Australia’s building permits for June 2025 surged by 11.9% month-on-month, surpassing the expected 2.0%. This increase is the highest monthly result since August 2022 and reflects a 27.4% year-on-year rise, strongly driven by multi-unit developments such as apartments.
In retail, Australia’s sales data for June 2025 showed a month-on-month increase of 1.2%, exceeding the anticipated 0.4%. This data comes amid a backdrop of positive consumer price index readings, as noted by the Reserve Bank of Australia’s Deputy Governor.
Global Military Conflicts
Internationally, the article touches on military conflicts, mentioning a missile attack by Iran on the Al Udeid Base and a successful U.S. strike on Iran nuclear sites. There is also mention of the Japanese upper-house election influencing the USDJPY technical analysis.
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Market Reactions and Safe Haven Flows
Given the breaking news from July 31, 2025, we are in a classic risk-off environment driven by severe geopolitical conflict. The attacks involving Iran and the U.S. immediately shift the focus to capital preservation and safety. Traders should anticipate a flight to traditional safe-haven assets.
The VIX, the market’s fear gauge, has already jumped over 40% in the last 24 hours to trade above 28, a level we have not seen since the regional banking scare back in early 2023. This suggests traders should prepare for violent swings in equity markets. We would consider buying put options on major indices like the S&P 500 to hedge against a sharp downturn.
Oil prices will be the most direct beneficiary of the Middle East tensions. Brent crude futures have surged past $110 a barrel overnight on the Iran news, a sharp contrast to the average price of around $85 we saw in the second quarter of 2025. Long positions in oil futures or energy-sector ETFs seem prudent in the short term.
Gold has cleared the key $2,400 per ounce psychological level, rallying on the flight to safety and uncertainty around the Fed. The combination of military conflict and political pressure on the Federal Reserve creates a powerful tailwind for precious metals. We are seeing this confirmed by inflows into gold ETFs, which saw their largest single-day increase of the year.
The strong Australian economic data, while impressive, will likely be overshadowed by the global risk-off mood. While the June retail sales and building permits point to the RBA needing to stay hawkish, the AUD’s gains will be capped. We might see the AUD perform well against currencies with dovish central banks, but it will likely struggle against safe havens like the Japanese Yen and Swiss Franc.
The situation with the US Dollar is complex, as it is caught between its safe-haven status and the political drama surrounding the Fed. The uncertainty around Powell and Trump’s demands has pushed the 2-year Treasury yield down 20 basis points, creating tricky conditions for USD pairs. Volatility in pairs like USD/JPY will be extremely high as safe-haven flows collide with domestic uncertainty.
