It’s a busy risk event calendar with the first Friday of the month always bringing with it the US monthly employment figures in the form of the non-farm payrolls data. Two major central bank meetings also feature, with the ECB and BoC both potentially cutting rates again, though the latter is more likely to sit on their hands. Looming over markets will also be ongoing trade war headlines and the Trump administration’s efforts to plot a new course for tariffs and negotiations after the setbacks against its plans last week.
Very few people have any idea what happens next in the tariff drama. Does it offer a way out for Trump to de-escalate and limit the economic fallout that many economists are predicting? Or does it force the administration to double down and increase levies further as its trade adversaries like the EU and China go hard in talks believing the US can’t sustain tariffs for much longer? It’s likely that not much changes as alternative methods are used, say for example with sectoral tariffs. More detail on this will be key, though Treasury Secretary Bessent recently noted that US-China talks have stalled and the US has accused China of cheating on its agreement.
Amid all this trade uncertainty, there’s been no stopping stocks in recent weeks. The S&P 500 enjoyed it best month since November in May, though the rally has stalled more recently. The Mag 7 have led the markets once again, and solid earnings from most likely mean bullish momentum can kick on if the benchmark index stays above the 200-day simple moving average at 5,785.  The dollar isn’t faring so well with its fourth straight month of selling and bears eyeing up the recent lows just below 98 on the Dollar Index.