Articles

• Official data so far reveals only modest impact of tariffs on prices, activity, labor market.
• If the Fed cuts in September and tariff effect shows up later, could pause rate cuts.
• Inflation boost is likely coming, but actual inflation indicates renewed progress towards 2% target.
• More time is needed to determine if effects of trade war are delayed, or if it will be smaller than thought.
• Emphasis must be on actual inflation, real economic data without committing to an easing policy path in case tariff effects delayed.

There’s nothing new here from Kashkari. He’s been on this camp for a while.

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

The post Ex-Dividend 30/6/2025 first appeared on IC Markets | Official Blog.

• This is a de-escalation.
• Agreement with China will allow magnets to flow to everyone who received them before on a regular basis.

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

Headlines:

• Major currencies not up to much to start the session
• China says London talks served to further confirm details on framework
• China reportedly seeks to tie French cognac deal with EV tariff talks
• ECB’s Knot: The ECB may well need to keep rates on hold for some time
• ECB’s de Guindos says on track to meet 2% inflation target
• PBoC: Will enhance monetary policy adjustment strength
• US Core PCE is expected at 2.6% Y/Y but it won’t change anything for the Fed
• Eurozone June final consumer confidence -15.3 vs -15.3 prelim
• France June preliminary CPI +0.9% vs +0.7% y/y expected
• Spain June preliminary CPI +2.2% vs +2.0% y/y expected
• Italy June consumer confidence 96.1 vs 97.0 expected

Markets:

• EUR leads, JPY lags on the day
• European equities higher; S&P 500 futures up 0.4%
• US 10-year yields up 2.2 bps to 4.275%
• Gold down 1.3% to $3,283.68
• WTI crude up 0.4% to $65.48
• Bitcoin down 0.8% to $106,998

It was another quiet session with little in terms of any major movements in the FX space. The dollar is keeping steadier on the day, with light changes all around but in the bigger picture remains in a more vulnerable spot following the losses yesterday.

It’s a build up now towards the US PCE price index release and month-end trading.

EUR/USD kept steady just above 1.1700 with USD/JPY also just a touch higher around 144.40-60 levels for the most part. Meanwhile, USD/CHF is testing waters under 0.6800 while AUD/USD is still trying to secure a breakout above daily resistance around 0.6537-50.

This comes amid a more positive backdrop in equities as investors look towards fresh record highs in Wall Street later in the day. European indices opened higher and held that momentum, hoping to trim down some of the losses for the month. US futures remain buoyed, with S&P 500 futures now up 0.4% close to the highs.

In other markets, gold is knocked down in a push below $3,300 and is now down on the month as precious metals slide back today.

The market focus is back on trade developments and the economy/central banks, though month-end flows will distract from that a little today and on Monday. All that before a fresh start in July as we move on from the last two weeks of geopolitical tensions.

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

In an hour, we’ll get the latest US PCE price index where professional forecasters expect the Core PCE Y/Y to tick higher to 2.6% and the M/M figure to come in at 0.15% which could see it being rounded either to 0.1% or 0.2% depending on the last decimal.

The data won’t change anything for the Fed or the market though because it’s kinda “old news”. Forecasters (and the Fed) can reliably project the PCE data from the CPI and PPI reports. This is why the CPI is much more market-moving.

The next NFP and CPI reports will be much more important. Soft or hot figures will influence the market pricing and therefore move the markets.

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

French cognac makers are reported to have reached a tentative deal with China to sort out prices but Beijing is said to want to only finalise that if there is progress made on EU tariffs over Chinese EVs. For some context, China imposed temporary duties on cognac as part of an anti-dumping investigation into European brandy. This was done in retaliation to the EU’s move of imposing added tariffs on imports of Chinese-made EVs.

If no agreement is struck by the 5 July deadline, China could permanently increase customs duties of up to 39% on European cognac imports. It’s a major blow for French cognac makers, which have been suffering already, with China being the world’s most valuable market for the spirit. Here’s an indication of the struggle since last year:

The sources report that there is now a provisional agreement, which will be “much better” than the existing duties. However, they are waiting on the sign off by Chinese authorities who are believed to want to link “finalising the cognac deal to movement on the electric vehicle dossier”.

It’s all a game of tradeoff it would seem now.

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

• Will keep liquidity ample.
• To guide financial institutions to step up credit supply.
• Will enhance central bank policy interest rate guidance.
• To give full play to the role of the self-discipline mechanism for market interest rate pricing.
• To enhance interest rate policy implementation.
• To guide social financing cost to lower.
• To pay attention to the changes in long-term yields in bond market.
• To prevent forex rate overshooting risk.
• To keep yuan exchange rate basically stable at reasonable, balanced level.
• To intensify efforts to revitalise existing commercial housing and land.

We have heard this stuff many times before, but they continue to have positive real rates in a deflationary environment. They should cut more aggressively and faster in my opinion.

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

Crude oil erased all the war
gains following the end of the Israel-Iran conflict as the geopolitical risk premium vanished. The focus now switched back to global growth.

The market was already supported by
positive growth expectations before the conflict started. In fact, we
have Fed rate cuts ahead, Trump’s “big, beautiful bill” and further
de-escalation in trade war and so on. These are all positive drivers for
demand.

In
the bigger picture, the market might remain rangebound between the 60
and 90 levels, but the path of least resistance should remain to the upside.

On the daily chart, we can see that the buyers are stepping in around the key support zone at 64.00-65.00 to position for a rally back into the 72.00 resistance. The sellers will want to see the price breaking lower to start targeting the 55.00 level next.

On the 1 hour chart, we can see that the bearish momentum waned right at
the support zone. We will likely keep on consolidating here until we get a bullish or bearish catalyst, but this zone should be key for the market.

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

• Economic confidence 94.0 vs 95.1 expected
• Prior 94.8
• Industrial confidence -12.0 vs -9.9 expected
• Prior -10.3; revised to -10.4
• Services confidence 2.9 vs 1.6 expected
• Prior 1.5; revised to 1.8

Euro area economic sentiment worsened slightly in June amid a drop in manufacturing confidence, offsetting the slight improvement in services sector confidence. The overall reading remains relatively subdued since last year, though it hasn’t gotten much worse as the economy has been a bit more resilient than expected – especially in Q4 2024 and Q1 2025.

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

Global Markets:

•  Asian Stock Markets : Nikkei up 1.45%, Shanghai Composite down 0.44%, Hang Seng down 0.24% ASX down 0.12%
• Commodities : Gold at $3307.35 (-1.79%), Silver at $36.38 (-0.49%), Brent Oil at $67.18 (0.59%), WTI Oil at $65.68 (0.33%)
• Rates : US 10-year yield at 4.256, UK 10-year yield at 4.469, Germany 10-year yield at 2.564

News & Data:

• (USD) Final GDP q/q -0.5%  to -0.2% expected
• (USD) Unemployment Claims 236K  to 244K expected

Markets Update:

Asia-Pacific markets traded mixed on Friday, diverging from Wall Street’s overnight gains. Investor sentiment remained cautious after White House spokesperson Karoline Leavitt downplayed the urgency of upcoming tariff deadlines, which have been weighing on markets. The so-called “liberation day” tariffs are scheduled to take effect on July 8 after a 90-day pause, while July 9 marks the deadline for a potential EU agreement to avoid 50% tariffs. Leavitt remarked, “The deadline is not critical. Perhaps it could be extended, but that’s a decision for the president to make.”

Japan’s Nikkei 225 surged 1.38%, topping 40,000 for the first time since January 7, while the Topix gained 1.22%. Tokyo’s core CPI, excluding fresh food and fuel, rose 3.1% in June, slower than May’s 3.6%. In South Korea, the Kospi fell 1.2% and the Kosdaq slipped 1.18%. Hong Kong’s Hang Seng and China’s CSI 300 were flat after industrial profits dropped 9.1% in the first five months of 2025. Australia’s S&P/ASX 200 edged down 0.17% in volatile trade, while India’s Nifty 50 and Sensex were little changed.

Meanwhile, U.S. futures advanced during Asian trading as investors awaited key data. Overnight, the S&P 500 rose 0.8%, approaching its record high, while the Nasdaq gained 0.97% and the Dow climbed 0.94%.

Upcoming Events: 

• 12:30 PM GMT – CAD GDP m/m
• 12:30 PM GMT – USD Core PCE Price Index m/m

The post Friday 27th June 2025: Asia-Pacific Markets Mixed as Tariff Deadlines Loom first appeared on IC Markets | Official Blog.

IC Markets Europe Fundamental Forecast | 27 June 2025

What happened in the Asia session?

The Tokyo Core CPI climbed at an annual rate of 3.1% in June, easing from the 3.6% rise seen in May and below the market forecast of 3.3%. This represents the first deceleration in core inflation since February, although the rate still exceeds the Bank of Japan’s (BoJ) 2% target, keeping expectations for additional rate hikes alive. BoJ Governor Kazuo Ueda recently indicated that further rate increases could be possible if ongoing wage growth continues to fuel consumer spending and allows businesses to pass on higher costs, factors considered essential for stabilising inflation near the 2% objective. Nevertheless, the BoJ’s most recent Summary of Opinions reflected a more cautious outlook, with policymakers emphasising the need to maintain supportive monetary policy in light of persistent global trade challenges and geopolitical risks. This ‘soft’ inflation print could cause demand for the yen to wane slightly, providing a near-term floor for USD/JPY – this currency pair floated around 144.30 by midday in Asia.

What does it mean for the Europe & US sessions?

The Canadian economy likely expanded at a monthly rate of 0.1% in April, the same as in March, based on advance estimates. Sectors such as mining, quarrying, and oil and gas extraction, and finance and insurance, increased while manufacturing decreased. The final estimate now points to GDP output coming in flat, reflecting the ongoing uncertainty in business outlook and confidence.

The Dollar Index (DXY)

Key news events today

PCE Price Index (12:30 pm GMT)

UoM Consumer Sentiment (2:00 pm GMT)

What can we expect from DXY today?

After decelerating over the past couple of months, both headline and core PCE are anticipated to accelerate in May. This reversal in direction is likely attributed to the impact of the universal 10% tariffs placed on imports coming into the United States. Meanwhile, the University of Michigan (UoM) will release its final report on consumer sentiment, which is expected to confirm the improvement in confidence levels. This would mark the first increase in six months, driven by broad-based gains in assessments of current conditions and future expectations. The persistent drag reflects continued concern over downside risks to the economy, particularly stemming from US tariff policies.

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 18 June 2025.
• The Committee seeks to achieve maximum employment and inflation at the rate of 2% over the longer run; uncertainty around the economic outlook has diminished but remains elevated.
• The Committee is attentive to the risks to both sides of its dual mandate and judges that the unemployment rate remains low, labour market conditions remain solid, but inflation is somewhat elevated.
• Although swings in net exports have affected the data, recent indicators suggest that economic activity has continued to expand at a solid pace.
• GDP growth forecasts were revised downward for 2025 (1.4% vs. 1.7% in the March projection) while PCE inflation projections have been adjusted higher for 2025, with core inflation expected to reach 3.1% (vs. 2.8% in the March projection), 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 29 to 30 July 2025.

Next 24 Hours Bias

Medium Bearish

Gold (XAU)

Key news events today

PCE Price Index (12:30 pm GMT)

UoM Consumer Sentiment (2:00 pm GMT)

What can we expect from Gold today?

After decelerating over the past couple of months, both headline and core PCE are anticipated to accelerate in May. This reversal in direction is likely attributed to the impact of the universal 10% tariffs placed on imports coming into the United States. Meanwhile, the University of Michigan (UoM) will release its final report on consumer sentiment, which is expected to confirm the improvement in confidence levels. This would mark the first increase in six months, driven by broad-based gains in assessments of current conditions and future expectations. The persistent drag reflects continued concern over downside risks to the economy, particularly stemming from US tariff policies. However, despite the weaker dollar, gold prices have also edged lower this week due to some easing of geopolitical tensions in the Middle East. This precious metal will notch its second week of decline by the time markets close, falling over 4% over this period.

Next 24 Hours Bias

Weak Bullish

The Australian Dollar (AUD)

Key news events today

No major news events.

What can we expect from AUD today?

The Aussie rebounded off Monday’s lows to surge 3% by Thursday. This currency pair rose above 0.6550 and the upward trajectory will likely continue as the final trading day of the week comes to a close.

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 ongoing broad weakness in the greenback pushed the Kiwi beyond 0.6070 overnight. This currency pair continues to see strong tailwinds, and a push toward the 0.6100 handle cannot be ruled out on Friday.

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

Tokyo Core CPI (11:30 pm GMT 26th June)

What can we expect from JPY today?

The Tokyo Core CPI climbed at an annual rate of 3.1% in June, easing from the 3.6% rise seen in May and below the market forecast of 3.3%. This represents the first deceleration in core inflation since February, although the rate still exceeds the Bank of Japan’s (BoJ) 2% target, keeping expectations for additional rate hikes alive. BoJ Governor Kazuo Ueda recently indicated that further rate increases could be possible if ongoing wage growth continues to fuel consumer spending and allows businesses to pass on higher costs, factors considered essential for stabilising inflation near the 2% objective. Nevertheless, the BoJ’s most recent Summary of Opinions reflected a more cautious outlook, with policymakers emphasising the need to maintain supportive monetary policy in light of persistent global trade challenges and geopolitical risks. This ‘soft’ inflation print could cause demand for the yen to wane slightly, providing a near-term floor for USD/JPY – this currency pair floated around 144.30 by midday in Asia.

Central Bank Notes:

• The Policy Board of the Bank of Japan decided on 17 June, 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. The scheduled amount of monthly long-term government bond purchases will, in principle, be reduced by about ¥400 billion each quarter from January to March 2026, and by about ¥200 billion each quarter from April to June 2026 onward, aiming for a level of around ¥2 trillion in January to March 2027.

• Japan’s economy, while showing some weak movements in certain areas, is recovering moderately. Overseas economies, though partly exhibiting weakness due to the effects of various countries’ trade policies, are generally growing at a moderate pace. Exports and industrial production, while showing some last-minute demand due to the U.S. tariff increases, are basically moving sideways.
• On the price front, looking at the year-on-year rate of change in consumer prices (excluding fresh food), the rate is currently in the mid-3% range, reflecting continued pass-through of wage increases to sales prices, as well as the effects of past rises in import prices and recent increases in food prices such as rice. Expected inflation rates are rising moderately.
• As for consumer prices (excluding fresh food), the effects of past import price increases and recent rises in food prices such as rice, which have pushed up inflation so far, are expected to wane. During this period, the underlying rate of increase in consumer prices may stagnate somewhat due to the slowdown in growth pace.
• Looking ahead, the Japanese economy is expected to slow its growth pace, as overseas economies decelerate due to the effects of various countries’ trade policies, putting downward pressure on Japanese corporate profits, etc., although accommodative financial conditions will provide some support. Thereafter, as overseas economies return to a moderate growth path, Japan’s growth rate is expected to increase.
• As the growth rate rises, labour shortages intensify, and medium- to long-term expected inflation rates rise, inflation is expected to gradually increase. In the latter half of the projection period in the “Outlook Report,” inflation is expected to move at a level generally consistent with the “price stability target”.
• There are various risk factors, but in particular, the outlook for the development of trade policies in various countries and the resulting uncertainty regarding overseas economic and price trends is extremely high. It is necessary to closely monitor the impact on financial and foreign exchange markets, as well as on Japan’s economy and prices.
• The next meeting is scheduled for 31 July 2025.

Next 24 Hours Bias

Medium Bearish

The Euro (EUR)

Key news events today

No major news events.

What can we expect from EUR today?

After showing signs of improvement from April through June, consumer confidence in Germany dropped once again as the GfK Consumer Climate Indicator edged down to -20.3 in July. Not only did the latest reading miss market forecasts of -19.1, but it also marked the first drop in four months as lingering uncertainty over the U.S. government’s unpredictable policies, particularly regarding customs and trade, continues to weigh heavily on consumer sentiment and confidence. Despite the depressed levels of confidence, the Euro surged to an overnight high of 1.1744 before settling around 1.1700, as the sell-off in the U.S. dollar remained sustained.

Central Bank Notes:

• The Governing Council reduced the three key ECB interest rates by 25 basis points on 5 June to mark the seventh 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 2.15%, 2.40% and 2.00% respectively.
• Inflation is currently at around the Governing Council’s 2% medium-term target. In the baseline of the new Eurosystem staff projections, headline inflation is set to average 2.0% in 2025, 1.6% in 2026 and 2.0% in 2027. The downward revisions compared with the March projections, by 0.3 percentage points for both 2025 and 2026, mainly reflect lower assumptions for energy prices and a stronger euro. Staff expect inflation excluding energy and food to average 2.4% in 2025 and 1.9% in 2026 and 2027, broadly unchanged since March.
• Staff see real GDP growth averaging 0.9% in 2025, 1.1% in 2026 and 1.3% in 2027. The unrevised growth projection for 2025 reflects a stronger-than-expected first quarter combined with weaker prospects for the remainder of the year. While the uncertainty surrounding trade policies is expected to weigh on business investment and exports, especially in the short term, rising government investment in defence and infrastructure will increasingly support growth over the medium term.
• Higher real incomes and a robust labour market will allow households to spend more. Together with more favourable financing conditions, this should make the economy more resilient to global shocks. Wage growth is still elevated but continues to moderate visibly, and profits are partially buffering its impact on inflation.
• 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.
• 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, and it is not pre-committing to a particular rate path.
• 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 next meeting is on 24 July 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?

Significant weakness in the greenback has seen USD/CHF tumble nearly 2.3% this week, briefly falling through the threshold of 0.8000 overnight. This currency pair stabilised in early Asia trade to hover around 0.8010. However, a fourth decline in six weeks is all but certain for USD/CHF.

Central Bank Notes:

• The SNB eased monetary policy by lowering its key policy rate by 25 basis points, from 0.25% to 0% on 19 June 2025, marking the sixth consecutive reduction.
• Inflationary pressure has decreased further as compared to the previous quarter, decreasing from 0.3% in February to -0.1% in May, mainly attributable to lower prices in tourism and oil products.
• Compared to March, the new conditional inflation forecast is lower in the short term. In the medium term, there is hardly any change from March, putting the average annual inflation at 0.2% for 2025, 0.5% for 2026 and 0.7% for 2027.
• The global economy continued to grow at a moderate pace in the first quarter of 2025 but the global economic outlook for the coming quarters has deteriorated due to the increase in trade tensions.
• Swiss GDP growth was strong in the first quarter of 2025, but this development was largely because, as in other countries, exports to the U.S. were brought forward.
• Following the strong first quarter, growth is likely to slow again and remain rather subdued over the remainder of the year; the SNB expects GDP growth of 1% to 1.5% for 2025 as a whole, while also anticipating GDP growth of 1% to 1.5% for 2026.
• 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 25 September 2025.

Next 24 Hours Bias

Weak Bearish

The Pound (GBP)

Key news events today

No major news events.

What can we expect from GBP today?

Bank of England (BoE) Governor Andrew Bailey’s speech at the British Chambers of Commerce Global Annual Conference on Thursday focused on the U.K. economy’s outlook amid global uncertainty. He highlighted that the ongoing global risks, like recent energy price swings and unpredictable trade policies, are weighing on domestic businesses and delaying investment decisions, while emphasising the need for a ‘gradual and careful’ approach to monetary policy, given both domestic and international uncertainties. He also mentioned signs of slack in the job market but warned that inflation’s outlook is still uncertain, so policy isn’t on a preset path. Despite the above challenges, Cable surged to an overnight high of 1.3770, primarily due to the intense sell-off in the U.S. dollar.

Central Bank Notes:

• The Bank of England’s Monetary Policy Committee (MPC) voted by a majority of 6 to 3 to maintain the Bank Rate at 4.25% on 19 June 2025, with three members preferring to reduce the Bank Rate by 25 basis points.
• 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 £100 billion over the next 12 months to a total of £558 billion, starting in October 2024. On 19 June 2025, the stock of UK government bonds held for monetary policy purposes was £590 billion.
• There has been substantial disinflation over the past two years, as previous external shocks have receded, and as the restrictive stance of monetary policy has curbed second-round effects and stabilised longer-term inflation expectations.
• Twelve-month CPI inflation increased to 3.4% in May from 2.6% in March, in line with expectations in the May Monetary Policy Report. The rise was largely due to a range of regulated prices and previous increases in energy prices.
• Underlying UK GDP growth appears to have remained weak, and the labour market has continued to loosen, leading to clearer signs that a margin of slack has opened up over time.
• Measures of pay growth have continued to moderate and, as in May, the Committee expects a significant slowing over the rest of the year.
• Global uncertainty remains elevated while energy prices have risen owing to an escalation of the conflict in the Middle East, prompting the Committee to remain sensitive to heightened unpredictability in the economic and geopolitical environment.
• There remain two-sided risks to inflation. Given the outlook and continued disinflation, a gradual and careful approach to the further withdrawal of monetary policy restraint remains appropriate and the Committee will continue to monitor closely the risks of inflation persistence and what the 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 7 August 2025.

Next 24 Hours Bias

Medium Bullish

The Canadian Dollar (CAD)

Key news events today

GDP (12:30 pm GMT)

What can we expect from CAD today?

The Canadian economy likely expanded at a monthly rate of 0.1% in April, the same as in March, based on advance estimates. Sectors such as mining, quarrying, and oil and gas extraction, and finance and insurance, increased while manufacturing decreased. The final estimate now points to GDP output coming in flat, reflecting the ongoing uncertainty in business outlook and confidence.

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

Weak Bullish

Oil

Key news events today

No major news events.

What can we expect from Oil today?

After diving nearly 18% this week, crude oil prices stabilised on Thursday with WTI oil futures edging above the $65 handle. Easing concerns over Middle East supply risks due to the Iran-Israel ceasefire holding intact, coupled with higher fuel demand in the U.S. as the summer driving season ramped up to provide a near-term floor. However, oil prices are set to notch their second week of decline as fundamentals for this commodity continue to remain weak.

Next 24 Hours Bias

Medium Bearish

The post IC Markets Europe Fundamental Forecast | 27 June 2025 first appeared on IC Markets | Official Blog.

• Prior was 96.5
• Business Confidence 87.3 vs 87.0 expected
• Prior 86.6

Business confidence has been steadily picking up since the April’s low, which is something that we’ve been seeing with many other countries. This is of course due to the de-escalation of the trade war.

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