The Dollar Index rose slightly as 2025 rate cut expectations dropped to 35 basis points. EUR/USD fell on Lagarde's dovish remarks, while GBP/USD declined due to BoE rate cut votes and weak Q3 GDP. The yen weakened as mixed data and BoJ caution on rate hikes outweighed higher Tokyo inflation.
Gold traded steadily amid light data and geopolitical calm, pressured by the Fed's hawkish stance and limited 2025 rate cut outlook. Silver struggled due to China's economic slowdown, solar sector overcapacity, and yuan devaluation risks.
Fixed Income: Last week, 2-year U.S. Treasury yields remained steady at 4.32%, while 10-year yields increased slightly to 4.58%.
US initial jobless claims fell by 1,000 to 219,000 in mid-December, below expectations of 224,000, signaling a tight labor market. However, outstanding unemployment claims rose to 1.91 million, the highest in three years, indicating longer job search periods. The four-week moving average increased slightly to 226,000, with notable state-level increases in New Jersey and Tennessee.
The British economy stagnated in Q3 2024, with GDP growth revised to 0% from an initial 0.1%. Services showed no growth, while production fell 0.4%, driven by declines in energy supply. Construction grew by 0.7%, and business investment rose by 1.9%, but lower government spending and trade revisions contributed to overall weakness.
US durable goods orders fell 1.1% in November to $285.1 billion, worse than the expected 0.4% drop. Transportation equipment led the decline, down 2.9%, while non-defense capital goods excluding aircraft, a business investment measure, rose 0.7%, the largest gain since August 2023.
US new home sales rose 5.9% in November to an annual rate of 664,000, beating expectations. Gains were led by the South and Midwest, while sales fell in the West and Northeast. The median home price stood at $402,600, with an inventory equivalent to 8.9 months of supply.
The Dollar Index edged higher, supported by lowered expectations for 2025 rate cuts and US policy shifts under Trump. EUR/USD weakened after Lagarde’s dovish comments on service inflation. GBP/USD declined due to BoE rate cut votes and weak Q3 GDP. The yen fell on mixed BoJ signals, despite higher Tokyo inflation. USD/CAD rose as Canada’s GDP revision fueled speculation of further rate cuts. The yuan weakened following a large liquidity withdrawal by the People's Bank of China amid a shift to a “moderately loose” monetary policy.
Gold traded steadily, pressured by the Fed's hawkish stance and limited 2025 rate cut expectations. Silver struggled due to China’s economic slowdown, solar sector issues, and yuan devaluation risks.
US stocks rebounded this week, with the Nasdaq up 2%, the S&P 500 gaining 1.5%, and the Dow Jones rising 1.1%. Apple and Nvidia led the rally, while Meta and Microsoft lagged with a 1% decline.
Dollar Slips on Tariff Fears and Fiscal Woes (26 - 30 May, 2025)The dollar index held near 99.5 on Friday, its lowest in over two weeks, as Trump’s proposed 50% tariffs on EU goods and widening U.S. fiscal concerns pressured sentiment. The euro touched $1.137 before easing to $1.13, set for a weekly gain, supported by solid German data but capped by weak PMI and ECB rate cut bets. The yen rose to 143.6, gaining over 1% this week after core inflation hit a two-year high at 3.5%. The pound climbed above $1.347 on strong UK retail sales, improved confidence, and falling energy prices, though inflation at 3.5% kept BoE cut expectations in play.
Detail Euro Rebounds, Gold Holds Ground (05.23.2025)EUR/USD rebounded near 1.1330 as Treasury yields fell and traders awaited Eurozone GDP data.
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Memorial Day (26-27 May, 2025)Trading conditions for certain instruments will be changed due to the Memorial Day Holiday on 26 and 27th May, 2025.
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