InvestMacro

The Dow Jones Index (US30) decreased by 0.61% (for the week -2.21%) on Friday. The S&P 500 Index (US500) was down 0.67% (for the week -1.70%). The Nasdaq Technology Index (US100) closed lower by 0.93% (for the week -1.05%). The US stocks declined on Friday after Donald Trump escalated trade tensions by threatening tariffs against Apple and the European Union. Apple shares fell 3%, bringing its value below $3 trillion, after Trump demanded that iPhones sold in the US be made domestically or face a 25% tariff. He also proposed a 50% tariff on all imports from the EU starting June 1 due to stalled trade talks, renewing fears of protectionist policies.

The US stock futures jumped on Monday after President Trump announced on Sunday that he would delay the imposition of 50% tariffs against the EU, extending the deadline to July 9. The move came after a turbulent week for markets, with growing concerns over the US fiscal outlook and trade tensions weighing heavily on investor sentiment.

The Canadian dollar (USD/CAD) strengthened to 1.375 per US dollar, the highest since October 2024, as bets that the Bank of Canada (BoC) will be less accommodative added to the impact of a weaker dollar. Canadian retail sales rose by 0.5% in April, following up on a 0.8% increase in March, signaling strength in Canadian consumers.

The Mexican peso (USD/MXN) rose to 19.3 per US dollar in May 2025, the strongest since last October, as budget concerns and tariff uncertainty in the US weakened the dollar. The dollar declined against major currencies after the US House of Representatives approved a bill that could increase the federal budget deficit by more than $3 trillion and days after Moody’s downgraded their debt rating due to unsustainable debt. On the domestic front, the latest data showed that Mexico’s GDP grew 0.2% in the first quarter. While this avoided a technical recession, it signaled underlying weakness in the Mexican economy and a more urgent need for Banxico to cut interest rates.

Equity markets in Europe were mostly falling on Friday. Germany’s DAX (DE40) fell by 1.54% (week ended -0.32%), France’s CAC 40 (FR40) closed down 1.65% (week ended -1.52%), Spain’s IBEX35 (ES35) fell by 1.18% (week ended +0.22%), and the UK’s FTSE 100 (UK100) closed negative 0.24% (week ended +0.38%). European stocks fell sharply on Friday after US President Trump said he recommends imposing tariffs of 50% on goods from the European Union, which could deprive demand from a key source of European exports. Shares of Mercedes Benz, BMW, Stellantis, Hermes and Inditex fell between 2% and 4.5%. Meanwhile, the likelihood of retaliatory measures from the European Commission put pressure on banks, with Intesa Sanpaolo, UniCredit, and BBVA down 3% each. On the data side, German Q1 GDP growth was revised upward to 0.4% from 0.2%, helped by strong manufacturing numbers and a surge in exports in March, suggesting the economy is resilient amid trade tensions.

WTI crude prices rose by 0.5% to settle at $61.50 a barrel on Friday, but still recorded their first weekly loss in three weeks, pressured by expectations of another OPEC+ production increase. The group is expected to increase output by 411,000 barrels a day in July, with discussions next week likely to confirm the move. Market sentiment deteriorated further on reports that OPEC+ may roll back the remainder of its voluntary 2.2 million bpd production cut by October.

Asian markets were mostly up last week. Japan’s Nikkei 225 (JP225) fell by 1.10%, China’s FTSE China A50 (CHA50) gained 0.43%, Hong Kong’s Hang Seng (HK50) rose by 0.92%, and Australia’s ASX 200 (AU200) posted a positive 0.21%.

Japan’s Index of leading economic indicators, which gauges the economic outlook for the coming months based on data such as job offers and consumer sentiment, was revised upward to 108.1 for March 2025 from a preliminary estimate of 107.7. However, the latest reading remains slightly below February’s 108.2 and is the lowest since last December due to deteriorating consumer sentiment.

The New Zealand dollar rose to around USD 0.602 on Monday, extending Friday’s 1.5% gain and nearing its highest level in seven months. The rally was largely driven by a broad-based decline in the US dollar, which weakened amid renewed trade tensions and growing concerns about the US fiscal outlook. However, tensions eased slightly when Trump announced on Sunday that he would extend the deadline for tariff talks with the EU until July 9. Domestically, traders are now awaiting Wednesday’s Reserve Bank of New Zealand (RBNZ) meeting, where the Central Bank is expected to cut the cash rate by 25 bps as inflation remains low. Markets currently expect rates to fall to around 3% or 2.75% by the end of the year.

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.

At the end of Wednesday, the Dow Jones Index (US30) decreased by 1.91%. The S&P 500 Index (US500) was down 1.61%. The Nasdaq Technology Index (US100) closed lower by 1.34%. The US stocks fell on Wednesday as a sharp rise in Treasury yields and renewed fiscal concerns weighed heavily on investor sentiment. Long-term bond yields rose after a weak $16 billion auction of 20-year Treasuries, and 30-year yields jumped to 5.08%, the highest level since 2023, amid heightened concerns that Washington’s proposed tax-and-spending bill could further widen the federal budget deficit.

Bitcoin surpassed the $109,500 mark for the first time ever, extending a rally since mid-April, as the advancement of legislation to regulate stablecoins in the US supported the outlook for digital assets. Democrats in Congress dropped their opposition to a bill aimed at regulating stablecoins, paving the way for its passage by the end of the week. The move reinforced expectations that government regulation of digital assets tied to the US dollar could spur adoption of the asset class.

Equity markets in Europe traded flat on Wednesday. Germany’s DAX (DE40) was up 0.36%. France’s CAC 40 (FR40) closed down 0.40%, Spain’s IBEX35 (ES35) fell by 0.11%, and the UK’s FTSE 100 (UK100) closed positive 0.06%. European equities closed unchanged, holding near two-month highs hit in the previous session, as a lack of new catalysts kept hopes alive that rising government spending in Europe would lead to increased investment among corporate giants.

Silver (XAG/USD) prices climbed above $33.1 an ounce on Wednesday, testing the highest level in three weeks, amid a weaker dollar and evidence of heavy buying by the industry. The dollar came under pressure despite a fresh rise in long-dated Treasury yields, reflecting lingering doubts about the exclusivity of US assets and consistent with the recent rush into precious metals in search of safety.

WTI crude oil prices reversed previous gains and are trading below $62 a barrel after an unexpected increase in US crude inventories. The EIA reported a 1.328 million barrel increase in crude inventories, contradicting expectations of a 1.85 million barrel decline.

Asian markets were predominantly up yesterday. Japan’s Nikkei 225 (JP225) fell by 0.61%, China’s FTSE China A50 (CHA50) gained 0.69%, Hong Kong’s Hang Seng (HK50) rose by 0.62%, and Australia’s ASX 200 (AU200) gained 0.52%. Japanese stocks hit a two-week low and followed a sharp sell-off on Wall Street overnight. Japan’s Core Machinery Orders, a key leading indicator of capital investment, unexpectedly rose 13% in March, well above expectations of a 1.6% decline. Despite the upbeat data, sentiment was dampened by weak economic signals elsewhere: manufacturing activity remained in contractionary territory in May, while growth in the services sector also slowed.

Malaysia’s annual inflation rate for April 2025 was 1.4%, unchanged from March and in line with market expectations. It remained the lowest since February 2021, with food prices rising the least in six months (2.3% vs. 2.5% in March). Core consumer prices, excluding volatile fresh food and administrative expenses, rose to 2.0% y/y in April after increasing 1.9% in the previous two months, the sharpest pace since November 2023.

Singapore could slip into a technical recession this year, a government official warned after final GDP data confirmed the economy shrank in the first quarter of 2025, even before US tariffs take effect. The country’s trade-dependent economy grew 3.9% y/y but contracted 0.6% q/q.