Global Central Banks Shift as Inflation and Jobs Data Roll In

 ECB cuts rates, BoC holds steady, U.S. job growth cools slightly—markets weigh policy paths ahead.

Here’s your latest economic snapshot:

• Eurozone inflation slowed to 1.9%
• Bank of Canada kept its rate at 2.75% 
• ECB cut interest rates by 25 bps
• U.S. nonfarm payrolls rose by 139K

Stay informed with these critical updates!

Market Recap:

Eurozone Consumer Price Index (CPI) YoY: Eurozone inflation slowed to 1.9% year-on-year in May 2025, dipping below the ECB’s 2% target for the first time since September 2024. This strengthens expectations for a 25 bps rate cut later this week. The slowdown was driven by weaker services inflation (3.2%) and falling energy prices (-3.6%). Core inflation dropped to 2.3%, the lowest since January 2022.

Canada Interest Rate Decision: The Bank of Canada kept its interest rate steady at 2.75% in June 2025, pausing for the second time after a series of rate cuts. The decision reflects concerns over rising U.S. tariffs and uncertainty in trade talks, which pose risks to growth and push inflation expectations higher. The BoC cited unclear U.S. trade policy and potential new tariffs as key reasons for holding off on further easing.

Eurozone Interest Rate Decision: The ECB cut interest rates by 25 bps in June 2025, citing improved inflation and growth forecasts. Inflation is nearing the 2% target, with projections lowered for 2025–2026. Core inflation is expected to ease gradually, and GDP growth is seen at 0.9% in 2025. Trade tensions remain a risk, but strong labour markets and public investment support the outlook. President Lagarde signaled the ECB may pause further cuts, noting the rate cycle is nearing its end.

U.S. Nonfarm Payrolls: U.S. nonfarm payrolls rose by 139K in May 2025, slightly above expectations but down from April’s revised 147K. Job gains were led by health care (+62K), leisure and hospitality (+48K), and social assistance (+16K), while federal government (-22K) and manufacturing (-8K) saw declines. Revisions to March and April data cut 95K jobs from previous estimates. Despite signs of a cooling market, overall employment remains solid, though Trump’s recent policy shifts may weigh on job growth ahead.

Oil and Commodities:

Brent Crude: Oil rose to $67 by week’s end, as hopes for a China-U.S. trade deal lifted demand outlook, offsetting OPEC+’s July output hike. HSBC warned further supply increases could pressure its $65 Brent forecast for late 2025.

Gold: Gold fell over 1% to $3300 last Friday after a stronger-than-expected U.S. jobs report reduced expectations for near-term Fed rate cuts. 

Currency Watch:

EUR/USD: Last week, the euro fell 0.43% to $1.1395 after jobs data but still gained about 10% year-to-date versus the dollar. It slipped from a six-week high of $1.1495 following ECB’s Lagarde saying the easing cycle was near its end.

GBP/USD: Last week, sterling was set to close higher at 1.35192, supported by the UK’s resilient economy despite global uncertainty. However, investors remained cautious about the government’s spending plans.

USD/JPY:  The pair rose to 144.939 by the end of the week.

Bitcoin rose 4.21% to $104,739.17. Ethereum rose 4.17% to $2,499.02.

Preview of the Upcoming Week:

June 11, 2025

U.S. Consumer Price Index (CPI) YoY: Inflation in the U.S. fell to 2.3% in April from 2.4% in March 2025. However, it’s expected to rise to around 2.8% by the end of the quarter, according to analysts and economic models. Looking further ahead, inflation is forecasted to stabilize near 2.4% in 2026 and 2.3% in 2027.

Given these inflation trends, traders should pay close attention to USD pairs like EUR/USD, GBP/USD, and USD/JPY, as inflation changes often influence the dollar’s strength and central bank policies.

U.S. Crude Oil Inventories: US crude oil inventories dropped by 4.3 million barrels last week—much more than the expected 0.9 million and the biggest decline since November 2024. However, stocks at the Cushing delivery hub rose by 576,000 barrels. Gasoline and distillate fuel inventories also increased significantly, exceeding forecasts.

Traders should watch oil prices and related energy stocks closely, as large shifts in inventories can impact supply expectations and market volatility.

June 12, 2025

U.K. Gross Domestic Product (GDP) MoM: UK monthly GDP growth slowed to 0.2% in March, down from 0.5% in February 2025. It’s expected to ease further to 0.1% by the end of the quarter. Looking ahead, growth is forecasted to pick up slightly to around 0.4% in 2026 and 0.3% in 2027.

Traders should keep an eye on GBP pairs like GBP/USD and EUR/GBP, as GDP trends influence the Bank of England’s policy outlook and sterling’s strength. UK-focused stocks and bonds may also react to these economic shifts.

U.S. Producer Price Index (PPI) MoM : US Producer Price Inflation dropped to -0.5% in April from 0% in March 2025. It’s expected to rise to 0.3% by the end of the quarter. In the longer term, PPI is forecasted to stabilize around 0.4% in 2026 and 0.2% in 2027.

Watch USD pairs like USD/CAD and USD/JPY, as changes in producer inflation can affect the dollar’s outlook and impact commodities and inflation-sensitive assets.

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