Global markets traded cautiously on Monday, ahead of a pivotal week filled with top-tier economic releases and central bank decisions. Investors remained focused on Friday’s upcoming U.S. Nonfarm Payrolls data, the ECB’s interest rate decision on Thursday, and continued speculation around Fed policy. Equities were mostly mixed, bond yields edged slightly higher, and FX markets saw modest moves. Here’s a breakdown of Monday’s key developments across major economies:
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United States
Previous Day Highlights:
- Equities: The S&P 500 rose slightly by +0.1%, Nasdaq gained +0.3%, and Dow Jones edged down -0.2% as tech outperformed defensive sectors.
- Bonds: The 10-year Treasury yield increased to 4.41% (+3 bps), with traders cautious ahead of Friday’s jobs report.
- FX: The Dollar Index (DXY) held steady around 104.10 as markets awaited key macro data later in the week.
- Macro Data:
- ISM Manufacturing PMI (May): Rose to 48.7 from 49.2, below expectations, remaining in contraction territory. New orders and employment components weakened.
Key Headlines:
- Fed’s Barkin noted that inflation remains sticky and it’s “too soon” to declare victory.
- CME FedWatch: Markets now price in 1.3 cuts in 2025, down from 2+ in April.
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Eurozone
Previous Day Highlights:
- Equities: Euro Stoxx 50 fell -0.4%, led by losses in financials and energy.
- Bonds: 10Y German bund yield rose slightly to 2.66% ahead of Thursday’s ECB meeting.
- FX: EUR/USD traded flat near 1.0870.
Key Headlines:
- ECB expected to deliver a 25 bps rate cut on Thursday, but markets are more focused on forward guidance.
- Eurozone May CPI data (released last week) surprised to the upside: core inflation at 2.9% y/y vs. 2.7% expected.
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United Kingdom
Previous Day Highlights:
- Equities: FTSE 100 rose +0.2%, supported by oil and mining stocks.
- Bonds: 10Y gilt yields climbed to 4.34%, following global bond moves.
- FX: GBP/USD held near 1.2770, showing resilience despite mixed data.
Key Headlines:
- No major macro data on Monday. Focus remains on upcoming BOE decision (June 20) and inflation trends.
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Japan
Previous Day Highlights:
- Equities: Nikkei 225 fell -0.6% amid profit-taking and a stronger yen.
- Bonds: 10Y JGB yield was steady around 1.02%.
- FX: USD/JPY dipped below 156.00 as intervention concerns resurfaced.
Key Headlines:
- BOJ’s Takata signaled the central bank may adjust policy as early as July, noting that inflation is “moving in line with projections.”
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China
Previous Day Highlights:
- Equities: Shanghai Composite gained +0.2%, while the Hang Seng rose +0.4%, helped by tech.
- FX: USD/CNH was unchanged near 7.25.
Key Headlines:
- Chinese state banks reportedly intervened in the FX market to stabilize the yuan ahead of upcoming trade data and U.S. tariff review.
- Investors await May Caixin Services PMI on Wednesday.
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EMEA Region
Highlights:
- Turkey: USD/TRY remained steady near 32.28, while the BIST 100 index rose +0.6%. Turkish 10Y yields hovered around 27.5%.
- South Africa: ZAR firmed to 18.32 vs. USD as political uncertainty eased after ANC confirmed coalition talks.
- Russia: RUB weakened as Brent crude dipped slightly and sanctions headlines reemerged.
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Commodities
- Oil: WTI fell -3.6% to $74.01, and Brent dropped to $78.12 after OPEC+ signaled a gradual unwinding of output cuts starting October.
- Gold: Rose +0.4% to $2,355/oz, benefiting from weaker ISM data and stable bond yields.
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