11th June, 2025

The USD is mixed at the start of the day though direction continues to be limited overall ahead of today's main scheduled event of the week US CPI for May.

USD/YEN trades just above its psychological 145.00 mark, as an appeals court ruled Trump can keep his global tariffs in place for now..

Bbg reports the US and China agreed on the outlines of a plan to revive the flow of sensitive goods. US Secretary of Commerce Howard Lutnick said Beijing pledged to speed up rare earth metal shipments, while Washington would ease some export controls.

The agreement still needs approval from Donald Trump and Xi Jinping and Saxo Markets suggest the absence of further meetings signals that we’re not out of the woods yet.

US stock futures are all tiny in the red as wires reported overnight, citing sources, that Hong Kong’s pension fund managers have formed a preliminary plan to sell down their Treasury holdings within as soon as three months if the US loses its last recognized top credit rating. The downgrade of US sovereign debt by Moody’s in May left Japan’s Rating & Investment Information Inc as the only remaining approved firm with the highest score.

Meanwhile, oil rallied into the Open as US President Trump admitted that he is less confident about an Iran deal. Of course, one consequence of failed talks could be a possible attack on Tehran's nuclear facilities by Israel. Mini-range high remains Tuesday's Usd 68.00/brl high.

To the main event and US headline CPI is forecast a touch higher at 2.4% y/y and the core to 2.9% y/y vs 2.3% and 2.8% respectively. These both from cyclical lows though.

The USD could move on a surprise and ahead Bbg remarks traders have boosted bets that the Fed will cut interest rates only once this year. Is the path of resistance to the USD's downside?

We also get Canada building permits, seen at 2.0% m/m in April.

Also, it's UK spending review day.

Ahead, BBC News reports Chancellor Rachel Reeves will deliver her Spending Review later, setting out the budgets for all government departments over the next few years.

The NHS and defence are expected to get the biggest boost when Reeves lays out how taxpayers' money will be spent at 12:30 BST. She is also expected to announce Gbp 39bln to help build social and affordable housing over the next 10 years, as well as extending the Gbp 3 bus fare cap in England until 2027. The IFS warn, however, that sharp trade-offs are unavoidable.

With the Fed blackout period continuing until June 19, ECB speak remains a focus.

Overnight, the Bank's chief economist Lane stated the Bank’s latest reduction in borrowing costs will guard against inflation getting stuck below 2%.

Kazaks said further interest rate cuts may be needed. But exactly how and when will very much depend on how the economy develops, especially at this time of very high uncertainty.

Meanwhile, the ECB's wage tracker predicts salaries will rise by an annual 1.7% in Q4 2025, down sharply from last year's 5.4% peak.

Finally, Elon Musk said he regrets some of his social media posts during last week’s angry exchange with Trump, saying “they went too far.” Tesla shares rose pre-market amid some signs of contrition.

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