As we enter the first week of June 2025, global financial markets remain sensitive to ongoing macroeconomic developments, central bank policies, and geopolitical shifts. Traders should prepare for a dynamic trading environment as key data releases and policy commentary could set the tone for short- to medium-term market sentiment.

🌐 Global Economic Overview

The global economy is treading a fine line between recovery and stagnation. The U.S. Federal Reserve has paused its rate hike cycle, but market participants remain cautious as inflation, though easing, still hovers above target levels. In Europe, the ECB maintains a hawkish stance amidst persistent price pressures, while the Bank of Japan continues its ultra-loose policy, widening the divergence in global interest rates.

China’s economic recovery is showing signs of fragility as consumer demand lags and manufacturing remains under pressure, despite recent fiscal stimulus. Meanwhile, geopolitical concerns, including ongoing tensions in the Middle East and the Russia-Ukraine conflict, continue to influence commodity prices and risk appetite.

📅 Key Economic Events This Week (3rd – 7th June)

Monday, June 3

• U.S. ISM Manufacturing PMI – Key gauge of U.S. manufacturing activity.
• Germany CPI (YoY) – Inflation data that could influence ECB decisions.

Tuesday, June 4

• Australia RBA Interest Rate Decision – Any change could impact AUD crosses.
• Eurozone Unemployment Rate – Labor market strength in the eurozone.

Wednesday, June 5

• U.S. ISM Services PMI – A critical reading for the largest sector of the U.S. economy.
• Canada Interest Rate Decision (BoC) – Markets watching for a potential rate cut.

Thursday, June 6

• U.S. Initial Jobless Claims – Weekly snapshot of the U.S. labor market.

Friday, June 7

• U.S. Non-Farm Payrolls (NFP) – The most watched employment data globally.
• U.S. Unemployment Rate & Average Hourly Earnings – Indicators of labor market health and wage inflation.

📈 Fundamental Analysis

1. Interest Rates & Central Banks
   Rate divergence remains a key market driver. The Fed’s pause has softened the USD slightly, while ECB hawkishness is supporting the euro. Emerging markets with higher rates (like Mexico and Brazil) continue to attract carry trade interest.
2. Inflation Trends
   Core inflation in the U.S. and Europe is slowly cooling, but not fast enough to prompt aggressive easing. Sticky services inflation is a particular concern for central bankers.
3. Labor Markets
   Jobs data remains robust in the U.S., but wage growth has slowed—suggesting a potential soft landing scenario. Watch Friday’s NFP report closely for confirmation.
4. Commodities & Energy
   Oil prices remain volatile amid conflicting signals—OPEC+ output strategies vs. weaker demand forecasts. Gold is holding steady above $2,300/oz as markets hedge against geopolitical risks.
5. Geopolitical Risks
   Escalations in the Taiwan Strait and continued instability in the Middle East could spark flight-to-safety flows toward USD and gold.

Technical Analysis:

EURUSD on the 4h timeframe is looking very  bullish as we are creating structure to the upside, however we can see some shorts coming into play as  we have  broken the highs  and  potentially grabbed a lot of resting liquidity in the markets. We can expect the market to react and potentially get a lot more  sellers into the market before we break the highs  aain and continue the bull run.

📌 Final Thoughts

This week presents ample opportunities—but also risks. With high-impact news almost every day, risk management and disciplined trading will be key. Always pair your technical setups with fundamental insights, and remember: consistency and patience are your strongest edges.

Wishing all our traders at Propel Capital a successful and profitable trading week!