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• Prior was $-0.51 billion (revised to $-2.26 billion)
• Exports $60.44 billion vs $69.90 billion prior (revised to $67.76 billion)
• Imports $67.58 billion vs $70.40 billion prior (revised to $70.01 billion)

This article was written by Giuseppe Dellamotta at www.forexlive.com.

• Prior was 240K
• Continuing claims 1904K vs 1910K expected
• Prior 1919K

The market has been waiting for a climb in initial jobless claims. This reading is the highest since October, so it’s certainly creeping up and the US dollar has dipped on the data.

This article was written by Adam Button at www.forexlive.com.

• Prelim was +5.7% vs +2.0% prior
• Productivity -1.5% vs -0.8% prelim
• Prior productivity +1.7%

On face value, there’s some inflationary pressure here with labour costs higher and productivity lower but it’s volatile and lagging data.

This article was written by Giuseppe Dellamotta at www.forexlive.com.

The New York Fed conducted a survey on tariffs passthrough. They found that “most businesses passed on at least some of the higher
tariffs to their customers, with nearly a third of manufacturers and
about 45 percent of service firms fully passing along all tariff-induced
cost increases by raising their prices.”

One caveat is that the survey was conducted between May 2 and May 9 before tariff hikes on goods from China were reduced from 145 percent to 30 percent.

They also found that “price increases happened rapidly: over half of both manufacturers and
service firms said they raised prices within a month of experiencing
tariff-related cost increases—many within a day or week.”

The most concerning finding was that “a significant share of businesses also reported raising
the selling prices of their goods and services unaffected by tariffs.
Many businesses indicated they increased prices to cover other rising
costs such as wages and insurance, though it is possible that in some
cases, businesses were taking advantage of an escalating pricing
environment to increase prices.”

The recent US PMIs showed inflationary pressures increasing which could result in higher CPI readings in the next months.

For the Fed it’s a tricky situation because it might be true that tariffs are a one-off price increase and they are focused on the trend instead. But if they start to ease with the tax cuts and deregulation ahead, the price increase could become embedded and the return to the 2% target could become even more difficult (especially considering that we’ve been above target for 5 years).

Here you can find the NY Fed survey

This article was written by Giuseppe Dellamotta at www.forexlive.com.

Headlines:

• One last consecutive rate cut for the road by the ECB?
• What are the expectations for the ECB decision coming up later?
• China vice president Han Zheng says US-China relations are at ‘critical juncture’
• Japan to offer a package on China in tariff talks with the US – Nikkei
• Suzuki stops production of Swift model cars due to China’s rare earth restriction
• Majority of UK firms see no material impact from US trade policy changes – BOE survey
• Eurozone April PPI -2.2% vs -1.8% m/m expected
• Germany April industrial orders +0.6% vs -1.0% m/m expected
• Germany May construction PMI 44.4 vs 45.1 prior
• UK May construction PMI 47.9 vs 47.2 expected
• Italy April retail sales +0.7% vs +0.2% expected
• US Challenger May layoffs 93.82k vs 105.44k prior

Markets:

• AUD and NZD lead, JPY lags on the day
• European equities higher; S&P 500 futures up 0.1%
• US 10-year yields down 2.7 bps to 4.337%
• Gold up 0.5% to $3,392.63
• WTI crude up 0.2% to $62.97
• Bitcoin up 0.2% to $104,870

It was another quiet session for the most part as we await the ECB policy decision later today alongside more trade developments before the end of the week.

Major currencies didn’t get up to much amid a lack of significant headlines, with just some murmurs about what is happening between the US and Japan as Akazawa heads to Washington again for more talks.

The dollar is trading more mixed, keeping little changed against the euro, pound, and franc. USD/JPY is seen up 0.3% to 143.27 but there wasn’t too much pushing and pulling during the session. USD/CAD is also fairly subdued, down 0.1% to 1.3660 while AUD/USD is up 0.3% to 0.6508 in flirting with a potential breakout above 0.6500 at least. The latter is perhaps the only notable move in the FX space.

Besides that, risk sentiment was fairly more tentative as well. European indices continue to creep higher with US futures keeping lightly changed after a bit of a pullback late yesterday.

Instead, it was precious metals that stood out with silver jumping over 2% to fresh highs in 12 years. The price moved up to hit nearly $36 before settling around $35.70 now, up 2.1% on the day. That also saw gold recover from light losses to be up to close in on the $3,400 mark now as we look to US trading.

The ECB is up next and will deliver a 25 bps rate cut. All eyes will on what Lagarde has to say next before the focus turns back towards more trade headlines and the US jobs report tomorrow.

This article was written by Justin Low at www.forexlive.com.

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This article was written by Justin Low at www.forexlive.com.

The post Ex-Dividend 06/6/2025 first appeared on IC Markets | Official Blog.

• Mutual respect, peaceful coexistence, cooperation between US and China is in the interests of both parties and conducive to world development and peace

Just a point to note that the US-China Track II dialogue is an informal set of discussions between the two countries. So, this is the meeting that Han Zheng is coming from. There is no further mention of what was discussed but typically they are looking to find some common ground and discuss potential understandings on pretty much everything. There’s still no word about a Trump-Xi phone call though, so that’s still something to watch out for before the end of the week.

This article was written by Justin Low at www.forexlive.com.

The 25 bps rate cut today will bring the deposit rate back to 2.00%. And that will fit in between the estimate for the neutral rate by the central bank, which is roughly around 1.75% to 2.25%. That said, one can reasonably expect Lagarde & co. to continue to not put much emphasis that this is the range where the ECB will stop. At least not when there are still significant downside risks to the economy still looming large.

So, what else can we expect from the ECB today besides the 25 bps rate cut?

Not much really. The forward guidance will continue to center around the current data dependent approach and that they will take things meeting-by-meeting. Lagarde’s interpretation of this and the risks surrounding the outlook heading into the summer will be one to watch instead.

The question is, will there be an explicit hint or suggestion of a pause in July? I want to say yes but then again, the ECB has time to play with so they can hold back on that today. The July decision only falls on the fourth week of the month and policymakers will still have to weigh trade discussions between the EU and US, which supposedly has a deadline for 9 July.

Given the potential for downside risks to materialise and the amount of uncertainty up in the air, don’t expect the ECB to be firm on any narrative about pausing today. Lagarde will certainly reiterate that there is a lot of uncertainty to filter through and they will want to maintain as much flexibility to deal with that.

As things stand, markets are pricing in just 30 bps of rate cuts after deducting the decision from today. That means just one more rate cut is priced in between the four meetings from July to December. That one rate cut is only fully priced in by the October meeting.

So, that sets the stage on where we are at heading into the policy decision today. If anything, the balance of risks lies to the hawkish side should there be any mentions about pausing in July to appease the hawks on the board. But if Lagarde spins it as leaving a vague door for further easing instead i.e. no clear explicit guidance, that will be seen as her doing her job right.

The market reaction will ride on her press conference for the most part as such.

This article was written by Justin Low at www.forexlive.com.

The ECB is widely expected to cut by 25 bps and bring the policy rate down to 2.00%. The central bank is also expected to revise its economic projections downward for growth and inflation.

The market expects the ECB to cut by 25 bps again in September and reach the bottom of their neutral rate range at 1.75%. This could be a non-event given that everything is pretty much priced in and it will be hard to get any surprise.

President Lagarde is likely to strike a more neutral tone and reaffirm data dependence as they approach the end of their easing cycle.

This article was written by Giuseppe Dellamotta at www.forexlive.com.

IC Markets Europe Fundamental Forecast | 5 June 2025

What happened in the Asia session?

Australia’s trade surplus in goods narrowed to A$5.4 billion in April, down from a marginally revised A$6.9 billion in the previous month, missing market expectations of A$5.9 billion, as exports fell while imports rose. Exports dropped 2.4% from the previous month to A$44.1 billion, reversing a downwardly revised 7.2% increase in March as shipments to the U.S. were dampened by Trump’s tariffs. Meanwhile, imports grew by 1.1% to A$38.7 billion, rebounding from an upwardly revised 2.4% decline in the previous month. Despite a narrowing trade surplus, demand for the Aussie remains robust due to broad weakness in the greenback.

Moving over to Australia’s largest trading partner, the Caixin Services PMI rose from 50.7 in the prior month to 51.1 in May, up from a seven-month low while coming in line with market forecasts. The latest reading signalled a stronger expansion in the services sector, supported by faster growth in new business and activity, despite a renewed decline in new export orders. New export orders fell for the first time in 2025, dampened by Trump’s tariffs. Employment increased for the first time in three months, with the rate growth being the fastest since last November. Steady growth for the services sector could provide near-term support for crude oil prices.

What does it mean for the Europe & US sessions?

Construction activity in the U.K. fell into contraction at the beginning of this year and output continued to deteriorate till April. Although the construction PMI reading edged higher to 46.4, it signalled a fourth straight month of contraction as business uncertainty delayed new projects and caused further drops in new orders and staffing levels in April. May’s estimate of 47.4 points to another month of slight improvement in the PMI reading but it would still mark further deterioration for this sector. Despite a weakening construction sector, demand for the pound is likely to remain robust due to the broad weakness in the U.S. dollar.

The European Central Bank (ECB) is widely expected to move ahead with a seventh consecutive rate cut, making another 25 basis point (bps) reduction in the three key interest rates – this would bring the main refinancing rate down to 2.15%. ECB President Christine Lagarde’s press conference commences half an hour after the monetary policy statement is released; this event will be closely scrutinised, especially given the current environment of tariff escalation and uncertainty between the U.S. and its major trading partners, including the European Union. Despite a potential rate cut, demand for the Euro could remain robust as investors appear to have lost confidence in the U.S. dollar.

Canada’s Ivey PMI is anticipated to register a second successive month of contraction for domestic economic activity due to the ongoing tariff uncertainty with its neighbour to the south. Despite PMI activity deteriorating further, the Loonie has remained resilient due to higher oil prices in recent weeks, along with broad weakness in the greenback.

The Dollar Index (DXY)

Key news events today

Unemployment Claims (12:30 pm GMT)

What can we expect from DXY today?

Unemployment claims unexpectedly jumped from 226,000 in the previous week to 240,000 in the period ending 24th of May, exceeding market forecasts of 230,000. This result suggests that the U.S. labour market may have started to soften amidst the heightened economic uncertainty due to trade tariff escalation, while increasing continuing claims underscore the slowing hiring pace for firms. The latest estimate shows claims remaining somewhat elevated, with an expected reading of 236,000. Should claims continue to trend higher, it raises concerns surrounding the strength of the labour market while potentially intensifying the overhead pressures for the dollar.

Central Bank Notes:

• The Board of Governors of the Federal Reserve System voted unanimously to maintain the Federal Funds Rate in a target range of 4.25 to 4.50% on 7 May 2025.
• The Committee seeks to achieve maximum employment and inflation at the rate of 2% over the longer run, but uncertainty around the economic outlook has increased further.
• The Committee is attentive to the risks to both sides of its dual mandate and judges that the risks of higher unemployment and higher inflation have risen.
• Although swings in net exports have affected the data, recent indicators suggest that economic activity has continued to expand at a solid pace while the unemployment rate has stabilised at a low level in recent months, and labour market conditions remain solid. However, inflation remains somewhat elevated.
• GDP growth forecasts were revised downward for 2025 (1.7% vs. 2.1% in the December projection) while PCE inflation projections have been adjusted slightly higher for 2025, with core inflation expected to reach 2.5%, partly due to tariff-related pressures.
• In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook and would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of its goals.
• Beginning in April, the Committee will slow the pace of decline of its securities holdings by reducing the monthly redemption cap on Treasury securities from $25B to $5B while maintaining the monthly redemption cap on agency debt and agency mortgage-backed securities at $35B.
• The next meeting is scheduled for 17 to 18 June 2025.

Next 24 Hours Bias

Medium Bearish

Gold (XAU)

Key news events today

Unemployment Claims (12:30 pm GMT)

What can we expect from Gold today?

Unemployment claims unexpectedly jumped from 226,000 in the previous week to 240,000 in the period ending 24th of May, exceeding market forecasts of 230,000. This result suggests that the U.S. labour market may have started to soften amidst the heightened economic uncertainty due to trade tariff escalation, while increasing continuing claims underscore the slowing hiring pace for firms. The latest estimate shows claims remaining somewhat elevated, with an expected reading of 236,000. Should claims continue to trend higher, it raises concerns surrounding the strength of the labour market while potentially intensifying the overhead pressures for the dollar – a result that should function as a bullish catalyst for gold.

Next 24 Hours Bias

Weak Bullish

The Australian Dollar (AUD)

Key news events today

Trade Balance (1:30 am GMT)

What can we expect from AUD today?

Australia’s trade surplus in goods narrowed to A$5.4 billion in April, down from a marginally revised A$6.9 billion in the previous month, missing market expectations of A$5.9 billion, as exports fell while imports rose. Exports dropped 2.4% from the previous month to A$44.1 billion, reversing a downwardly revised 7.2% increase in March as shipments to the U.S. were dampened by Trump’s tariffs. Meanwhile, imports grew by 1.1% to A$38.7 billion, rebounding from an upwardly revised 2.4% decline in the previous month. Despite a narrowing trade surplus, demand for the Aussie remains robust due to broad weakness in the greenback.

Central Bank Notes:

• The RBA reduced its cash rate by 25 basis points (bps), bringing it down to 3.85% on 20 May, following a pause on 1 April.
• Inflation has fallen substantially since the peak in 2022, as higher interest rates have been working to bring aggregate demand and supply closer towards balance.
• Data on inflation for the March quarter provided further evidence that inflation continues to ease. At 2.9%, annual trimmed mean inflation was below 3% for the first time since 2021 and headline inflation, at 2.4%, remained within the target band of 2 to 3%.
• While recent tariff announcements have resulted in a rebound in financial market prices, there is still considerable uncertainty about the final scope of the tariffs and policy responses in other countries, contributing to a weaker outlook for growth, employment and inflation in Australia.
• Private domestic demand appears to have been recovering, real household incomes have picked up and there has been an easing in some measures of financial stress. However, businesses in some sectors continue to report that weakness in demand makes it difficult to pass on cost increases to final prices.
• At the same time, a range of indicators suggests that labour market conditions remain tight. Employment is continuing to grow, measures of labour underutilisation are at relatively low rates and business surveys and liaison suggest that availability of labour is still a constraint for a range of employers.
• Looking through quarterly volatility, wage growth has softened over the past year or so but productivity growth has not picked up and growth in unit labour costs remains high.
• There are uncertainties about the outlook for domestic economic activity and inflation stemming from both domestic and international developments. While the central projection is for growth in household consumption to continue to increase as real incomes rise, recent data suggest that the pick-up will be a little slower than was expected three months ago.
• There is a risk that any pick-up in consumption is even slower than this, resulting in continued subdued growth in aggregate demand and a sharper deterioration in the labour market than currently expected.
• With inflation expected to remain around target, the Board therefore judged that an easing in monetary policy at this meeting was appropriate, assessing that this move would make monetary policy somewhat less restrictive.
• The Board will be attentive to the data and the evolving assessment of risks to guide its decisions. In doing so, it will pay close attention to developments in the global economy and financial markets, trends in domestic demand, and the outlook for inflation and the labour market.
• The Board is focused on its mandate to deliver price stability and full employment and will do what it considers necessary to achieve that outcome.
• The next meeting is on 8 July 2025.

Next 24 Hours Bias

Medium Bullish

The Kiwi Dollar (NZD)

Key news events today

No major news events.

What can we expect from NZD today?

The abysmal ADP employment report triggered a sharp sell-off in the greenback to provide a strong boost for the Kiwi as it rose 0.7% on Wednesday. Strong tailwinds remain in place as this currency pair extended the upward momentum on Thursday, climbing towards 0.6050 as Asian markets came online.

Central Bank Notes:

• The Monetary Policy Committee (MPC) agreed to reduce the Official Cash Rate (OCR) by 25 basis points bringing it down to 3.25% on 28 May, marking the sixth consecutive rate cut.
• The Committee stated that annual consumer price index inflation increased to 2.5% in the first quarter of 2025 while inflation expectations across firms and households have also risen.
• However, core inflation is declining and there is spare productive capacity in the economy; these conditions are consistent with inflation returning to the mid-point of the 1 to 3% target band over the medium term.
• The New Zealand economy is recovering after a period of contraction as high commodity prices and lower interest rates are supporting overall economic activity but recent developments in the international economy are expected to reduce global economic growth.
• Both tariffs and increased policy uncertainty overseas are expected to moderate New Zealand’s economic recovery and reduce medium-term inflation pressures. However, there remains considerable uncertainty around these judgements.
• Labour market conditions remain weak while the unemployment rate is expected to peak this quarter at 5.2%.
• Inflation is within the target band, and the Committee is well placed to respond to domestic and international developments to maintain price stability over the medium term.
• The next meeting is on 9 July 2025.

Next 24 Hours Bias

Medium Bullish

The Japanese Yen (JPY)

Key news events today

No major news events.

What can we expect from JPY today?

The ongoing global trade uncertainty provides fuel for safe-haven assets such as the yen, with USD/JPY tumbling 1% on Wednesday. This currency pair fell as low as 142.60 overnight before stabilising around 143 at the beginning of Thursday’s Asia session.

Central Bank Notes:

• The Policy Board of the Bank of Japan decided on 1 May, by a unanimous vote, to set the following guidelines for money market operations for the inter-meeting period:
  1. The Bank will encourage the uncollateralized overnight call rate to remain at around 0.5%.
  2. The Bank will continue its plan to reduce the amount of its monthly outright purchases of JGBs, aiming to reach about 3 trillion yen by January-March 2026.
• Japan’s economic growth is likely to moderate, as trade and other policies in each jurisdiction lead to a slowdown in overseas economies and to a decline in domestic corporate profits and other factors, although factors such as accommodative financial conditions are expected to provide support. Thereafter, Japan’s economic growth rate is likely to rise, with overseas economies returning to a moderate growth path.
• The year-on-year rate of increase in the consumer price index (CPI, all items less fresh food) is likely to be in the range of 2.0-2.5% for fiscal 2025, in the range of 1.5-2.0% for fiscal 2026, and at around 2% for fiscal 2027. The effects of the past rise in import prices and of the recent rise in food prices such as rice prices – these factors have pushed up the inflation rate so far – are expected to wane.
• Meanwhile, underlying CPI inflation is likely to be sluggish, mainly due to the deceleration in the economy. Thereafter, however, underlying CPI inflation is expected to increase gradually.
• Regarding the employment and income situation, despite the deceleration in the economy, labour market conditions are likely to remain tight, as it will become more difficult for labour supply of women and seniors to increase.
• Comparing the projections through fiscal 2026 with those presented in the previous Outlook for Economic Activity and Prices (Outlook Report), the projected real GDP growth rate for fiscal 2024 is somewhat higher, but the projected growth rates for fiscal 2025 and 2026 are lower due to the effects of trade and other policies in each jurisdiction.
• There are various risks to the outlook. In particular, it is extremely uncertain how trade and other policies in each jurisdiction will evolve and how overseas economic activity and prices will react to them. It is therefore necessary to pay due attention to the impact of these developments on financial and foreign exchange markets and on Japan’s economic activity and prices.
• With regard to the risk balance, risks to economic activity are skewed to the downside for fiscal 2025 and 2026. Risks to prices are also skewed to the downside for fiscal 2025 and 2026.
• The next meeting is scheduled for 17 June 2025.

Next 24 Hours Bias

Medium Bearish

The Euro (EUR)

Key news events today

ECB Interest Rate Decision (12:15 pm GMT)

ECB Press Conference (12:45 pm GMT)

What can we expect from EUR today?

The European Central Bank (ECB) is widely expected to move ahead with a seventh consecutive rate cut, making another 25 basis point (bps) reduction in the three key interest rates – this would bring the main refinancing rate down to 2.15%. ECB President Christine Lagarde’s press conference commences half an hour after the monetary policy statement is released; this event will be closely scrutinised, especially given the current environment of tariff escalation and uncertainty between the U.S. and its major trading partners, including the European Union. Despite a potential rate cut, demand for the Euro could remain robust as investors appear to have lost confidence in the U.S. dollar.

Central Bank Notes:

• The Governing Council reduced the three key ECB interest rates by 25 basis points on 17 April to mark the sixth successive rate cut.
• Accordingly, the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will be decreased to 2.40%, 2.65% and 2.25% respectively.
• The disinflation process is well on track with both headline and core inflation declining in March while services inflation has also eased markedly over recent months. Most measures of underlying inflation suggest that inflation will settle at around the Governing Council’s 2% medium-term target on a sustained basis.
• Wage growth is moderating, and profits are partially buffering the impact of still elevated wage growth on inflation. The euro area economy has been building up some resilience against global shocks, but the outlook for growth has deteriorated owing to rising trade tensions.
• Increased uncertainty is likely to reduce confidence among households and firms, and the adverse and volatile market response to the trade tensions is likely to have a tightening impact on financing conditions. These factors may further weigh on the economic outlook for the euro area.
• The asset purchase programme (APP) and pandemic emergency purchase programme (PEPP) portfolios are declining at a measured and predictable pace, as the Eurosystem no longer reinvests the principal payments from maturing securities.
• The Governing Council is determined to ensure that inflation stabilises sustainably at its 2% medium-term target. Especially in current conditions of exceptional uncertainty, it will follow a data-dependent and meeting-by-meeting approach to determining the appropriate monetary policy stance.
• In particular, the Council’s interest rate decisions will be based on its assessment of the inflation outlook in light of the incoming economic and financial data, the dynamics of underlying inflation and the strength of monetary policy transmission.
• The next meeting is on 5 June 2025.

Next 24 Hours Bias

Medium Bullish

The Swiss Franc (CHF)

Key news events today

No major news events.

What can we expect from CHF today?

Demand for the Swiss franc continues to remain robust due to ongoing global trade uncertainty, causing USD/CHF to fall 0.8% on Wednesday. This currency pair fell as low as 0.8186 overnight before stabilising around 0.8200 as Asian markets came online on Thursday.

Central Bank Notes:

• The SNB eased monetary policy by lowering its key policy rate by 25 basis points, from 0.50% to 0.25% on 20 March 2025, marking the fifth consecutive reduction.
• Underlying inflationary pressure has decreased further this quarter.
• Inflation in the period since the last monetary policy assessment has again been lower than expected, decreasing from 0.7% in November to 0.3% in February, primarily due to lower electricity prices.
• In the shorter term, the new conditional inflation forecast is slightly higher than December: 0.3% for Q2 2025, 0.4% for 2025 overall, and 0.8% for 2026 and 2027, based on the assumption that the SNB policy rate remains at 0.25% over the entire forecast horizon.
• GDP growth in Switzerland remains moderate, with the services sector continuing to show slightly stronger growth, while manufacturing faces challenges.
• The SNB anticipates GDP growth of around 1.0% to 1.5% for 2025.
• The SNB will continue to monitor the situation closely and will adjust its monetary policy if necessary to ensure inflation remains within the range consistent with price stability over the medium term.
• The next meeting is on 19 June 2025.

Next 24 Hours Bias

Weak Bearish

The Pound (GBP)

Key news events today

S&P Global Construction PMI (8:30 am GMT)

What can we expect from GBP today?

Construction activity in the U.K. fell into contraction at the beginning of this year and output continued to deteriorate till April. Although the construction PMI reading edged higher to 46.4, it signalled a fourth straight month of contraction as business uncertainty delayed new projects and caused further drops in new orders and staffing levels in April. May’s estimate of 47.4 points to another month of slight improvement in the PMI reading but it would still mark further deterioration for this sector. Despite a weakening construction sector, demand for the pound is likely to remain robust due to the broad weakness in the U.S. dollar.

Central Bank Notes:

• The Bank of England’s Monetary Policy Committee (MPC) voted by a majority of 5 to 4 to reduce the Bank Rate by 25 basis points (bps), bringing it down to 4.25% on 8 May 2025.
• Two members preferred a larger cut of 50 bps, while two opted to hold rates steady at 4.5%.
• The MPC also voted unanimously to reduce the stock of UK government bond purchases held for monetary policy purposes and financed by the issuance of central bank reserves, by £100B over the next 12 months to a total of £558B, starting in October 2024. On 18 December 2024, the stock of UK government bonds held for monetary policy purposes was £655B.
• Progress on disinflation in domestic price and wage pressures is generally continuing. Twelve-month CPI inflation fell to 2.6% in March from 2.8% in February, close to expectations in the February Report.
• Although indicators of pay growth remain elevated, a significant slowing is still expected over the rest of the year.
• Wholesale energy prices have fallen back since the February Report. Previous increases in energy prices are still likely to drive up CPI inflation from April onwards, to 3.5% for 2025 Q3, but is expected to fall back thereafter.
• Underlying UK GDP growth is judged to have slowed since the middle of 2024 and has been much less volatile than growth in headline GDP – growth was expected to have been around zero in 2025 Q1, well below Bank staff’s projection for headline growth of 0.6%.
• Underlying employment growth has also softened recently and the labour market has continued to loosen. The ratio of vacancies to unemployment has fallen further and is now judged to be below its equilibrium level – the impact of higher Employers’ National Insurance Contributions (NICs) on employment appears to have been fairly small to date.
• Based on the Committee’s evolving view of the medium-term outlook for inflation, a gradual and careful approach to the further withdrawal of monetary policy restraint is appropriate and it will continue to monitor closely the risks of inflation persistence and what the evolving evidence may reveal about the balance between aggregate supply and demand in the economy.
• Monetary policy will need to continue to remain restrictive for sufficiently long until the risks to inflation returning sustainably to the 2% target in the medium term have dissipated further and the Committee will decide the appropriate degree of monetary policy restrictiveness at each meeting.
• The next meeting is on 19 June 2025.

Next 24 Hours Bias

Medium Bullish

The Canadian Dollar (CAD)

Key news events today

Ivey PMI (2:00 pm GMT)

What can we expect from CAD today?

As widely expected, the Bank of Canada (BoC) kept its overnight rate steady at 2.75% for the second successive board meeting. The Governing Council observed that the ongoing fluctuations in U.S. tariffs, along with the unpredictable results of bilateral trade talks and tariff rates that remain significantly higher than at the start of 2025, have created downside risks to economic growth and pushed up inflation expectations. The heightened uncertainty is largely due to the lack of a clear U.S. tariff policy and ongoing threats of new trade measures. As a result, the Governing Council emphasised risks such as the potential impact of higher U.S. tariffs on demand for Canadian exports.

Later today, the Ivey PMI is anticipated to register a second successive month of contraction for domestic economic activity due to the ongoing tariff uncertainty with its neighbour to the south. Despite PMI activity deteriorating further, the Loonie has remained resilient due to higher oil prices in recent weeks, along with broad weakness in the greenback.

Central Bank Notes:

• The Bank of Canada maintained its target for the overnight rate at 2.75%, with the Bank Rate at 3% and the deposit rate at 2.70% on 4th June – marking the second consecutive meeting where rates were kept on hold.
• The Governing Council noted that the ongoing increase and decrease of various U.S. tariffs, coupled with highly uncertain outcomes of bilateral trade negotiations and tariff rates remaining well above their levels at the beginning of 2025, placed downside risks on growth and lifted inflation expectations, warranting caution regarding the continuation of monetary easing.
• The higher uncertainty stemmed from the absence of a clear tariff path by the U.S. and persistent threats of new trade actions, which prompted the BoC Governing Council to highlight risks such as the extent to which higher US tariffs reduce demand for Canadian exports.
• Canada’s economic growth in the first quarter came in at 2.2%, slightly stronger than the original forecast, while the composition of GDP growth was largely as expected. Consumption slowed from its very strong fourth-quarter pace, but continued to grow despite a large drop in consumer confidence.
• Housing activity was down, driven by a sharp contraction in resales, while government spending also declined. The economy is expected to be considerably weaker in the second quarter, with the strength in exports and inventories reversing and final domestic demand remaining subdued.
• The labour market has weakened, particularly in trade-intensive sectors, and unemployment has risen to 6.9% while CPI inflation eased to 1.7% in April, as the elimination of the federal consumer carbon tax reduced inflation by 0.6%.
• The Bank’s preferred measures of core inflation, as well as other measures of underlying inflation, moved up, while recent surveys indicate that households continue to expect that tariffs will raise prices and many businesses say they intend to pass on the costs of higher tariffs.
• The Governing Council will continue to assess the timing and strength of both the downward pressures on inflation from a weaker economy and the upward pressures on inflation from higher costs while proceeding carefully, with particular attention to the risks and uncertainties facing the Canadian economy.
• The Governing Council will focus on ensuring that Canadians continue to have confidence in price stability through this period of global upheaval by supporting economic growth while ensuring that inflation remains well-controlled.
• The next meeting is on 30 July 2025.

Next 24 Hours Bias

Medium Bearish

Oil

Key news events today

No major news events.

What can we expect from Oil today?

In a similar vein to the API stockpiles, the EIA crude oil inventories declined for the second successive week as 4.3 million barrels of crude were removed from storage, significantly higher than the forecast of a 2.9 million draw. However, the downward trend in U.S. inventories could not keep oil prices supported as Saudi Arabia announced plans to cut its July prices for Asian crude buyers, marking the lowest prices in four years. The price cuts by Saudi Arabia, a key oil producer within OPEC+, follows the organisation’s move over the weekend to increase output by 411,000 barrels per day for July. After coming within a whisker of the $64 mark on Wednesday, WTI oil initially tumbled nearly 2% before settling higher at around $62.70 per barrel by the end of the U.S. trading hours.

Next 24 Hours Bias

Medium Bearish

The post IC Markets Europe Fundamental Forecast | 5 June 2025 first appeared on IC Markets | Official Blog.

The lack of changes in the macro picture and the waiting for the key US data has caused the bullish momentum to wane recently. Growth
expectations remain positive and that should keep supporting bitcoin in the bigger picture.

The
only risk I see ahead for risk assets is a more hawkish repricing in
interest rate expectations if inflation worries increase. This
repricing might trigger a bigger pullback in bitcoin and the stock
market in the short-term, although the uptrend should remain intact.

The economic data is now back in focus, especially on the inflation side. We have three key events in the next couple of weeks with the NFP report tomorrow, the US CPI next week and the FOMC decision the week after.

On the 4 hour chart, we can see that bitcoin broke below the key trendline, and after a retest, continued lower towards the 102,127 level. From a risk management perspective, that level would offer a nice risk to reward setup for the buyers to position for new all-time highs. For now, we are consolidating below the newly created resistance aroudn the 106,800 level.

On the 1 hour chart, we can see that we are compressing between two trendlines. The buyers will likely continue to lean on the upward trendline to keep pushing into new highs and increase the bullish bets on the break above the downward trendline. The sellers, on the other hand, will continue to lean on the downward trendline and increase the bearish bets on the break of the upward trendline.

This article was written by Giuseppe Dellamotta at www.forexlive.com.