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Germany’s Ifo business climate rises to 88.5, services and construction lead sentiment rebound

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    ActionForex
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    Germany’s Ifo Business Climate index rose from 87.5 to 88.4 in June, modestly above expectations. Expectations Index jumped to 90.7 from 88.9, while Current Assessment Index edged up only slightly from 86.1 to 86.2. Ifo said the economy is “slowly building confidence”.

    Sector details showed the clearest momentum in services, where firms raised expectations significantly, especially among business-related providers. Manufacturing also saw better sentiment ahead, though order books remain under pressure. Construction extended its recovery trend, with expectations hitting the highest level since early 2022. Wholesale trade led the modest rebound in commerce, but retail conditions slipped again.

    Full German Ifo business climate release here.

    Oil crashes on ceasefire hopes, market unwinds war premium

      By
      ActionForex
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      Oil prices plunged overnight as markets reassessed geopolitical risk following what appears to be a restrained Iranian response to US strikes and a potential ceasefire between Iran and Israel. WTI tumbled sharply after reports that Iranian forces attacked a US base in Qatar—an incident that was intercepted with no reported casualties. The muted retaliation defused immediate fears of further escalation, setting the stage for a pullback in crude.

      Sentiment turned further when US President Donald Trump declared a 12-hour ceasefire between Israel and Iran, announcing the end of what he called the “12 Day War.” While his comments on social media were optimistic and celebratory, the official Iranian response was more guarded. Foreign Minister Seyed Abbas Araghchi emphasized that no agreement had been reached, though he indicated Iran would halt further retaliation if Israeli operations ceased by 4 a.m. Tehran time.

      Technically, nonetheless, the steep selloff in WTI should have marked the complete of the whole rebound from 55.20 low at 78.87, well ahead of 81.01 key structural resistance. Short covering could come at around 61.8% retracement of 55.20 to 78.87 at 64.24, and bring bounce. That should set the range of sideway trading in the near term between 64/79.

      Fed’s Goolsbee: Tariff impact milder than feared, cuts still on the table

        By
        ActionForex
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        Chicago Fed President Austan Goolsbee struck a cautiously optimistic tone Monday, saying that the recent surge in tariffs has not delivered the economic shock many had feared.

        Speaking at a mid-year business outlook event in Milwaukee, Goolsbee noted that the fallout so far has been “somewhat surprisingly” modest, particularly in terms of inflation. While uncertainty remains around future price pressures, the current evidence suggests that the economy may still be on a favorable course.

        “If we do not see inflation resulting from these tariff increases,” Goolsbee said, “then, in my mind, we never left what I was calling the golden path before April 2.” That path—defined by disinflation without a major slowdown—would support the case for eventual rate cuts.

        His remarks echo a growing sentiment within the Fed that policy easing could resume later this year, provided inflation continues to behave and growth risks mount.

        Fed’s Bowman opens door to July cut if inflation, jobs data cooperate

          By
          ActionForex
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          Fed Vice Chair Michelle Bowman signaled openness to a rate cut as soon as the July FOMC meeting, should incoming data show continued progress on inflation and further signs of labor market fragility.

          In a speech today, Bowman noted that recent inflation readings have come in below expectations and appear to be on a “sustained path” toward the 2% target. She downplayed the inflationary impact of recent trade policy changes, stating their effects on core PCE are likely to be “only minimal”.

          Bowman acknowledged that risks to the Fed’s employment mandate may soon become more pressing, citing recent softness in consumer spending and “signs of fragility” in the labor market.

          She emphasized the importance of upcoming economic data—including June’s jobs report and inflation print—as key inputs ahead of the July policy meeting.

          “If inflation pressures remain contained,” Bowman said, “I would support lowering the policy rate as soon as our next meeting.”

          Full speech of Fed’s Bowman here.

          US PMI composite rises to 53.0, resilient growth but inflation surge raises Fed caution

            By
            ActionForex
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            US PMI Composite dipped slightly from 53.0 to 52.8, as PMI Services slipped to 53.1 from 53.7, offsetting a steady Manufacturing reading at 52.0. S&P Global’s Chris Williamson noted that while activity and new orders remained in positive territory, falling exports and heightened uncertainty—particularly around inflation—are starting to weigh on business sentiment.

            Williamson pointed to stockpiling activity, especially in manufacturing, as a temporary support to demand, likely driven by concerns over tariffs and future supply disruptions. However, this inventory-driven boost could fade quickly, particularly if cost pressures remain elevated and begin to weigh on broader consumption.

            A notable concern is that “inflationary pressures have risen sharply” in the past two months. Goods prices have risen at their fastest pace in three years. Service providers are also feeling the pinch, with food and input-related inflation filtering into final prices.

            “The data therefore corroborate speculation that the Fed will remain on hold for some time to both gauge the economy’s resilience and how long this current bout of inflation lasts for,” Williamson added.

            Full US PMI flash release here.

            ECB’s Lagarde sees near-term weakness, but also resilience ahead

              By
              ActionForex
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              ECB President Christine Lagarde acknowledged in a speech that Eurozone faces “weaker prospects” in the near term. Survey data suggest slowing momentum, with higher tariffs and a stronger Euro expected to weigh on exports. Elevated uncertainty is also delaying corporate investment. Risks remain “tilted to the downside”, with trade tensions, fragile market sentiment, and geopolitical instability posing ongoing threats to the outlook.

              Still, Lagarde emphasized several sources of resilience. A strong labor market, rising real incomes, and robust private sector balance sheets are expected to support consumption. Recent rate cuts are also contributing to easier financing conditions, while increased spending on defence and infrastructure could help offset external headwinds.

              “A swift resolution to trade and geopolitical tensions or a further increase in defence and infrastructure spending could spur activity by more than expected,” Lagarde said.

              On inflation, Lagarde noted the outlook is “more uncertain than usual.” Trade frictions are creating both upward and downward pressures—supply chain fragmentation could lift prices, while weaker global demand may suppress Eurozone export growth.

              Full speech of ECB’s Lagarde here.

              UK PMI composite rises to 50.7, weak growth and softening inflation

                By
                ActionForex
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                The UK economy showed marginal improvement in June, with PMI Composite inching from 50.3 up to 50.7, suggesting the economy is narrowly expanding. PMI Services rose from 50.9 to 51.3, while Manufacturing remained below the 50 threshold, albeit improving from 46.4 to 47.7.

                S&P Global’s Chris Williamson described the picture as one of “lackluster” activity, with data pointing to just 0.1% GDP growth in Q2. Beyond weak growth, the survey flagged ongoing uncertainty from recent UK policy shifts, global trade frictions, and geopolitical instability, including increased Middle East tensions.

                Crucially, inflationary pressures have cooled significantly because of the above developments. With growth near stall speed and inflation slowing, the path is opening for BoE to deliver another rate cut in August.

                Full UK PMI flash release here.

                Eurozone PMI composite unchanged at 50.2, inflation risk contained for ECB

                  By
                  ActionForex
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                  Eurozone flash PMIs offered little cause for celebration in June, as the economy continued to tread water. PMI Composite held steady at 50.2. PMI Manufacturing was unchanged in contraction at 49.4. Services ticked back from 49.7 to the 50.0 mark, barely returning to expansion.

                  According to Hamburg Commercial Bank’s Cyrus de la Rubia, the bloc is “struggling to gain momentum,” with both manufacturing and services showing only marginal progress. Germany showed faint signs of improvement, but France continues to act as a drag. Still, firms remain cautiously optimistic: employment has been broadly stable, and expectations have improved modestly according to the survey.

                  For ECB, while services inflation remains “slightly tense” due to sticky input costs, this is counterbalanced by disinflation in goods and the dampening effects of a strong Euro and US tariffs. Energy prices—now rebounding due to Middle East tensions—could become a concern, though much of the impact is not yet captured in the current PMI readings.

                  Full Eurozone PMI flash release here.

                  WTI oil soars on US strikes in Iran; 80 now the line between calm and 100+ chaos

                    By
                    ActionForex
                    -

                    WTI crude surged at the start of the week as geopolitical tensions flared after US airstrikes hit Iranian nuclear targets over the weekend. The move marks a dramatic escalation in the long-simmering conflict between Iran and Israel, now drawing in direct US involvement. Investors are now awaiting Tehran’s next move after Iranian officials said “all options” remain on the table in response.

                    Attention is now centered on the Strait of Hormuz, a strategic waterway through which one-fifth of the world’s oil flows. Iranian lawmakers have approved a non-binding motion to shut down the strait, though the final decision lies with the National Security Council. Any disruption to shipments through Hormuz would have a profound impact on global supply chains and energy prices.

                    Technically, WTI crude’s surge from the 55.20 low is now approaching a key resistance at 81.01. Barring a broader escalation, the rally could stall here, especially with overbought momentum indicators flashing caution. A break below 73.69 would be an early sign of stabilization and may trigger profit-taking correction.

                    But if the conflict deepens and prices break decisively above 81.01, the rally could accelerate toward through 38.2% retracement of 131.82 (2022 high) to 55.20 at 84.46. Sustained break above 84.46 would mark a significant reversal of the long-term downtrend from the 2022 high and open the path to 95.50 or even to 61.8% retracement at 102.55.

                    With tensions high and the market highly headline-sensitive, holding below 80 will be key to preventing a return to 100+ oil—and renewed inflationary concerns worldwide.

                     

                    Japan PMI composite rises to 51.4, but trade uncertainty weighs on demand

                      By
                      ActionForex
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                      Japan’s private sector showed a modest rebound in June, with PMI Composite rising from 50.2 to 51.4, the highest reading since February. The pickup was led by stronger services sector, which rose from 51.0 to 51.5. PMI Manufacturing returned to expansion territory at 50.4, up from 49.4.

                      Annabel Fiddes of S&P Global noted that business activity gained momentum into quarter-end, but demand conditions remained fragile. New business rose only slightly, while foreign demand for manufactured goods weakened further. Firms cited ongoing concerns over US tariffs and global trade uncertainty, which continued to weigh on client orders and export sales.

                      Still, there were signs of easing cost pressures, with input prices rising at the slowest pace in 15 months. Employment also improved, with overall job creation accelerating to the fastest rate in nearly a year.

                      Full Japan PMI flash release here.

                      Australia PMIs improve modestly, support case for further RBA cuts

                        By
                        ActionForex
                        -

                        Australia’s private sector showed modest improvement in June, with the S&P Global PMI Composite rising from 50.5 to 51.2. PMI Services climbed from 50.6 to 51.3, while PMI manufacturing held steady at 51.0.

                        According to S&P Global’s Jingyi Pan, forward-looking indicators present a mixed picture. While output expectations remain positive, divergences between sectors were notable. New orders and future output softened more clearly in manufacturing, while services continued to gain traction. Weak external demand remains a concern, with export orders seeing their sharpest drop in nearly a year.

                        Combined with signs of easing inflation and slower employment growth, the PMI report supports the case for further rate cuts by RBA in the second half of 2025.

                        Full Australia PMI flash release here.

                        Fed’s Waller: Should consider rate cut as early as July

                          By
                          ActionForex
                          -

                          Fed Governor Christopher Waller signaled openness to a rate cut as early as July, citing minimal inflation risks from US tariffs and mounting concerns over the labor market.

                          In an interview with CNBC, Waller said, “I think we’re in the position that we could do this and as early as July,” while acknowledging it’s uncertain whether the broader committee will align with that view.

                          Waller emphasized the risks of delaying action, warning against waiting for a clear downturn in employment. “If you’re starting to worry about the downside risk labor market move now don’t wait,” he argued.

                          Regarding tariffs, Waller dismissed concerns that they would create sustained inflationary pressure, reiterating that the price effects should be limited and one-off.

                          “Even if the tariffs come in later, the impacts are still the same,” he said, calling for the Fed to “start thinking about cutting the policy rate at the next meeting”, after pausing the easing cycle for six months.

                          Canada’s retail sales rise 0.3% mom in April, but May outlook weakens on trade tensions

                            By
                            ActionForex
                            -

                            Canada’s retail sales rose 0.3% mom in April to CAD 70.1B, falling short of market expectations of a 0.5% mom rise. Growth was supported by increases in six of nine subsectors, particularly in motor vehicle and parts dealers. However, sales excluding autos and fuel—rose just 0.1% mom. In volume terms, sales rose a healthier 0.5%, but the strength may not carry forward. Statistics Canada’s advance estimate for May suggests a -1.1% mom decline.

                            Trade tensions between Canada and the US are emerging as a key drag on the retail sector. Statistics Canada reported that 36% of retail businesses were affected in April, citing price increases, shifting demand, and supply chain disruptions. While most subsectors recorded sales growth, all nine reported some degree of negative impact.

                            Full Canada’s retail sales release here.

                            BoJ’s Ueda eyes future hikes on labor-driven inflation

                              By
                              ActionForex
                              -

                              BoJ Governor Kazuo Ueda said today that Japan’s underlying inflation could “stagnate” in the short term as economic growth slows. But he remains confident it will “accelerate thereafter”.

                              He pointed to “intensifying labor shortages” as a source of upward pressure on medium- to long-term inflation expectations.

                              Ueda emphasized that BoJ stands ready to hike rates further, contingent on sustained improvements in the economy.

                              UK retail sales plunge -2.7% mom in May, led by sharp drop in food spending

                                By
                                ActionForex
                                -

                                UK retail sales volumes slumped -2.7% mom in May, far worse than expectations of a -0.5% decline, marking the steepest monthly fall since December 2023.

                                The downturn was driven by a sharp -5.0% mom drop in food store sales, reversing April’s 4.7% mom gain and registering the largest fall in this category since May 2021. Non-food store sales also retreated, down -1.4% mom on the month, as department and household-related purchases weakened amid cautious consumer sentiment.

                                Despite May’s setback, retail sales volumes rose by 0.8% in the three months to May compared to the prior three-month period ending February.

                                Full UK retail sales release here.

                                BoJ minutes reflect extremely high uncertainties, stresses need to judge without preconceptions

                                  By
                                  ActionForex
                                  -

                                  BoJ’s May policy meeting minutes reveal a board wary of “extremely high uncertainties” stemming from global trade tensions. While BoJ left its short-term interest rate unchanged at 0.5%, it sharply downgraded its growth and inflation outlooks, largely due to the expected hit on Japan’s economy from higher US tariffs.

                                  Members reiterated that “if the outlook for economic activity and prices was realized,” further rate hikes would still be appropriate, aligning with gradual normalization. However, A key theme was the need to remain flexible and data-dependent, with many members emphasizing the importance of “carefully examining” the evolving outlook before acting.

                                  Many members warned that it was crucial “to judge whether the outlook… would be realized, without any preconceptions.” One policymaker admitted that the probability of the forecast materializing was “not as high as before,” while another stressed that both upward and downward risks must be weighed.

                                  The minutes also captured divergent internal views. One board member said that “while the Bank would enter a phase of pausing,” policy must remain “nimble and more flexible.” Another warned of the risk that simultaneous supply-chain disruptions and inflation spikes would leave Japan in a difficult position, especially given that “inflation expectations were not as anchored as in the United States.”

                                  Full BoJ minutes here.

                                  Japan’s CPI core jumps to 3.7% as rice prices more than double

                                    By
                                    ActionForex
                                    -

                                    Japan’s core consumer inflation (ex-fresh food) accelerated from 3.5% yoy to 3.7% yoy in May, beating expectations of 3.6% yoy and marking the fastest pace since January 2023. The gain was driven by soaring rice costs, which jumped over 100% amid supply shortages. The core-core inflation measure, excluding both fresh food and energy, also quickened to 3.3% yoy from 3.0% yoy, reflecting broadening price pressures.

                                    While the headline CPI edged down slightly from 3.6% yoy to 3.5% yoy, underlying inflation trends continue to exceed BoJ’s 2% target, where they have remained since April 2022.

                                    Also Service prices rose 1.4% yoy in May, up from 1.3% yoy in April, with dining and travel costs gaining momentum—an important sign for BoJ, which monitors this segment closely as a proxy for wage-driven inflation.

                                    ECB’s Villeroy: Next move could be a cut amid sub-2% inflation risks

                                      By
                                      ActionForex
                                      -

                                      French ECB Governing Council member Francois Villeroy de Galhau further easing could be on the table if inflation continues to drift below target.

                                      “Barring a major exogenous shock, including possible new military developments in the Middle East, if monetary policy were to move in the next six months, it could be more in the direction of accommodation,” Villeroy said in a speech.

                                      He highlighted that investors are increasingly concerned inflation could settle below ECB’s 2% target, not above it.

                                      ECB’s Nagel: Monetary policy is on the right track

                                        By
                                        ActionForex
                                        -

                                        German ECB Governing Council member Joachim Nagel remarked today that with inflation nearing 2% on average this year, ECB is “more or less mission accomplished” on the price stability front. He added that rates are now in “neutral territory,” and monetary policy is “on the right track.

                                        At the same conference, Vice President Luis de Guindos reiterated that the path forward will be data-dependent and decided on a meeting-by-meeting basis. He warned of elevated geopolitical risks, including trade tensions and Middle East conflict, which could alter both inflation and economic outlook.

                                        BoE on hold, dovish undercurrent builds with 3 votes for cut

                                          By
                                          ActionForex
                                          -

                                          BoE left its policy rate unchanged at 4.25% today, as expected. The vote came in at 6–3, with Swati Dhingra, Dave Ramsden, and Alan Taylor opting for a 25bps cut. Known doves Dhingra and Taylor had pushed for a larger 50bps cut at last meeting. A surprise was that Ramsden who aligned with the majority last time and supported the 25bps cut. The voting marked a slight shift toward a more dovish stance.

                                          In its accompanying statement, BoE acknowledged that underlying UK GDP growth has remained weak, and that labor market slack is becoming more evident. Inflation jumped to 3.4% in May, largely as expected. BoE expects inflation to hover around current levels through year-end before gradually falling toward the 2% target in 2026.

                                          The statement also pointed to heightened geopolitical risks, particularly from the Middle East, as a complicating factor for inflation and energy costs. In light of this backdrop, the BoE reaffirmed that its next moves will be “gradual and careful” and emphasized that monetary policy decisions are “not on a pre-set path”.

                                          Full BoE statement here.

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