Swiss franc’s safe haven status is proving to be a headache for the nation

Forex

Summary:

The Swiss franc's strength amid global trade tensions is fueling deflation and pressuring the Swiss National Bank to consider rate cuts or FX intervention, risking U.S. backlash and economic strain.

U.S. President Donald Trump’s trade policies have rocked global equities in recent weeks, driving investors to seek out pockets of safety in financial markets.

One of the beneficiaries of the market volatility has been the Swiss franc

, widely seen as a safe haven asset in times of macroeconomic or geopolitical uncertainty. The Swiss currency has appreciated 10% against the U.S. dollar since the beginning of the year – but inside Switzerland’s borders, rising demand for the franc is stirring up challenges for policymakers.

The Swiss franc was last seen trading 0.2% higher against the greenback, with $1 buying around 0.82 Swiss francs. Switzerland’s currency, which was trading flat earlier on Wednesday, rallied after ADP data showed hiring slowed to a two-year low in America’s private sector last month.

A strong franc puts deflationary pressure on Switzerland. As the currency appreciates, imports – which play a significant role in the country’s economy – become cheaper.

For some countries, this effect might be a welcome reprieve from sticky inflation. But while many developed markets, such as the U.S. and the U.K., are still working to bring inflation down to their 2% targets, Switzerland is facing the opposite problem: prices are falling too much.

Swiss inflation turned negative in May, with the country’s Consumer Price Index falling by 0.1% year-on-year. The price of imported goods contracted significantly, falling by 2.4% on an annual basis after staying flat in the previous month.

Charlotte de Montpellier, senior France and Switzerland economist at ING, noted the role the currency rally was playing in the country’s inflation picture.

“The latest decline is largely driven by external factors,” she said in a note on Tuesday. “A strong Swiss franc has significantly reduced the cost of imported goods ... Given that imports make up 23% of the CPI basket, this has a notable impact on overall inflation in Switzerland.”

The May data marked Switzerland’s first return to deflation since the Covid-19 pandemic. It could push the Swiss National Bank toward utilizing two key policies previously implemented to address what De Montpellier labeled a “persistent headache” for the central bank.

Negative interest rates

The SNB ended a seven-year stretch of negative interest rates in 2022 — an unpopular policy with savers and lenders, as they eliminate returns on savings deposits and squeeze banks’ margins and profitability.

At its most recent meeting in March, the central bank cut its key rate by 25 basis points to 0.25%.

In the wake of this week’s inflation data, the SNB is expected to “seek to combat the appreciation of the Swiss franc with the weapons at its disposal,” De Montpellier said.

ING expects the SNB to cut its key interest rate by 25 basis points at its next meeting later this month — and De Montpellier argued that further cuts will likely follow.

“Based on current data, a return to negative interest rates before year-end appears increasingly probable,” she said. “Our base case includes a second 25bp cut in September, bringing the policy rate to -0.25%. While the SNB would prefer to avoid deeper cuts, a 50bp reduction in June cannot be ruled out.”

While ING expects Swiss policymakers to stop cutting rates at -0.25%, De Montpellier said a further strengthening of the Swiss franc “could force [the SNB’s] hand,” leaving it with little choice but to take rates further into negative territory.

Lily Fang, a professor of finance at business school INSEAD, told CNBC that current conditions were likely to push Switzerland back into a negative rates environment — a move that SNB Chair Martin Schlegel has stressed remains on the table.

“The Swiss authorities are clearly concerned, because … it’s a small, open economy that relies on international trade, and the U.S. in particular is their single most important trading partner beyond the EU bloc,” Fang said in a phone call.

“Switzerland has already gone ahead and lowered rates ahead of the EU. I think it is very likely to go to zero and even negative.”

Currency intervention

Another tool the SNB has previously used to cool the Swiss franc is intervening in the foreign exchange market by selling the franc and purchasing foreign currencies.

However, with U.S. President Donald Trump back in the White House, this strategy now comes with political challenges.

Back in 2020, the U.S. Treasury, under the first Trump administration, labeled Switzerland a currency manipulator, accusing it of deliberately devaluing the Swiss franc against the greenback. The SNB denied those allegations at the time.

Trump’s full list of so-called reciprocal tariffs said “currency manipulation and trade barriers” had been factored into calculating the levies individual countries were imposing on the United States. The administration said it had calculated that Switzerland — which abolished all industrial tariffs last year — charged tariffs of 61% to the U.S., and it would therefore slap new tariffs of 31% onto Swiss goods.

While ING’s De Montpellier acknowledged that any possible FX intervention from the SNB risked “provoking the ire of the US administration,” she argued it was likely the central bank would intervene in markets in the coming months.

Alex King, a former FX trader and founder of personal finance platform Generation Money, agreed that any direct purchase of foreign currencies by the SNB was “unlikely to sit well with the US administration.”

“When Switzerland was labelled a currency manipulator in 2020 the threat of tariffs wasn’t such a major factor, but it now has a dilemma on its hands,” he told CNBC in an email. “If it was to intervene directly again in FX markets, it could get hit with higher US tariffs, and the negative impact of this could be worse than short term inflationary pressures.”

Last month, SNB’s Schlegel said Swiss officials had held constructive talks with the U.S. on the central bank’s FX interventions, in comments cited by Bloomberg.

“We have never influenced the exchange rate to get us an advantage,” he reportedly told an audience in the Swiss city of Lucerne.

“I’m not sure that they will immediately go and use currency intervention, market intervention, because the U.S. tends to be … labeling countries ‘manipulators,’” added INSEAD’s Fang. “I don’t think that they really want to be labeled as a manipulator again, [so] I think that they will use that probably as a last resort tool.”

source :cnbc

Risk Warnings and Disclaimers

You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.

Add to Favorites

Owen Li

Political

After two days of deafening silence from the White House on Ukraine's Sunday massive drone assault, dubbed 'Operation Spider's Web' - which took out many key Russian aircraft, including long-range strategic bombers and likely even Russia's extremely rare A-50 Radar Plane - President Trump has finally reacted publicly.

The president revealed he has held a phone call with President Vladimir Putin on Wednesday, which significantly lasted about an hour and fifteen minutes. Trump warned that peace is not very close on the horizon and that the two leaders covered several pressing issues in their conversation.

"We discussed the attack on Russia’s docked airplanes, by Ukraine, and also various other attacks that have been taking place by both sides." Trump went on to call it a good conversation, however "not a conversation that will lead to immediate Peace."

That's when Trump clarified that "President Putin did say, and very strongly, that he will have to respond to the recent attack on the airfields."

The Russian leader's words are consistent with Dmitry Medvedev's ominous words issued the day prior, wherein the deputy chairman of Russia’s Security Council, said "retribution is inevitable". Medvedev had warned of what's coming:

"Our Army is pushing forward and will continue to advance. Everything that needs to be blown up will be blown up, and those who must be eliminated will be."

Below: Ukraine on Wednesday released additional footage of strikes on four Russian air fields, including on two A-50 aircraft in Ivanovo...

Trump didn't reveal much further in the way of details, after the White House in a Tuesday briefing again affirmed that President Trump did not have foreknowledge of the Ukrainian cross-border operation. (But did US intelligence? very likely so.)

The fresh Truth Social statement was further taken up with Iran. "I stated to President Putin that Iran cannot have a nuclear weapon and, on this, I believe that we were in agreement. President Putin suggested that he will participate in the discussions with Iran and that he could, perhaps, be helpful in getting this brought to a rapid conclusion," he wrote.

The US President concluded, "It is my opinion that Iran has been slowwalking their decision on this very important matter, and we will need a definitive answer in a very short period of time!"

The full statement:

This comes after the Ayatollah dismissed the latest US proposal which was submitted over the weekend. The central issue is the US demand that uranium enrichment be taken down to zero.

Whether Iran, Ukraine-Russia, or Gaza - conservative voices have been urging Trump to stand by his campaign promises to end conflicts in hotspots around the world. But the fact remains that the US is still funding and weaponizing one side of these various wars, especially in the case of Ukraine.

Of note in Trump's phone call with Putin is that nothing was stated from Trump in the way of a US demand that Putin not retaliate against Ukraine (or at least which was not disclosed in his Truth Social post).

The absence of a preemptive condemnation for any major retaliation is interesting also combined with the White House Press Secretary saying yesterday to reporters that the war is very far away, which suggests it's no longer a top administration priority.

Source: Zero Hedge

Risk Warnings and Disclaimers

Add to Favorites

Adam

Economic

Private payroll additions tumbled in May as weak consumer sentiment and trade policy uncertainty weighed on hiring.

On Wednesday, data from ADP showed private payrolls grew by just 37,000 in May, far fewer than the 114,000 expected by economists and below the 60,000 new jobs added in April. This marked the smallest increase in private payrolls since March 2023.

"The weak numbers we're seeing now does not point to a labor market that's collapsing, but there is hiring hesitancy," ADP chief economist Nela Richardson said on a call with reporters.

The survey encapsulated the week of May 12, meaning it included the initial reaction to the US-China 90-day tariff pause. Additionally, Trump's baseline tariffs of 10% on various countries were in effect.

Richardson said trade policy uncertainty is just one of several factors weighing on hiring, with weak consumer sentiment also potentially weighing on labor market activity.

"It's like driving through fog for some of our firms here," Richardson told Yahoo Finance during the call with reporters. "When you're in that situation, you can't really stop, but you might slow down. And so that's what we're seeing."

She pointed to strong wage growth and low layoffs as points of strength in the labor market. ADP's May data showed wages for workers who changed jobs grew 7% while wages for those who stayed in the same job grew 4.5%. Both were unchanged from the month prior.

"The key takeaway is a slowdown in hiring momentum, but still a labor market that's in good enough shape to support consumer spending and provide the Fed the latitude they've had on rates while it continues to decipher its inflation outlook," Richardson said.

Richardson added that while May's data was weighed down by the economic "fog," it isn't a clear sign the labor market is taking a turn for the worse.

"I do think that once the uncertainty clears a bit, you'll see more activity in the labor market," Richardson said.

President Trump posted about the numbers on Truth Social shortly after the release, calling for Federal Reserve Chair Jerome Powell to cut interest rates.

"ADP NUMBER OUT!!! “Too Late” Powell must now LOWER THE RATE," Trump said. "He is unbelievable!!! Europe has lowered NINE TIMES!"

In another sign that tariff uncertainty is weighing on economic data, the Institute for Supply Management's Services PMI registered a reading of 49.9 in May, below the 51.6 seen in April and lower than the increase to 52 economists had expected. Readings above 50 for this index indicate an expansion in activity, while readings below 50 indicate contraction. May's data marked just the fourth time the services sector has fallen into contraction in the past five years.

New orders tumbled to a reading of 46.4 in May, below the 52.3 seen the month prior. Meanwhile, the prices paid index increased to 68.7, up from 65.1 in April. This marked the highest prices paid reading since November 2022, when the Consumer Price Index (CPI) had shown inflation at 7.1%.

Steve Miller, the chair of ISM's Services Business Survey, said in the release that "Tariff impacts are likely elevating prices paid."

"May’s PMI level is not indicative of a severe contraction, but rather uncertainty that is being expressed broadly among ISM Services Business Survey panelists," Miller said. "The average reading of 50.8 percent over the last three months still indicates expansion in that time period, but it is a notable shift of 2 percentage points below its average of 52.8 percent over the previous nine months."

source : finance.yahoo

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

Add to Favorites

Adam

Forex

Most emerging market currencies will hold the gains they have made this year or extend them against a retreating dollar in the next six months as traders ditch the U.S. exceptionalism trade that fuelled the greenback's dream run, a Reuters poll of FX strategists found.

At the start of the year, emerging market currencies looked set for a rough ride on expectations of U.S. economic strength and delayed Federal Reserve interest rate cuts as well as trade tensions.

But they have since defied expectations as U.S. President Donald Trump's broader-than-expected but erratically implemented tariff together with a deteriorating fiscal outlook have sparked a flight from the dollar and U.S. assets.

That is expected to continue, with more than half the currencies polled forecast to trade in tight ranges or gain, while the rest were expected to give back only a small portion of this year's strong gains, according to a May 30-June 4 poll of more than 50 foreign exchange strategists.

"The path of least resistance is a mildly weaker dollar at the moment," said Christopher Turner, head of FX strategy at ING.

"We think (the decline) will be sort of modest and gradual and that should keep the mindset for investors to buy EM currencies on dips and that's kind of what we're seeing at the moment."

Separately, the dollar has become a preferred funding currency as Trump's trade war fuels recession fears and outflows from U.S. assets.

The EM carry trade - borrowing in low-yielding currencies to invest in higher-yielding EM ones - has long attracted investors chasing returns.

High-yielders like the South African rand and Brazilian real are up around 6.0% and 10.0% respectively this year. The real was predicted to lose only about 2.0%, while the rand is likely to trade in a tight range over the next six months.

"I think the trend for emerging market currency outperformance can continue in the second half of this year, but there are downside risks to be wary of as well," said Lee Hardman, senior currency economist at MUFG, referring to trade disruption and the potential hit to global growth.

The Turkish lira, the weakest-performing emerging market currency so far this year, is projected to soften by another 8.0% from 39 per dollar to 42.8/dollar over the next six months.

In Asia, the heavily managed Chinese yuan is expected to stay rangebound despite widespread concerns about weak demand in its economy, and a standoff with Washington over tariff policy and export controls.

The Indian rupee, Korean won and Thai baht are all expected to gain just less than 1% by the end of November, pointing to steady but modest appreciation.

"The big risk we see short-term for emerging market currencies is the risk of a turnaround in dollar sentiment," said Nick Rees, head of Macro Research at Monex Europe.

"We do expect longer-term depreciation, but by the same token, we think the dollar looks too cheap on a fundamentals basis right now," added Rees.

source :Reuters

Risk Warnings and Disclaimers

Add to Favorites

Adam

Economic

Central Bank

The European Central Bank is all but guaranteed to trim its key interest rate on Thursday.

Markets were last pricing in an around 99% chance of a 25-basis-point cut, according to LSEG data. That would take the deposit facility rate to 2% — half of the mid-2023 high of 4%.

But Europe faces a highly uncertain economic outlook, raising the question of what the ECB could do beyond Thursday’s meeting.

Inflation is now hovering around the central bank’s 2% target again, with flash data on Tuesday showing consumer prices in the euro zone rose just 1.9% in May. Meanwhile, economic growth has still been sluggish: The gross domestic product in the euro zone grew by 0.3% in the first quarter of 2025, according to the latest estimate.

The bloc faces many unknowns, both at home and abroad. That includes U.S. President Donald Trump’s tariff agenda — widely regarded as having a negative impact on growth — and potential retaliatory moves from the European Union, as well as how the EU’s major rearmament plans and Germany’s big fiscal shift could play out.

Here’s what analysts say about the central bank’s potential next steps, and what they might mean for consumers.

Rate outlook for the rest of the year

Analysts and economists are widely expecting more interest rate cuts from the ECB later in the year, but aren’t counting on the bank to give a strong indication of where exactly rates could be headed.

Tuesday’s inflation figures increased chances that, after this week, the next rate trim could come as soon as July, said Jack Allen-Reynolds, deputy chief euro zone economist.

Others struck a more cautious tone, with Barclays economists suggesting in a note last week that rate cuts are on the horizon but won’t be implemented as soon.

“We believe the ECB will remain non-committal on its policy path and continue to follow a meeting-by-meeting approach to maintain flexibility and optionality in policy calibration,” they said.

They’re also expecting more rate cuts from the ECB, forecasting two more 25-basis-point reductions in September and December — meaning the ECB would hold rates steady over the summer months.

Elsewhere, a BofA Global Research report published earlier this week said the ECB was now “running out of reasons not to go below 2%,” echoing the suggestion of further rate cuts on the horizon.

But, it noted, the ECB is unlikely to give hints about just how low it could go.

“We expect some acknowledgment that door is open to move rates below 2%, but a very explicit signal is unlikely. Uncertainty on tariffs will give the Governing Council enough cover to not pre-commit to more,” the report said.

Crucially, the ECB will also publish its latest staff projections this week, highlighting what it expects for inflation and economic growth. That comes after the Organisation for Economic Co-operation and Development’s latest Economic Outlook report, which forecast 1% growth and 2.2% inflation for the euro area this year.

How rate cuts might affect consumers

For consumers, more ECB rate cuts would mainly affect borrowing and savings rates.

Exactly how it plays out for them depends on what type of products they hold, and how long the rates on them are set for, Bas van Geffen, senior macro strategist at RaboResearch, told CNBC.

For example, he said, a 10-year fixed mortgage and a demand deposit would be affected in different ways.

“The interest rate on short-term deposits tends to follow the deposit rate quite closely,” he said.

“A week after the ECB meeting, the policy rate goes into effect. So, if the ECB cuts the deposit rate Thursday, banks will receive 0.25% lower interest on their deposits with the central bank. This may cause them to lower the interest rate they pay on savings accounts as well,” van Geffen explained.

Products with fixed longer-term rates have a more complicated relationship with central bank interest rates, he said, as they’re not only determined by the current policy rate — which often changes — but also by future expectations.

“The market has long been expecting the ECB to cut rates this week. So, that may already be included in long-term interest rates to some extent. That also means that these long-term rates do not necessarily change after this week’s policy decision,” van Geffen said.

source : cnbc

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

Add to Favorites

Thomas

Economic

The U.S. services sector contracted for the first time in nearly a year in May while businesses paid higher prices for inputs, a reminder that the economy remains in danger of experiencing a period of very slow growth and high inflation.

The survey from the Institute for Supply Management (ISM) on Wednesday showed uncertainty was the dominant theme among businesses as they tried to navigate President Donald Trump's constantly shifting trade policy.

The whiplash from the tariffs that Trump has announced, paused, and imposed has left most businesses in limbo and struggling to plan ahead, to the detriment of the economy. The Trump administration has given U.S. trading partners until Wednesday to make their "best offers" to avoid other punishing import levies from taking effect in early July.

"Until there is clarity on the trading environment, it appears that the business sector will remain wary of putting money to work," said James Knightley, chief international economist at ING.

The ISM said its nonmanufacturing purchasing managers index (PMI) dropped to 49.9 last month, the first decline below the 50 mark and lowest reading since June 2024. It stood at 51.6 in April.

Economists polled by Reuters had forecast the services PMI would rise to 52.0 following some easing in the U.S.-China trade tensions. A PMI reading below 50 indicates contraction in the services sector, which accounts for more than two-thirds of the economy. The ISM associates a PMI reading above 48.6 over time with growth in the overall economy.

"May's PMI level is not indicative of a severe contraction, but rather uncertainty," said Steve Miller, chair of the ISM Services Business Survey Committee. "Respondents continued to report difficulty in forecasting and planning due to longer-term tariff uncertainty and frequently cited efforts to delay or minimize ordering until impacts become clearer."

The ISM on Monday reported that manufacturing contracted for a third straight month in May, with suppliers taking the longest time in nearly three years to deliver inputs amid tariffs.

Retailers, airlines and auto manufacturers are among the businesses that have either withdrawn or refrained from giving financial guidance for 2025. While economists do not expect a recession this year, stagflation is on the radar of many.

Public administration, utilities, educational services, information as well as healthcare and social assistance were among the 10 services industries reporting growth. Eight industries, including retail trade, construction, transportation and warehousing, reported contraction.

Businesses in the construction industry said "tariff variability has thrown residential construction supply chains into chaos," adding that "major heating, ventilation and air conditioning equipment manufacturers are passing on their cost increases due to higher refrigerant and steel commodity prices."

They also noted that "planning is difficult for community projects that could be scheduled for the next 22 to 30 months."

Trump on Tuesday doubled steel and aluminium duties to 50%. Businesses in the information sector said tariffs were a challenge "as it is not clear what duties apply," adding "the best plan is still to delay decisions to purchase where possible." Transportation and warehousing businesses said the import duties had "increased the cost of doing business."

The White House's unprecedented campaign to slash spending also impacted purchasing decisions by companies in the healthcare and social assistance industry. But tariffs are boosting demand for retailers as some customers pull purchases forward to avoid higher prices. Demand for data centers was driving activity for businesses in the utility industry.

Stocks on Wall Street were largely flat. The dollar eased against a basket of currencies. U.S. Treasury yields fell.

ISM services PMI

WEAK ORDERS

The ISM survey's new orders measure dropped to 46.4, the lowest reading in nearly 2-1/2 years, from 52.3 in April, likely as the boost from front-running related to tariffs faded. Data on Tuesday showed the new light vehicle sales rate slumped in May by the most in about five years.

Services sector customers viewed their inventory as too high in relation to business requirements, which does not bode well for activity in the near term. Backlog orders were the lowest in nearly two years.

Suppliers' delivery performance continued to worsen. This, together with lengthening delivery times at factories, points to strained supply chains that could drive inflation higher through shortages. Businesses are also seeking to pass on tariffs, which are a tax, to consumers.

That effort was corroborated by a report from the New York Federal Reserve showing the majority of businesses in its district said they had passed on at least some of the tariffs in the form of higher prices in May. Companies also flagged considerable confusion and uncertainty in navigating the duties.

The ISM survey's supplier deliveries index for the services sector rose to 52.5 from 51.3 in April. A reading above 50 indicates slower deliveries. A lengthening in suppliers' delivery times is normally associated with a strong economy. Delivery times are, however, likely getting longer because of supply-chain bottlenecks.

That situation was reinforced by a surge in the survey's measure of prices paid for services inputs to 68.7, the highest level since November 2022, from 65.1 in April. Most economists anticipate the tariff hit to inflation and employment could become evident in the so-called hard economic data by this summer.

Services sector employment picked up. The survey's measure of services employment rose to 50.7 from 49.0 in April. Some companies said "higher scrutiny is being placed on all jobs that need to be filled." The index is generally consistent with a steadily cooling labor market.

Economists shrugged off the release on Wednesday of the ADP National Employment Report, which showed private payrolls increased by only 37,000 jobs in May, the smallest gain since March 2023, after a rise of 60,000 in April. They noted ADP had a poor record predicting the government's closely watched employment report.

The government is expected to report on Friday that nonfarm payrolls increased by 130,000 jobs in May after advancing by 177,000 in April, a Reuters survey of economists showed. The unemployment rate is forecast to hold steady at 4.2%.

Source: Reuters

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

Add to Favorites

Adam

Commodity

Natural Gas Futures Pressured by Weak Demand but Supported by Hotter Outlook

U.S. natural gas futures are showing signs of exhaustion after Monday’s sharp rally, slipping slightly on Wednesday as traders assess near-term weather and technical signals. While short-term resistance levels are forming below the 50-day moving average, expectations for above-normal mid-June temperatures are lending some support to July contracts.

Can Technical Resistance at the 50-Day MA Hold Off Further Gains?

Price action is being capped by minor tops at $3.764, $3.832, and $3.859, with the 50-day moving average at $3.900 acting as the key breakout level. On the downside, the 200-day moving average at $3.548 is offering major support. Although typically a break below this level would signal a trend reversal, current price behavior is showing limited follow-through selling. Traders appear hesitant to chase weakness given seasonally bullish potential from temperature-driven demand.

Will Forecasted Heat Drive a Demand Rebound for Power Burn?

Weather forecaster Atmospheric G2 is calling for above-normal temperatures across much of the central and eastern U.S. from June 8–12, with further heat possible through mid-month. This aligns with recent strength in July Nymex natural gas (NGN25), which gained another $0.028 (+0.76%) on Tuesday after Monday’s sharp rally. Hotter conditions increase power burn from utilities, as cooling demand rises — particularly across the southern U.S., where temperatures are already surging into the 90s and 100s.

Is Weak Demand and Supply Growth a Bearish Underpinning?

Despite the bullish weather outlook, underlying fundamentals remain soft. Lower-48 gas production rose to 103.9 bcf/day (+1.7% y/y), while gas demand slipped to 68.8 bcf/day (-2.7% y/y). LNG export flows also fell to 12.9 bcf/day, down 12.9% week-over-week. Additionally, electricity generation dropped 4.4% y/y for the week ending May 24, reducing utility gas demand. The latest EIA storage report also weighed on sentiment, showing a +101 bcf injection — above the 5-year average — and inventories standing +3.9% above seasonal norms.

Will Storage Surplus and Slowing Exports Weigh on Summer Prices?

European gas storage levels were reported at 49% full as of June 1, notably below the 60% five-year average, though still not alarming. Domestically, drilling activity remains subdued, with Baker Hughes reporting only 99 active rigs — slightly off the recent four-year low. While this limits forward supply growth, near-term fundamentals appear well-balanced, if not slightly loose.

Market Forecast: Neutral-to-Bullish Bias Holds for Now

With production steady and demand lagging, short-term gas prices face resistance. However, the potential for persistent June heat could tighten balances through higher cooling-related power burn. As long as prices hold above the 200-day moving average and weather forecasts stay hot, the bias favors a neutral-to-bullish stance in the short term, particularly if $3.900 resistance is breached.