Vietnam Weekly Market Wrap-Up 27th June

Week Ending June 27, 2025 | 22:30 UTC Published by Oliver Barclay

Executive Summary

Week's Defining Theme: Global markets surged on U.S.-China trade deal finalization while Vietnam's VN-Index hit a 3-year high amid sustained regional optimism and transformative banking sector reforms.

Top 3 Market Stories: The Trump administration's confirmed trade agreement with China drove record highs across global equities, sustained Iran-Israel ceasefire reduced geopolitical risk premiums by 12% in oil markets, and revised U.S. Q1 GDP contraction to -0.5% fueled Federal Reserve rate-cut expectations ahead of Powell's pivotal testimony.

Vietnam Performance Context: Vietnam's VN-Index gained 1.6% weekly to close at 1,371.4, outperforming regional peers except Shanghai (+1.91%) as new credit institution laws effective July 1st and trade deal spillovers supported the rally to three-year highs, with banking stocks positioned as key beneficiaries.

Top Three Market Stories

Story 1: U.S.-China Trade Deal Drives Global Rally

President Trump announced a finalized trade agreement with China on Thursday, confirmed by China's Ministry of Commerce on Friday, with the White House downplaying the July 9 tariff deadline as "not critical." The complex 55% tariff structure (10% baseline + 20% on China + 25% existing) will be phased over 18 months. The S&P 500 surged to a record close of 6,173.07, gaining 3.44% weekly, while the Nasdaq Composite jumped 4.25% to 20,273.46. The dollar weakened to a 3-year low, boosting commodity prices as Brent crude recovered to $67.77/barrel.

Cross-asset impacts were profound: global equities rallied with Vietnam's VN-Index hitting 3-year highs, emerging market currencies strengthened on dollar weakness, and agricultural commodities gained on improved trade flow expectations. The timeline from Thursday's announcement to Friday's confirmation triggered immediate market responses, with S&P futures extending gains 0.3% in after-hours trading. Regional Southeast Asian markets attracted increased capital flows, positioning Vietnam favorably for FDI acceleration.

Story 2: Sustained Iran-Israel Ceasefire Reduces Risk Premiums

The week-long ceasefire between Iran and Israel held firm, significantly reducing geopolitical risk premiums across energy markets. Oil markets initially fell 12% weekly as Middle East supply disruption fears subsided, though U.S. summer demand helped stabilize Brent at $67.77/barrel by Friday. The S&P 500 gained 0.8% Thursday as Netanyahu affirmed "peace opportunities," with the VIX fear gauge declining to 16.59 (-1.01%).

Energy sector performance reflected this shift, with XLE rising 1.4% as volatility premiums compressed. The sustained peace reduced near-term risk factors, allowing investors to focus on fundamental demand drivers. Treasury yield curve inversion deepened as risk-off positioning unwound, while commodity markets benefited from both reduced geopolitical premiums and dollar weakness from trade deal optimism.

Story 3: GDP Revision Boosts Rate-Cut Expectations