### United States
The market’s attention remains firmly on US economic data, particularly the employment report. The ISM services report exceeded expectations, pushing the two-year Treasury yield to approximately 3.71%, its highest since the last employment release. The 10-year yield also settled above 3.80% for the first time in a month. The US Dollar Index extended its advance for four consecutive sessions, indicating heightened market sensitivity to economic surprises. Despite this strength, the dollar appears more vulnerable to downside risks in case of disappointing employment figures, due to recent market positioning and price actions. The Federal Reserve, maintaining its focus on the labor market, is prepared for potential rate adjustments, with market expectations leaning slightly towards rate cuts in the foreseeable future. Stocks have shown resilience, though the performance varied across regions, with mixed results observed in Asian markets.
### Eurozone
The European market is focused on the proposal to increase tariffs on Chinese electric vehicles, following determinations of unfair subsidies by Beijing. The European Commission seeks to impose tariffs of up to 45%, contingent on attaining sufficient votes from member states. The bloc’s inflation has continued to decline faster than anticipated, enhancing confidence (over 90%) within the swaps market that the ECB will cut rates further. The euro, pressured by recent US economic reports, hovered around $1.10, with technical signals suggesting vulnerability should the currency close below this level.
### United Kingdom
The British Pound faced notable pressure recently, experiencing its largest daily fall in a month, with market movements suggesting an ongoing vulnerability. The recent sell-off took sterling below a key uptrend support, stabilizing somewhat just above $1.3100, but showing limited upside potential.
### China
Although mainland Chinese markets have been closed for a significant part of the week, the response to economic stimulus has been robust. Shares trading in Hong Kong soared, aided by Beijing’s measures, but skepticism remains among foreign economists about the sustainability of these gains. The central challenge continues to be boosting household confidence, as China’s markets prepare to reopen.
### Japan
Japan, under its newly appointed government, appears to continue mainstream economic policies. Prime Minister Ishida is expected to pursue an additional budget to include energy subsidies, and the Bank of Japan is anticipated to maintain lower interest rates in light of soft economic data and global uncertainties.
### Canada
The US dollar has demonstrated strength against the Canadian dollar. Oil prices remained volatile, impacting the exchange rate correlation. Despite oil price rallies, the Canadian dollar traded heavily, constrained by broader market developments.
### Australia
In Australia, weakening household spending has put pressure on the Australian dollar, which found itself retreating in North American trading. The currency remains cautious amidst downside risks, with technical indicators pointing towards potential further decreases.
### Mexico
The US dollar declined against the Mexican peso, which enjoyed four days of gains, consolidating in a narrow range. Support levels around MXN19.25 and below are proving formidable, indicating continued peso resilience against the greenback. Meanwhile, Brazil’s trade figures and upcoming CPI releases hold potential for market impact, as the currency undergoes broad consolidation.
