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US labour market in focus

This week, markets focus on a heavy run of US labour-market data and euro-area inflation figures that could shape the near-term monetary policy debate on both sides of the Atlantic. In the United States, the JOLTS job openings report is due on Tuesday, followed by ADP employment data on Wednesday and nonfarm payrolls on Friday, which together will provide a key read on labour-market conditions ahead of the Fed's next policy meeting mid-June. In Europe, the euro area releases May consumer price data on Tuesday, while Switzerland publishes May inflation on Thursday and the euro area follows with first-quarter gross domestic product data on Friday. Purchasing Managers’ Indices also feature prominently, with manufacturing surveys from around the globe on Monday, followed by services readings on Wednesday.

  • Date
  • Auteur Shane Strowmatt, Senior Investment Writer
  • Temps de lecture 5 minutes

Market
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Most Asian equity markets advanced on Monday as enthusiasm around artificial intelligence helped investors look beyond lingering uncertainty over a possible US-Iran agreement. South Korea’s KOSPI was the standout, jumping 4% to a record, led by chip and electronics groups including Samsung Electronics and SK Hynix, amid reports that Nvidia chief executive Jensen Huang will meet major South Korean technology executives later this week. Japan’s Nikkei 225 also rose 0.9%, with SoftBank among the strongest gainers, while Hong Kong’s Hang Seng Index was up 0.9%.

China factory PMI tops forecasts

Mainland China’s CSI 300 was trading 0.7% lower after manufacturing data released on Sunday and Monday pointed to slower growth in May. China’s private manufacturing Purchasing Managers’ Index came in at 51.8 in May, according to data released on Monday, down from 52.2 in April but slightly stronger than the market had expected. The survey indicated factory activity continued to expand, although export orders and manufacturing employment both weakened, while input prices fell from the previous month for the first time in six months. The reading contrasted with official data released on Sunday, which showed China’s manufacturing PMI easing to 50 from 50.3, pointing to softer momentum across the broader industrial sector. The mixed results add to signs that China’s economic recovery remains uneven, with manufacturing and consumer activity showing differing trends.

Oil rises as Lebanon conflict widens

Oil prices climbed on Monday after Israel ordered an expanded military operation in Lebanon, undermining hopes that a ceasefire between Washington and Tehran would hold. Brent crude rose 2.4% to USD 93.33 a barrel, while West Texas Intermediate gained 2.8% to USD 89.77, as investors weighed the risk of broader Middle East supply disruptions. Gold prices were slightly lower on Monday, trading around USD 4520 per ounce. The US dollar was a touch firmer, with the Dollar Index up 0.1%. US Treasury yields moved higher across the curve, with the 2-year yield trading around 4% and the 10-year yield at 4.5%.

US stocks hit fresh records

Wall Street equities closed at new highs on Friday as optimism over possible progress in Iran talks and continued enthusiasm around artificial intelligence lifted sentiment. The Dow Jones Industrial Average rose 0.7% to 51,032.46 points, while the S&P 500 gained 0.2% to 7580.06 and the Nasdaq 100 advanced 0.4% to 30,333.18. Computer maker Dell surged 33% after reporting strong demand for AI servers, helping drive gains across parts of the technology sector. Hopes that US President Donald Trump could soon back a framework agreement with Iran also supported markets, although reports suggested uncertainties around the negotiations remained.

Swiss outlook remains subdued

Switzerland’s KOF economic barometer edged up to 98.0 points in May, from a revised 97.8 in April, data released on Friday showed, but it remained below its medium-term average, signalling that the outlook for the Swiss economy is still subdued. The near-flat reading reflected mixed trends across the underlying indicators, with weakness in manufacturing partly offset by stronger signals from financial and insurance services. External demand pointed to a somewhat firmer outlook, while consumer demand weakened. Within the producing sector, order books, inventories and the general business situation improved, but export activity and production lost momentum. Switzerland’s SMI outperformed other European markets modestly on Friday, rising 0.3%.

German inflation eases, employment stagnates

German consumer price inflation cooled to 2.6% year-on-year in May from 2.9% in April, according to provisional Destatis figures released last Friday, while prices fell 0.2% month-on-month. Core inflation, which excludes food and energy, rose to 2.5% from 2.3%, as energy costs increased 6.6% from a year earlier, down from 10.1% in April, and food inflation slowed to 0.4% from 1.2%. Separate data released on Friday showed Germany’s employment level was broadly unchanged in April, with the seasonally adjusted number of people in work slipping by 6000 from March to 45.61 million, while employment was 0.4% lower than a year earlier and the jobless rate held at 3.8%. European equity markets were mixed on Friday and mostly little changed by the close. The Euro Stoxx 50 edged lower by 0.1%, while Germany’s DAX was essentially flat.

Corporate and economic calendar

Corporate news in focus: There is no major corporate news scheduled today.

Economic data in focus: Manufacturing Purchasing Managers’ Indices from several of the world’s largest economies, including Switzerland (09:30), France (09:50), Germany (09:55), the euro area (10:00), the UK (10:30), Canada (15:30), the US (15:45) and the US ISM Manufacturing PMI (16:00); German retail sales (08:00), Swiss gross domestic product (09:00), EU unemployment rate (11:00).

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