At the end of Thursday, the Dow Jones index (US30) was virtually unchanged. The S&P500 Index (US500) was down 0.04%. The Nasdaq Technology Index (US100) closed higher by 0.15%. Wall Street remained cautious as a bill to cut taxes and increase defense spending now heads to the Senate and could add trillions to the $36 trillion national debt. The US Congressional Budget Office estimates spending at nearly $4 trillion, raising concerns about budget instability. Bond markets reflected this concern, with 30-year Treasury yields briefly hitting 5.14%, the highest level since 2023.

The US initial jobless claims fell 2,000 from the previous week to 227,000 for the period ended May 17, the lowest in four weeks and below market expectations for a rise to 230,000. The result extended a period of relative strength in the US labor market.

Bitcoin surpassed the $110,800 mark for the first time in history as the US government’s deregulation of cryptocurrencies reinforced the positive momentum since mid-April. Democrats in Congress dropped their opposition to a bill aimed at regulating stable cryptocurrencies, paving the way for legislation by the end of the week. The move reinforced expectations that government regulation of cryptocurrencies tied to the US dollar could spur the adoption of the asset class.

European stocks closed significantly lower on Thursday, following declines in global equities amid concerns over rising US debt and risks to European growth. Germany’s DAX (DE40) fell by 0.51%, France’s CAC 40 (FR40) closed down 0.58%, Spain’s IBEX35 (ES35) lost 0.25%, and the UK’s FTSE 100 (UK100) closed 0.54% yesterday. In Germany, the Ifo Business Climate Index rose to 87.5 in May, the highest reading since June 2024 and slightly above market expectations of 87.4, indicating some easing of recent uncertainty among companies. However, PMI data pointed to a renewed and sharper-than-expected contraction in the Eurozone’s private sector — the strongest in six months — driven by a moderate decline in service sector activity. Output declined in Germany and France, while the rest of the Eurozone continued to show positive growth.

WTI crude prices fell by 0.6% to settle at $61.2 a barrel on Thursday, pressured by reports that OPEC+ is considering increasing production in July, raising concerns about a potential supply glut. A production increase of 411,000 barrels per day is reportedly being discussed, although a final decision has yet to be made. Prices were further impacted by an unexpected 1.3 million barrel increase in US crude inventories last week, driven by higher imports and lower demand for the fuel.

The US natural gas prices (XNG/USD) fell more than 3% to $3.25/MMBtu after the EIA reported a larger-than-expected increase in storage inventories. Inventories rose by 120 billion cubic feet last week, exceeding forecasts of 115 Bcf and well above last year’s 78 Bcf and the five-year average of 87 Bcf. The growth was driven by mild weather that limited heating and cooling demand.

Asian markets were predominantly up yesterday. Japan’s Nikkei 225 (JP225) fell by 0.84%, China’s FTSE China A50 (CHA50) added 0.09%, Hong Kong’s Hang Seng (HK50) lost 1.19%, and Australia’s ASX 200 (AU200) was negative 0.45%.

On May 23, the People’s Bank of China (PBOC) injected CNY500 billion into financial institutions under a one-year medium-term credit line (MTL) to maintain sufficient liquidity in the country’s banking system. This month’s net injection of MLF was down from CNY600 billion in the previous month.

New Zealand retail sales in the three months to March 2025 rose 0.8% quarter-on-quarter, following an upwardly revised 1% increase, and beat market expectations for a 0.1% increase. On a year-on-year basis, retail sales rose 0.7%, the second increase since Q3 2022, following an upwardly revised 0.3% increase in the previous quarter.

Singapore’s annual inflation rate in April 2025 was 0.9%, unchanged from the previous two months but slightly above market expectations of 0.8%. The rate remained at its lowest level since February 2021. Singapore’s core consumer prices rose 0.7% year-on-year in April 2025, accelerating from a four-year low of 0.5% in the previous month and exceeding market forecasts of 0.5%. This was the highest core inflation rate since January, mainly driven by higher inflation in services and food.