InvestMacro

Wall Street closed lower on Thursday as investors grappled with the public feud between President Trump and Elon Musk, renewed trade uncertainty between the US and China, and growing signs of weakness in the labor market. At the end of Thursday, the Dow Jones Industrial Average (US30) index fell by 0.25%. The S&P 500 (US500) Index fell by 0.53%. The Nasdaq (US100) technology index closed down 0.80%. Tesla shares fell by 14.3% after Trump criticized Musk for his disagreement with a major tax and spending bill, suggesting that he could revoke government contracts and subsidies for Musk’s companies. Meanwhile, the number of applications for unemployment benefits rose to 247,000 last week, the highest in eight months, heightening concerns about a slowdown in labor market growth. Economists expect the May employment report to show an increase of 125,000 jobs, which is lower than the previous month and will keep the three-month average at 162,000.

Stock markets in Europe traded without a single trend yesterday. The German DAX (DE40) rose by 0.19%, the French CAC 40 (FR40) closed down 0.18%, the Spanish IBEX35 (ES35) added 0.73%, and the British FTSE 100 (UK100) closed 0.11% on Thursday. European stocks rose on Thursday after the European Central Bank (ECB) cut interest rates for the eighth time this year. The ECB lowered borrowing costs by 25 basis points and revised its inflation forecasts for 2025 and 2026 downward. Although the rate cut was largely anticipated, the sharper-than-expected downward revision of the inflation forecast for 2026 took some market participants by surprise. ECB President Lagarde acknowledged that the inflation outlook remains more uncertain than usual.

WTI crude oil prices traded around $63 per barrel on Friday, targeting a weekly gain of 4% — the first in three years — thanks to optimism about peak seasonal demand despite lingering concerns about oversupply. However, the bullish momentum weakened after Saudi Arabia signaled the need for a significant increase in production, calling on OPEC+ to raise output by at least 411,000 barrels per day in August and possibly in September to meet summer demand.

Silver prices (XAG/USD) held steady at around $36 per ounce on Friday, trading at their highest levels since February 2012, as weak US economic data and the Federal Reserve’s “dovish” outlook continued to stimulate demand for safe-haven assets. Expectations for a Fed rate cut in September have intensified after a series of disappointing indicators. The latest data showed an increase in jobless claims, a decline in private sector employment, and an unexpected slowdown in service sector activity, all pointing to signs of a softening labor market. Investors will now turn their attention to the upcoming non-farm payrolls report for further clarity on the economic outlook.

Asian markets traded without a clear trend yesterday. Japan’s Nikkei 225 (JP225) fell by 0.51%, China’s FTSE China A50 (CHA50) jumped 0.17%, Hong Kong’s Hang Seng (HK50) added 1.07%, and Australia’s ASX 200 (AU200) showed a negative result of 0.03% on Thursday.

On Friday, the New Zealand dollar held onto its recent gains, reaching $0.604 and remaining close to an eight-month high, thanks to renewed optimism about easing trade tensions, which reduced risks for the export-dependent currency. A telephone conversation between US President Donald Trump and Chinese President Xi Jinping, during which the two leaders agreed to resume trade talks, contributed to the positive sentiment. Domestically, markets expect the RBNZ to hold rates steady in July, while the probability of a rate cut in August is around 70%, potentially the last cut in this easing cycle.

Vietnam’s annual inflation rate rose to 3.24% in May 2025, a four-month high, from 3.12% in April. Meanwhile, core inflation, which excludes volatile items, rose to 3.33% from 3.14%, the highest since October 2023.

The Reserve Bank of India (RBI) unexpectedly cut its key repo rate by 50 basis points to 5.50% at its May meeting — more than the market had expected, which was anticipating a 25-basis-point cut — and shifted its policy stance from accommodative to neutral. As a result of Friday’s meeting, the total rate cut since February amounted to 100 basis points, bringing borrowing costs to their lowest level since August 2022. This decision was driven by lower inflation and ongoing uncertainty regarding global trade tensions.

At the end of Wednesday, the Dow Jones Index (US30) fell by 0.22%. The S&P 500 Index (US500) rose by 0.01%. The Nasdaq (US100) Tech Index closed up 0.32%. Investors digested a sharp slowdown in private sector employment growth, as the ADP report showed only 37,000 new jobs in May, significantly below expectations and the lowest figure in two years. This data cast a shadow over the upcoming nonfarm payrolls report, raising concerns that trade policy uncertainty is putting pressure on the labor market. Activity in the services sector also declined in May, further heightening concerns about the broader economic outlook. Meanwhile, President Trump doubled tariffs on steel and aluminum imports to 50% and lashed out at Fed Chairman Powell, renewing pressure for interest rate cuts. Hopes for a resolution to trade relations between the US and China dimmed as Trump called Xi Jinping “extremely difficult to work with.”

The Bank of Canada unexpectedly left its base interest rate unchanged at 2.75% in its June 2025 decision (more than 60% of correspondents expected a 0.25% rate cut), which was the second rate hold after a 2.25% point cut in seven consecutive decisions. The Governing Council noted that the ongoing increase and decrease in various US tariffs, combined with the highly uncertain outcome of bilateral trade negotiations and tariff rates remaining significantly above early 2025 levels, create risks of slower growth and raise inflation expectations, which requires caution regarding the continuation of monetary policy easing. The Canadian dollar strengthened to $1.37 per US dollar, its highest level in nearly eight months.

European stock markets traded without a single trend yesterday. The German DAX (DE40) rose by 0.77%, the French CAC 40 (FR40) closed up 0.53%, the Spanish IBEX35 (ES35) lost 0.19%, and the British FTSE 100 (UK100) closed positive 0.16%. European stocks rose on Wednesday, thanks to new tax stimulus measures and progress in trade negotiations between the EU and the US. The German DAX Index rose to a new record high after the government approved a €46 billion tax relief package for the period 2025–2029, aimed at supporting businesses and reviving economic growth. In corporate news, Airbus shares soared more than 4% after reports that Chinese airlines are considering ordering up to 300 aircraft, with a potential deal likely to be concluded as early as next month during a planned visit by European leaders to Beijing.

Silver prices held steady at around $34.50 per ounce on Thursday, reaching their highest level in seven months, as a wave of disappointing economic data from the US put pressure on the dollar and increased demand for safe-haven assets.

WTI oil prices fell more than 1% to below $63 per barrel as Saudi Arabia said it may demand a significant increase in production, heightening concerns about oversupply in the global oil market. The kingdom is reportedly seeking for OPEC+ to increase production by at least 411,000 barrels per day in August and possibly September, seeking to capture market share during peak summer demand. This comes after an increase in production for July was announced over the weekend.

Asian markets were mostly up yesterday. Japan’s Nikkei 225 (JP225) rose by 0.80%, China’s FTSE China A50 (CHA50) added 0.11%, Hong Kong’s Hang Seng (HK50) increased by 0. 60%, and Australia’s ASX 200 (AU200) showed a positive result of 0.89%.

Nominal wages in Japan rose 2.3% year-on-year in April 2025, in line with the pace seen in March but below market expectations of 2.6% growth. Meanwhile, real wages, adjusted for inflation and a key indicator of consumer purchasing power, fell by 1.8%, marking the fourth consecutive month of decline. The weak real wage data underscores the ongoing problem of persistent inflation, which continues to outpace wage growth.

Australia’s trade surplus narrowed to 5.41 billion Australian dollars compared to a slightly revised figure of 6.89 billion Australian dollars in the previous month and below market expectations of 5.90 billion Australian dollars, as exports declined and imports rose. Exports fell 2.4% from the previous month to 44.08 billion Australian dollars. Meanwhile, imports rose by 1.1% to 38.66 billion Australian dollars, recovering from a revised 2.4% decline in the previous month.

The US stocks rose on Monday, starting June with growth, despite heightened tensions in global trade. At the end of Monday, the Dow Jones Index (US30) rose by 0.08%. The S&P 500 Index (US500) added 0.41%. The Nasdaq Technology Index (US100) closed higher at 0.67%. Tensions between the US and China have risen again after Beijing responded to US accusations of violating the tariff truce by accusing Washington of doing so. Markets are watching for a possible conversation this week between President Trump and Chinese President Xi, which could be decisive in clarifying the trade situation.

The Mexican peso strengthened to 19.2 per US dollar, its highest level in eight months, largely reflecting the weakening of the US dollar amid renewed trade restrictions and dovish shifts in US monetary expectations. Domestically, moderate growth in unemployment to 2.5% in April and stable core inflation support the Bank of Mexico’s decision to keep rates unchanged, underscoring the peso’s resilience amid global headwinds.

The Canadian dollar strengthened above the 1.37 threshold against the US dollar, reaching its highest level in almost eight months, supported by strong domestic economic indicators and rising commodity prices. In the first quarter, Canada’s economy grew by 2.2% year-on-year, exceeding the consensus expectations of 1.7%, thanks to significant growth in exports and accumulation of inventories, as companies began active deliveries ahead of expected steel tariffs in the US, while retail sales also showed notable growth in the second month, indicating broad demand.

European stock markets traded without a single trend yesterday. The German DAX (DE40) fell by 0.28%, the French CAC 40 (FR 40) closed down 0.19%, and the Spanish IBEX35 (ES35) rose by 0.36%, and the British FTSE 100 (UK100) closed up 0.02%. Negotiations between Kyiv and Moscow ended without a ceasefire, with only an agreement on the exchange of prisoners. Investors have now shifted their attention to the upcoming ECB meeting, where another rate cut is expected.

WTI oil prices rose to around $62.9 per barrel on Tuesday, continuing their rise for the second session in a row, as ongoing geopolitical tensions heighten concerns about a reduction in global supply. On Monday, Russia and Ukraine held a second round of direct peace talks after a sharp escalation of hostilities the day before, but the discussions did not yield significant progress in resolving the conflict. Iran is ready to reject the US proposal to end the decades-long nuclear dispute, arguing that it does not serve Tehran’s interests and does not soften Washington’s position on uranium enrichment.

On Monday, silver prices rose more than 5% to $34.60 per ounce, reaching two-month highs, as escalating tensions in global trade increased demand for safe assets. Amid growing uncertainty surrounding global trade policy and its potential economic implications, investors have turned to precious metals as a hedge, causing silver prices to rise alongside gold prices.

Asian markets mostly fell yesterday. Japan’s Nikkei 225 (JP225) fell by 1. 30%, China’s FTSE China A50 (CHA50) lost 0.44%, Hong Kong’s Hang Seng (HK50) decreased by 0.57%, and Australia’s ASX 200 (AU200) posted a negative result of 0.24%.

The Australian dollar weakened to 0.647 US dollars on Tuesday, reversing the sharp rise of the previous session, after the Australian Central Bank said it had considered an excessive rate cut last month. During its May meeting, the Central Bank said that policymakers had considered a bold 50 basis point rate cut as “insurance” against growing global trade risks, but ultimately opted for a more cautious 25 basis point cut. Nevertheless, markets now estimate the probability of another rate cut at the next RBA meeting at around 70%, although many analysts expect the Central Bank to wait for second-quarter inflation data before taking further action.

On Tuesday, the New Zealand dollar fell to around US$0.60, cutting its gains by 1% from the previous session and retreating from its highest level since November last year, as the US dollar regained strength. Investors continued to weigh the risks associated with ongoing global trade tensions, with friction between China and the US intensifying after Beijing rejected Trump’s claim of trade rule violations and vowed to retaliate. Additional pressure on bears came from private data from China showing a sharp decline in factory activity in May, raising concerns about kiwi exports given China’s role as a key trading partner.