Asian Market Wrap
Asian equities broke a four-day losing streak as markets drew some optimism from positive . The labor data appeared to soothe market concerns around a global slowdown, even if the move proves temporary it is a welcome one.
South Korea’s index rose over 2%, reaching its highest level since August 2024. This also pushed the MSCI index of Asia-Pacific shares (excluding Japan) (NASDAQ:) up by nearly 1%.
In Japan, the index gained 0.8%, while Taiwan’s stock market jumped 2%, following a boost in U.S. stocks on Tuesday thanks to AI giant Nvidia (NASDAQ:).
Toyota (NYSE:)’s shares dropped by up to 13%, the biggest fall in nine months, after announcing a privatization deal. Investors and analysts criticized the plan, saying it undervalues the company.
On Wednesday, the rose slightly by 0.18% against the , reaching 144.225. The stayed steady at $1.1368.
The , which tracks the dollar against six major currencies, was at 99.31, close to its six-week low of 98.58 from Monday. So far this year, the index has dropped 8.5%.
Source: LSEG
In commodities, fell due to increased OPEC+ production and worries about the global economy caused by tariff issues. dropped 0.38% to $65.38 per barrel, while U.S. West Texas Intermediate crude fell 0.41% to $63.15 per barrel. For more on this, read OPEC+ Oil Production and Brent Crude: Key Factors Driving Price Fluctuations
stayed mostly unchanged at $3,351.5 per ounce, with a huge 28% gain this year as investors look for safe options. Without clarity on the recent uptick in hostilities between the US-China, Gold is likely to hold the high ground and remain supported.
Trade deals have so far failed to materialize, with today being the deadline for US trading partners to submit proposals for trade deals to avoid tariffs, which are set to come into play in five weeks’ time.
We have heard deals are close with certain countries,s and markets will no doubt be keeping an eye on any proposals submitted and the reaction by US officials.
This, coupled with the hopes that a possible call between US President Trump and Chinese counterpart Xi Jinping, and risk sentiment, remains very much on a knife-edge for now.
The European Open
European stocks edged higher on Wednesday, helped by a 3.4% rise in Airbus shares. This came after reports that Chinese airlines might order hundreds of planes as early as next month.
The index gained 0.3% by early morning, up about 15% since its April lows, thanks to U.S. President Trump pausing major tariffs and making a trade deal with the UK. Most sectors in Europe saw gains, with mining and technology stocks leading the way.
Euro Area PMI Data
Business activity in the euro zone barely grew in May, as the services sector shrank for the first time since November due to weak demand that has been an issue for a year, according to a survey.
The , which measures business activity, dropped to 50.2 in May from 50.4 in April. While this was better than an earlier estimate of 49.5, it was still the weakest since February.
A PMI above 50 means growth, while below 50 signals a decline. The activity fell to 49.7 from 50.1, showing a slight contraction for the first time in six months.
Source: HCOB, S&P PMI
New business across the euro zone has been declining since June 2024, though at a slow pace. The new business index dipped to 49.0 in May from 49.1. Foreign orders have been falling for over three years, adding to the economic struggles.
Companies worked through their existing orders faster to make up for the lack of new work. The services backlog of orders dropped further, with its index falling to 47.4 from 48.1.
Among the biggest eurozone economies, only southern countries showed growth. Italy saw its fastest growth in over a year, while Spain’s growth slowed to its weakest in 17 months. France showed signs of stabilizing with its smallest decline in nine months, but Germany slipped back into decline.
Employment in the euro zone grew slightly in May, mainly in the services sector, while manufacturers cut jobs. Business confidence improved for the first time since January but stayed low, as companies remain cautious about the future despite hopes for interest rate cuts and government support
Economic Data Releases and Final Thoughts
Looking at the economic calendar, the rest of the day sees focus shift to North American data.
The US session will bring the services PMI to the fore. The is expected to slightly increase to 52.0 in May, up from 51.6 in April. However, recent weak might have lowered these expectations.
The US being a predominantly service-based economy means that the reading is likely to stoke some volatility and provide actual insight into the health of the US economy.
We also have the Bank of Canada rate decision, where markets are divided as to what decision we may get. According to LSEG data, market participants are pricing in a 73% probability that rate will remain at 2.75%.
Given that today is the deadline for trade deal proposals, keep an eye out for any developments on that front that could have a significant impact on overall sentiment.
Chart of the Day – DAX Index
From a technical standpoint, the has now recorded two consecutive daily candle closes above the 24000 handle, with both candle closes as hammer candlesticks.
This would hint at further upside with the DAX trading 0.80% higher on the day, with fresh all-time highs now a definite possibility.
A break of the May 29 high at 24390 could face resistance at 24500 before the 24750 and 25000 handles come into focus.
There is no historic price action to analyse above 24390, which means I will be focusing on significant whole numbers as areas of interest. Markets tend to be attracted to these levels.
The RSI remains shy of overbought territory for now, which does bode well for bulls eyeing fresh all-time highs.
Immediate support rests at 24000 and the 20-day MA at 23897.
DAX Index Daily Chart, June 4, 2025![DAX-Daily Chart]( "DAX-Daily Chart")
Source: TradingView.com