Garton Global | Weekly Market Digest
Markets remain cautious as debt concerns, trade tensions, and central bank decisions weigh on sentiment.
The US dollar steadies ahead of key data, while sterling rallies on strong wages. All eyes are on the ECB’s rate call.
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Last Week
🇺🇸 US Dollar slipped on debt worries
● USD slipped as investors grew more cautious over America’s rising debt levels, sparked by uncertainty surrounding Trump’s tax plans.
● Concerns about political unpredictability and reduced confidence in the dollar’s global role hit sentiment.
● The dollar index ended the week down 2%, as investors moved money into other assets.
🇬🇧 Pound Sterling rose on strong wage growth
● GBP rose after UK wages showed the biggest jump in annual pay since June 2022, indicating a healthier domestic economy.
● Traders also reacted positively to the news that Trump’s 50% EU tariffs were postponed, easing trade tensions.
● The pound reached its highest level against the dollar in three years.
🇪🇺Euro edged higher after US tariffs overturned
● EUR edged higher when a US court overturned President Trump’s tariffs on European goods, calming trade concerns.
● This ruling lifted confidence in European markets and boosted the euro’s appeal.
● The euro closed near 1.1345 against the dollar by Friday.
This Week
🇺🇸 Dollar faces volatile week ahead of key US data releases
● Dollar hovering after tariff uncertainty; traders await direction from US ISM PMIs and nonfarm payrolls.
● Strong payrolls could support the dollar, especially if wage growth exceeds 3% amid Fed inflation concerns.
● Markets will watch Fed speakers closely for hints on future rate cuts, with current bets on 50bps this year.
🇪🇺 Euro eyes ECB rate cut decision amid trade tensions
● ECB expected to cut rates by 25bps on Thursday; traders focus on statement and macro projections.
● Despite a solid Q1 GDP and core inflation at 2.7%, weak PMIs may justify a dovish tilt.
● Euro could retreat if Lagarde signals more cuts ahead, but trade tensions may keep dollar pressure in check.
Key Events
Monday June 2nd
15:00 US manufacturing PMI
18:00 Fed Chair Powell Speaks
Tuesday June 3rd
07:30 Swiss CPI
Wednesday June 4th
02:30 Australian GDP
13:15 US non farm employment
14:45 Canadian Cash Rate
15:00 US Services PMI’s
15:30 Bank of Canada Press Conference
Thursday June 5th
13:15 Euro Policy Statement
13:45 ECB Press Conference
Friday June 6th
13:30 Canadian Unemployment Rate & US Unemployment Rate & Average hourly earnings
Have a great week,
The Garton Team.
Have a great week,
The Garton Team.
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