2025-06-05 05:44

Trump-Musk dispute impacts Tesla shares, Nasdaq falls Trump-Xi call raises hopes for trade dispute resolution ECB cuts rates as expected; Lagarde sets table for summer pause Weak labor data raises Fed rate cut expectations NEW YORK, June 5 (Reuters) - Wall Street veered to a sharply lower close and crude prices advanced on Thursday as a high-profile dispute between U.S. President Donald Trump and billionaire Elon Musk overshadowed trade talks between Washington and Beijing and a spate of downbeat economic data. Stocks wavered through much of the session, but turned decisively lower as a falling-out unfolded between Trump and Musk, the billionaire Trump tapped to lead the Department of Government Efficiency (DOGE). Sign up here. A 14.3% plunge in Tesla shares (TSLA.O) , opens new tab followed Trump's threats to terminate Musk's government subsidies after Musk criticized Trump's tax and spending bill. Tesla helped pull the Nasdaq down the most, while the S&P 500 and the Dow suffered shallower losses. "There's a diversity of opinion on whether or not the 'Big, Beautiful Bill' addresses the debt or the deficit at all, or if it goes in the opposite direction," said Thomas Martin, Senior Portfolio Manager at GLOBALT in Atlanta. "This Trump-Musk spat sort of exemplifies that." Trump held talks with Xi by phone on Thursday in an effort to iron out trade disputes between the world's two largest economies that have buffeted the global economy, and they agreed to further discussions, according to U.S. and Chinese summaries of their call. "The market seems to be accepting that if they're talking they're not going to do anything drastic, and if they don't do anything drastic, then it's okay to buy stocks now," Thomas added. "People are just sort of guessing and wondering which way the wind is blowing and the wind keeps shifting." "I think investors want to own stocks and they're afraid of missing out, but they also don't want to own stocks if it's going to be a disaster," Martin added. Economic data showed initial jobless claims hit the highest level since October, while a 16.3% drop in imports - arising from Trump's erratic tariff policy - resulted in the narrowest U.S. trade gap since November 2023. Weaker-than-expected labor market data, including a 47% year-on-year jump in Challenger layoffs and a significant downside surprise in ADP's private payrolls, are dampening expectations for the Labor Department's closely watched May employment report expected on Friday. But Matthew Keator, managing partner in the Keator Group in Lenox, Massachusetts believes the softer data could open the door for the Federal Reserve to implement more than one rate cut before the end of the year. "With some of the more benign inflation numbers that have come through recently and a potential pick-up in jobless claims might give the Fed a little bit more cause to (cut interest rates) at least maybe more than once this year," Keator said. "That could be an encouraging sign, particularly for some sectors." The Dow Jones Industrial Average (.DJI) , opens new tab fell 108.00 points, or 0.25%, to 42,319.74, the S&P 500 (.SPX) , opens new tab fell 31.48 points, or 0.53%, to 5,939.33 and the Nasdaq Composite (.IXIC) , opens new tab fell 162.04 points, or 0.83%, to 19,298.45. ECB CUTS RATES As widely expected, the European Central Bank lowered its three key interest rates by 25 basis points, a decision based on its updated economic outlook now that inflation is currently around the central bank's 2% target. Even so, European shares pared earlier gains to close only slightly in positive territory after ECB President Christine Lagarde appeared to float the possibility of a summer pause in its year-long easing cycle. MSCI's gauge of stocks across the globe (.MIWD00000PUS) , opens new tab fell 2.47 points, or 0.28%, to 886.46. The pan-European STOXX 600 (.STOXX) , opens new tab index rose 0.16%, while Europe's broad FTSEurofirst 300 index (.FTEU3) , opens new tab rose 4.07 points, or 0.19% Emerging market stocks (.MSCIEF) , opens new tab rose 9.94 points, or 0.85%, to 1,182.39. MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) , opens new tab closed higher by 0.81%, to 622.86, while Japan's Nikkei (.N225) , opens new tab fell 192.96 points, or 0.51%, to 37,554.49. The dollar erased earlier gains in the wake of the soft U.S. economic indicators and Lagarde's hints at an ECB rate pause. The dollar index , which measures the greenback against a basket of currencies including the yen and the euro, rose 0.01% to 98.80, with the euro up 0.18% at $1.1437. Against the Japanese yen , the dollar strengthened 0.68% to 143.73. U.S. Treasury yields gained ground as trade deal hopes outweighed soft economic data. The yield on benchmark U.S. 10-year notes rose 3.5 basis points to 4.4%, from 4.365% late on Wednesday. The 30-year bond yield was flat at 4.8877% from 4.888% late on Wednesday. The 2-year note yield, which typically moves in step with interest rate expectations for the Federal Reserve, rose 5.6 basis points to 3.933%, from 3.877% late on Wednesday. Crude oil prices rose after reports of the Trump/Xi call, which helped investors look past the U.S. stockpile buildup and Saudi Arabia's July price cuts for Asia. U.S. crude rose 0.83% to settle at $63.37 per barrel, while Brent settled at $65.34 per barrel, up 0.74% on the day. Gold prices reversed an earlier gain after the Trump-Xi call hinted at a thaw in trade relations between Washington and Beijing. Spot gold fell 0.56% to $3,356.41 an ounce. U.S. gold futures fell 0.48% to $3,357.30 an ounce. https://www.reuters.com/world/china/global-markets-wrapup-1-2025-06-05/

2025-06-05 04:57

ECB cuts rates as bets build on a summer pause US weekly jobless claims rise for second straight week Investors await details of Trump-Xi call, trade deals Traders focused on US May payrolls on Friday NEW YORK, June 5 (Reuters) - The dollar dropped against the euro on Thursday after the European Central Bank indicated a possible end to its year-long policy easing cycle and U.S. data pointed to softening labor market conditions amid mounting economic headwinds from tariffs. The ECB cut interest rates for the eighth time in a year on Thursday, acknowledging inflation was under control and turning more pessimistic about economic prospects amid risks of a trade war with the United States. Sign up here. While not confirming a pause, ECB President Christine Lagarde said after the rate cut that the central bank was getting towards the end of its monetary policy easing cycle as it responded to economic shocks including the war in Ukraine and the energy crisis. The euro was last up 0.18% after rising to as high as $1.1495, a fresh six-week high against the dollar, not far from the more than 3-year high of $1.1573 touched on April 20. "The euro-dollar has taken off here in response to Lagarde saying the ECB is getting towards the end of its rate cutting cycle," said Shaun Osborne, chief currency strategist at Scotiabank. The dollar's softer tone was an extension of its recent weakness, with the U.S. currency down nearly 11% against the euro for the year. "This just broadly reflects the softening in the broader dollar sentiment here and may well continue into non-farm payrolls tomorrow," Osborne said. "We are also seeing a little bit of volatility around news of President Trump talking to Xi, in a first sign of high-level communication between the White House and Beijing in quite some time," Osborne said. Chinese President Xi Jinping on Thursday held talks with the U.S. president by phone, China's state-run news agency Xinhua reported, as bilateral relations have been strained by trade disputes. The dollar was also pressured by data showing that the number of Americans filing new applications for unemployment benefits last week increased for a second straight week, pointing to softening labor market conditions amid mounting economic headwinds from tariffs. The claims data have no bearing on the Labor Department's closely watched employment report for May, scheduled to be released on Friday, as it falls outside the survey period. Nonfarm payrolls likely increased by 130,000 jobs last month after advancing by 177,000 in April, a Reuters survey of economists showed. The unemployment rate is forecast being unchanged at 4.2%. "Evidence of a cooling in labour markets is beginning to build, lowering expectations ahead of tomorrow’s non-farm payrolls report and putting downward pressure on yields," Karl Schamotta, chief market strategist at Corpay, said. Markets have been rattled since Trump announced a slate of tariffs on countries around the world on April 2, only to pause some and declare new ones, leading investors to look for alternatives to U.S. assets. Investors remain worried about U.S. trade negotiations and the lack of progress in hashing out deals ahead of an early July deadline. Despite its weakness against the euro, the dollar was slightly stronger against safe-haven currencies including the Japanese yen and Swiss franc, reflecting possible market positioning ahead of the jobs data. The dollar strengthened 0.51% to 143.49 against the yen and was up 0.16% to 0.819 against the franc . The greenback is still down about 9% year-to-date against both safe-haven currencies. The dollar index , which measures the greenback against a basket of currencies including the yen and the euro, fell 0.09% to 98.71, on track for the second straight session of losses. Sterling was 0.11% higher against the dollar. The United Kingdom is the only country to have struck a trade deal with the Trump administration and was spared from higher U.S. steel and aluminium tariffs, though analysts question how beneficial those factors are. Bitcoin, the world's largest cryptocurrency by market capitalisation, extended earlier losses and was down 2.5% on the day at $102,061.52. https://www.reuters.com/world/middle-east/dollar-frail-weak-economic-data-trade-uncertainty-lingers-2025-06-05/

2025-06-05 04:31

A look at the day ahead in European and global markets from Rocky Swift It's Switch 2 Day! The much-anticipated sequel to Nintendo's immensely successful portable gaming unit goes on sale around the world on Thursday. But don't bother trying to find one: They're all sold out. Sign up here. The Switch 2 is manufactured mostly in China and sold out of Japan, so it's anybody's guess when there will be more of them available and what they'll cost, given all the uncertainty over tariffs and supply chains. A United States deadline for "best offers" on trade came and went on Wednesday without any trade announcements, and President Donald Trump continued to stir up controversy on the global stage with a proclamation banning nationals of 12 countries from the U.S. But the trade talks go on, with Japan sending its head trade negotiator Ryosei Akazawa to the U.S. again today in search of a deal. Germany's new chancellor, Friedrich Merz, is also headed to Washington for some face time with Trump in the Oval Office. The main event today will be the European Central Bank's interest rate decision, which is almost certain to cut rates by 25 basis points. The post-decision comments by President Christine Lagarde will be all the more important for clues on future policy moves. Stock futures pointed to flat openings for both European and U.S. markets. Key developments that could influence markets on Thursday: - ECB decision, speech by Christine Lagarde - German Chancellor Friedrich Merz travels to Washington - German data on industrial orders, consumer goods for April - U.S. data on jobless claims for end of May, trade data for April - Fed's Jeffrey Schmid, Patrick Harker, Adriana Kugler to speak Trying to keep up with the latest tariff news? Our new daily news digest offers a rundown of the top market-moving headlines impacting global trade. Sign up for Tariff Watch here. https://www.reuters.com/world/europe/global-markets-view-europe-2025-06-05/

2025-06-05 03:03

MUMBAI, June 5 (Reuters) - The Indian rupee is set to open slightly higher on Thursday, aided by a decline in the U.S. dollar after weaker-than-expected private payrolls and services data spurred concerns over the U.S. economic outlook and fuelled hopes of a dovish Federal Reserve stance. The 1-month non-deliverable forward indicated a open in the 85.82-85.84 range, versus 85.90 in the previous session. The Indian currency has logged daily losses in six of the past seven sessions, and on Wednesday it slipped past the 86 level. Sign up here. "The rupee should find relief from its downtrend," a currency trader at a Mumbai-based bank said. Whether that opening move has any follow through or holds is doubtful, he said. The 85.70–85.75 zone will now act a support for the dollar/rupee pair, while resistance is in the 86.00–86.10 region, he added. The current bias, he noted, favours a break past 86.00–86.10 rather than a sustained move dip below 85.70–85.75. The dollar dropped against its major peers on Wednesday and the currency was down versus Asian currencies on Thursday after two disappointing sets of data raised the odds of the Fed cutting rates at the September meeting. The probability of Fed rate reduction this month remains low. The private survey showed the increase in U.S. private payrolls was well short of estimates. The Institute for Supply Management (ISM) report on the U.S. services sector unexpectedly showed a contraction. The ISM's measure of prices paid for services inputs rose to 68.7, the highest level since November 2022, from 65.1 in April. Concerns around the U.S. economic outlook mounted after the data, pushing U.S. yields and the dollar lower, Morgan Stanley said in its daily commentary. Private payroll has been slowing since the fourth quarter of 2024, signalling softening in the labour market and the ISM services data signals stagflation concerns, it added. KEY INDICATORS: ** One-month non-deliverable rupee forward at 85.98; onshore one-month forward premium at 10.75 paise ** Dollar index at 98.86 ** Brent crude futures down 0.2% at $64.8 per barrel ** Ten-year U.S. note yield at 4.37%, dropped 10 basis points on Wednesday ** As per NSDL data, foreign investors sold a net $385.6 million worth of Indian shares on June 3 ** NSDL data shows foreign investors bought a net $15 million worth of Indian bonds on June 3 https://www.reuters.com/world/india/september-fed-rate-cut-bets-undermine-dollar-handing-rupee-breather-2025-06-05/

2025-06-05 02:35

MANILA, June 5 (Reuters) - Philippine annual inflation eased for a fourth consecutive month in May, driven by slower increases in utility and food prices, the government said on Thursday, and the central bank said the data would allow for a more accommodative monetary policy. The consumer price index rose 1.3% year-on-year in May, down from 1.4% in April, marking the lowest inflation rate since November 2019. The figure matched the forecast in a Reuters poll and brought the year-to-date average to 1.9%, undershooting the central bank's 2.0% to 4.0% target range for the year. Sign up here. "On balance, the more manageable inflation outlook and the downside risks to domestic economic activity allow for a shift toward a more accommodative monetary policy stance," the central bank said in a statement. Price increases for housing, water, electricity, and other fuel items moderated to 2.3% in May from 2.9 % in April, while transport costs declined more sharply, falling 2.4% versus April's 2.1% drop. Core inflation, which excludes volatile food and energy prices, was steady at 2.2 % "Looks like the door remains wide open for the Bangko Sentral ng Pilipinas (BSP, the central bank) to cut rates in June,” said Metrobank economist Nicholas Mapa on X. The BSP resumed monetary easing in April, cutting its key policy rate (PHCBIR=ECI) , opens new tab by 25 basis points to 5.5% to support economic growth amid global headwinds. The central bank is scheduled to review policy again on June 19. On Thursday, the lower house of Congress approved a bill raising the daily minimum wage by 200 pesos ($3.60), which the country's chief statistician said could have inflationary effects. ($1 = 55.574 Philippine pesos) https://www.reuters.com/world/asia-pacific/philippine-annual-inflation-13-may-2025-06-05/

2025-06-05 02:06

BENGALURU/JOHANNESBURG, June 4 (Reuters) - Most emerging market currencies will hold the gains they have made this year or extend them against a retreating dollar in the next six months as traders ditch the U.S. exceptionalism trade that fuelled the greenback's dream run, a Reuters poll of FX strategists found. At the start of the year, emerging market currencies looked set for a rough ride on expectations of U.S. economic strength and delayed Federal Reserve interest rate cuts as well as trade tensions. Sign up here. But they have since defied expectations as U.S. President Donald Trump's broader-than-expected but erratically implemented tariff together with a deteriorating fiscal outlook have sparked a flight from the dollar and U.S. assets. That is expected to continue, with more than half the currencies polled forecast to trade in tight ranges or gain, while the rest were expected to give back only a small portion of this year's strong gains, according to a May 30–June 4 poll of more than 50 foreign exchange strategists. "The path of least resistance is a mildly weaker dollar at the moment," said Christopher Turner, head of FX strategy at ING. "We think (the decline) will be sort of modest and gradual and that should keep the mindset for investors to buy EM currencies on dips and that's kind of what we're seeing at the moment." Separately, the dollar has become a preferred funding currency as Trump's trade war fuels recession fears and outflows from U.S. assets. The EM carry trade - borrowing in low-yielding currencies to invest in higher-yielding EM ones - has long attracted investors chasing returns. High-yielders like the South African rand and Brazilian real are up around 6.0% and 10.0% respectively this year. The real was predicted to lose only about 2.0%, while the rand is likely to trade in a tight range over the next six months. "I think the trend for emerging market currency outperformance can continue in the second half of this year, but there are downside risks to be wary of as well," said Lee Hardman, senior currency economist at MUFG, referring to trade disruption and the potential hit to global growth. The Turkish lira, the weakest-performing emerging market currency so far this year, is projected to soften by another 8.0% from 39 per dollar to 42.8/dollar over the next six months. In Asia, the heavily managed Chinese yuan is expected to stay rangebound despite widespread concerns about weak demand in its economy, and a standoff with Washington over tariff policy and export controls. The Indian rupee , Korean won and Thai baht are all expected to gain just less than 1% by the end of November, pointing to steady but modest appreciation. "The big risk we see short-term for emerging market currencies is the risk of a turnaround in dollar sentiment," said Nick Rees, head of Macro Research at Monex Europe. "We do expect longer-term depreciation, but by the same token, we think the dollar looks too cheap on a fundamentals basis right now," added Rees. (Other stories from the June Reuters foreign exchange poll) https://www.reuters.com/world/china/most-emerging-market-currencies-set-hold-gains-2025-06-05/