Sample Category Title

ECB President Christine Lagarde said in a speech today that the global economic order is "fracturing", as multilateralism gives way to bilateral power struggles and protectionism. She highlighted that even Dollar's dominant role in the global financial system is no longer assured

Lagarde cautioned that this fragmentation poses serious risks for Europe’s economic security and resilience. However, she emphasized that these challenges could be turned into opportunities if Europe adopts the right policy responses, especially when it comes to expanding the "international role" of the Euro.

As the second-most widely held currency, accounting for roughly 20% of global FX reserves compared to Dollar’s 58%, Euro is well positioned to take on a greater global role.

Doing so would bring tangible benefits: lower borrowing costs for EU governments and businesses, reduced vulnerability to FX swings, and greater insulation from external financial coercion or sanctions.

Full speech of ECB's Lagarde here.

Markets

European markets have to find out the direction of travel on their own as the US (Memorial Day) and UK markets (Spring Bank Holiday) enjoy a long weekend. In addition, there were no data with market moving potential scheduled for release. European investors were ‘happy’ as president Trump during the weekend made another U-turn after on Friday ‘recommending’ 50% tariffs on European imports as soon as June 1. A weekend phone call with EC Commission President Ursula von der Leyen put the negotiation deadline back at July 9. EMU equities understandably reacted with a relieve rally reversing a part but not all of Friday’s setback (Eurostoxx 50 +1.1%). This feels like a technical rebound, but lacks conviction. Already before Friday’s setback (European and US) equities showed signs running into resistance. Trumps U-turn only illustrates that there is still a lot of work to do to bring some trust and a more structured approach to the US-EU negotiation table. It would be an outright miracle if there wouldn’t be new hick-ups in the run-up to July 09. The trade-theme since Friday again came to the forefront as a driver for trading, but it remains ‘pari passu’ with the topic of debt sustainability. Despite the risk-off, the US 30-y yield on Friday still closed north of 5.0%. After a risk-off decline on Friday, German ST yields today rebound 3.0 bps (2-y) but the long very long end even declines further (30-y -1.0 bp). As is the case for equities, the rebound (in yields) for sure doesn’t reverse Friday’s decline. The restoration of July 09 as the trade talks deadline also isn’t enough for markets to really question expectations for a ‘pre-emptive’ 25 bps rate cut at next week’s ECB meeting. ECB’ Simkus (Lithuania) today reconfirmed he sees room for a rate cut next week as risks of inflation dropping below the ECB goal have increased due to trade frictions and a stronger euro. Especially next week’s ECB updated (inflation) forecasts will be interesting lecture for market watchers. Similar picture or even slightly worse for the US dollar. Trade-driven risk-off most often is a negative for the US currency and a risk-on rebound doesn’t help. The DXY index morning even declined further to test the 98.70 area, but regained some ground to trade still marginally lower compared to Friday (99.05). EUR/USD holds Friday’s gains (1.137). The yen slightly underperforms at 143.

News & Views

Polish retail sales (at constant prices) rose by 6.2% M/M in April to be 7.6% higher in Y/Y-terms. Consensus expected a more modest increase (+2.1% M/M & +3.4% Y/Y). YTD 2025 sales increased by 3.3% Y/Y. Compared with April 2024, retail sales rose most for “motor vehicles, motorcycles & parts” (+14.9% Y/Y), “furniture radio, TV & household appliances” (+13.2% Y/Y) and “food, beverages & tobacco products” (+9.7% Y/Y). In April 2025, the value of retail sales via internet increased by 7.1% compared to a year ago. The share of sales via internet in total sales was the same as in the previous year (8.8%). The Polish zloty trades stronger against the euro today (EUR/PLN < 4.25), though that’s more linked to general (positive) risk sentiment than the data. This week’s Polish calendar is backloaded with May inflation numbers (Friday) and the second round of presidential elections (Sunday). Especially the latter has market-moving potential. PM Tusk’s candidate Trzaskowski and PiS candidate Nawrocki go neck-and-neck. A Trzaskowski win would enable Tusk to enroll his pro-EU agenda and should support the zloty. A Nawrocki win – he outperformed expectations in the first round - implies more clashes with the government and will weigh on PLN.

Czech consumer (100.7 from 97.7 vs 98.2 consensus) and business confidence (101 from 96.5 vs 96.9) both surged in May, lifting the aggregate indicator from 96.7 to 101, its highest level since May 2022. Especially businesses turn less pessimistic when compared to the past couple of years. On a sectoral-level, improved business sentiment in industry (+3.9 pts) and selected services (+6.6 pts) outweighed deteriorations in trade (-1.8 pts) and construction (-1.7 pts). Consumers turned less pessimistic on the overall economic situation and their own financial situation over the next 12 months. EUR/CZK is today testing the YtD low around 24.85.

Daily Pivots: (S1) 141.93; (P) 143.07; (R1) 143.72; More...

Intraday bias in USD/JPY stays on the downside at this point. Fall from 148.64 is in progress for retesting 139.87. On the upside, above 144.31 minor resistance will turn intraday bias neutral again and bring consolidations first, before staging another decline.

In the bigger picture, price actions from 161.94 are seen as a corrective pattern to rise from 102.58 (2021 low), with fall from 158.86 as the third leg. Strong support should be seen from 38.2% retracement of 102.58 to 161.94 at 139.26 to bring rebound. However, sustained break of 139.26 would open up deeper medium term decline to 61.8% retracement at 125.25.

Daily Pivots: (S1) 0.8179; (P) 0.8238; (R1) 0.8273; More….

Intraday bias in USD/CHF stays on the downside for the moment. Fall from 0.8475 is in progress for retesting 0.8038 low. Firm break there will resume larger down trend to 61.8% projection of 0.9200 to 0.8038 from 0.8475 at 0.7757 next. On the upside, above 0.8305 minor resistance will turn intraday bias neutral again.

In the bigger picture, long term down trend from 1.0342 (2017 high) is still in progress and met 61.8% projection of 1.0146 (2022 high) to 0.8332 from 0.9200 at 0.8079 already. In any case, outlook will stay bearish as long as 55 W EMA (now at 0.8713) holds. Sustained break of 0.8079 will target 100% projection at 0.7382.

Daily Pivots: (S1) 1.3451; (P) 1.3496; (R1) 1.3587; More...

Intraday bias in GBP/USD remains on the upside for the moment. Firm break of 61.8% projection of 1.2706 to 1.3442 from 1.3138 at 1.3593 will target 100% projection at 1.3874. On the downside, below 1.3468 minor support will turn intraday bias neutral first. But retreat should be contained well above 1.3138 support to bring another rally.

In the bigger picture, up trend from 1.3051 (2022 low) is in progress. Next medium term target is 61.8% projection of 1.0351 to 1.3433 from 1.2099 at 1.4004. Outlook will now stay bullish as long as 55 W EMA (now at 1.2870) holds, even in case of deep pullback.

Daily Pivots: (S1) 1.1303; (P) 1.1339; (R1) 1.1402; More...

Intraday bias in EUR/USD remains on the upside for the moment. Correction from 1.1572 should have completed at 1.1064. Further rise should be seen to retest 1.1572 first. Decisive break there will resume larger up trend to 61.8% projection of 1.0176 to 1.1572 from 1.1064 at 1.1927. On the downside, below 1.1255 minor support will turn intraday bias neutral, and probably extend the corrective pattern with another falling leg.

In the bigger picture, rise from 0.9534 long term bottom could be correcting the multi-decade downtrend or the start of a long term up trend. In either case, further rise should be seen to 100% projection of 0.9534 to 1.1274 from 1.0176 at 1.1916. This will now remain the favored case as long as 55 W EMA (now at 1.0858) holds.

Global markets are showing tentative signs of relief after US President Donald Trump walked back his threat to impose a 50% tariff on the European Union. The abrupt shift to reinstate a July 9 deadline for negotiations has helped ease investor concerns for now. Stocks in Germany and France are trading modestly higher in European session, though the UK market remains closed for holiday. US equity futures are also pointing to a firmer open, suggesting a rebound from last week's tariff-induced selloff. This shift in tone has also taken some steam out of safe-haven flows. Gold prices dipped slightly as investors rotated back into risk assets.

The European Commission confirmed that trade representatives from both sides are scheduled to talk later today, describing the development as a “new impetus”. A Commission spokesperson noted that both parties have agreed to fast-track negotiations and remain in close contact, providing hope that a workable framework could still be reached before the "old" deadline.

In the currency markets, the mildly risk-on environment is supporting higher-beta currencies. Kiwi and Aussie are leading the pack, with Sterling also gaining some traction. On the other hand, traditional safe havens like Yen, Swiss Franc are under modest pressure, while Dollar is also weak. Euro and Loonie positioning in the middle.

For Gold, as long as 3279.22 support holds, the bullish case for Gold still holds. That is, correction from 3499.79 should have completed with three waves down to 3120.34. Further rise should be seen to retest 3499.79 next. Firm break there will resume larger up trend. Nevertheless, break of 3279.22 will dampen this case and extend the corrective pattern with another falling leg.

In Europe, the UK is on holiday. DAX is up 1.45% at the time of writing, CAC i sup 0.97%. Germany 10-year yield is up 0.011 at 2.583. Earlier in Asia, Nikkei rose 1.00%. Hong Kong HSI fell -1.35%. China Shanghai SSE fell -0.05%. Singapore Strait Times fell -0.18%. Japan 10-year JGB yield fell -0.052 to 1.496.

Fed Kashkari: Uncertainty to delay policy at least until September

Minneapolis Fed President Neel Kashkari warned today that major shifts in US trade policies are clouding the outlook for monetary policy, making it difficult for the Fed to move on interest rates before September.

While “anything is possible,” Kashkari said in an interview with Bloomberg TV, he’s unsure whether the picture will be “clear enough” by then. Much hinges, he added, on whether trade negotiations between the US and its partners yield concrete deals in the coming months, which could “provide a lot of the clarity we are looking for.”

The uncertainty, Kashkari explained, is weighing on economic activity. He emphasized the stagflationary nature of the tariff shock, noting that its impact will depend on both the scale and duration of the levies.

On financial markets, Kashkari acknowledged that rising US Treasury yields might reflect a broader reassessment by global investors about the risks of holding American assets. He suggested that the current bond market reaction could signal a new global paradigm.

EUR/USD Mid-Day Outlook

Daily Pivots: (S1) 1.1303; (P) 1.1339; (R1) 1.1402; More...

Intraday bias in EUR/USD remains on the upside for the moment. Correction from 1.1572 should have completed at 1.1064. Further rise should be seen to retest 1.1572 first. Decisive break there will resume larger up trend to 61.8% projection of 1.0176 to 1.1572 from 1.1064 at 1.1927. On the downside, below 1.1255 minor support will turn intraday bias neutral, and probably extend the corrective pattern with another falling leg.

In the bigger picture, rise from 0.9534 long term bottom could be correcting the multi-decade downtrend or the start of a long term up trend. In either case, further rise should be seen to 100% projection of 0.9534 to 1.1274 from 1.0176 at 1.1916. This will now remain the favored case as long as 55 W EMA (now at 1.0858) holds.

The price of gold fell on Monday to $3,346 per troy ounce, pausing its recent upward trend as investors assessed the implications of a phone call between the US and the EU.

Key factors driving gold’s movement

Demand for safe-haven assets weakened after US President Donald Trump announced plans to delay proposed 50% tariffs on European goods. While he had initially intended to impose the levies from 1 June, he set a new deadline of 9 July to allow time for negotiations with the European Union.

However, trade risks persist and remain a focal point for markets. Last Friday, Trump warned Apple Inc. that its products could face 25% tariffs if iPhones are manufactured outside the US.

Gold had surged nearly 5% last week amid escalating trade uncertainty and growing concerns over the US economic and fiscal outlook.

Adding to market apprehension, Trump’s new tax bill – already passed by the House of Representatives and now awaiting a Senate vote – could expand the US budget deficit by nearly $3 trillion over the next decade. A final vote is expected by August.

Technical analysis: XAU/USD

On the H4 chart, XAU/USD found support at 3,280 before rallying to 3,364. A corrective pullback towards 3,255 is possible today, followed by a potential upward move to 3,388. This scenario is supported by the MACD indicator, whose signal line has exited the histogram zone and is now pointing decisively downward.

On the H1 chart, the market has completed its local corrective target. A further decline to at least 3,255 is anticipated today, after which another upward wave may develop towards 3,388. Bullish momentum would likely be exhausted at that point, with the entire rally regarded as a correction within the broader downtrend. Once this correction concludes, a resumption of the downtrend may follow, with a potential decline to 3,222 and an eventual extension towards 3,060. This bearish outlook is corroborated by the Stochastic oscillator, whose signal line has dipped below 80 and is trending sharply downward towards 20.

Conclusion

Gold’s rally has stalled as markets digest shifting US-EU trade dynamics, though lingering risks and technical indicators suggest further volatility ahead.

Market Picture

The Crypto Market cap rose by 6.5% from last week’s level to $3.43 trillion. However, since Friday, the market has taken a pause and moved further sideways, falling to $3.35—the upper boundary of the previous resistance. Market capitalisation has been building up in small steps upwards, which looks like the formation of a solid base typical of the early stages of bullish momentum.

The sentiment index is at 73, having pulled back from extreme greed territory. The market is balancing around the current mark, letting off steam after strong bounces, which is also helping to extend the rally, albeit at a slower pace.

Bitcoin recharged over the weekend, retreating to $106.5K. As of Monday morning, it is trying again to break above $110.0K. At the end of last week, the Relative Strength Index touched the 80 level on the daily timeframes, indicating overbought conditions, but the subsequent retreat cleared the way for a rally. However, whether the coin goes there will depend on the dynamics of global markets, where the focus remains on the US and Japanese bond markets.

News Background

Significant inflows into US spot bitcoin ETFs have continued for five consecutive weeks. According to SoSoValue, net inflows into spot BTC-ETFs totalled $2.75bn last week, bringing the total amount invested since January 2024 to $44.53bn.

Inflows into spot Ethereum-ETFs in the US have continued for 4 out of the last 5 weeks, totalling $248.3 million last week, bringing the total since the ETF’s launch in July 2024 to $2.76 billion.

Strategy announced the launch of a new $2.1bn Class A preferred share offering programme. The funds are expected to go predominantly towards additional bitcoin investments.

According to the WSJ, major US banks are in talks to jointly issue a stablecoin. The initiative aims to counter the growing influence of the crypto industry.

Former IMF chief economist Kenneth Rogoff said cryptocurrency is increasingly being used in the global shadow economy, undermining the US dollar’s dominance. He noted that the dollar is gradually surrendering its position to the yuan and euro.

EURUSD rose to one-month high on Monday after receiving fresh boost from the latest US/EU trade tariffs.

President Trump shocked markets again after announcing 50% tariffs on all imports from EU as from June1, with unexpected change of its plans over the weekend, to put tariffs on hold until July 9 and allow for talks between two sides, providing relief and fueling risk appetite.

The pair broke above Fibo 61.8% of 1.1573/1.1065 correction and cracked round-figure 1.1400 barrier, though quick pullback (shown on hourly chart) warns of increased headwinds above 1.14.

Overbought stochastic on daily chart contributes to the scenario however, dips are likely to be shallow and mark positioning for fresh push higher as overall picture is bullish (rising thick daily cloud continues to underpin the advance, daily Tenkan/Kijun-sen are converging and about to form a bull-cross that would verify positive signal.

Dips should find firm ground at 1.1320 (daily Kijun-sen) to keep bulls in play for fresh attempt through 1.1400 zone and extension towards targets at 1.1453 (Fibo 76.4%) and 1.1500 (psychological).

Res: 1.1400; 1.1418; 1.1453; 1.1500
Sup: 1.1359; 1.1320; 1.1300; 1.1270