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⑴ US Treasuries received buying support during Thursday’s Asian session, with 2-year yields down 3 basis points, 10-year yields down 2 basis points, and long-term bond yields down 1 basis point. Trump signaled patience on the Iran issue, indicating reluctance to re-engage in a broader war, but emphasized that any killing of US soldiers by Iran would end the ceasefire. Despite Iran attacking US military bases and Kuwait Airport, Trump rejected Iran’s latest draft memorandum of understanding, insisted on more substantive concessions, and noted he was not in a hurry to reach a deal. US sanctions may remain in place until after Labor Day.⑵ From a trading psychology perspective, the market interprets Trump’s statements as intent to maintain the maximum pressure strategy: using strategic ambiguity and media guidance to force Iran to reduce regional conflicts while continuing economic sanctions. Currently, the Trump administration appears maximally flexible, balancing limited agreements against continued pressure, with no commitment to diplomatic resolution nor escalation into new conflict. Institutions believe the tactical preference remains two-way range trading but it’s better to sell on rebounds. The expected trading range for 10-year US yields is 4.46% to 4.50%.⑶ Multiple employment figures will be released Thursday: May Challenger corporate layoff report, weekly initial jobless claims, and final Q1 productivity. Initial jobless claims have shown a slight upward trend recently; last week’s initial and continuing claims hit five-week highs of 215,000 and 1.786 million, respectively. The market expects a slight decrease this week to 213,000 and 1.78 million. Challenger layoffs continue to rise—83,387 layoffs announced in April, the second-highest in the past six months. Of these, the tech sector accounted for 33,361 layoffs, and AI-related for 21,490, making up 16% of total layoffs year-to-date. After the downward revision of Q1 GDP, productivity is expected to be revised down from a quarter-on-quarter annualized rate of 0.8% to 0.5%, and unit labor costs revised up from 2.3% to 2.5%.

(1) During the European session on Thursday, the euro climbed strongly against other major currencies. Despite weak eurozone retail sales data, market sentiment improved significantly due to the Lebanon ceasefire agreement. Israel and Lebanon agreed to implement a ceasefire, coupled with easing concerns surrounding Trump’s tariff comments and falling oil prices, which together boosted risk appetite. (2) However, the euro's gains in the region were still constrained by multiple factors, including a new wave of tension in the private credit markets, continued worries from Trump’s tariff statements, and uncertainty regarding inflation and interest rate prospects. Data showed that eurozone retail sales in April declined by 0.4% month-on-month, worse than the expected drop of 0.3%, and in sharp contrast to March's growth of 0.8%. The year-on-year increase also slowed from 2.1% in March to 1.0%, mainly dragged down by falling sales of non-food items and automotive fuels. (3) In terms of market conditions, the euro rose against the pound to a four-day high of 0.8656; against the US dollar, Swiss franc, and yen, it climbed to 1.1631, 0.9191, and 185.96, respectively. Versus the Australian dollar, New Zealand dollar, and Canadian dollar, it reached 1.6302, 1.9803, and 1.6167, all recent highs. The market is watching for the release of the US weekly initial jobless claims data during Thursday's New York session to determine whether the euro can further test resistance levels.