Apple Earnings & US Jobs Data Take Center Stage

The EUR/USD pair edged lower on Monday, hovering near the 1.1720 mark after failing to sustain early gains seen at the Asian open.

The decline follows remarks from Donald Trump, who signaled that the United States intends to raise tariffs on European Union vehicle imports to 25% from the current 15% as early as this week. The move is reportedly tied to alleged violations of a prior trade agreement.

In a social media statement, Trump warned that EU-based automakers could face steeper duties unless they shift production to the United States, a strategy aimed at boosting domestic manufacturing. The European Commission pushed back against the claims, asserting compliance with last year’s agreement and pledging to safeguard European economic interests if Washington proceeds with the tariff hike.

Meanwhile, the US Dollar regained some ground, trimming earlier losses as market sentiment turned risk-averse amid escalating geopolitical tensions in the Middle East. According to Bloomberg, Trump announced plans for the US to begin escorting neutral vessels stranded in the Persian Gulf through the strategic Strait of Hormuz starting Monday.

The proposal drew sharp criticism from Ebrahim Azizi, a senior Iranian lawmaker and former commander in the Islamic Revolutionary Guard Corps. Azizi warned that any US involvement in the region’s maritime operations would be viewed as a breach of the existing ceasefire, emphasizing that the Strait of Hormuz and surrounding waters should not become a stage for geopolitical escalation.

Gold prices remained under pressure at the start of the week trading lower during Monday’s Asian session.

Mounting concerns over renewed inflation—largely driven by energy market disruptions linked to Middle East tensions—have reinforced expectations that major central banks will maintain a hawkish stance. The Federal Reserve and its global peers are increasingly seen as likely to keep monetary policy tighter for longer, reducing the appeal of non-yielding assets such as gold.

Geopolitical risks continue to play a dual role in the market. Donald Trump announced plans to escort vessels stranded in the Persian Gulf through the Strait of Hormuz under an initiative dubbed “Project Freedom,” warning of a forceful response to any disruptions. The proposal drew criticism from Ebrahim Azizi, who cautioned that US involvement would breach the ceasefire. Meanwhile, the Islamic Revolutionary Guard Corps accused Washington of failing to uphold prior agreements, raising the risk of renewed hostilities.

Recent US economic data has reinforced this narrative. Figures released last week indicated a pickup in inflation, strengthening expectations that the Federal Reserve could keep interest rates elevated well into next year. The central bank’s recent decision to hold rates within the 3.50%–3.75% range was marked by the highest level of dissent since 1992, highlighting growing divisions among policymakers.

Adding to the hawkish tone, Neel Kashkari, President of the Minneapolis Fed, warned that a prolonged conflict involving Iran could intensify inflationary pressures and increase economic risks. He also signaled that further rate hikes cannot be ruled out given the high degree of uncertainty.

Market participants are now turning their attention to upcoming US economic releases, particularly the closely watched Nonfarm Payrolls due later this week, which could provide fresh direction. For now, the broader macro backdrop points to a downside bias for gold, albeit with limited conviction in the near term.

Oil prices edged lower on Monday following comments from Donald Trump about US efforts to support maritime traffic in the Strait of Hormuz. However, the absence of a breakthrough in US-Iran negotiations continued to underpin the market, keeping prices firmly above the $100 per barrel threshold.

Trump stated on Sunday that the United States would begin escorting vessels stranded in the region, aiming to ease congestion and improve safety along one of the world’s most critical energy transit routes. Still, the lack of a formal peace agreement between Washington and Tehran, combined with ongoing constraints on shipping, has limited any downside in prices.

Diplomatic efforts between the US and Iran continued over the weekend, with both sides reviewing proposals. While securing a nuclear agreement remains a priority for Washington, Tehran has indicated it prefers to delay such talks until after the conflict subsides and maritime restrictions in the Gulf are lifted.

On the supply side, the OPEC+ group announced it would increase output targets by 188,000 barrels per day in June for seven member countries, marking the third consecutive monthly production hike.

Overall, while prices have softened slightly, the combination of constrained supply, fragile geopolitics, and uncertain diplomacy continues to keep oil markets elevated and sensitive to further developments.

US equities closed on a mixed note Friday, though overall sentiment remained constructive as strong corporate earnings—led by Apple—helped offset lingering geopolitical concerns and volatility in oil markets.

Investor confidence was supported by easing crude prices following reports that Iran had put forward a new peace proposal. However, caution persisted after Donald Trump signaled dissatisfaction with Tehran’s position, underscoring the fragility of the geopolitical backdrop.

At the same time, robust earnings from major technology firms provided a key tailwind. Apple’s strong quarterly results and upbeat guidance reinforced confidence in large-cap tech, which continues to play a dominant role in driving the cap-weighted S&P 500.

Encouraging macroeconomic data also contributed to the positive tone. Recent US releases—including GDP figures, jobless claims, and manufacturing surveys—have supported expectations for solid corporate earnings in the coming quarters.

Apple was a key driver of Friday’s gains, with shares rising more than 3% after the company reported resilient iPhone demand and continued strength in its high-margin services segment. The tech giant projected revenue growth of 14%–17% for the current quarter, alongside a strong margin outlook.

The earnings report also marked the first since the announcement that CEO Tim Cook will eventually be succeeded by John Ternus. Ternus joined the post-earnings call, emphasizing confidence in the company’s product pipeline and long-term strategy.

Overall, while geopolitical risks and policy uncertainty remain in focus, a combination of easing energy prices, resilient economic data, and strong earnings momentum continues to underpin equity markets.