Markets Brace for Packed Fed and Data Calendar

The US dollar staged a late-week rebound from three-year lows on Friday, supported by a recovery in Treasury yields following the Federal Reserve’s rate cut. The move helped cap gains in the euro, with EUR/USD slipping as political unrest in France added further headwinds for the shared currency.

San Francisco Fed President Mary Daly struck a mildly dovish tone, emphasizing the rate cut’s role in cushioning a weakening labor market. Minneapolis Fed President Neel Kashkari maintained a neutral stance, even suggesting hikes could be warranted if conditions improve. In contrast, Governor Stephen Miran reiterated his call for deeper easing, noting he would not have been concerned by a 50-basis-point cut.

In Europe, widespread protests weighed on the euro as hundreds of thousands took to the streets in France’s major cities. Demonstrators urged President Emmanuel Macron and newly appointed Prime Minister Sébastien Lecomu to abandon spending cuts proposed under former Prime Minister François Bayrou, intensifying political risks for the single currency.

This week’s US calendar will be packed with key releases, including S&P Global Flash PMIs, Durable Goods Orders, GDP data, weekly jobless claims, and the Fed’s preferred inflation gauge, Core PCE. A busy slate of Fed speakers will also provide further guidance on the policy outlook.

Gold prices traded modestly higher above $3,685 in early Asian hours on Monday, supported by the Federal Reserve’s recent policy easing and rising geopolitical tensions. Investors now await fresh guidance from Fed officials later in the day for additional direction.

The Fed cut rates by 25 bps, citing labor market weakness despite elevated inflation. Chair Powell framed it as a “risk-management cut” and signaled a cautious, meeting-by-meeting approach, hinting at a slower easing path that could support the US dollar and cap gold’s gains.

Beyond monetary policy, ongoing geopolitical risks continue to underpin demand for safe-haven assets. Ukrainian President Volodymyr Zelensky reported that Russia launched a large-scale drone and missile attack over the weekend, highlighting the ongoing escalation of the war. Meanwhile, heightened tensions in the Middle East and Eastern Europe are also encouraging risk-averse flows into gold.

With the Fed entering a new phase of monetary easing and global geopolitical risks persisting, gold is likely to remain well-supported in the near term. Traders will closely watch speeches from Fed officials later on Monday for clues on the pace and scale of additional policy moves.

Oil prices fell on Friday as ample supplies and signs of weakening demand overshadowed expectations that the Federal Reserve’s first interest-rate cut of the year might spur consumption.

Oil supplies remain strong, while OPEC has been easing its production cuts, and Russian exports have yet to be impacted by sanctions.

The Fed cut its benchmark rate by 25 basis points on Wednesday, citing a cooling labor market. While lower borrowing costs typically boost energy demand, smaller cuts may have limited impact, with underlying fundamentals continuing to weigh on crude markets.

On the demand side, major energy agencies have flagged concerns about weakening consumption, tempering expectations for near-term price gains. Seasonal refinery maintenance is also expected to reduce demand as plants shut units for overhauls.

U.S. data reinforced the bearish tone. Distillate stockpiles rose by 4 million barrels last week, raising concerns over fuel demand in the world’s largest oil consumer. At the same time, labor market softness and a plunge in single-family homebuilding to multi-year lows highlighted broader economic weakness.

U.S. stocks extended their winning streak on Friday, with the US 500 and the US 30 notching new all-time closing highs as optimism over further Federal Reserve rate cuts and a surge in Apple shares lifted sentiment.

The Fed cut rates by 25 bps to 4.00%–4.25%, its first reduction since December, and projected more cuts ahead. Chair Powell called it a “risk-management cut,” stressing a cautious, data-dependent approach amid persistent inflation and uneven growth.

On the political front, President Donald Trump said progress was made during a call with Chinese leader Xi Jinping, highlighting discussions on trade, fentanyl, the Russia-Ukraine war, and the TikTok deal. The talks could pave the way for an in-person meeting later this year at a summit in South Korea. A resolution on TikTok’s U.S. operations, owned by China’s ByteDance, would remove a lingering source of uncertainty for the platform.

FedEx reported stronger-than-expected quarterly revenue of $22.24 billion and adjusted profit of $912 million, helped by cost-cutting measures that offset softer international volumes. Executives said the end of the “de minimis” tariff exemption reduced revenue by $150 million, but results still beat estimates.

In tech, Apple shares jumped after JPMorgan raised its price target to $280 from $255, citing robust demand for the new iPhone 17. In Beijing, launch day drew long lines at the company’s flagship store. Intel shares, however, pulled back after a sharp 22% rally the previous session on news of a $5 billion investment from Nvidia.