Articles

• Prior -8

This is a very volatile data set and not a market moving release. That’s the lowest reading since March as UK retail sales
balance pulls back in May. The expectations balance for June is even worse, falling to -37 and that is down from -33 previously, which would be the lowest since February 2024.

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

• Economic confidence 94.8
• Prior 93.6; revised to 93.8
• Services confidence 1.5
• Prior 1.4; revised to 1.6
• Industrial confidence -10.3
• Prior -11.2; revised to -11.0

It’s a slight improvement in the euro area economic sentiment but the estimate continues to range thereabouts since the turn of the year. With Trump’s latest tariffs threat, there’s still much uncertainty and that won’t help with the outlook heading into the second half of 2025 at least.

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

• Hope that by the beginning of July, we will have a result from discussions with the US
• Need to diversify; important not to depend on single trading partner

As a reminder, Switzerland was slapped with 31% tariffs from the initial announcement in April as they are being treated separately from the EU. However, now the tables have turned a little with Trump threatening the latter with 50% tariffs upon the same deadline in July. Tick tock, tick tock. Six more weeks to go.

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

Two sources told Reuters that Japan will consider trimming issuance of super-long bonds in response to the recent sharp rise in yields. The report weighed on yields and the Japanese Yen as the market started to expect government intervention on the matter.

BoJ officials recently didn’t provide anything to calm the surge in yields, but this news was enough to sooth things for the time being. The decision is expected in June but the total size of bond issuance will remain unchanged. They will just change the composition.

Here you can find the full report

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

The very soft French inflation figures released this morning are weighing on the euro as the market might be starting to look for a stronger divergence between the Fed and the ECB.

The ECB policymakers also continue to blame the stronger euro for the downside risks for inflation. This might eventually force them to cut more than expected while the Fed keeps rates higher for longer due to upside inflation risks as seen already in the latest US Flash PMIs.

On the 4 hour chart, we can see that the price is now approaching a key upward trendline that’s been defining the bullish momentum on this timeframe. The buyers are likely to lean on the trendline with a defined risk below it to position for another rally into new highs. The sellers, on the other hand, will look for a break lower to increase the bearish bets into the 1.1260 support zone next.

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

• I see scope for an interest rate reduction in June.
• Balance of risks for inflation is to the downside due to trade friction with the US and stronger euro.
• Borrowing costs are currently at the upper end of the neutral range.
• The risks that inflation will be below the goal in the future have increased.

Today, the French inflation data missed expectations by a big margin which weighed on the euro. We might see the divergence between the Fed and the ECB getting stronger in the next months.

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

The association now sees the German economy contracting by 0.3% this year, compared with their previous forecast of a 0.5% decline. Their forecast for overall exports is for a decline of 2.5% through the course of 2025. Meanwhile, they see German inflation holding at 2.1% this year and that’s just marginally lower from the 2.2% estimate in 2024.

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

• Eurostoxx flat
• Germany DAX +0.2%
• France CAC 40 -0.2%
• UK FTSE +0.8%
• Spain IBEX -0.1%
• Italy FTSE MIB flat

UK stocks have some catching up to do after the holiday break yesterday. And the same will be the case for Wall Street later, with S&P 500 futures seen up 1.2% currently. Looking to the days ahead, month-end flows will factor in alongside Nvidia earnings after the close tomorrow for tech shares especially.

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

• Prior +0.8%
• HICP +0.6% vs +0.9% y/y expected
• Prior +0.9%

That’s a softer set of readings than expected, with services inflation in particular seen easing. That dropped from 2.4% in April to 2.1% in May and that will feed into the core estimate further. Although, core annual inflation was already on the lower side for France at 1.3% last month.

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

• Prior CHF 6.35 billion; revised to CHF 6.29 billion

The Swiss trade surplus was little changed in April with exports falling from CHF 30.3 billion in March to CHF 25.4 billion in April. Meanwhile, imports were seen down from CHF 24.0 billion in March to CHF 19.1 billion in April.

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

• Prior -20.6; revised to -20.8

That’s a slight improvement in consumer morale going into next month but there’s still some reservations. There continues to be a decline in the willingness to spend among households alongside an increase in the willingness to save. The better headline reading is largely helped by an improvement in economic expectations instead.

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

Adam Button, before setting off for the FMAS:25 was able to stop in the studio of BNN Bloomberg and give his view on the CAD and more.

To watch the segment click on the link: A bullish case for the Canadian dollar – BNN Bloomberg

This article was written by Greg Michalowski at www.forexlive.com.