- US equities concluded the first trading session of June with gains. The S&P 500 cash index rose by 0.41%, while the Nasdaq advanced 0.67%.
- These gains occurred despite ongoing uncertainty surrounding future Trump administration policies. The US and China continue to accuse each other of violating aspects of their tariff reduction agreement, with Trump notably imposing doubled tariffs of 50% on steel and aluminium.
- The European Union has signalled potential retaliatory measures in response to these increased duties.
- The rally on Wall Street followed reports of planned discussions between President Trump and President Xi Jinping. Meanwhile, the US has extended tariff exemptions for certain Chinese products until August 31.
- The American administration aims to receive final offers from trade partners by Wednesday, with one month remaining until the current tariff suspension expires.
- Asian markets extended these gains today. The Hang Seng China Enterprises Index climbed 1.33%, and the Shanghai Composite rose 0.42%. The Nikkei 225 closed up 0.1%.
- A 10-year Japanese bond auction somewhat assuaged investor concerns, drawing strong demand. However, apprehension remains regarding Thursday’s planned auction of 30-year bonds. Yields on these longer-dated bonds are near 20-year highs, and demand has been limited.
- The Caixin PMI for China’s manufacturing sector unexpectedly fell to 48.3 points, contrary to expectations of an increase to 50.7 points and down from the previous reading of 50.4.
- The US dollar strengthened this morning, primarily against Antipodean currencies and the Norwegian Krone.
- The dollar’s appreciation against the Australian dollar was triggered by the release of the RBA minutes, which indicated the central bank is prepared to cut interest rates by 50 basis points should economic turbulence arise from the trade war and a global recession.
- During the Asian session, Bank of Japan Governor Ueda stated that interest rates would only be raised with an economic recovery and a rise in inflation. Ueda also highlighted the potential negative impacts of trade policy on the Japanese economy. The yen weakened following these comments.
- President Trump is reportedly negotiating with reluctant Republicans to garner support for a tax reform bill promising significant cuts. While the bill passed the House of Representatives by a single vote, it faces substantial opposition in the Senate.
- Discussions between Ukraine and Russia in Istanbul yielded no immediate breakthroughs but laid the groundwork for a further prisoner exchange.
- Crude oil continues its ascent, driven by geopolitical uncertainty and the sustained pace of production increases by OPEC+. Brent crude gained 0.3% this morning, nearing $65 per barrel.
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