Saxo Market Call Crossfire hurricane ahead of US jobs report
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Jun 5, 2025 Weak U.S. economic indicators are shaking up the dollar and boosting treasuries, leaving markets uncertain. Germany's cautious tax reform strategy contrasts with past U.S. measures, sparking a debate on economic recovery. Meanwhile, U.S.-China trade tensions simmer as discussions on rare earth supplies unfold. Insights into job figures reveal challenges ahead, alongside turmoil within the Republican Party over contentious bills. The future of tax reforms and debt ceiling negotiations raise questions about sustainable growth and market reactions.
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US Data Weakens, Treasury Rally
- Weak ISM services and dismal ADP payrolls signal slowing momentum in US economy.
- This triggered a strong rally in US Treasuries with yields dropping across the curve.
Dollar Volatility in Crossfire
- Dollar is volatile, trading choppy amid weak US data and concerns over Japanese bond demand.
- Medium-term outlook suggests US dollar weakness tied to lower US yields and risk sentiment.
Germany's Modest Tax Cuts
- Germany's $46 billion corporate tax plan is modest and slow, reducing rates only gradually from 2028.
- Contrasts with US's rapid Trump tax cuts cutting from 35% to 21% immediately.