Global Economy Update!

Big updates on the US and Australia economies. Let’s break it down!

US Economy Shocks!

The US economy had a rough May. Services and jobs slowed way down. The services PMI hit 49.9, below the 50 mark. That means contraction for the first time in nearly a year. New orders for services dropped a lot too. And inflation is rising fast. Prices index hit 68.7, the highest since November 2022. This shows demand is falling while costs are rising. On jobs, private employers only added 37,000 jobs, way below expectations. Small businesses are barely hiring. Trump’s even calling for the Fed to cut rates. Now, people think the Fed will start cutting rates in September. Markets reacted: the Dow Jones ended its winning streak, the dollar dropped, and gold went up. Non – US currencies like the euro, pound, yen, and offshore yuan all rose. This all shows the US economy’s facing falling demand, rising prices, and slowing jobs. There’s growing fear of a possible downturn. The next key thing to watch is the official May jobs report. If it also shows weakness, the chances of the Fed easing up on policy this year will be even higher.

Aussie Economy Shows Resilience!

Australia’s Q1 GDP was underwhelming at just 0.2%. But the Aussie dollar’s still holding up! The AUD/USD is between 0.6445 and 0.6490. Technically, it’s above the 30 – period moving average with an RSI slightly above 50. If it breaks above 0.6500, it might head to 0.6550. The Reserve Bank of Australia might cut rates if the US tariff policy affects Australia’s economy. The market’s giving an 80% chance of a July rate cut. Other central banks’ moves will also impact forex markets. In summary, despite the weak GDP, the Aussie’s resilience is due to expectations of RBA policy and technical support. The US job market’s strength is propping up the dollar, but trade policies are still a big risk. Keep an eye on upcoming data and central bank actions!