The week began with a cautious mood as investors await final updates on the next round of US-China trade talks, scheduled for Monday in London. Market participants are closely watching for any signs of progress that could ease ongoing trade tensions.
In Europe, attention will focus on the Sentix investor confidence index for June. Later in the week, the United States will release wholesale inventory data for April, which could provide further insight into economic momentum.
US Employment Data Mixed but Better Than Expected for May
The US Bureau of Labor Statistics reported on Friday that non-farm payrolls increased by 139,000 in May. This number slightly exceeded market expectations of 130,000 new jobs. Meanwhile, the unemployment rate held steady at 4.2%, matching forecasts.
However, the report also revised down job gains for March and April by 65,000 and 30,000 respectively, indicating some cooling in earlier months.
Following the release, the US dollar index rose modestly and closed higher on Friday. On Monday, the index remained under pressure during early European trading, fluctuating just below the 99.00 level.
US stock futures showed cautious sentiment, falling between 0.2% and 0.25%, reflecting increased risk aversion among investors.
ECB Chief Lagarde Signals Extended Tightening on Interest Rates
European Central Bank President Christine Lagarde commented over the weekend that interest rates must stay restrictive as long as necessary to maintain price stability. She stated, “There is still a long way to go before inflation is squeezed out of the economy.”
Following her remarks, EUR/USD remained positive in early European trading on Monday, holding above 1.1400 after a 0.4% dip on Friday.
China Reports Growing Trade Surplus but Declining Consumer Prices
During the Asian session, China released trade data showing its trade surplus widened to $103.22 billion in May, up from $96.18 billion in April. Exports increased by 4.8% year-on-year, while imports fell by 3.4%.
Meanwhile, China’s consumer price index (CPI) dropped by 0.2% month-on-month in May, highlighting ongoing deflationary pressures.
The AUD/USD currency pair maintained its upward momentum in early Monday trading, staying above the 0.6500 level.
GBP/USD Resumes Uptrend Ahead of UK Labor Data
The GBP/USD pair slipped about 0.3% on Friday but closed the week with gains. On Monday, the pound continued its upward trend, trading above 1.3550.
Investors now await the release of the UK’s April labor market data on Tuesday from the Office for National Statistics.
Japanese Prime Minister Notes Rising Interest Rate Trend
Japanese Prime Minister Shigeru Ishiba said Monday that the economy is moving toward a period of rising interest rates. He warned that higher rates could increase government debt financing costs and impact spending plans.
In response, USD/JPY retreated in early trading, falling toward the 144.00 level after gaining ground over the past two days.
Gold Prices Fall as Market Sentiment Shifts
Gold prices came under pressure at the start of the week after falling more than 1% on Friday, dipping below $3,300 per ounce.
In early European trading, gold/USD pulled back but stabilized above the $3,300 mark.
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