Markets were a little fearful going into last Friday’s NFP report, particularly given the dismal ADP employment data from earlier in the week, but in the end such fears were unfounded. The headline figure came in slightly above expectations at 139k new jobs, while the unemployment rate remained steady at 4.2%. As usual with non-farm payrolls, these numbers are susceptible to heavy revision over the next few publications, but doomsaying will fall on deaf ears for the time being – at least until the latest CPI numbers on Wednesday.
US stocks were predictably upbeat following the positive NFP report. All three major indices closed the day around 1% higher and the S&P 500 climbed back above 6,000 points for the first time since February, placing it around 2% down from its all-time high. The Dollar remained relatively stable, gaining half a percent over the usual basket and pushing the DXY back above 99. Gold on the other hand reacted somewhat poorly to the data, falling 1.3% to a $3,310 weekly close. More interesting is the price action in silver, which is currently pushing above $36 an ounce for the first time since 2012. Although gold has captured the lion’s share of headlines so far this year, both precious metals are up roughly 25% in 2025.
The odds of a rate cut are now nil. Interest rate traders are pricing in a rate hold during next week’s meeting with 100% certainty. President Trump, who has been characteristically vocal in criticising Jerome Powell, will soon put forward names for the Fed Chairman’s replacement, although the incumbent is under no obligation to relinquish his position until May 2026. Kevin Warsh, a former Fed governor, is seen as the frontrunner to take over the role.
US-China trade talks are expected to re-emerge this week, with negotiations scheduled for later today in London. The economic calendar is looking relatively sparse again over the next few days, with very little to offer until the latest US CPI report on Wednesday, followed by PPI on Thursday. Headline consumer inflation is expected to tick up slightly to 2.5% annually, while headline PPI is expected to rise to 0.2% in May. There is a small splattering of earnings reports this week, including Gamestop (GME) and Oracle (ORCL), but Tesla (TSLA) will probably also remain relevant due to the spat between Musk and Trump, which seems to have mostly blown over already.
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