2025-07-03 14:25

May trade deficit C$5.9 billion, led by 1.1% export jump Exports to rest of the world except the U.S. reach a record Exports to the U.S. lowest outside of pandemic year of 2020 OTTAWA, July 3 (Reuters) - Canada's trade deficit in May narrowed after a record-breaking deficit in April as total exports rose and imports fell even as the impact of U.S. tariffs dented shipments south of the border, data showed on Thursday. The trade deficit in May met expectations at C$5.9 billion ($4.34 billion), down from a downwardly revised C$7.6 billion in the prior month, Statistics Canada said. Exports increased by 1.1% on a monthly basis after an 11% slump in April. Sign up here. This was the first increase in exports in four months, Statscan said, and was driven by record exports to the rest of the world, excluding the U.S. "The biggest takeaway I see from the data is just diversification," said Prince Owusu, senior economist with Export Development Canada. "While we continue to bleed in the U.S., we are basically diverting trade to other markets," he said. The share of the exports and imports with the U.S. dropped to their lowest levels in May, barring the pandemic year of 2020. Exports to the U.S., Canada's biggest trading partner, fell for the fourth month in a row with May registering a drop of 0.9%. In volume terms total exports were up 0.7% in May. President Donald Trump has imposed 25% tariffs on imports of Canada-made automobiles and 50% tariffs on imports of steel and aluminum. Canada has also imposed retaliatory tariffs. This trade skirmish between the two countries whose bilateral trade surpassed a trillion Canadian dollars last year has depleted Canada's exports and has hit the job market. Canada's Prime Minister Mark Carney and Trump are aiming to reach some form of a trade deal by July 21. Canada's total exports for May were C$60.81 billion, up from C$60.12 billion in April, Statscan said. This category increased by 15.1%, driven mainly by exports of unwrought gold that were up 30.1% to reach a record $5.9 billion. "Most of the rise was attributable to higher physical shipments of gold to the United Kingdom," the statistics agency said. Excluding metal and non-metallic mineral products, total exports were down 1.2%, it added. As trade with the U.S. has dropped, Canadian companies have been scouting for opportunities to increase trade with rest of the world. Exports to countries other than the United States rose 5.7% in May to reach a record high, Statscan said, but it was not enough to fully mitigate the impact of lost exports to the U.S., as well as China due to a drop in canola and crude oil shipments. Total imports dropped by 1.6% to C$66.66 billion, with imports from the U.S. falling by 1.2% in May. The Canadian dollar slightly weakened after the trade data and was trading down 0.23% to 1.3615 to the U.S. dollar. Yields on the two-year government bonds were up 3.7 basis points to 2.706%. The deficit in May, albeit narrower than the prior month, is still among the highest seen historically and economists said that two months of decline will pull down the second quarter GDP. ($1 = 1.3592 Canadian dollars) https://www.reuters.com/world/americas/canadas-trade-deficit-may-narrows-exports-us-drops-lowest-level-2025-07-03/

2025-07-03 14:11

BUENOS AIRES, July 3 (Reuters) - Brazilian President Luiz Inacio Lula da Silva said on Thursday that the Mercosur bloc of South American countries should focus on strengthening its ties with Asian nations, which he described as the "dynamic center" of the global economy. "Our participation in global value chains will benefit from closer ties with Japan, China, South Korea, India, Vietnam and Indonesia," Lula said during a speech at the Mercosur summit in Buenos Aires. Sign up here. https://www.reuters.com/world/china/brazils-lula-urges-mercosur-deepen-ties-with-asia-2025-07-03/

2025-07-03 13:45

NEW YORK, July 3 (Reuters) - U.S. job growth in June rose above expectations, while the unemployment rate fell, suggesting the labor market is stable. Nonfarm payrolls increased by 147,000 jobs in June, after rising 144,000 in May, the Labor Department showed on Thursday. Economists polled by Reuters had forecast 110,000 jobs added last month. Sign up here. The unemployment rate fell to 4.1% in June from 4.2% in the previous month. On Wednesday, the ADP National Employment Report showed private payrolls unexpectedly fell in June, the first drop in more than two years. MARKET REACTION STOCKS: All major Wall Street indexes posted gains after market open, with the S&P last up 0.46% BONDS: The yields on benchmark U.S. 10-year notes and on the two-year note rose after the jobs report FOREX: The dollar advanced against major currency pairs COMMENTS: KEVIN O’NEIL, ASSOCIATE PORTFOLIO MANAGER AND SENIOR RESEARCH ANALYST, BRANDYWINE GLOBAL, PHILADELPHIA: "The bond market clearly wasn’t expecting such a strong jobs report, including the upward revisions to the previous two months. While easing inflation continues to support the case for Fed rate cuts, a 4.1% unemployment rate significantly reduces the urgency for aggressive action. Notably, the gains came from the government sector, which had seen subdued job growth this year in part due to the administration’s initiatives. In terms of bond action, today’s data will likely help reverse some of the yield curve steepening that’s taken place in recent weeks." ERIC TEAL, CHIEF INVESTMENT OFFICER, COMERICA WEALTH MANAGEMENT, CHARLOTTE: "we continue to anticipate rate cuts are a ways off until we gain clarity that inflation is contained. However, with the passage of OBBBA on the horizon, changes in tax accounting for fixed asset depreciation and R&D outlays are significantly benefiting capital and R&D intensive industries which should continue to provide positive momentum toward the stock market." JIM BAIRD, CHIEF INVESTMENT OFFICER, PLANTE MORAN FINANCIAL ADVISORS, SOUTHFIELD, MICHIGAN: "The fact that the headline number was as strong as it was, was largely attributable to the big increase in state and local government jobs, particularly in education. I don't think there's any question that you're still seeing a softer hiring environment. Companies may not be laying off in mass yet, but they're certainly still in a little bit of a holding pattern in terms of hiring as they await greater clarity on the trade and tax front." SIMON DANGOOR, HEAD OF FIXED INCOME MACRO STRATEGIES, GOLDMAN SACHS ASSET MANAGEMENT, LONDON: "The FOMC’s conviction that it should hold its wait-and-see stance while it braces for an acceleration in inflation over the summer will only be strengthened. But we still see a path to a resumption of the Fed’s easing cycle later in the year should the summer acceleration in inflation prove more modest than expected, or the softening in the labor market exceed the relatively low thresholds implied by the dot plot." JEFFREY ROACH, CHIEF ECONOMIST, LPL FINANCIAL, CHARLOTTE METRO: "If businesses keep expanding payrolls like they’ve done so far this year, the Fed can comfortably sit in 'wait and see' mode at the upcoming policy meeting. Uncertainty around tariffs and trade have apparently not spooked businesses into shedding workers. One note of caution: the administration is still actively negotiating details with several major trading partners and the eventual business impacts are unknown.' PETER CARDILLO, CHIEF MARKET ECONOMIST, SPARTAN CAPITAL SECURITIES, NEW YORK: “Apparently, the government has called back some of those laid off employees. Without government jobs, payrolls would have been anemic.” “That takes us back to a September rate cut. On the other hand, if inflation should pop up from the tariffs, then they would probably go even out further and wait for December. But things but things staying the way they are now, I think we’ll get a rate cut in September. But I certainly rule out July.” BRIAN JACOBSEN, CHIEF ECONOMIST, ANNEX WEALTH MANAGEMENT, MENOMONEE FALLS, WISCONSIN: "The large increase in the number of discouraged workers is disappointing. This is after a sharp increase in job openings, so there’s a disconnect between employers and potential employees that needs to be resolved. Those who have been without work the longest are also those having the hardest time finding work. With the diffusion index below 50, job gains are unfortunately narrowing." https://www.reuters.com/business/view-us-job-growth-beats-expectations-june-2025-07-03/

2025-07-03 12:50

June ECB minutes reveal wariness over trade war and inflation Current strength of euro noted in accounts Latest rate cut aimed at preventing tightening of financial conditions July 3 (Reuters) - Euro zone policymakers cut rates last month to prevent an unwarranted tightening of monetary conditions in the face of the elevated uncertainty around global trade, the accounts of their June 3-5 meeting showed on Thursday. The ECB cut interest rates for the eighth time in a year last month but signalled a pause in any further easing as inflation is already back at target and erratic U.S. trade policy creates too much uncertainty. Sign up here. "Members underlined that the outlook for the global economy remained highly uncertain," the ECB accounts said, and that "elevated trade uncertainty was likely to prevail for some time and could broaden and intensify." A pause in the ECB's rate cutting cycle has become an even greater certainty in the weeks as the majority of policymakers have lined up behind the premise that key data and clarity on U.S. trade talks will not be available by their July 24 meeting. Markets are also on the same page. Investors see only one more cut in the ECB's 2% deposit rate, sometime towards the end of the year, before rates start going back up in late 2026. "Indicators for April and May already suggested some slowdown" in the global economy, the ECB's accounts on Thursday added. Although most policymakers argue that the ECB has essentially delivered on its inflation target, some, including Finland's Olli Rehn, Portugal's Mario Centeno and Belgium's Pierre Wunsch, have warned about the risk of inflation going too low, thereby requiring more support. Indeed, price growth is projected to dip below the ECB's target later this year and stay under 2% for 18 months on a strong euro, low energy costs and cheap Chinese imports, before coming back to target. Last month's rate cut should "ensure that the temporary undershoot in headline inflation did not become prolonged," the accounts said. The strength of the euro - up nearly 14% this year against the dollar - was also noted a number of times in the accounts. Historically, the euro falls against the greenback when market volatility increases. Over the past three months, however, the euro has gone up hand in hand with volatility, the ECB said, "suggesting that the euro – rather than the dollar – had recently served as a safe-haven currency". But the euro's rise will also weigh on exports, the ECB said. Policymakers have ramped up warnings this week about the hit the bloc's economy will face from further euro appreciation. The bank also described the resilience of the euro area government bond markets in the face of April's turbulence driven by U.S. President Donald Trump's trade war as "remarkable." Others, however, have warned that deglobalisation, a green transition and the ageing of the world's population will raise price pressures further out, and the ECB could soon face above target inflation once again. https://www.reuters.com/business/finance/ecb-wary-rising-global-trade-uncertainty-ecb-accounts-show-2025-07-03/

2025-07-03 12:46

ISTANBUL, July 3 (Reuters) - A wildfire killed a bedridden man who was home alone in Turkey's western Izmir province after it spread to a residential area, state-owned Anadolu news agency said on Thursday, the first casualty after nearly a week of scattered blazes. The man, 81, was killed in the Odemis district where firefighters battled the blaze for a second day, with several helicopters and other aircraft dropping water on the mountainous terrain amid billowing smoke. Sign up here. Authorities closed some roads to the Aegean resort town of Cesme due to fire, Anadolu said. Broadcasters showed footage of flames across parts of the main highway as water tankers arrived. Wildfires across Turkey's west have damaged some 200 homes, and victims were provided alternative accommodation, Interior Minister Ali Yerlikaya said. Some 50,000 people were temporarily evacuated earlier in the week due to fires, which were stoked by high temperatures, low humidity and strong winds. Some have been contained. Other blazes also broke out on Thursday in the southern resort province of Antalya and just outside Istanbul, Turkey's largest city, according to Anadolu. https://www.reuters.com/business/environment/wildfire-turkeys-izmir-province-spreads-residential-area-killing-bedridden-man-2025-07-03/

2025-07-03 12:46

HAMBURG, July 3 (Reuters) - Freight shipping on the river Mosel in west Germany has been blocked to shipping after an accident involving a passenger ship that damaged a lock, authorities said on Thursday. The river, known as the Moselle in France, is an important transit route for grains and rapeseed between Germany and France. Transit was halted after an accident on Wednesday damaged a lock at Sankt Aldegund between Koblenz and Trier, a police spokesperson said. Sign up here. Vessels cannot pass the Sankt Aldegund lock in either direction, the spokesperson said. Technical experts on Thursday were examining the lock, and it is not yet possible to comment on the level of damage or say how long the impact on shipping will last, river navigation authority WSA said. German federal transport minister Patrick Schnieder said in a statement he will visit the accident site later on Thursday. “I will do everything in my power to ensure that the lock can resume operations as soon as possible,” Schnieder said. The river was closed to inland waterways shipping in December after an accident that damaged a lock at Mueden, south of Koblenz, and only reopened in February after lengthy repairs. Initial indications are that the lock’s concrete structure and drive mechanism were not damaged in the accident, WSA head Eric Oehlmann said in a statement. Technicians are currently assessing whether it is possible to resume limited lock operations for the waiting vessels to pass, he said. “If not, we will find another solution, for example, through emergency locks with temporary water control barriers, which have already proven effective,” Oehlmann said. A temporary lock was successful in allowing ships to transit during the winter disruption. “Despite the accident, there is determination that shipping on the Moselle will not come to a complete standstill," Oehlmann said. https://www.reuters.com/markets/commodities/freight-shipping-mosel-river-germany-blocked-after-accident-2025-07-03/