The Euro is performing steadily despite a stronger dollar following the NFP release, with markets now focusing on US-China trade talks in London, led by Treasury Secretary Scott Bessent, aimed at easing ongoing trade tensions. In Europe, ECB policymaker Yannis Stournaras announced a successful “soft landing” for the eurozone, signaling the end of the easing cycle, though both he and ECB President Christine Lagarde warned that potential US tariffs could threaten growth amid heightened economic uncertainty.

Japan’s economy showed resilience in Q1 2025, with revised figures indicating flat growth instead of the initially reported 0.2% contraction, though far from the 0.6% growth of late 2024. Trade significantly boosted GDP by 0.4 points, a sharp reversal from the earlier estimated 0.8-point drag, despite a 0.5% drop in exports and a 3% surge in imports, aided by a 90-day trade truce with the Trump administration. Household spending grew slightly by 0.1%, business investment rose 1.1%, but public spending fell 0.5%, signaling potential challenges unless private spending increases.

China’s trade surplus surged to $103.2 billion in May, driven by a robust 4.8% rise in exports, but a worrying 3.4% drop in imports marked the fourth consecutive month of decline, signaling weak domestic demand that could hurt Australia. Consumer and producer prices continued to fall, with deflation deepening as food prices dropped sharply, though Chinese stocks rose slightly amid optimism over renewed US-China trade talks in London. Despite the grim data, the Australian Dollar gained, even as expectations grow for a significant 35-point rate cut in Australia due to economic concerns.