Week commencing 8 June 2026

Global markets rotate as US equities rise

With one session to go, United States (US) equity markets are on track to finish the week higher ahead of tonight’s critical non-farm payrolls report and the usual end-of-week headlines from the Middle East. Under the surface, investors have been taking profits on technology stocks after their strong run higher, rotating into more defensive and cyclical sectors. This rotation has supported the blue-chip Dow Jones, even as the  Nasdaq declined, reflecting growing caution around stretched valuations in large-cap technology names.

The week that was: highlights

• The US Institute for Supply Management (ISM) services purchasing managers’ index (PMI) rose to 54.5 in May, exceeding the 53.8 consensus forecast, with the prices-paid component climbing to 71.3, its highest level in nearly four years
• The ISM manufacturing PMI also rose to 54.0, beating expectations of 53.0 and marking its fastest pace of expansion in four years
• US private payrolls increased by 122,000 in May, according to the Automatic Data Processing (ADP) report, surpassing the 117,000 forecast
• Job Openings and Labor Turnover Survey (JOLTS) job openings rose to 7.618 million in April, above expectations of 6.88 million
• US factory orders increased 4.8% month-on-month (MoM) in April, exceeding the 4.6% forecast and accelerating from 1.8% previously
• Initial jobless claims rose to 225,000 for the week, 10,000 above consensus and the highest level since mid-December
• In China (CN), the RatingDog services PMI rose to 54.4 in May, well above the 52.3 forecast, while the National Bureau of Statistics (NBS) manufacturing PMI held at 50.0, in line with expectations
• Euro area (EA) core inflation rose to 2.5% year-on-year (YoY) in May from 2.2%, while headline inflation increased to 3.2%
• West Texas Intermediate (WTI) crude oil rose 6.28% to $92.85
• The US dollar index (DXY) rose 0.49% to 99.42
• Bitcoin fell 13.34% to $63,750
• Gold fell 1.69% to $4463
• The volatility index (VIX) rose to 15.39 from 15.31 the previous week.

Key dates for the week ahead

China & Japan

• Japan (JP) – current account: Monday 8 June at 7.50am SGT
• CN – balance of trade: Tuesday 9 June at 11.00am SGT
• CN – consumer price index (CPI) and producer price index (PPI): Wednesday 10 June at 9.30am SGT
• CN – new yuan loans: Saturday 13 June (time to be advised)

United States

• US – CPI: Wednesday 10 June at 8.30pm SGT
• US – PPI: Thursday 11 June at 8.30pm SGT

Europe & United Kingdom

• EA – European Central Bank (ECB) rate decision: Thursday 11 June at 8.15pm SGT
• EA – ECB press conference: Thursday 11 June at 8.45pm SGT
• United Kingdom (UK) – gross domestic product (GDP): Friday 12 June at 2.00pm SGT

Key events for the week ahead

CN: CPI

Date: Wednesday 10 June at 9.30am SGT

For April, China’s CPI rose 1.2% YoY, accelerating from 1.0% in March and exceeding consensus expectations of 0.8%. Non-food prices picked up notably (1.8% vs 1.2%), driven by higher transport costs due to elevated energy prices and supply-chain effects linked to Middle East tensions. Conversely, food prices fell 1.6%, reversing a previous marginal gain, on the back of weak pork and fresh produce pricing. Core CPI edged higher to 1.2% from 1.1% prior.

Consensus for the May print suggests headline CPI will hold steady at 1.2% YoY. An outcome in line with expectations would likely provide policymakers with more than enough space to re-accelerate fiscal stimulus in the months ahead if required.

 China annual inflation chart

US:CPI

Date: Wednesday 10 June at 8.30pm SGT

For April, headline CPI rose 0.6% MoM, lifting the annual rate to 3.8%, the highest reading since May 2023, from 3.3% prior. Core CPI increased 0.4% MoM, pushing the annual rate to 2.8% from 2.6%. Energy, particularly gasoline, along with shelter costs were the main drivers, while goods prices also showed some reacceleration.

Next week’s inflation update comes at a sensitive juncture for the Federal Reserve (Fed). At the late-April Federal Open Market Committee (FOMC) meeting, the Fed held rates steady in the 3.50% - 3.75% range but delivered its most divided vote since 1992.

Consensus for May expects a monthly headline gain of around 0.5%, lifting the annual rate to 4.2%. Core inflation is expected to rise 0.3% MoM to 2.9% annually. A stronger print would support the US dollar and pressure risk assets, while a softer outcome would ease those concerns.

The US interest rates market is set to finish this week pricing in 17 basis points (bp) of tightening for December, with a full 25 bp hike priced for March.

 US core CPI chart

EA: ECB interest rate decision

Date: Thursday 11 June at 8.15pm SGT

At its April meeting, the ECB held key rates steady, with the deposit facility remaining at 2.00%, as the conflict in the Middle East created a challenging dual pressure of rising inflation and slowing growth.

Since then, incoming data has only reinforced this difficult backdrop. Euro area headline inflation climbed to 3.2% in May, a significant jump from the 1.7% low struck in January, while core inflation rose to 2.5%, its highest level since April 2025. Simultaneously, economic momentum remains tepid, with real GDP expanding by just 0.1% in Q1 2026.

Despite growth concerns, policymakers are widely expected to raise all three key lending rates, including the deposit rate, by 25 bp next week to slow inflation. A second 25 bp rate hike is then expected in September.

EA deposit rate facility chart