Weekend:
The weekend news hasn't been great for market confidenceUK PM Starmer expected to announce Brexit "reset" deal on Monday. (Is Brexin the word?)Australian PM Albanese says he's "up for a deal" with Europe on free tradeECB's Lagarde:EUR/USD up justified by the uncertainty & loss of confidence in US policiesEuropean Central Bank Board Member Schnabel cautious on a June ECB rate cutECB’s Kazaks: Rate cuts may be nearing end, but outlook still uncertainNewsquawk Week Ahead: UK-EU Summit, RBA, China Activity Data, Global PMI Data, Canada CPIFriday bombshell: Moody's downgrades US credit ratingForexlive Americas FX news wrap: Hot UMich inflation expectations cool Fed rate cut talkMarkets reopened for the new week digesting the late-Friday US credit rating downgrade by Moody’s. The agency announced the move after US markets had closed, a decision some have called oddly timed—perhaps even irresponsible.
Opening FX trade saw a generally weaker US dollar, with the most notable move in USD/JPY, which fell more than 60 points from Friday’s close. EUR/USD also edged higher, with gains extending after Romania’s presidential election results came in. Pro-EU and pro-NATO candidate Dan won, defeating a far-right challenger. The outcome was interpreted as a win for EU political stability, lending the euro a modest boost.
As the session wore on, the dollar continued to soften a touch, the move was far from a rout.
US equity index futures gapped lower on the Globex open, as did US Treasury futures. As of writing, equity futures have slipped further.
China's April data was the key focus for the session:
Industrial output rose 6.1% y/y (vs. 5.5% expected, prior 7.7%)
Retail sales grew 5.1% y/y (vs. 5.5% expected, prior 5.9%)
Fixed asset investment was up 4.0% YTD (vs. 4.2% expected and prior)
Surveyed jobless rate dipped to 5.1% from 5.2% in March
House prices remained soft
Overall, the data were mixed. Industrial activity held up well, even as signs of weaker consumption and ongoing deflationary pressures linger. Trump’s tariffs have yet to cause significant damage, though slowing exports and falling bank lending suggest headwinds are mounting.
In Japan, Prime Minister Ishiba ruled out tax cuts funded by new debt, acknowledging that with market interest rates now positive, the country’s fiscal health is "worse than Greece." Finance Minister Kato added that Japan is not facing problems issuing debt but warned that a loss of market trust could weaken the yen and trigger inflationary stress. JPY barely moved on the comments.
In the US, a House committee narrowly advanced President Trump’s tax cut package in a 17–16 vote on Sunday evening. Interestingly, four GOP “hardliners” who had opposed it earlier shifted their "no" stance to “present.” Hardliners? That label seems generous if they caved so easily—perhaps just political theatre.
Bitcoin has continued its ascent, climbing to fresh highs above USD 106,500.
Former US President Joe Biden has been diagnosed with an 'aggressive form' of prostate cancer that has metastasized to the bone, his office said in a statement, adding that 'the cancer appears to be hormone-sensitive which allows for effective management'
We wish him well.
This article was written by Eamonn Sheridan at www.forexlive.com. Read More Details
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