In the week ahead: U.S. Core CPI & PPI, U.K. GDP, UoM Consumer Sentiment Survey

The euro gained ground on Monday, lifted by a combination of improved risk sentiment from US-China trade discussions and increasingly hawkish messaging from European Central Bank (ECB) officials.

Market sentiment brightened after high-level talks between US and Chinese officials were held in the United Kingdom. According to The Wall Street Journal, President Trump granted US Treasury Secretary Bessent greater leeway to ease export restrictions on China—a move that initially supported the dollar but ultimately led to a shift toward risk assets, boosting equities and weighing on the greenback.

In contrast to the Federal Reserve’s steady stance, ECB policymakers signaled growing reluctance to continue monetary easing. Bundesbank President Joachim Nagel called for flexibility in future rate decisions, while ECB Executive Board member Isabel Schnabel warned against expecting a lasting policy divergence between the ECB and the Fed.

With Friday’s robust US jobs report and key inflation data expected this Wednesday, the Federal Reserve is widely anticipated to maintain its current policy stance. Meanwhile, the euro is benefiting from both relative policy support and improving global sentiment.

Bitcoin surged on Monday, lifted by renewed optimism surrounding US-China trade negotiations, even as investors tread cautiously ahead of a pivotal U.S. inflation report due later this week.

After trading in a tight range in recent sessions, Bitcoin’s rally was sparked by signs of progress in talks between senior U.S. and Chinese officials. Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick met with Chinese Vice Premier He Lifeng in London to discuss easing tariffs, adjusting export controls, and broader economic cooperation.

The discussions—set to continue for a second day—build on a preliminary agreement reached in Geneva in May, raising hopes for improved geopolitical stability and strengthening appetite for risk-sensitive assets such as cryptocurrencies.

Bitcoin reached an all-time high of $112,000 last month, buoyed by growing institutional adoption and increasing political support. However, renewed global trade tensions prompted a retreat, with the token entering a period of sideways movement as market participants reassessed risk.

While Bitcoin’s latest rally underscores a return in risk appetite, short-term direction will likely hinge on the outcome of the U.S. inflation report and any further developments in the US-China trade dialogue. A favorable resolution on either front could support further upside, though macroeconomic uncertainty continues to temper bullish momentum.

Oil prices rose to their highest levels in weeks on Monday, supported by a softer U.S. dollar and optimism that progress in U.S.-China trade talks could bolster global growth and fuel demand for crude.

Last week, crude benchmarks posted strong weekly gain as risk appetite improved amid growing expectations of a potential trade agreement between the world’s two largest economies.

Investor attention remained focused on trade talks in London, where U.S. Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick met Chinese Vice Premier He Lifeng. The talks, which followed a phone call between Presidents Trump and Xi last week, aimed to reduce trade friction and discuss broader economic cooperation.

A breakthrough in the negotiations could boost the global economic outlook, strengthening demand prospects for oil and other commodities.

While hopes of a trade deal underpinned Monday’s rally, weak Chinese economic indicators raised concerns about the demand side. Official data showed that China’s exports in May grew at their slowest pace in three months, as U.S. tariffs continued to weigh on shipments. Meanwhile, producer price deflation worsened to a two-year low.

China’s crude oil imports also declined to a four-month low in May, as refiners—both state-owned and independent—undertook scheduled maintenance.

Crude prices remain sensitive to both geopolitical developments and macroeconomic data. While recent gains are supported by a weaker dollar and signs of improving trade relations, any setbacks in negotiations or signs of slowing global demand could cap further upside.

The US 500 edged higher on Monday, supported by gains in heavyweight tech stocks Amazon and Alphabet, as investors monitored renewed trade negotiations between the United States and China.

Senior officials from both countries resumed talks in London, seeking to build on a preliminary agreement reached last month that had temporarily eased tensions between the world’s two largest economies.

Amazon.com and Google parent Alphabet each rose more than 1%, providing key support for the US 500. Amazon announced plans to invest at least $20 billion in Pennsylvania to expand its data center footprint, reflecting its growing commitment to artificial intelligence infrastructure.

Meanwhile, Apple slipped 1.2% after unveiling only incremental updates at its annual software developer conference, underwhelming investors expecting bolder innovation.

Investor attention now shifts to key economic data releases later this week. The May Consumer Price Index (CPI) report is due Wednesday, followed by initial jobless claims on Thursday. While the Federal Reserve is widely expected to hold interest rates steady at next week’s policy meeting, traders will be watching closely for any signs that inflationary pressures are intensifying—especially amid concerns that renewed tariffs could drive prices higher.