U.S. Core PPI, U.S. Jobless Claims, Adobe Earnings

The euro gained ground against the U.S. dollar on Wednesday bolstered by weaker U.S. inflation data and renewed optimism around U.S.–China trade talks. These developments have collectively pressured the greenback and improved appetite for riskier assets.

May’s Consumer Price Index (CPI) data showed inflation rising less than forecast, with headline CPI up 2.4% year-over-year—below the 2.5% estimate and only a slight increase from April’s 2.3%. Core CPI held steady at 2.8% YoY, signaling that while headline inflation is easing, underlying price pressures remain persistent. The softer inflation print has strengthened market expectations that the Federal Reserve may lower interest rates in the near term to support the economy.

In response to the data, former U.S. President Donald Trump took to social media to urge the Fed to cut rates by a full percentage point.

On the European front, the euro drew limited reaction from recent commentary by European Central Bank (ECB) officials. Governing Council member Boris Vujcic noted the need for greater clarity on trade conditions, while fellow member Martins Kazaks suggested that reaching the ECB’s 2% inflation target may require further policy easing. Chief Economist Philip Lane said the ECB’s recent rate cut helped clarify the central bank’s commitment to returning inflation to target.

Looking ahead, the next major catalyst for EUR/USD will likely be the release of the U.S. Producer Price Index (PPI).Alongside this, Initial Jobless Claims data will offer further insights into the U.S. labor market.

Bitcoin prices retreated on Wednesday as markets reacted to mixed signals from U.S.–China trade negotiations and weaker U.S. inflation data, both of which continue to shape investor sentiment around risk assets and monetary policy expectations.

Speaking in London on Wednesday, U.S. President Donald Trump confirmed that a provisional trade framework with China had been reached, pending final approval from himself and Chinese President Xi Jinping. The agreement—emerging after two days of talks in the UK—would see China resume export licenses for rare earth minerals and magnets, while the U.S. retains a 55% tariff on Chinese imports. In return, China would continue imposing a 10% levy on American goods, and Chinese students would maintain access to U.S. universities.

While the announcement initially sparked some optimism, Trump's follow-up comments unsettled markets. He warned that letters outlining unilateral tariff proposals would be sent to major economies within weeks, with a firm July 9 deadline. These would reportedly be presented as non-negotiable offers, although Trump said an extension was possible if needed.

Investors interpreted the announcement as a potential escalation rather than resolution, weighing on appetite for risk-sensitive assets like cryptocurrencies.

Adding to the cautious mood, U.S. inflation figures released showed softer-than-expected consumer price growth in May. The data bolstered expectations that the Federal Reserve may need to cut interest rates later this year to support the economy amid ongoing trade uncertainty.

As traditional and digital asset markets remain highly sensitive to macroeconomic developments, Bitcoin’s short-term direction will likely hinge on evolving trade dynamics and the Fed’s monetary policy stance.

Oil prices jumped on Wednesday, reaching their highest levels in over two months, as escalating geopolitical risks in the Middle East and stronger-than-expected U.S. inventory data fueled bullish sentiment in energy markets.

The rally was sparked by reports that the United States is preparing to evacuate its embassy in Iraq—OPEC’s second-largest oil producer—due to rising regional security concerns. A U.S. official also indicated that military dependents might be withdrawn from Bahrain, another key strategic location.

Adding to the tension, Iranian Defense Minister Aziz Nasirzadeh warned that Tehran could target U.S. military bases in the region if nuclear talks collapse and conflict arises. Meanwhile, President Donald Trump expressed doubts over Iran’s willingness to curtail uranium enrichment, casting further uncertainty over any potential nuclear agreement.

Despite geopolitical pressures, the broader supply picture remains dynamic. OPEC+ is set to increase production by 411,000 barrels per day in July as part of its ongoing effort to unwind pandemic-era output cuts.

Further supporting prices, the U.S. Energy Information Administration reported a larger-than-expected 3.6 million-barrel draw in crude inventories last week, bringing total stockpiles to 432.4 million barrels. Analysts surveyed by Reuters had forecast a 2 million-barrel decline.

U.S. equities closed modestly lower on Wednesday, halting a three-day winning streak as markets digested a mix of easing inflation data, renewed geopolitical risks, and a lack of clarity around a newly announced U.S.–China trade agreement.

President Donald Trump confirmed that his administration had reached a trade agreement with China, calling it a “done” deal, though he noted final approval was still pending from both himself and Chinese President Xi Jinping.

Under the terms outlined by Trump, U.S. tariffs on Chinese goods will remain at 55%, while Chinese tariffs on U.S. exports will be set at 10%.

Despite the headline, investors appeared wary. The absence of formal details and the memory of a collapsed Geneva agreement earlier this year left markets unconvinced that this would result in a lasting resolution.

On the economic front, U.S. inflation data released earlier in the day came in cooler than expected.  Core CPI, which excludes volatile food and energy prices, held steady at 2.8% YoY, while easing to 0.1% month-over-month, both slightly below estimates. The softer inflation print boosted market expectations for Federal Reserve rate cuts later this year.

On the corporate front, Chewy shares slipped after the online pet supply retailer reported stronger-than-expected revenue but missed on net income expectations.

After hours, attention turned to Oracle, which was set to report quarterly results. Oracle shares surged over 7% in after-hours trading on Wednesday after the company raised its fiscal 2026 revenue forecast, citing strong demand for its cloud infrastructure and AI-driven services. The upbeat guidance follows a solid quarterly performance, with revenue reaching $15.9 billion—topping analyst estimates.