Markets swung wildly on Wednesday as weak U.S. data fueled Fed rate cut hopes, sinking bond yields while boosting gold.
Stocks closed mixed, oil slid despite falling inventories, and the dollar closed lower across the board.
Here are headlines you may have missed in the last trading sessions!
Headlines:
- Japan Jibun Bank Services PMI Final for May 2025: 51.0 (50.8 forecast; 52.4 previous)
- Australia GDP Capital Expenditure for Q1 2025: 0.1% q/q (0.7% q/q previous)
- AUD Slumped as Australian GDP Report Fueled Growth Fears
- US President Trump called China President Xi “extremely hard to make a deal with” amid US-China trade negotiations
- Germany HCOB Services PMI Final for May 2025: 47.1 (47.2 forecast; 49.0 previous)
- Euro area HCOB Services PMI Final for May 2025: 49.7 (48.9 forecast; 50.1 previous)
- U.K. S&P Global Services PMI Final for May 2025: 50.9 (50.2 forecast; 49.0 previous)
- EU’s top trade negotiator, Maroš Šefčovič met with US counterpart Trade Representative Jamieson Greer and said negotiations are “advancing in the right direction at pace”
- Bloomberg reported that Saudi Arabia is seeking to add at least 411K barrels/day output in August and potentially September to take advantage of peak summer demand
- U.S. ADP National Employment Report for May 2025: 37.0k (70.0k forecast; 62.0k previous)
- US President Trump once again called on Fed Chair Powell to lower interest rates following a weaker-than-expected ADP report
- Canada S&P Global Services PMI for May 2025: 45.6 (43.0 forecast; 41.5 previous)
- BOC Kept Rates Steady in June with “Diversity of Views” on Policy Path
- U.S. S&P Global Services PMI Final for May 2025: 53.7 (52.3 forecast; 50.8 previous)
- U.S. ISM Services PMI for May 2025: 49.9 (52.0 forecast; 51.6 previous)
- U.S. EIA Crude Oil Stocks Change for May 30, 2025: -4.3M (-2.8M previous)
- The Senate has begun deliberations over President Trump’s “Big Beautiful Bill” that narrowly passed the House on May 22
Broad Market Price Action:
Dollar Index, Gold, S&P 500, Oil, U.S. 10-yr Yield, Bitcoin Overlay Chart by TradingView
The major assets were tossed around on Wednesday as individual catalysts pulled in every direction.
First up, weak U.S. data had traders leaning harder into the idea of Fed rate cuts. The ISM services index slipped into contraction at 49.9 when everyone was looking for a 52.0 print. ADP private payrolls were just plain ugly at 37,000 compared to 115,000 expected.
The dollar stumbled, and bond buyers flooded in, knocking the 10-year yield down from 4.46% to 4.365%, its biggest drop in seven weeks. Gold, bumped higher by a softer dollar, sinking yields, and global growth concerns, shot up to $3,370, the highest close in nearly a month.
Oil could not catch a break. Even though the EIA crude stockpiles fell by 4.3 million barrels, gasoline and distillates piled up. Add Saudi Arabia hinting at pumping more barrels next month, and you get Brent slipping to $64.76 and WTI to $62.66.
Stocks chopped around before closing mixed. Weak US data scared folks into thinking recession but also stirred up hope for Fed rate cuts. The Dow dropped 0.22%, the S&P stayed flat, and the Nasdaq gained 0.32%. Over in Europe, the DAX rose 0.71% on upbeat U.S.-EU trade talk vibes. Bitcoin quietly crept up to just under $105,000 after hitting lows near $104,250.
FX Market Behavior: U.S. Dollar vs. Majors:
Overlay of USD vs. Majors Chart by TradingView
AUD/USD saw increased volatility around Australia’s GDP release, but US dollar pairs mostly tiptoed through the Asian session, likely as traders had little interest in making big moves ahead of key U.S. data. London brought a bit more energy, but not enough to break the wide ranges as markets waited for something to sink their teeth into.
In Europe, the dollar got brief bullish swings from mixed European data. Euro Area services PMI slipped to 49.7 while the U.K. managed a slim gain at 50.9. But that was as good as it got. The Greenback took a beating once U.S. numbers rolled in. ADP private payrolls showed only 37,000 jobs, the slowest pace in over two years. Traders immediately trimmed their NFP expectations for Friday.
The stagflation alarm bells rang louder when ISM services PMI dropped to 49.9, the first contraction in almost a year. To make things worse, input prices spiked to the highest in two and a half years. Slowing growth and sticky inflation are not what anyone wanted to see.
President Trump jumped in, firing off a Truth Social post telling Fed Chair Powell to get on with the rate cuts. The Bank of Canada (BOC) held rates steady at 2.75%, but only provided CAD strength against USD and AUD. By the end of the day, the dollar closed lower across the board as traders priced in their Fed rate cut expectations.
Upcoming Potential Catalysts on the Economic Calendar:
- Swiss Unemployment Rate for May 2025 at 5:45 am GMT
- Germany Factory Orders for April 2025 at 6:00 am GMT
- Euro area HCOB Construction PMI for May 2025 at 7:30 am GMT
- U.K. New Car Sales for May 2025 at 8:00 am GMT
- Euro area PPI for April 2025 at 9:00 am GMT
- U.S. Challenger Job Cuts for May 2025 at 11:30 am GMT
- European Central Bank Interest Rate Decision at 12:15 pm GMT
- Canada Balance of Trade for April 2025 at 12:30 pm GMT
- U.S. Initial Jobless Claims for week ending May 31 at 12:30 pm GMT
- U.S. Exports & Imports for April 2025 at 12:30 pm GMT
- U.S. Balance of Trade for April 2025 at 12:30 pm GMT
- European Central Bank Press Conference at 12:45 pm GMT
- Canada Ivey PMI s.a for May 2025 at 2:00 pm GMT
- U.S. Fed Kugler Speech at 4:00 pm GMT
- U.S. Fed Harker Speech at 5:30 pm GMT
- U.S. Fed Balance Sheet for June 4, 2025 at 8:30 pm GMT
- Japan Household Spending for April 2025 at 11:30 pm GMT
The European session could heat up with German factory orders and the ECB decision in focus, both strong triggers for euro volatility and global interest rate expectations.
In the US session, trade data and jobless claims may take the spotlight, but later Fed speeches could keep markets on their toes.
As always, stay nimble and don’t forget to check out our Forex Correlation Calculator when taking any trades!