Insights 
VT 
In North American trading on June 3, 2025, the US dollar strengthened due to several factors. The JOLTS report showed job openings at 7.391 million, exceeding expectations. The China-US trade talks gained momentum, and fears regarding trade tensions seemed to ease. However, US factory orders for April came in at -3.7%, below the expected -3.1%. In other data, New Zealand’s GDT Price Index showed a decline of 1.6%.
Current market highlights include gold dropping $27 to $3351 and WTI crude oil rising 90 cents to $63.43. The S&P 500 saw a 0.6% increase, while US 10-year yields remained flat at 4.46%. The USD led the currency movements, particularly strengthening against the JPY, as USD/JPY surged 135 pips to 144.05, recovering from the previous day’s losses.
The euro saw a decrease, wiping out prior gains and remaining flat for the week. While the USD showed less robust gains against commodity currencies, positive trade sentiment boosted commodities and equities. The financial markets will be watching upcoming trade announcements, ECB decisions, and the US non-farm payrolls report this Friday.
Us Labor Market Resilience
In light of the unexpected strength in the JOLTS report, with job openings surpassing forecasts at 7.391 million, it’s clear that the US labour market hasn’t lost its momentum just yet. This stronger reading—for many, a reliable forward indicator of hiring demand—provided the dollar with a refreshed tailwind, especially in North American hours. It overshadowed the surprisingly weak US factory orders number, which came in well below forecast at -3.7%, pointing towards some contraction in the pace of demand for durable goods across industries. The divergence between these data points might indicate that while businesses remain hesitant to commit to capital projects, they haven’t yet turned cautious on hiring.
The optimism stemming from a more constructive tone in China-US trade discussions served to stabilise global sentiment. With tensions easing, at least temporarily, the appetite for risk improved. This was reflected in the rise in US equities, where the S&P 500 gained 0.6%, a rise that’s more than just an intraday fluke—it hints at momentum reassessing the strength of corporate earnings relative to recent macro data.
Government bonds didn’t move much, despite this improvement in sentiment. The US 10-year yield stayed stuck at 4.46%, suggesting neither bond nor equity traders are re-pricing growth in a dramatic fashion just yet. It’s interesting that yields held steady even as the dollar advanced—normally, stronger job data would invite speculation of policy moves and move yields accordingly, but stability here implies that rate expectations are already fully priced in.
Meanwhile, the substantial move in USD/JPY—135 pips higher to 144.05—signals renewed confidence in the dollar’s relative yield advantage. Yesterday’s yen strength was likely overdone, considering Japan’s fragile economic signals and the reluctance from officials there to intervene meaningfully in currency markets lately. Now, we’ve seen that unwind quickly. When cross-asset volatility remains low, such fast retracements could become more common. For exposure in yen-paired options or futures, this swing makes one thing clear: directional conviction alone is insufficient without tight awareness of short-term flows.
Potential Impact Of Upcoming Us Non Farm Payrolls
We note that gold’s decline by $27 to $3351 reflects more than just dollar strength. Lower factory orders hint at softer physical demand for metals at the industrial level, yet that should not have triggered a 0.8% fall in isolation. It’s equally about haven positioning being unwound as traders embrace risk again. No flight to safety, no bid for precious metals. For short-term positions in derivatives tied to metals, it’s essential to watch how inflation expectations evolve through Friday’s labour data.
Crude oil’s $0.90 rise to $63.43 coincided with better trade expectations. Traders seem firm in their pricing that global shipping and manufacturing could pick up in the coming months. This kind of rally during just a modest shift in sentiment implies positioning had been excessively defensive. If we’ve learned anything from past supply-driven oil surges, futures contracts can reprice quickly on even slight improvements in cross-border optimism.
As for the euro, it’s failed to hang onto earlier gains, now flattened for the week. That should raise concerns about upcoming messaging from Lagarde’s team. Core inflation in parts of the Eurozone remains sticky, yet the common currency has underperformed against this backdrop. The market appears less convinced by forward guidance from the ECB, and currency traders are expressing that with subdued positioning. This component warrants tightening attention over the next three days.
Lastly, traders should not lose sight of Friday’s US non-farm payrolls figure. Several bets will reset depending on whether that confirms the strength suggested in Tuesday’s JOLTS data. If hiring continues to look resilient while inflation slowly moderates, commodities, bond yields, and the dollar could decouple in performance. Positioning across these assets shouldn’t be viewed in isolation—intermarket exposure now poses compounded risk, especially when the data trail splits like this.
