European markets mixed in early trade

Wall Street closed the week on a positive note after the US labour market delivered a better-than-expected jobs report on Friday. The headline payroll print of 139,000 comfortably beat forecasts, offering reassurance after a week of mixed economic data. 

The Dow, S&P 500 and NASDAQ ended Friday’s session with gains of 1% and above. The mid-cap Russell 2000 led the pack, closing up 1.7%. The S&P 500 closed above 6,000 for the first time since February.

Source: TN Trader

US stock index futures were little changed in early trade on Monday. Investors sat on their hands ahead of today’s US-China trade talks in London.

Asian Pacific stock indices kicked off the new week on a broadly positive note. Hong Kong’s Hang Seng added 1.5% while the Japanese Nikkei tacked on 0.9%. The Shanghai Composite gained 0.4% while Australia’s ASX was closed for a holiday. 

Investors took their lead from Friday’s strength across Wall Street following the better-than-expected payroll data. They were also looking ahead to today’s trade talks between the US and China, brushing aside data which saw Chinese PPI (wholesale inflation) drop 3.3% year-on-year, its biggest drop in close to two years.

The US and China resume high-level trade negotiations in London today, with both sides under pressure to reach a deal. The talks come after a sharp 34% drop in Chinese exports to the US in May - the steepest monthly fall in five years.

The data underscore the toll that tariff barriers have taken, adding urgency to the upcoming discussions. Markets will be watching closely for any breakthrough, especially as prior agreements remain fragile.

For now, the talks offer a focal point for the session and could shape short-term direction across asset classes.

In the forex market, the US dollar came under selling pressure in early trade. It made losses across the board, while the euro got an additional lift after European Central Bank (ECB) member Peter Kazimir said that the bank may already be done with interest rate cuts. This follows last week's 25 basis point cut from the ECB. 

The Dollar Index dropped further below 99.00, extending its recent drift lower. Sterling was another beneficiary of dollar weakness. The GBPUSD closed in on 1.3600 as it headed back up to highs last seen in February 2022.

Source: TN Trader

Gold was a touch firmer in early trade, pushing back above $3,300 following its sharp sell-off at the end of last week.  While dollar weakness remains supportive, gold has encountered stiff resistance just below $3,400 on recent rallies.

Source: TN Trader

In contrast, silver has continued to attract bullish attention. Trading north of $36/oz, silver has taken over leadership in the precious metals space, as it trades at highs last seen over thirteen years ago.

Source: TN Trader

At the end of last week, crude oil rallied in a move which saw front-month WTI break above $64, hitting its highest level in over a month. It pulled back a touch this morning but continues to trade around $64, a level which has acted as resistance since late April. Last week’s move off the lows was driven by a combination of a better demand outlook and ongoing positioning ahead of trade developments.

Traders are watching closely to see if resumed US-China talks lead to more sustained upside momentum. The market is also monitoring any potential supply adjustments, although no new signals have emerged to shift expectations just yet.

Source: TN Trader

Natural Gas prices slipped lower Monday, giving back some of last week’s gains. Today’s move suggests a pause in upward momentum. After surging last week, the market appears to be consolidating. For now, gas remains within its broader range, and sentiment appears balanced as the week begins.

Bitcoin bounced back on Friday following a sharp sell-off that saw it test $100,000 as support. It is now back in a range, trading around $105,000, but it appears to be consolidating once again.  

While sentiment hasn’t turned bearish, the absence of a clear driver has kept enthusiasm in check. For now, crypto appears to be taking its cue from the broader macro landscape.

The CBOE Volatility Index (VIX) was up 1% in early trade on Monday. Despite recent geopolitical and macroeconomic headlines, implied volatility has stayed relatively subdued.

However, whereas the VIX seemed quite relaxed around the mid-teens in February, it is currently held in the high teens. This represents a small but significant increase in investor caution, which is understandable given the ongoing uncertainty around global trade.

Citi revised its S&P 500 year-end target to 6,300, up from 5,800, citing stronger-than-expected momentum in the equity space.

In corporate news, Qualcomm announced a $2.4 billion acquisition of UK chipmaker Alphawave - a deal that will likely draw attention in the semiconductor space. Apple kicks off investor week with AI expected to dominate the agenda, while Nvidia CEO Jensen Huang is scheduled to speak at London Tech Week.

These events could help shape the tech narrative in the coming days.

The economic calendar is light today, with no major data or earnings scheduled. However, the rest of the week picks up with key inflation prints, which are expected to set the tone ahead of next week’s FOMC meeting. With US-China trade talks also underway in London, traders may remain on alert for headline-driven moves, even in the absence of top-tier data today.

Friday’s better-than-expected payrolls print gave bulls fresh fuel, pushing the S&P 500 above 6,000 for the first time since February. While markets may be technically overbought following the mid-April rally, momentum remains upward for now. Risk-on positioning is holding up with the dollar sliding and silver pushing higher.

However, with trade talks and inflation data ahead, the path may not be one-way. Developments in London will likely shape today’s tone - and whether headlines extend the bull run or deliver a dose of caution.