Manufacturing Monday – Diverging PMIs fire the starting gun

Markets open the week digesting a trio of final May PMIs. The Euro-area ticked up to 49.4, a six-month high but still contractionary; the U.K. sank deeper to 45.1; and the U.S. ISM hovers near the same threshold at 49–49½. 
A negative output gap on one side of the Atlantic and a flat-lining U.S. manufacturing base create asymmetric growth expectations. If the ISM print surprises on the upside, algorithms are likely to reload long-dollar positions, pushing EUR/USD back toward the 1.1300 handle and GBP/USD toward 1.3400. Conversely, a downside miss could see DXY test fresh five-month lows.

Mid-week signals – BoC decision + dense Fed speaker slate

Wednesday brings the Bank of Canada; consensus is split between a 25 bp cut or another hold, with swaps pricing a 30 % chance of easing. 
On the U.S. side, speech after speech (Waller in Seoul, Logan in Dallas, Goolsbee in Iowa, Powell in Washington) offers intra-day tape bombs. Traders should watch two-year Treasury auction tails for evidence of rate-cut conviction; a soft bid could flatten USD/JPY.

Thursday – The ECB’s credibility test

The European Central Bank meets just hours before U.S. jobless claims. Economists are split: some forecasts point to a 25 bp rate cut to a 2 % deposit rate to protect faltering credit growth, while hawks flag sticky services CPI and wage pressures as arguments for a hold. 
If President Lagarde keeps a tightening bias in the press conference, look for Bund yields to re-steepen and EUR/USD to squeeze toward 1.1450. A cut paired with a dovish guidance pivot could refocus bears on 1.1200.

Positioning Playbook – Three currency pairs

*One-week horizon only; see risk section.

Bonds & rates – Eye on the belly

UST 5s30s steepened last week; another resilient NFP could accelerate a re-steepening back toward +55 bp. Core-EU govies are vulnerable to a dovish ECB surprise; the Schatz-Bund box could widen 5–7 bp.

Equities – Sector rotations & volatility surface

A hawkish ECB + firm ISM is a tailwind for European banks and U.S. industrial cyclicals. Conversely, a global PMI miss may revive the “AI-only” leadership pattern, keeping megacap tech bid but pressuring value. Watch EuroStoxx 50 June gamma at 1 .5 %, which could amplify moves post-ECB.

Risks & wildcards

• Geopolitics: White House tariff rhetoric remains erratic; any concrete escalation with China is JPY-positive.
• Oil: OPEC+ supply hikes scheduled for July may cap Brent at $64 despite Libya outages.
• Liquidity: Friday’s U.S. payrolls release coincides with option expiries in several Asian markets, increasing gap-risk for AUD and CNH.