Global Markets

June 12, 2025

Published 16 hours ago

TL;DR

U.S.–China trade deal with 55% tariffs, Middle East tensions lift oil, China tightens rare earth controls.


Highlights

  • Trump announces U.S.–China trade deal with 55% tariffs on Chinese imports (pending Xi’s approval)1; China to supply rare earths and impose 10% tariffs on U.S. goods1.
  • China restricts rare-earth export licenses to six months for U.S. buyers4; secures new rare earth mines in Myanmar, now supplying half of China’s imports18.
  • Oil jumps over 4% to two-month highs (Brent $69.77, WTI $68.15) on Middle East escalation risks and U.S. embassy evacuations7.
  • Israel reportedly weighing unilateral strike on Iran2; Iran to open third enrichment site and upgrade Fordow centrifuges after IAEA censure3.
  • U.S. raises alert at Mideast diplomatic and military posts6; UK issues rare shipping warning for Gulf, Oman, and Hormuz16.
  • Boeing shares drop up to 8% after Air India 787 Dreamliner crash17.
  • UK GDP falls 0.3% in April, worst monthly decline since Oct 2023; Japanese business sentiment turns negative8.
  • EU proposes sanctions on two Chinese banks for aiding Russia’s trade, expanding pressure on China’s financial sector5.
  • U.S. Treasury signals likely extension of July 9 reciprocal tariff deadline for 18 partners, including Japan20.
  • Ant International to seek stablecoin licenses in Hong Kong and Singapore, lifting Alibaba-linked stocks15.
  • World Bank lifts ban on nuclear power funding for first time since 1959; may finance reactor upgrades and small modular reactors in developing countries12.
  • JERA signs 20-year deal to triple U.S. LNG imports to Japan; Shell plans up to 12 million tons new LNG capacity by 203011.

Commentary

Trade and geopolitical risks remain in sharp focus. The U.S.–China trade deal, if finalized, signals a more entrenched tariff regime (55% on Chinese imports)1, but with rare earth supply guarantees and limited reciprocal tariffs from Beijing1. China’s move to restrict rare-earth export licenses to six months4 and its control over Myanmar’s rare earth output18 reinforce its leverage over global supply chains, especially for U.S. tech and EV sectors. The U.S. Treasury’s likely extension of the reciprocal tariff deadline for key partners, including Japan, offers some relief to global trade flows20, but uncertainty persists.

Escalating Middle East tensions are driving a risk premium in energy markets. Oil prices surged to two-month highs as Israel considers a potential unilateral strike on Iran2 and Iran responds to IAEA censure by expanding enrichment capacity3. The U.S. has raised alert levels at diplomatic and military sites6, and the UK has issued a rare warning for shipping in the Gulf and Hormuz16, underscoring the risk of supply disruptions. LNG markets are also in focus with Japan’s JERA securing long-term U.S. supply and Shell expanding capacity, highlighting ongoing efforts to diversify energy sources11.

Equities are mixed. Boeing faces renewed pressure after the Air India 787 crash17, while Alibaba-linked stocks rallied on Ant International’s stablecoin licensing plans in Asia15. European and Asian economic data remain soft, with UK GDP contracting and Japanese business sentiment deteriorating amid trade uncertainty and higher costs8. The EU’s proposed sanctions on Chinese banks for aiding Russia could further strain China-Europe financial relations5.

Fixed income may see safe-haven flows as traders weigh geopolitical escalation and slower growth in major economies. The World Bank’s decision to lift its nuclear funding ban signals potential for long-term infrastructure investment, but immediate market impact is limited12.

Traders should monitor developments in U.S.–China trade policy, Middle East security, and rare earth supply chains, as well as sector-specific moves in energy, tech, and defense.

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Global Markets

June 11, 2025

Published 2 days ago

TL;DR

US-China trade framework, World Bank cuts global growth, Russia extends oil export ban.


Highlights

  • US and China reach provisional framework to ease rare-earth and tech export restrictions; awaiting Trump and Xi approval 1.
  • World Bank cuts 2025 global growth outlook to 2.3% on trade tensions; US and Eurozone forecasts lowered 2.
  • ECB’s Lagarde in Beijing warns that escalating protectionism risks triggering a global downturn 3.
  • Russia extends ban on oil sales to countries observing Western price cap through end-2025; shipments require special permission 4.
  • OPEC projects 44% rise in oil demand by 2050, urges $17.4T investment; Brent crude holds above $67 12.
  • Hong Kong pension funds plan to cut US Treasuries if US loses AAA rating after Moody’s downgrade 14.
  • EDF reports new cracks at Civaux nuclear plant, driving European power prices higher 13.
  • US and Mexico near deal to lift 50% steel tariffs in exchange for import quotas; US steel stocks fall 6.
  • Israel cancels banking waiver for Palestinian institutions, risking collapse of Palestinian financial system; UK and allies sanction Israeli ministers 820.
  • Iran warns it will target US bases if conflict erupts, after missile test; US/EU file IAEA censure resolution 1110.
  • Inditex misses earnings forecasts, pulling IBEX 35 down ~1% to 14,100; European equities mixed 17.
  • South Korea unveils “one strike” rule and dividend-tax reforms to boost market confidence 16.
  • Japan’s Marelli files for US Chapter 11, secures $1.1B financing to maintain operations 18.
  • Peter Thiel-backed crypto exchange Bullish confidentially files for US IPO 19.
  • China offers zero tariffs on all products from 53 African nations (except Eswatini), deepening Africa ties 5.

Commentary

The US-China provisional trade framework signals a potential de-escalation in critical sectors, notably rare earths and technology 1, but implementation hinges on final approval from both leaders 1. While this could stabilize supply chains and support global manufacturing equities, the World Bank’s lowered growth outlook 2 and ECB ’s Lagarde’s warnings 3 highlight that trade policy uncertainty remains a drag on global sentiment. Market participants should monitor for concrete details and signatures before pricing in a sustained improvement.

Energy markets remain tight. Russia’s extension of its oil export ban to price-cap adherents 4 and OPEC’s call for massive long-term investment 12 underpin Brent crude above $67 12. The supply outlook is further clouded by EDF ’s new nuclear safety issues, which have pushed European power prices higher 13 and may pressure Eurozone inflation. These developments support energy equities and could keep inflation expectations elevated, complicating central bank policy paths.

Fixed income faces renewed scrutiny: Hong Kong pension funds’ contingency to cut US Treasuries 14 if the US loses its AAA rating adds to global concerns over sovereign credit quality. This could drive volatility in US yields and the dollar, especially if further rating actions materialize.

In equities, Inditex’s earnings miss and the resulting IBEX 35 drop underscore ongoing earnings sensitivity in Europe 17. The US-Mexico steel deal, if finalized, would ease supply chain tensions but weighs on US steelmakers such as United States Steel Corporation and Steel Dynamics Inc 6. South Korea’s capital market reforms 16 and Bullish ’s IPO filing 19 highlight regional efforts to boost investor confidence and capitalize on digital asset momentum.

Geopolitical risk remains high. Israel’s banking move 8 and new Western sanctions 20 could destabilize Palestinian finances and raise regional tensions. Iran’s threats 11, coupled with US/EU censure at the IAEA 10, add to Middle East risk premia. Traders should stay alert to further escalations impacting energy, regional assets, and safe havens.

Global Markets

June 10, 2025

Published 3 days ago

TL;DR

US-China rare earth talks, EU tightens Russian oil cap, Nvidia/TSMC surge on AI and tariff shifts.


Highlights

  • US-China trade talks in London focus on rare earths and chip export controls; both sides signal possible concessions1.
  • China’s rare-earth export curbs disrupt global auto supply chains; Maruti Suzuki cuts EV output, India and others seek alternatives14.
  • BYD’s deep EV price cuts trigger a China-wide price war, erasing $21.5B in BYD market value; government urges restraint13.
  • EU’s 18th sanctions package lowers Russian oil price cap to $45/bbl, targets shadow fleet and Nord Stream2.
  • OPEC oil output rises 150k bpd in May, well below OPEC+ target; oil steady near $65/bbl3.
  • Nvidia accelerates US shipments ahead of 145% China tariffs; TSMC, Quanta, and Gigabyte post strong AI-driven May sales1520.
  • US court blocks Trump’s IEEPA tariffs, but 10% baseline and 125% China tariffs remain during appeal17.
  • BOJ’s Ueda signals limited scope for further easing; yen weakens to 145/USD as inflation stays below 2%8.
  • UBS shares drop 7% after Swiss government proposes $26B capital raise, raising concerns on payouts and competitiveness9.
  • Bitcoin tops $110,000 on ETF inflows and short squeeze; over $200M in positions liquidated10.
  • Societe Generale to launch USD CoinVertible stablecoin with BNY Mellon ; trading begins July11.
  • NATO and German intelligence warn of increased Russian hybrid threat to Europe; calls for higher defense spending718.

Commentary

US-China trade negotiations in London are a focal point, with rare earths and technology export controls at the center1. Both sides are considering concessions, but China’s ongoing rare-earth export restrictions are already causing production cuts and supply chain adjustments in the global auto sector, notably forcing Maruti Suzuki to reduce EV output14. This supply risk is compounded by a price war in China’s EV industry, triggered by BYD’s price cuts, which has led to sharp declines in sector valuations and prompted government intervention to stabilize the market13.

Energy markets remain sensitive to geopolitics. The EU’s new sanctions package aims to further limit Russia’s oil revenue by lowering the price cap and targeting the shadow fleet, while OPEC’s modest output increase fell short of pledged targets23. Oil prices remain steady near $65/bbl, but traders should monitor for further supply disruptions or compliance issues that could impact volatility3.

In technology, Nvidia accelerates US-bound shipments ahead of steep China tariffs, and strong AI-related sales from TSMC and peers highlight ongoing demand and pre-tariff stockpiling1520. The legal environment for US tariffs remains unsettled, as courts have blocked Trump’s IEEPA-based tariffs but left high tariffs on China in place during appeal, keeping trade policy risk elevated for importers and exporters17.

In financials, UBS shares saw their steepest drop in two months after Swiss authorities proposed a $26B capital raise, raising questions about future dividends and competitiveness9. Meanwhile, the Bank of Japan’s dovish stance and limited room for further easing have pushed the yen to 145/USD, reinforcing yield differentials and supporting Japanese equities8.

Crypto markets are active, with Bitcoin surging above $110,000 on ETF inflows and a short squeeze10, while Societe Generale’s upcoming USD CoinVertible stablecoin launch with BNY Mellon signals further institutional adoption in Europe11. Security concerns remain high in Europe, as NATO and German officials warn of increased Russian hybrid threats and call for greater defense spending718.

Global Markets

June 9, 2025

Published 4 days ago

TL;DR

China extends deflation, US-China trade talks open, PBOC boosts liquidity, Bitcoin tops $107K.


Highlights

  • China’s May CPI fell 0.1% YoY, extending deflation to four months; exports to the US dropped 34.5% amid tariff escalation1.
  • PBOC injected $139B and 173.8B yuan via reverse repos, supporting a rally in Chinese and Hong Kong equities; Hang Seng Tech Index rose over 3%4.
  • Hong Kong Monetary Authority intervened with HK$129.4B to defend the USD peg as local rates hit record lows; 80% of offshore yuan payments now processed via Hong Kong3.
  • Japan faces rising JGB yields and considers super-long bond buybacks as debt-to-GDP reaches 250%; Japanese investors sold German bunds at the fastest pace since 20145.
  • Taiwan’s May exports to the US surged 38.6% YoY, driven by AI demand and pre-tariff shipment acceleration19.
  • US-China trade talks begin in London, with China agreeing to resume rare-earth exports; rare-earth export licenses under review2.
  • Ukraine intercepted a record 479 Russian drones and 20 missiles; Poland scrambled jets and raised air defense alert after Russian strikes near its border67.
  • NATO chief called for a 400% increase in European air and missile defense capabilities10.
  • Qualcomm to acquire UK’s Alphawave for $2.4B; IonQ to acquire Oxford Ionics for $1.08B, both targeting semiconductor and quantum tech growth1112.
  • UK announced a £1bn AI investment and Nvidia partnership to train 7.5 million workers by 203014.
  • JPMorgan now accepts Bitcoin ETFs and Ethereum as collateral; Bitcoin topped $107,000, with risk of large short liquidations1617.
  • WPP CEO Mark Read to retire in 2025 as shares decline and Publicis overtakes as largest ad group20.

Commentary

China’s ongoing deflation and sharp drop in exports to the US underscore persistent domestic demand weakness and the impact of renewed tariff pressures1. The PBOC’s substantial liquidity injections have stabilized sentiment, fueling gains in Chinese and Hong Kong equities, particularly in tech4. However, the trade environment remains challenging, with US tariffs weighing heavily and rare-earth export concessions from Beijing setting the stage for this week’s London trade talks2. Taiwan’s surge in US-bound exports, driven by AI demand and pre-tariff shipment acceleration, further highlights shifting supply chain dynamics in the region19.

In fixed income, Japan’s rising long-end yields and consideration of super-long JGB buybacks reflect a significant shift in the country’s rate environment, with implications for global bond flows—evidenced by Japanese investors’ notable reduction in German bund holdings5. Hong Kong’s defense of its USD peg amid capital flow volatility and ultra-low local rates continues to support local property and bond markets, but ongoing scrutiny of the peg’s sustainability remains a theme3.

Geopolitical risk remains elevated. The record Russian drone and missile attacks on Ukraine, Poland’s air defense escalation, and NATO’s call for a major increase in missile defense all point to persistent security concerns in Eastern Europe6710. These developments may continue to influence energy and defense sectors, as well as broader risk sentiment.

Corporate activity in tech and AI remains strong, with Qualcomm ’s Alphawave acquisition and IonQ ’s Oxford Ionics deal signaling continued investment in semiconductor and quantum computing1112. The UK’s AI investment and collaboration with Nvidia further reinforce the sector’s momentum14. In crypto, JPMorgan’s acceptance of Bitcoin and Ethereum as collateral and Bitcoin’s move above $107,000 reflect ongoing institutionalization and volatility, with technical levels likely to drive near-term price action1617.

Key watch points: outcomes of US-China trade talks, Asian central bank liquidity actions, Japanese bond market developments, and any further escalation in Eastern Europe. Tech and AI sectors remain in focus, while crypto volatility is set to persist.

Global Markets

June 8, 2025

Published 5 days ago

TL;DR

Trump-Xi to restart trade talks; US tightens China tech controls; rare earth curbs hit autos.


Highlights

  • Trump and Xi to meet in London on June 9 to resume high-level US-China trade and rare-earth negotiations; both sides cite progress on tariffs and rare earths1.
  • US suspends all export licenses for nuclear plant components to China, tightening controls on strategic tech transfers2.
  • China’s rare earth export curbs disrupt global auto supply chains, with India’s EV sector facing possible July production halts and price increases3.
  • Boeing resumes 737 Max deliveries to China after tariff reductions and DOJ settlement; 90-day US-China trade truce in place5.
  • Swiss government proposes $26B capital increase for UBS by 2027, aiming to strengthen banking sector resilience4.
  • SEC approves Nasdaq Crypto US Settlement Price Index (SOL, ADA, XLM, XRP), improving prospects for spot altcoin ETFs17.
  • UK FCA proposes lifting ban on retail crypto ETNs; consultation open through July, aligning UK closer to EU crypto rules16.
  • US imposes new sanctions on Iran’s shadow banking network; Trump warns Iran against uranium enrichment, threatening military response87.
  • Russian forces launch largest strike on Kharkiv since 2022; Germany announces plan to add 60,000 troops to meet NATO targets1012.
  • Leaked FSB memo reveals Russian counterintelligence program against Chinese espionage, despite official “no-limits” partnership11.
  • Spain halts Venezuelan oil imports ahead of US sanctions; Venezuela signs deals with Chinese oilfield service firms19.
  • Circle surges 168% after $1.1B NYSE IPO; Gemini files confidentially for US listing, highlighting strong demand for crypto equities20.

Commentary

US-China relations are in focus as Trump and Xi prepare for direct talks in London aimed at easing trade tensions and resolving rare-earth supply issues1. While both sides project optimism, the US move to suspend nuclear plant component exports to China signals ongoing strategic competition, particularly in sensitive technology sectors2. The outcome of Monday’s negotiations will be closely watched by industrials, autos, and tech, with any progress on tariffs or rare-earths likely to drive short-term moves in equities exposed to global supply chains13.

China’s rare earth export curbs continue to ripple through the auto sector, with Indian EV manufacturers warning of imminent production halts and price hikes3. Japanese and European automakers are also affected, highlighting the vulnerability of global supply chains to geopolitical developments3. The resumption of Boeing 737 Max deliveries to China and the temporary tariff truce provide a near-term boost for US aerospace, but underlying trade risks remain5.

Geopolitical risk remains elevated. The US imposed new sanctions on Iran’s financial networks and issued fresh military warnings over uranium enrichment87, while Russia escalated attacks on Kharkiv and Germany announced a significant military expansion to meet NATO goals1012. These developments may support defense equities and keep energy markets alert, especially as Spain halts Venezuelan oil imports and Venezuela pivots to Chinese service providers to maintain production19.

In financials, the Swiss government’s proposed capital increase for UBS reflects ongoing regulatory tightening post-Credit Suisse, with implications for European bank capital planning4. Austria faces higher borrowing costs after a Fitch downgrade, underscoring fiscal pressures in parts of Europe18. Meanwhile, crypto markets are buoyed by Circle 's blockbuster IPO and the SEC’s approval of a Nasdaq crypto index for major altcoins, setting the stage for potential spot ETF launches2017. The UK’s move to consult on lifting its retail crypto ETN ban further signals regulatory convergence with the EU and continued institutionalization of digital assets16.

Traders should monitor headlines from the Trump-Xi summit, developments in rare earths and tariffs, and ongoing geopolitical risk in Ukraine and the Middle East. Crypto, defense, and select industrials are likely to see increased volatility in the near term.

Global Markets

June 6, 2025

Published 7 days ago

TL;DR

US-China trade talks resume; global equities hit records; rare metals, FX, and tariffs drive volatility.


Highlights

  • Trump and Xi held a 90-minute call, agreeing to resume US-China trade talks and reciprocal state visits; rare earths remain a sticking point1.
  • China’s rare metals export restrictions continue to disrupt global auto and EV supply chains, with European suppliers reporting shutdowns3.
  • US Treasury added Ireland and Switzerland to its FX monitoring list, kept China, Japan, and South Korea after interventions, and warned China over currency transparency9.
  • India and US are negotiating to avoid a 16% reciprocal tariff by July 9, focusing on agriculture, autos, and market access10.
  • Australia rejected US beef access over biosecurity concerns amid ongoing tariff talks; considering carbon border tariffs on high-emission imports11.
  • European Commission launched a tool to monitor import surges and trade diversion resulting from US tariffs12.
  • Russia cut its key interest rate to 20% (from 21%) for the first time since 2022, citing easing inflation and economic strain7.
  • BOJ is considering slower bond tapering through smaller quarterly cuts, possibly extending to March 2027; Japan may adjust bond issuance8.
  • Global equities, including the S&P 500 and MSCI ACWI, hit new all-time highs, driven by tech and strong US/EU earnings14.
  • Gold (+2.3% for the week), silver (+24% YTD), and oil rose on safe-haven demand, OPEC+ output moves, and US-China trade optimism13.
  • NATO ministers endorsed new defense capability targets and signaled support for raising spending to 5% of GDP6.
  • Metaplanet (Japan) to raise $5.4B to buy up to 210,000 BTC by 2027; UK FCA proposes lifting ban on crypto ETNs for retail investors1516.

Commentary

Traders are navigating a landscape shaped by renewed US-China engagement, persistent supply chain vulnerabilities, and shifting monetary policy. The Trump-Xi call signals a potential easing of trade tensions, but the lack of detail—particularly on rare earths—means industrial supply chains, especially in autos and EVs, remain exposed1. European and Asian manufacturers face ongoing risks from China's export controls, while new EU monitoring tools reflect heightened vigilance against trade diversion as US tariffs ripple through global flows312.

Currency markets are in focus after the US Treasury expanded its FX monitoring list, with scrutiny on China, Japan, and South Korea following recent interventions9. This, combined with the BOJ’s cautious approach to bond tapering and Russia’s rate cut amid economic strain, highlights diverging policy paths among major central banks78. Watch for increased volatility in JPY, KRW, and CNY, as well as possible shifts in global bond yields.

Equities remain buoyant, with global indices reaching record highs on strong tech and earnings momentum, even as trade and tariff risks persist14. Commodities are also active: gold and silver are benefiting from safe-haven flows and soft US data, while oil prices are supported by OPEC+ output signals and supply disruptions13. Meanwhile, institutional crypto adoption is accelerating, with Metaplanet’s large-scale Bitcoin purchase plan and the UK’s potential regulatory shift likely to drive further flows and volatility in digital assets1516.

Geopolitical and defense themes are intensifying. NATO’s push for higher defense spending and ongoing Russia-Ukraine hostilities may sustain elevated risk premiums in select sectors and sovereign bonds6. Trade negotiations between the US and India, as well as Australia’s stance on beef and carbon tariffs, underscore the complexity of global trade realignment1011. Traders should stay alert to headline risk from ongoing negotiations, central bank policy updates, and geopolitical developments.

Global Markets

June 5, 2025

Published 8 days ago

TL;DR

ECB to cut rates; China rare earth curbs disrupt autos; OPEC raises output, oil steady.


Highlights

  • ECB set to cut rates to 2% after Eurozone inflation drops to 1.9%, with a likely summer pause as trade tensions persist3.
  • US 10-year Treasury yield falls to 4.35% on weak data; BOJ faces ¥28.6T ($198B) unrealized bond losses as Japanese 40-year yields drop4.
  • China’s rare earth export restrictions disrupt global auto supply chains, halting Suzuki Swift production; EU launches 13 critical material projects outside China2.
  • US blocks 2.2 million barrels of ethane exports to China in response to Chinese rare earth curbs; US ethane market under pressure6.
  • OPEC raises output by 200,000 bpd; Saudi Arabia seeks further hikes, but oil prices remain steady amid demand, tariff, and supply concerns19.
  • European Commission to propose a draft ban on Russian gas, oil, and uranium imports by 2027, accelerating EU energy diversification1.
  • Ukraine drone strike damages 41 Russian aircraft; Germany to deliver Ukraine-made long-range weapons; US presses NATO for 5% of GDP defense spending7917.
  • IEA projects global energy investment at $3.3T in 2025, with $2.2T for clean energy; fossil fuel investment to decline18.
  • China delays Apple and Alibaba AI rollouts amid US tariff threats; US SEC proposes stricter disclosure for US-listed Chinese firms1011.
  • Citigroup to cut 3,500 tech jobs in China as part of global restructuring; Wise to shift primary listing from London to New York1514.
  • JPMorgan to accept Bitcoin ETF holdings as collateral for client loans, expanding crypto’s role in traditional finance12.
  • China issues 12.5B yuan in Hong Kong bonds; Hong Kong SFC to allow crypto derivatives trading for professional investors13.

Commentary

Central banks are in focus as the ECB prepares to cut rates to 2%, the first move after Eurozone inflation fell below target since 20233. While this should support European risk assets and peripheral bonds, policymakers are signaling a likely pause as global trade tensions and weak growth persist3. US Treasuries rallied on soft economic data, with yields dropping across the curve, while the BOJ’s mounting unrealized losses highlight ongoing volatility in Japanese government bonds4.

Supply chain and trade disruptions remain a key risk. China’s rare earth export restrictions are forcing automakers to halt production and prompting the EU to accelerate diversification of critical material sources2. The US response—blocking ethane exports to China—adds further stress to energy and petrochemical markets, with knock-on effects for US exporters and Chinese manufacturers6. Meanwhile, OPEC’s output increases and Saudi Arabia’s push for more supply have not moved oil prices as demand concerns and tariff risks weigh on sentiment19.

Geopolitical tensions continue to shape defense and energy markets. The EU’s proposed ban on Russian energy imports by 2027 will accelerate diversification and likely support renewables and nuclear investment, as seen in Czechia’s $18B nuclear deal with South Korea120. Ukraine’s drone strike on Russian aircraft and Germany’s support for Ukrainian weapons production, coupled with the US push for higher NATO defense spending, keep defense and security themes in play7917.

In capital markets, the US SEC’s proposed disclosure rules for Chinese firms and delays in Apple /Alibaba AI launches in China underscore persistent US-China decoupling risks for tech and cross-border listings1011. Wise’s planned move to New York highlights ongoing challenges for European exchanges14. In digital assets, JPMorgan’s acceptance of Bitcoin ETF holdings as collateral and Hong Kong’s expansion of crypto derivatives trading mark further institutionalization of crypto markets1213.

Traders should monitor post-ECB communications, US economic data, and developments in energy and supply chain policy. Cross-asset volatility remains elevated amid shifting macro and geopolitical dynamics.

Global Markets

June 4, 2025

Published 9 days ago

TL;DR

China rare earth halt strains global autos; U.S. doubles steel tariffs; gold tops $3,500/oz.


Highlights

  • China’s rare earth export halt since April 4 is straining global auto, EV, defense, and tech supply chains; Trump-Xi talks expected1.
  • Trump administration doubles U.S. steel and aluminum tariffs to 50%, temporarily exempting the UK; manufacturers warn of higher costs2.
  • France and Belgium block EU Russian LNG ban by 2027, keeping major flows intact; Spain and Netherlands support the ban3.
  • China mulls order for up to 500 Airbus jets, boosting Airbus and Rolls-Royce shares; Boeing excluded from new Chinese deliveries4.
  • RBI expected to cut repo rate by 25bps to 5.75% on June 6 as inflation cools; Indian equities and banks in focus7.
  • Germany approves €46B corporate tax relief, DAX hits record 24,346; corporate tax rate set to fall to 10% by 20328.
  • Ukraine claims drone strikes destroyed 41 Russian aircraft, including strategic bombers; further attacks hit Crimea bridge6.
  • Spot gold rises above $3,500/oz (+2.5%) on haven demand; central banks, including Poland and China, continue buying18.
  • OECD cuts global growth forecast to 2.9% for 2025–26, citing Trump tariffs; U.S. growth seen at 1.6%, inflation risks rising17.
  • Volkswagen to cut 35,000 German jobs by 2030, shift Golf production to Mexico, and transition Wolfsburg to EVs15.
  • Dutch government collapses over immigration policy ahead of NATO summit, adding to EU political uncertainty10.
  • Bulgaria set to join the euro area on Jan 1, 2026, pending EU approval; domestic opposition remains11.

Commentary

Trade tensions are intensifying, with China’s rare earth export halt and the U.S. doubling steel and aluminum tariffs sharply raising input cost and supply chain risk for global manufacturers12. The rare earth squeeze is already pressuring automakers in the U.S., Europe, and India, with inventories dwindling and warnings of imminent production halts1. The upcoming Trump-Xi talks are a critical watchpoint for any sign of easing or escalation, particularly for industrials, autos, and tech1.

In Europe, policy divergence is evident. Germany’s €46 billion corporate tax relief has lifted the DAX to record highs, supporting sentiment for European equities, while Volkswagen ’s restructuring underscores sector cost pressures and the ongoing EV transition815. Meanwhile, the EU’s plan to ban Russian LNG is stalled by France and Belgium, ensuring continued Russian gas flows and tempering immediate energy price volatility3. The Dutch government’s collapse ahead of the NATO summit adds political risk to the region, while Bulgaria’s euro adoption is likely to proceed despite domestic resistance1011.

Asia presents mixed signals. India’s expected rate cut, coupled with strong growth and moderating inflation, is supportive for local equities and fixed income7. In China, auto sector overcapacity and price wars persist, but a potential mega-order for Airbus jets highlights Beijing’s strategic leverage in global supply chains and ongoing trade realignment away from U.S. suppliers like Boeing414.

Geopolitical risk remains elevated. Ukraine’s drone strikes on Russian airbases and infrastructure mark a significant escalation, raising risk premiums in the region6. Gold ’s surge above $3,500/oz reflects persistent haven demand, with central banks continuing to accumulate reserves18. The OECD’s global growth downgrade and higher U.S. inflation risks point to continued volatility in rates and FX, with the dollar supported by trade tensions but select EM currencies (notably INR) buoyed by domestic policy actions17.

Global Markets

June 3, 2025

Published 10 days ago

TL;DR

U.S.-EU tariffs escalate, China rare earth ban hits autos, oil surges on supply and geopolitical risks.


Highlights

  • U.S. doubles tariffs on EU steel and aluminum to 50%; EU threatens $107B in retaliatory tariffs, with negotiations ongoing and measures possible by July 14 1.
  • China maintains rare earth magnet export ban, risking imminent U.S. auto production cuts and factory shutdowns 2.
  • OECD cuts 2025 global growth forecast to 2.9% (from 3.1%) due to U.S.-China tariffs; U.S. and Asian exporters downgraded 4.
  • Global equities and U.S. dollar fall on tariff escalation; automakers drop >4%, steelmakers rally, gold and oil surge 6.
  • WTI crude jumps 5% to $63.39/bbl on OPEC+ supply restraint, Canadian wildfires (350,000 b/d offline), and geopolitical risks 78.
  • Bank of Japan expected to pause JGB purchase tapering amid yield volatility and liquidity concerns in super-long bonds 3.
  • U.S. plans tighter tech export controls and chip software bans targeting Chinese firms; TSMC projects record 2025 profit on AI demand but warns tariffs could dampen global demand 1213.
  • White House expects Trump-Xi trade call this week; markets watch for possible movement on trade tensions 5.
  • EU prepares 18th Russia sanctions package targeting energy, Nord Stream, and banking; NATO reaffirms Ukraine’s irreversible membership path 910.
  • Ukraine claims major underwater blast damages Crimea Bridge, disrupting Russian supply lines 11.
  • SEC confirms U.S. banks and Wall Street can now custody and offer Bitcoin services 14.
  • KKR withdraws £4bn rescue bid for Thames Water, raising risk of special administration and highlighting U.K. utility sector stress 15.

Commentary

Global markets are under pressure as U.S. tariff actions against the EU and China escalate trade friction 16. The EU's threat of up to $107 billion in retaliatory tariffs and China's ongoing rare earth export ban are amplifying supply chain risks, particularly for the automotive and industrial sectors 12. The OECD's downgrade of global growth to 2.9% for 2025 highlights the drag from these disputes, with the U.S. and export-driven Asian economies facing the sharpest outlook cuts 4. Equity markets are reflecting these risks: automakers are sharply lower, while U.S. steelmakers benefit from tariff protection 6. The U.S. dollar's decline and a move into gold underline investor caution 6.

Energy markets are seeing heightened volatility. WTI crude surged 5% on a combination of OPEC+ output restraint, Canadian wildfire-related supply disruptions, and ongoing geopolitical tensions involving Russia, Ukraine, and Iran 78. Natural gas prices are also up, with the market pricing in tighter supply and persistent risks 7. The Bank of Japan's expected pause in JGB purchase tapering signals concern over bond market liquidity and could stabilize Japanese yields, a development to watch for global fixed income flows 3.

In tech, the U.S. is tightening export controls on Chinese firms, targeting chip software and supply chains 12. TSMC continues to benefit from robust AI chip demand, projecting record 2025 profits, but notes that tariffs may eventually weigh on global demand 13. Meanwhile, the SEC's move to allow banks and Wall Street to custody Bitcoin marks a significant step for institutional crypto adoption, potentially boosting digital asset flows 14.

Geopolitical risks remain elevated. The EU is preparing another sanctions package against Russia, while NATO reaffirmed Ukraine’s path to membership and the U.S. commitment to troop presence in Europe 910. Ukraine’s attack on the Crimea Bridge may disrupt Russian logistics and adds to regional uncertainty 11. In the UK, [Thames Water’s failed rescue bid underscores ongoing stress in the utility sector, with broader implications for UK credit markets 15.

Traders should focus on upcoming U.S.-China and EU-U.S. trade negotiations, developments in energy and commodity markets, and central bank policy signals 15. Monitoring supply chain disruptions and sector-specific volatility—especially in autos, commodities, and utilities—remains key as macro and geopolitical headwinds persist 2615.

Global Markets

June 2, 2025

Published 11 days ago

TL;DR

US doubles China steel tariffs; global equities, oil rise; ECB eyes rate cut as trade risks mount.


Highlights

  • US-China trade truce falters: both sides accuse each other of breaching Geneva deal; US doubles steel tariffs to 50% and imposes new tech export controls; China warns of "forceful measures."12
  • Global equities, including Dow futures and Asian indices, fall on renewed tariff escalation and geopolitical tensions.215
  • Indian Sensex drops 800 points, Nifty below 24,600, led by steep declines in metals and IT after US tariff move; foreign investors net sellers.14
  • OPEC+ raises oil output less than expected; Brent and WTI rise as Ukraine-Russia conflict and Iran nuclear talks drive supply concerns.56
  • Russia-Ukraine conflict intensifies with major drone/missile strikes and confirmed North Korean military support; Istanbul peace talks scheduled.3420
  • US Senate proposes 500% tariff on Russian oil/gas, threatening India’s $50B Russian crude imports and Europe’s refined product flows.8
  • Bank of Japan sets 100% provision for $198B in bond losses as yields climb; New World delays bond payments, highlighting China property sector risks.713
  • ECB expected to cut deposit rate to 2% on June 5; Fed signals possible 2025 rate cuts if inflation and tariffs stabilize.16
  • Morgan Stanley forecasts US Dollar Index to fall 9% by mid-2026 on Fed rate cuts; USD shorts build.18
  • EU to restrict Chinese medical device firms from public contracts, increasing regulatory scrutiny.9
  • Sanofi to acquire Blueprint Medicines for $9.1B; OpenAI acquires Jony Ive’s AI startup for $6.5B.1112
  • Metaplanet adds 1,088 Bitcoin ($117M), now holding 8,888 BTC; Bitcoin above $105,000.19

Commentary

Markets are under pressure as US-China trade tensions escalate, with both sides accusing each other of breaching the recent Geneva truce. The US move to double steel tariffs and impose new tech export restrictions has triggered a sharp selloff in global equities, particularly in Asia and India, where metals and IT stocks led declines. The risk-off sentiment is further reflected in rising volatility and safe-haven flows.121415

Commodities are in focus. Oil prices are climbing despite OPEC+ announcing a modest output increase, as supply concerns persist amid intensified Russia-Ukraine hostilities and Iran signaling rejection of US nuclear proposals. The US Senate’s proposed 500% tariff on Russian oil and gas could disrupt major flows to India and Europe, adding to energy market volatility.568

Credit risks remain elevated in Asia. The Bank of Japan’s full provisioning for bond losses underscores the impact of higher yields on central bank balance sheets, while New World’s bond payment delay revives concerns over China’s property sector stability.713 Meanwhile, the ECB is expected to cut rates this week, and the Fed signals 2025 cuts are possible if inflation and tariff impacts moderate.16 Morgan Stanley ’s bearish USD outlook reflects expectations for US monetary easing and ongoing policy uncertainty.18

In corporate activity, Sanofi and OpenAI are driving notable M&A in biotech and AI, while institutional crypto adoption continues with Metaplanet ’s large Bitcoin purchase.111219 The EU’s move to restrict Chinese medical device firms highlights ongoing regulatory and trade friction with China.9

Traders should monitor developments in US-China and Russia-related trade policy, central bank decisions (especially the ECB on June 5), and commodity price action for short-term direction. Geopolitical and credit risks remain key drivers of cross-asset volatility.