📆 Thursday, June 05
► European markets modestly higher ahead of ECB decision & Merz-Trump meeting
European stocks extended gains, with the Stoxx 600 up 0.25%, supported by optimism ahead of the ECB’s widely expected interest rate cut — the eighth in the current cycle. The DAX (+0.25%), CAC 40 (+0.25%), and FTSE 100 (+0.15%) all trade modestly higher. Momentum was boosted by solid corporate results and easing inflation expectations. The euro held near $1.142, up over 10% YTD (vs. the USD). Meanwhile, investors remained cautious amid lingering uncertainty over US trade policies, and rising scrutiny on Trump’s tax bill implications for long-term fiscal stability. The German 10-year yield dropped to 2.49%, reflecting continued bond demand. Investors will also be looking to Washington DC later in the day, with new German chancellor Merz first official meeting with US President Trump in the White House.
► US equity futures flat as traders await key payroll data
Futures for the S&P 500 and Nasdaq 100 were little changed, while Dow futures ticked up 0.1% after a negative performance on Wednesday as markets awaited Friday’s nonfarm payrolls — expected to show slower job growth and a steady unemployment rate. Sentiment remained muted after Wednesday’s disappointing ADP jobs report (+37K vs. 110K expected), but recent gains in tech stocks and a strong Q1 earnings season continue to provide support. The 10-year US Treasury yield hovered at 4.35%, as investors weighed fiscal concerns and a flattening economic outlook. Also rising expectations of Fed rate cuts are weighing on yields and the USD. Tariffs and delayed inflation effects are still seen as major overhangs into Q3.
► Asian markets slightly higher; Focus on the Fed, US labor market data & US-China trade updates
Asian equities posted moderate gains, with the Hang Seng Index surging 1.07%, helped by tech and consumer names. South Korea’s Kospi rose 1.49%, while Shanghai (+0.23%) and Taiwan (+0.26%) followed with smaller increases. India’s Nifty 50 gained 0.53%, while Japan’s Nikkei dropped 0.51%, as investor appetite waned after a mixed 30-year bond auction. Optimism over potential stabilization in US-China talks supported regional sentiment, but caution remains with trade risks unresolved. Market participants are closely watching the Fed’s reaction to soft jobs data, with potential implications for rate path adjustments.
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