering rally showcases the power of product scale and crypto momentum, but with lofty valuations and S&P 500 exclusion still unresolved, the stock may be sprinting ahead of fundamentals.

✈️ Vaz Reporting Live from Paris!

Vaz is currently in Paris preparing for a special live broadcast from the Paris Air Show, where he’ll be bringing you exclusive, real-time insights from one of the most important events in global aerospace. Tune in tomorrow—this will be a landmark show. To celebrate, we’re dropping a limited-edition Vaz logo mug—only 10 exist. This is the first time the Vaz logo has ever appeared on merch, making it a rare collector’s item. 🛫🔥

https://martynlucasshop.com/products/paris-air-show-edition-white-15oz-ceramic-mug-only-10