Insights 
VT 
The US dollar is currently weaker against the euro, yen, and pound. USDJPY has seen the largest decline, dropping by 0.39%. The dollar’s fall is 0.30% against the GBP and 0.19% against the EUR.
This week’s economic calendar includes key figures such as US CPI on Wednesday and UK GDP on Thursday. The expectations are varied, with UK GDP anticipated at -0.1% and US CPI y/y at 2.5%.
Key Inflation Insights
China’s May CPI decreased by 0.1% year-over-year. Monthly, CPI dropped 0.2% with PPI down 3.3% year-over-year. The European Central Bank suggests it might soon conclude its monetary easing cycle, citing the need for caution with inflation.
US stock futures show positive movement, with the Dow up 64 points, the S&P up 9 points, and the Nasdaq up 13.5 points. Last week’s market saw the Nasdaq climb by 2.18%.
US bond yields are stable with slight fluctuations, and crude oil, gold, and bitcoin all show increases in their current trading values. Bitcoin is trading up by $1940, reaching $107,729.
What we’ve seen so far outlines a US dollar that’s losing ground, notably with the yen showing the sharpest shift. That drop of 0.39% in USDJPY puts the yen ahead in this particular turn. Meanwhile, sterling and the euro are also firmer—GBPUSD up by 0.30% and EURUSD climbing by 0.19%. These may not be massive moves in isolation, but they collectively point to a broader pattern—one that says traders are likely anticipating a shift in the monetary or inflation picture.
Looking through the prism of upcoming data, it’s clear that the weight lies on Wednesday and Thursday. With US CPI due in the middle of the week, markets will be looking not just for confirmation of cooling inflation but for anything to suggest momentum in either direction. The expected 2.5% year-over-year figure isn’t bold, but it’s enough to test confidence in any near-term policy action. Thursday follows up with the UK GDP figure—a negative print of 0.1% is the current forecast. That would mark a slight contraction, and while it may not scream recession, it isn’t growth either.
Global Economic Trends
On the other end, the latest price readout from China reminds us that deflation hasn’t left the table. Consumer prices falling by 0.1% year-over-year and another dip in producer prices of 3.3% echo the broader slowdown we and others have been watching. The monthly CPI decline of 0.2% paints the picture further—domestic demand remains tepid, and this, in turn, will distort the global demand-supply balance for commodities and related asset classes.
Lagarde and her colleagues are dropping hints of restraint—suggesting there may be hesitation before further cuts are made. Inflation may not be gone, but it’s less uncomfortable than it was. To us, that signals the balance of risk is tilting, at least from the perspective of policymakers, towards staying put rather than doing more. It’s not status quo, it’s “wait and see”.
As for equity markets, the mood is buoyant. The Nasdaq, having posted 2.18% gains last week, now extends this rally with futures once again pointing north. While the S&P and Dow have less dramatic forward changes, their direction is clear. This trend isn’t happening in a vacuum—rates are steady and haven’t jolted positions, while wider sentiment appears to be holding firm.
Bitcoin, meanwhile, continues to defy historical norms. At $107,729, this isn’t just a speculative rally off the back of momentum—it’s part of a broader embrace by funds, traders, and, in some cases, institutional portfolios. That said, a rise of $1,940 in a session adds enough volatility to remain a key factor in risk-weighted strategies. Gold and oil also continue their slow march higher, a sign that commodities as an asset class remain both relevant and responsive.
From our perspective, this isn’t a market sitting still. The reaction to CPI alone could swing pair positioning, particularly if volatility in rates returns. With sterling and the UK’s GDP data still in play, short-term direction is not guaranteed, especially with backward-looking indicators. The backdrop sets up potential opportunities in both outright and spread positions, but alignment with impending macro prints has to remain the filter through which all setups pass.
