JOLTS job openings ahead

European markets are moving lower despite a buoyant session in China overnight. Sentiment within Europe has been directly impacted by events overnight with the collapse in the Chinese Caixin manufacturing PMI highlighting a slowdown in global economic activity as a result of Donald Trump’s tariffs. For the FTSE 100 this has had the effect of driving down valuations for some of the Top tier mining stocks, with Glencore, Rio Tinto, and Antofagasta all losing ground. Nonetheless, despite concerns around economic activity in the world’s second largest economy, Scott Bessant has alluded to a potential call between Trump and Xi Jinping this week. This provides optimism over a breakthrough in trade negotiations that could further lower tariffs or encourage trade.

The euro has been rolling over this morning, with the latest eurozone inflation data providing fresh food for thought ahead of Thursday’s ECB rate decision. While the Fed are hamstrung by concerns over tariff-led inflation pressures, the eurozone has seen headline CPI drop below 2% for just the second time in four-years. With both headline and core monthly inflation figures coming in at 0% for May, the weakness seen in the euro reflects the expectation that the ECB may go beyond the 50bp worth of cuts expected for the remainder of the year.

Looking ahead, today brings the first insight into the US jobs market for the week, with the JOLTS job openings report expected to bring yet another decline after last month’s four-year low of 7.19m. Coming in a week that builds towards Friday’s jobs report, markets will be watching closely for signs of weakness that could drive a more dovish narrative given last week’s 0.1% core PCE release. With treasury yields falling back over the past week, we are seeing some of the concerns around rising debt obligations ease to the benefit of equity markets. With that in mind, traders will be keen to see whether the jobs data released this week provide further downward pressure on yields and borrowing costs.