Markets:
What a day.
The market moves aren’t anything dramatic but the newsflow was memorable. It started with news from Chinese media that Trump and Xi were on a phone call, something that most were expecting to happen on Friday. That boosted sentiment and we anxiously awaited the readouts. When they came there was some disappointment at the lack of real action, but they set up high-level meetings on what could be a path towards a comprehensive deal.
We also continued to hear reports that the US and Canada were in trade talks, something we’ve been writing about all week. That was confirmed by the US ambassador, though whether there is a deal before the G7 on June 15 is now the question.
The big drama came late in the day as the relationship between Elon Musk and Trump utterly imploded. It started as a fight over deficits but got very ugly, very quickly as Elon said Trump was in the Epstein files and should be impeached. Trump said he was taking away Elon’s subsidies and shares of Tesla closed down 14.3%.
The ECB decision was moderately hawkish as officials teed up a pause in July after 8 straight quarter-point cuts. The market is now priced for just 25 bps more in easing in this cycle. The euro initially rose to 1.1494 but couldn’t climb above the big figure and later gave back 50 pips. Part of that was USD volatility and some ‘sell the fact’ on the US-China talks.
All told, the moves were relatively small on most fronts and the biggest mover was the yen, which roundly declined on falling trade tensions. Eyes now though might move to the US budget bill as Elon fights it. Republicans are hoping to pass it by July 4.
This article was written by Adam Button at www.forexlive.com.
Kansas City Fed President Jeff Schmid acknowledged in a speech overnight that monetary theory may suggest to “looking through a one-time price shock”, he would be “uncomfortable staking the Fed’s reputation and credibility on theory alone.” Despite the expected drag from tariffs, Schmid remains “optimistic” about the economy’s momentum. However, he acknowledged that both the […]
The post Fed’s Schmid: Tariff impact uncertain, policy must stay nimble appeared first on Action Forex.
Fed Governor Adriana Kugler cautioned that disinflation “has slowed” and that tariffs are beginning to exert upward pressure on prices, a trend she expects to continue into 2025. Speaking overnight, Kugler emphasized that the balance of risks has tilted, with “greater upside risks to inflation” now emerging, even as downside risks to employment and growth […]
The post Fed’s Kugler: Tariffs may entrench inflation via expectations, pricing power, and productivity appeared first on Action Forex.
The Euro is rallying despite the 25bps cut from the European Central Bank from this morning. The ECB Deposit Rate is now at 2% from 2.25%. The fact that the markets had the cut priced in (well-expected) led to prices were broadly unchanged – markets seesawed but came right back to their level from the […]
The post EUR/USD Rallies Despite 25 Bps Cut from the ECB appeared first on Action Forex.
Canada PM Carney spoke with the Premier of China, Li Qiang
Readout via Canada’s PM’s Office.
This article was written by Eamonn Sheridan at www.forexlive.com.
Key Highlights USD/JPY started a fresh decline below the 144.00 level. A connecting bullish trend line is forming with support at 143.40 on the 4-hour chart. EUR/USD is now gaining pace and might clear the 1.1500 resistance zone. GBP/USD is also rising and testing the 1.3600 resistance. USD/JPY Technical Analysis The US Dollar started a […]
The post USD/JPY Struggles Below Resistance: Is a Breakout on The Horizon? appeared first on Action Forex.
Musk in a reply tweet to Ackman agrees stronger together:
Tensions dialing back a little. US equity index futures bounced upon the reopening of Globex for US evening trade.
This article was written by Eamonn Sheridan at www.forexlive.com.
Markets are awaiting today’s US non-farm payrolls release, with little doubt that hiring had slowed meaningfully in May amid heightened tariff threats and elevated uncertainty. The key question now is just how sharp the slowdown was. Consensus forecasts see NFP at 130K, unemployment steady at 4.2%, and average hourly earnings rising 0.3% mom. Recent labor […]
The post US NFP: Muted Hiring or Major Miss? appeared first on Action Forex.
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