Gold hovered near $3,250, on track for its worst week in two months as safe-haven demand eased. Trump signaled hopes for a trade deal with China, India, Japan, and South Korea. The euro stayed above $1.13 after April inflation data beat forecasts, reinforcing ECB rate cut bets.
Gold fell toward $3,250, silver dropped 3% to $32, both pressured by easing trade tensions and weak data. China’s factory PMI hit a 16-month low. Brent crude slid 1.4% to $61.29, its worst week since March, as OPEC+ output risks and geopolitics weighed.
U.S. 10-year Treasury yields ended the week slightly higher, closing around the 4.30% level. Although 2-year yields tested as low as 3.55%, they managed to finish the week at 3.82%. Meanwhile, German 10-year bond yields rose to around 2.53%, while Japanese 10-year yields declined to the 1.24% range.
China’s NBS PMI fell to 49.0 from March’s 50.5, missing the 49.8 forecast and marking the first contraction since January. Output and new orders declined, while export orders sank to an 11-month low (44.7). Employment and purchasing activity weakened, and both input and selling prices saw their sharpest drops in seven months. Business confidence hit a seven-month low.
Germany’s economy grew 0.2% QoQ in Q1 2025, recovering from a 0.2% decline in Q4, matching expectations. Annual growth remained negative at -0.2%, its seventh consecutive contraction. The rebound was aided by stable government formation and easing inflation, though tariff risks remain a concern.
Inflation eased to 2.1%, slightly above forecasts. Energy prices dropped 5.4%, food inflation softened to 2.8%, while services inflation rose to 3.9%. Core inflation increased to 2.9% from 2.6%. Monthly CPI rose 0.4%.
Private payrolls rose by 62K, well below 115K forecasts and March’s 147K. Services gained modestly (+34K), but education and IT shed jobs. Goods-producing jobs rose by 26K, led by construction (+16K). ADP noted hiring caution amid policy and demand uncertainty.
The U.S. economy contracted 0.3% QoQ, below expectations for +0.3% and a sharp reversal from 2.4% in Q4. Imports surged 41.3% ahead of tariffs. Consumer spending slowed to 1.8%. Federal spending fell 5.1%, while fixed investment rose 7.8%.
The Bank of Japan held rates at 0.5%, citing trade uncertainty. It cut its FY25 GDP forecast to 0.5% and sees core inflation at 2.2%. Further rate hikes depend on data and trade stability. Talks with the U.S. remain a key variable.
Initial claims rose to 241K, the highest since February, above the 224K forecast. Continuing claims rose to 1.916M, the most since 2021. Claims from DOGE-related layoffs remain delayed due to severance packages.
Revised to 50.2, signaling marginal expansion. Output fell for a second month, domestic orders rose, and exports dropped sharply. Input cost inflation eased, but output prices jumped. Business sentiment fell to a 10-month low.
Declined to 48.7. Output and hiring worsened; new orders fell but at a slower rate. Export demand dropped further. Input prices surged to 69.8. Firms reported cost pressures and volatile demand due to tariffs.
Inflation held at 2.2%, above the 2.1% forecasts. Core inflation rose to 2.7%. Energy prices dropped, but services and food costs rose. Monthly CPI rose 0.6%.
Wages rose 0.2% MoM to $36.06, slightly below forecast. Nonsupervisory wages increased 0.3% to $31.06. Annual wage growth held at 3.8%.
The U.S. added 177K jobs, topping the 130K forecast. Healthcare (+51K), transport (+29K), and finance (+14K) led gains. Federal employment fell by 9K.
Held steady at 4.2%. Labor force participation ticked up to 62.6%, and the U-6 rate edged down to 7.8%.
The dollar hovered near 100 after solid jobs data. Euro remained above 1.13, supported by stronger inflation. The Yen slipped toward 145 as safe-haven demand faded and the BoJ downgraded forecasts while holding rates.
Gold traded near $3,250, heading for its steepest weekly loss in two months. Sentiment weakened as China hinted at trade talks with the U.S., and Trump expressed optimism on deals with multiple countries. Silver dropped over 1% to $32 on soft industrial demand and weaker China PMI. Brent crude fell 1.4% to $61.29, posting its worst week since March amid OPEC+ output uncertainty.
U.S. stocks rallied. The Nasdaq rose 3.38%, the S&P 500 gained 2.9%, and the Dow added 3%. Optimism over trade and strong earnings offset weak GDP. Microsoft surged 12%, Meta 9%, while Apple and Google were flat.
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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