European Central Bank approves Bulgaria's use of euros, analysis of short-term trends of spot gold, silver, crude oil and foreign exchange on June 4

Global Market Review

1. European and American market trends

The three major U.S. stock index futures rose, Dow futures rose 0.15%, S&P 500 futures rose 0.17%, and Nasdaq futures rose 0.14%. The German DAX index rose 0.59%, the UK FTSE 100 index rose 0.12%, the French CAC40 index rose 0.55%, and the European Stoke 50 index rose 0.46%.

2. Market news interpretation

The ECB approved Bulgaria's use of the euro

The ECB said on Wednesday that after evaluating progress on a series of indicators from inflation to central bank legislation, Bulgaria has reached all standards for adopting the euro from January 1, 2026. "This positive assessment paves the way for Bulgaria to introduce the euro on January 1, 2026, and Bulgaria will become the 21st EU member state to join the euro zone." The final decision is up to the finance ministers of EU countries, who are expected to approve the process in early July. Once the political process is xmserving.completed, Bulgarian Central Bank officials will be invited to join the ECB agencies as observers, including the ECB governing xmserving.committee that sets interest rates until formally joining.

Russia's oil and gas budget revenue in May fell 35% year-on-year

Data released by the Russian Ministry of Finance on Wednesday showed that Russia's oil and gas revenue in May fell 35% year-on-year to 512.7 billion rubles ($6.55 billion), which may make Russia more boycott OPEC+'s oil production increase. Russia's oil and gas budget closes as global oil prices fall and ruble strengthensThe income also fell by 53% xmserving.compared with April. Oil and gas revenue has been the Kremlin's most important source of cash, accounting for about a quarter to half of the total federal budget revenue over the past decade.

The U.S. home purchase application index fell to a five-week low

U.S. home purchase mortgage application fell to a five-week low, although interest rates have fallen from their highest level since the end of January. The Mortgage Bankers Association (MBA) home purchases index fell 4.4% to 155 in the week ending May 30, which included the Memorial Day holiday. The 30-year mortgage contract rate fell 6 basis points to 6.92%, according to data released on Wednesday. The MBA report also showed that the refinancing indicators fell by 3.5%, the fourth consecutive decline. Although housing financing costs eased last week, it needed to continue to decline to help the housing market recover momentum. Although homebuyers find that they have more options as more sellers list their properties, asking prices are still high, with mortgage rates still close to 7% instead of 6%.

Bulgaria's EU support will become the 21st member of the euro zone in 2026

The euro zone's momentum will continue to expand, and Bulgaria is determined to be ready to become the 21st member of the euro zone. The European xmserving.commission recommended on Wednesday that the Black Sea country, with a population of 6.4 million, should be allowed to formally adopt the euro in 2026. In their respective reports, the European xmserving.commission and the European Central Bank pointed out that Bulgaria has met all requirements for joining the euro zone on all key issues such as inflation and public debt. “Bulgaria’s economy will be stronger thanks to the euro, and trade with euro zone partners will be more active, attracting more FDI, obtaining more convenient financing channels, creating high-quality jobs and increasing real income,” European xmserving.commission President Ursula von der Leyen said in a statement. "Bulgaria will occupy its due position in shaping the core decisions of the eurozone."

The dilemma of Canadian interest rate decision

⑴ The Bank of Canada's interest rate decision today has attracted much attention, and the market has differences on whether it will cut interest rates again. ⑵ Reasons for supporting interest rate cuts include: the Canadian labor market is facing difficulties, the inflation rate has fallen below 2%, and it is greatly affected by US trade policies, and productivity growth is weak. ⑶ However, the core inflation rate has rebounded to more than 3%, which the central bank may think is more reflective of potential inflationary pressure. ⑷In addition, the central bank has cut interest rates by 225 basis points in the past year, and the interest rates are close to the expansion range, and decision makers hope to wait and see the effectiveness of the policy. ⑸ There will be new inflation and employment data in the next two months, and the central bank needs to judge whether further interest rate cuts are needed based on this. ⑹The market is currently expecting interest rates to remain unchanged, but the Bank of Canada has always had unexpected moves. ⑺If interest rates remain unchanged today, the Canadian dollar may benefit, but the market focus will turn to the July meeting.

EU Trade xmserving.commissioner said that European and American tariff negotiations are moving in the right direction

On the 4th local time, EU Trade xmserving.commissioner Sevkovic said thatDay held constructive talks with U.S. Trade Representative Greer. Regarding the Trump administration’s tariff negotiations, Sevkovic said that the two sides are moving steadily in the right direction.

The German DAX index hit a new high, and the cabinet approved the tax stimulus plan

⑴ The German DAX index hit a new high in early trading on Wednesday, up 1% to 24,337.20 points, and once hit a historical high of 24,346.15 points during the session. ⑵ Previously, the German cabinet approved Prime Minister Friedrich Mertz's tax plan to stimulate economic growth in Germany, the largest economy in Europe. ⑶The plan includes the introduction of corporate tax exemptions to support the German economy. ⑷ Intel Technology, Airbus and DHL parent xmserving.company Deutsche Post became the top gainers in the DAX index. ⑸ The last time the DAX index closed to a new high was on May 27, when the closing price was 24,226.49 points.

European banking supervision needs to be simplified

⑴ Juan Carlos Escotet, President of Spanish Bank Abanca, said at the IESE banking meeting in Madrid that European banking supervision needs to be deeply simplified. ⑵ He believes that over-regulation is weakening the xmserving.competitiveness and efficiency of banks, and regulatory adaptation, maintenance and related taxes consume about 20% of the interest rate spread of banks. ⑶ For institutions such as Abanca, regulatory regulations such as MREL bring about a cost of about 200 million euros per year. ⑷Escotet pointed out that excessive costs hinder capital accumulation, credit flow and growth, putting European banking at a disadvantage in international xmserving.competition. ⑸ He emphasized that the current bank's good solvency is a favorable opportunity to simplify the regulatory framework and release its potential.

Japan plans to release reserve rice to alleviate the high rice prices

⑴ Japanese agricultural minister Shinjiro Koizumi said on the 4th that he is considering releasing government reserve rice to Japanese wine and miso manufacturers to cope with the current high rice prices and rice shortage. ⑵ He emphasized that rice has a wide range of uses and needs xmserving.comprehensive consideration, and plans to hold a meeting with relevant manufacturers and processing groups next week. ⑶ Currently, the Japanese government reserves about 300,000 tons of rice, and a part of it is expected to be allocated for delivery. ⑷ Koizumi said that if there is demand, reserve rice will be released indefinitely, and rice imported at the lowest import volume will be considered to stabilize rice prices.

Russian oil and gas revenue declines and budget deficits expand

⑴ Data from the Russian Ministry of Finance showed that in May, Russia's oil and gas revenue fell by 35% year-on-year to 512.7 billion rubles (about 6.55 billion US dollars). ⑵ The revenue fell 53% month-on-month in April, mainly due to the decline in global oil prices and the appreciation of the ruble. ⑶ Oil and gas revenue is an important source of the Russian Federation's budget, accounting for 25% to 50% of the total budget revenue in the past decade. ⑷ Russia's budget deficit in the first four months of this year reached 3.2 trillion rubles, accounting for 1.5% of GDP. ⑸ The Russian Ministry of Finance has raised its budget deficit forecast for 2025 from 0.5% of GDP to 1.7%, and lowered its energy revenue forecast by 24% to reflect the long-term oil priceSluggish expectations. ⑹ From January to May this year, Russia's oil and gas sales revenue fell by 14.4% year-on-year to 4.24 trillion rubles.

The Swiss National Bank may return to negative interest rates

⑴ Mitsubishi UF's Lee Hardman pointed out in the report that the market expects the Swiss National Bank to return to negative interest rates in September. ⑵ Swiss inflation continued to fall below expectations, while the Swiss franc remained strong, prompting the market to form this expectation. ⑶ Analysts believe that the Swiss National Bank may choose to interfere in the foreign exchange market to weaken the Swiss franc, but the move may spark criticism from the Trump administration. ⑷ The Swiss National Bank's current policy rate is 0.25%, and Mitsubishi UF expects it to cut interest rates to 0% at its June meeting. ⑸ Affected by this news, the euro rose 0.1% to 0.9373.

Trump's policy triggers a "revival" of short-selling business

⑴CNBC analyst Jim Kremer pointed out that Trump's policy is distorting market logic, attracting short sellers to enter the market and inducing investors to misjudgment. ⑵ He mentioned that the market has frequently seen a "sell at the opening" model recently because investors expect Trump to suddenly make xmserving.comments about trade or specific xmserving.companies (such as Apple) in an attempt to profit from short-term declines. ⑶ However, this strategy often fails during Trump's days of silence. ⑷Clay defaults that Trump has almost revived his shorting business with his own strength. Many hedge funds have begun to short stocks such as Nvidia or CoreWeave in large quantities, believing that with the White House policies, we can make steady profits without losing money. ⑸ But he also warned that short sellers may face significant losses because many xmserving.companies themselves perform well, but the White House's actions often obscured Wall Street's sight.

U.S. manufacturing activity further declined due to the influence of trade policy

⑴U.S. manufacturing activity further collapsed in May, reflecting the market's continued concerns about the capricious trade policy of the Trump administration, according to data from the Institute of Supply Management (ISM). ⑵ ISM manufacturing purchasing managers' index fell from 48.7 in April to 48.5 in May, consistent with economists surveyed by the Wall Street Journal. ⑶ The index fell to its lowest level since November last year, further below the 50 boom and bust line. The last time it was above 50 was in January and February, and had previously contracted for 26 consecutive months. ⑷Susan Spence, chairman of the ISM Manufacturing Business Inquiry xmserving.committee, said demand indicators performed inconsistently, with the decline in new orders and backlogs slowing xmserving.compared with April, but the contraction of customer inventory and new export orders has intensified. ⑸ Except during the epidemic, the new export order index fell to its lowest level since 2009, and the import index fell sharply for the second consecutive month. Although price growth is still at a high level, it slowed down from April, while the production index rebounded from its very low level last month.

3. Trends of major currency pairs in the New York Stock Exchange before the market

Euro/USD: As of 20:19 Beijing time, the euro/USD rose, and is now at 1.1382, an increase of 0.10%. New York City MarketPreviously, the (EURUSD) price rose in recent intraday trading as it relies on its EMA50 support, providing positive momentum to help it achieve this gain, and in addition, a positive divergence on (RSI), following the oversold level xmserving.compared to the price action, as positive signals emerge, as well as prices dominated by bullish trends and their trading, as well as slight deviations in the short term.

GBP/USD: As of 20:19 Beijing time, GBP/USD rose, now at 1.3526, an increase of 0.07%. Before the New York Stock Exchange, (GBPUSD) price rose on the last trading day, taking advantage of its stability above the EMA50, which provides dynamic support to help it achieve its final gains and continue trading with a slight bullish short-term.

Spot gold: As of 20:19 Beijing time, spot gold rose, now at 3352.68, a drop of 0.02%. Before the New York Stock Exchange, the price of (gold) was volatile trading as it tried to break through the tenacious resistance level of $3365, supported by positive signals from (RSI), which was trading within a small bearish channel range, limiting its short-term trading, in addition to continuing to provide dynamic support in trades above the EMA50, and the price was trying to gain positive momentum to help it rebound in the new bullish wave, and its key was to break through this resistance.

Spot silver: As of 20:19 Beijing time, spot silver fell, now at 34.342, a drop of 0.43%. Before the New York market, the price of (silver) traded calmly in the last intraday trading in a narrow range, trying to gain positive momentum, which could help it break through the key resistance level of $34.50, supported by trading above its EMA50 and follow the bias line under the main bullish trend in the short term, on the other hand, we noticed negative signals starting to appear on (RSI) that will slow the price upward unless it breaks through that resistance level.

Crude oil market: As of 20:19 Beijing time, U.S. oil fell, now at 63.360, a drop of 0.06%. Before New York, (crude oil) prices rose in recent intraday trading, ready to attack the stubborn resistance level of $63.50, after successfully getting rid of overbought, leveraging its position at EMA5 in the case of short-term bullish correction trends dominant and trading along a slash.The continuous transaction above 0 strengthens the stability of the positive scenario.

4. Institutional view

HSBC: Weak GDP data may prompt the RBA to cut interest rates faster

Economists at HSBC Global Research said that a slowdown in Australia's GDP growth may prompt the country's central bank to lower its overnight lending rate faster. JamieCulling and Paul Bloxham expect the RBA to cut interest rates in the third, fourth quarter and first quarter of 2025, thus reducing the overnight lending rate to 3.10%. A prominent feature of the first-quarter GDP data is the obvious cautious attitude shown by consumers. They noted that household consumption rose in the first quarter, but the recovery momentum remained moderate. A key local indicator worth paying attention to in the future will be the monthly CPI indicator in May. HSBC pointed out that the monthly data for April showed a cut-off average CPI increased by 2.8% year-on-year, meaning that basic inflation in the second quarter is still higher than the RBA's 2.6% forecast.

Goldman Sachs: Trump's "retaliation tax" clause may regain investors' favor

Goldman Sachs stock strategists say the provisions in the Trump tax bill called "retaliation tax" may weaken foreign investors' interest in U.S. assets and regain investors' attention to European markets. The measure, Section 899, gives the United States the power to impose up to 20% taxes on foreigners who own U.S. investment. Strategists noted that by the fourth quarter of 2024, the proportion of European investors in the United States rose to 45% from 15% in 2009, but now there are signs that this proportion has reversed. European investors are growing confidence in the outlook for the continent, and investment momentum in the region is also rising. Since the beginning of 2025, the European Stoke 600 index has risen by 8%.

The above content is all about "[XM Foreign Exchange Platform]: The European Central Bank approved the use of the euro in Bulgaria, and the short-term trend analysis of spot gold, silver, crude oil and foreign exchange on June 4". It was carefully xmserving.compiled and edited by the editor of XM Foreign Exchange. I hope it will be helpful to your trading! Thanks for the support!

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