Market Highlight 05.06.2025

   Service sector activity in the United States slowed unexpectedly in May, signaling rising uncertainty and mounting cost pressures on firms in response to President Donald Trump’s tariff policies. The Purchasing Managers’ Index (PMI) for service providers fell to 49,9 in May from 51,6 in April, indicating a contraction for the first time in nearly a year. This decline in services followed a sharper-than-expected contraction in manufacturing activity earlier this week. The USD Index slipped by 0,43% on Wednesday after weaker-than-expected private payroll data added to evidence of a cooling labor market. According to the ADP National Employment Report released last night, private sector payrolls rose by only 37.000 jobs in May - well below expectations - after an increase of 60.000 jobs in April. In response to the disappointing figures, President Trump reiterated his call for Federal Reserve Chair Jerome Powell to cut interest rates in order to support the economy.
At the government’s regular cabinet meeting for May 2025, a representative from the Ministry of Finance reported that Vietnam’s exports rose by 14% during the month, resulting in a trade surplus estimated at USD 4,67 billion. Foreign direct investment (FDI) continued to be a bright spot, with total registered capital reaching USD 18,4 billion in the first 5 months of the year - up 51,1% year-over-year. Disbursed FDI was estimated at USD 8,9 billion, marking a 7,9% increase over the same period last year.
  The USD/VND interbank exchange rate rose by an additional VND 30 on Thursday, closing at the intraday high of 26.090. The rate has now appreciated by approximately 2.32% year-to-date. Continued domestic demand for USD and the ongoing third round of trade negotiations between Vietnam and the United States remain key factors shaping market sentiment. The exchange rate is expected to maintain its upward momentum today, with the 26.100 - 26.200 range likely to be tested.

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