Weekly Outlook | Trade talks to determine future market moves
Updated Updated Tue, 2025 June 3 02:35
Financial markets continue to trade under the influence of the trade talks between the US and China. After the initial court ruling, which deemed the tariffs illegal an appeal by the Trump administration caused them being reinstated again. Furthermore, Trump announced that tariffs on imports of steel and aluminum will be doubled to 50%, which is meant to support the local manufacturing. The stock markets closed higher last week, but lost some of their momentum over the course of Thursday and Friday.
This week important interest rate decisions as well as the usual NFP data on Friday might stir up markets as we will examine below.
Important events this week:
– CA- BoC rate Statement– The interest rate decision from Canada might offer some volatility to markets. The USDCAD currency pair might initially strengthen, should the BoC indeed cut rates as per the expectation. The general trend remains bearish, though. The USD remains weak and the Loonie cut continue to strengthen, which is also the case against the EUR.
USDCAD weekly chart
Following the bearish break below the important rising trendline as the chart above shows, more downside momentum might occur. Any price below the 1.3850 zone might hence be used as an entry opportunity. The interest rate decision will be held on Wednesday, June 04 at 15:45 CET.
– EU- ECB rate Statement– It is expected that the ECB will cut the main refinancing rate to 2.15% this week, which would bring the rate close to the neutral rate. Since also this rate cut is expected the downside momentum of the EUR might remain limited. Instead, the common currency has been rising in particular against the Dollar.
EURUSD monthly chart
With the uptrend of the currency pair, further positive momentum might occur. Though, the first trading days of the month of June could cause initial setbacks for the EURUSD. This might hence be used for fresh entry opportunities to higher levels medium term. In particular a break of the 1.1400 resistance zone might then unleash upside momentum towards the 1.1600 range or higher. The interest rate decision will be held on Thursday, June 05 at 15:45 CET.
– US- Non-farm Payrolls– The NFP data is usually offering volatility for financial markets. In particular with the current political turmoil in the US in regards to the tariffs this number might be crucial. Most indices currently start to face some profit taking and such moves might indeed gear up momentum.
Nasdaq 100 monthly chart
The monthly chart above shows, that the Nasdaq100 index kept rising but might currently face some profit taking. Being capped below the all- time- high from earlier this year the market might remain in a sideways pattern with the current uncertainty. With 130,000 new jobs created, the data is expected to be rather low. A positive surprise could therefore give the market another boost. The employment data will be released on Friday, June 06 at 15:45 CET.
