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European shares hold steady ahead of US key jobs data
Investors stayed away from major bets on Friday ahead of the crucial U.S. employment data. Trade tensions also added to the uncertainty. As of 0809 GMT the pan-European STOXX 600 remained at 551.95 and was on course for a second weekly gain if momentum continues. The day will begin with a monthly reading of U.S. Non-Farm Payrolls. This will help investors gauge how President Donald Trump’s trade policies have affected the labor market, and how the Federal Reserve may navigate the uncertain trade environment. Commerzbank analysts stated that "a print above the consensus could reinforce Fed's cautious position and serve as a bullish impetus" Double up Tariffs on imports of steel and aluminum, imposed earlier this week by the United States, heightened trade tensions. Investors remained hopeful about signs of a possible easing of U.S. - China tariff tensions after Trump's phone call On Thursday, President Xi Jinping of China met with the United States. On Thursday, German Chancellor Friedrich Merz also said that Germany and America aim to strengthen Trade ties without providing any details Investors have lowered their expectations of further interest rate cuts due to President Christine Lagarde’s indications that the central banks is nearing the end its easing cycle. Investors will focus on whether the public spat between Trump and Tesla's top boss Elon Mohs could have wider implications for markets. Fiona Cincotta is the senior analyst at City Index. She said that the comments made by Musk yesterday regarding Trump tariffs and the U.S. going into recession in the second part of this year, combined with the weak data released this week, has caused investors to stay away for the moment. On the market, healthcare and energy share dominated and offset declines in industrial products and services and miners. Adidas and Puma, two sportswear retailers, fell 0.6% and 1,4% respectively after U.S. competitor Lululemon Athletica reduced its profit forecast for the year. Dassault Systemes shares fell by 1.5% after it extended its target period for medium-term earnings forecasts per share by an additional year. Renk fell about 5% and was among the worst performers in the STOXX 600 after Exane BNP Paribas lowered the stock from "neutral" to "underperform". Data is a big deal. German exports The U.S. demand for goods has decreased after months of high purchases made in anticipation of U.S. Tariffs. In May, British house prices The drop was larger than expected.
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Document shows that Indonesia's Pertamina is looking for more gasoline in the term range from July to September.
Pertamina, Indonesia, is looking to purchase up to 1.2million barrels of gasoline term cargoes per month for delivery between July to September. This was its second tender this month. Pertamina wants to purchase up to 500,000 barrels octane 92 gasoline per month and up to 700,00 barrels octane 90 gasoline, according to the document. However, restrictions remain on the origins of the deliveries. The company's trading arm Pertamina Patra Niaga issued this tender. It closes on 10 June, with validity until 16 June. Multiple trade sources confirmed that the firm had purchased some cargoes on a discounted basis linked to a Singapore free-on-board basis through an earlier tender held in May. The oil company had sought to purchase up to 1.6 millions barrels octane 90 gasoline and 1.2million barrels octane 92 gasoline, for delivery every month between July and December. No further details about the volume awarded in the previous bid could be confirmed. However, trade sources stated that the company bought both grades of gas. Pertamina Niaga did no respond immediately to a comment request. Reporting by Mohi N. Narayan, New Delhi; Trixie Yap, Singapore; Bernadette C. Christina added reporting; Eileen Soreng edited.
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India auto dealers cautious about June sales due to rare earth restrictions and high inventory
Indian auto dealers expect a cautious demand in June, as the industry is impacted by high inventory levels and tighter financing. The Federation of Automobile Dealers Associations of India stated that while an above-normal rainy season is expected to boost sales of tractor and two-wheelers in semi-urban areas and rural areas, a shortage of rare earths, which are critical for EV production, could dampen demand. Around 55% of members of the trade body expect flat sales in June. Automakers and dealers are counting on the new EV launch to help them grow this year, and offset the slowdown in sales of combustion engines cars in urban areas. "... "Global supply-chain headwinds - from rare-earth shortages in EV components, to ongoing geopolitical conflicts - may keep urban consumer sentiment under control," FADA said. While EV sales in India are growing faster than gasoline cars, they only accounted for 2.5% of 4.3 million vehicles sold during the last fiscal year. The suspension of China's exports of rare earths, magnets, and other related materials has disrupted supply chains vital to automakers and aerospace manufacturers. Semiconductor companies, military contractors, and automotive manufacturers have also been affected. Export restrictions have caused global automakers to warn of production halts. Although Indian automakers have not yet publicly disclosed the impact of curbs, a private industry group told the government privately last month that it expected production to "come to a grinding stop" as soon as the end or early June. Bajaj Auto, India's largest e-scooter manufacturer, said last week that any delays in lifting export restrictions would affect the production of electric scooters starting July. TVS Motor has also warned that an impact is expected by June or July. FADA said that dealers continue to face a high inventory of automobiles and commercial vehicles. In May, inventories of cars were 52-53 days above the FADA recommended level. (Reporting and editing by Sonia Cheema and Niveditarjee in Bengaluru, Niveditarjee in New Delhi and Saumyadeb Chkrabarty).
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Iron ore gains for the week on Trump-Xi discussions and resilient China demand
The price of iron ore futures rose to an all-time high on Friday, and was set for a weekly gain, buoyed up by the progress made in Sino-U.S. negotiations and the steady demand from China, its largest consumer. However, seasonally low steel consumption limited gains. The September contract for iron ore on China's Dalian Commodity Exchange closed the daytime trading 0.86% higher, at 707.5 Yuan ($98.48), logging a week-long gain of 0.6%. Earlier in the session, the contract reached its highest level since 26 May at 713.5 Yuan per ton. As of 0716 GMT on Friday, the benchmark July iron ore traded at the Singapore Exchange had risen 0.9% to $95.7 per ton. This is a 0.1% increase this week. In the early part of the session, it reached its highest level since May 29, at $96.4. The market was optimistic after U.S. president Donald Trump and his Chinese counterpart Xi Jinping addressed weeks of brewing tensions over trade and a fight over vital minerals during a rare leader to leader call on Thursday. Analysts at Everbright Futures wrote in a report that the call between Sino-U.S. leader is a sign that trade tensions are easing between the two superpowers. This has sparked a risk-on mood. Analysts at Chaos Ternary Futures say that near-term ore consumption is expected to remain firm, as steelmakers will need to stockpile cargo in order to maintain production. Hot metal output has been relatively high, and the mills' inventory remains low. A survey by consultancy Mysteel revealed that the average daily hot metal production, which is a measure of iron ore consumption, was 2.42 million tonnes as of 5 June, up 2.6% compared to a year ago. As summer temperatures increased, construction was hampered. Coking coal, coke and other steelmaking ingredients have increased by 3.18% and 0.67 percent, respectively. The Shanghai Futures Exchange saw a majority of steel benchmarks rise. Rebar was up 0.57%, while hot-rolled coils and wire rod were also higher. Stainless steel fell 0.16%.
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Investors cautious as US jobs data approaches, European shares fall
Investors resisted placing large bets before the release of important U.S. employment data. Trade tensions also added to the uncertainty. As of 0709 GMT the pan-European STOXX 600 index held steady at 551.9 points. If momentum continues, it could be on course for a second weekly gain. Investors can gauge the Federal Reserve's ability to navigate the uncertain trade environment by assessing the monthly U.S. Non-Farm Payrolls. The U.S. president Donald Trump doubled the tariffs on imports of steel and aluminum earlier this week. This heightened trade tensions. The Trump administration has asked countries to submit best offers before Wednesday but the markets are yet to see any concrete results. Investors have lowered their expectations of further interest rate cuts after President Christine Lagarde signaled that the central banks is nearing the end its easing cycle. Adidas and Puma shares fell by nearly 1% each after U.S. competitor Lululemon Athletica reduced its profit forecast for the year.
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Gold prices rise as US data weakens and optimism over Trump-Xi meeting is tempered
Gold gained on Friday, and investors were looking forward to the U.S. payroll report. This was due out this week. As of 0548 GMT, spot gold was up by 0.3%, at $3,363.33 per ounce. Bullion is up 2.3% this week. U.S. Gold Futures rose 0.4% to $3387. Trump and Xi held a rare call between leaders on Thursday to discuss escalating tensions in trade and disagreements over minerals. However, key issues are still unresolved. Tim Waterer is the chief market analyst of KCM Trade. He said that the initial excitement for risk appetite after the Trump-Xi phone call has begun to fade, allowing gold to creep upward. Last week, the number of Americans who filed new claims for unemployment benefits reached a record high. Investors await the U.S. Nonfarm Payroll data at 1230 GMT after a series of data this week that highlighted a softening labor market. The economists polled predicted that non-farm payrolls would increase by 130,000 jobs by May, and the unemployment rate will remain at 4.2%. Waterer stated that "the upcoming NFP could be a catalyst for a break-out if the data produced a significant miss either side of expectations." Federal Reserve policymakers stated that inflation is a greater concern than the cooling of the labor market, which suggests a longer hold on monetary policies adjustments. Gold is often viewed as a safe haven asset. It tends to do well in times of economic uncertainty, and when interest rates are low. This week, the high price of gold dampened purchases in major Asian cities. In India, discounts reached their highest level in more than a month. Silver spot fell by 0.7%, to $35.92 an ounce. This is near the 13-year high. Platinum rose by 1.7%, to $1149.85, and palladium gained 0.7%, to $1012.60. All three metals are headed for weekly gains.
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Tesla falls as Trump-Musk's bromance soured. Stocks are on alert for payrolls
Asian shares fell on Friday, as investors prepared for the important U.S. payrolls data. Tesla also suffered heavy losses due to the public spat between Elon Musk and President Donald Trump. The markets are wary after a string of weak economic data, and they're worried about a surprise downturn in the payrolls report due later that day. This would increase fears of stagflation, while increasing pressure on the Federal Reserve. Tesla shares rose 0.8% after hours trading, after plummeting 14% overnight and wiping out $150 billion of market value. Trump had threatened to stop government contracts for Elon Musk's businesses after the relationship, which was once very close, deteriorated into an open and bitter disagreement. Trump told Politico, when asked about their relationship, that "it's fine" and that White House staff had arranged a phone call with Musk on Friday to try to find a solution. Nasdaq and S&P futures both rose by 0.3%, while losses in European stocks futures were reduced to just 0.1%. MSCI's broadest Asia-Pacific share index outside Japan fell 0.2% Friday from its eight-month high. The index is still on track for a 2.1% weekly increase. The Hang Seng in Hong Kong fell 0.5% and the blue chips of China dropped 0.2% as a phone call between Trump's and Xi Jinping's offered little clarity on how to ease trade tensions. Luke Yeaman is the chief economist of the Commonwealth Bank of Australia. He said: "I believe that the fact they are talking and that the channels of communication are opened is a good thing." "But it is clear that there are many tensions and that neither party wants to give away too much... There is not a great deal of goodwill with which to improve the trade relations." The majority of Asian shares are slightly down, but Japan’s Nikkei has been a bright spot, rising 0.4% and helping to reduce its weekly decline to 0.7%. WAIT FOR PAYROLLS Payrolls report expectations have been dampened by weaker-than-expected labour data. This includes a 47% jump in Challenger's layoffs year-on-year and a major surprise on the downside in ADP private payrolls. Forecasts predict a gain of 130,000 new jobs in May with the unemployment rate remaining at 4.2%. A sudden weakness in the U.S. economy could trigger a rate cut and cause a massive rally in Treasuries. The futures market indicates that there is little chance of a rate reduction until September. This is 93% priced-in, and another move will likely come in December. The yields on benchmark 10-year Treasuries remained flat at 4.3887 percent, after rising 3 basis points over night to recover from a 1-month low. In a client note, analysts at TD Securities said that they expect payrolls in May to print below consensus levels of 110,000. In recent weeks, the markets have been focusing solely on tariffs and debts. Macro has taken a backseat. We may not have enough information to help catalyze a renewed focus on macroeconomics, but we do expect that downside surprises will cause a greater market reaction. The dollar rose 0.2% against its major counterparts on Friday, just a little above a six week low due to soft economic data that dented the U.S. Overnight, the euro reached a six-week high of $1.1495 after the European Central Bank lowered rates. However, it also signaled the nearing end of the year-long cycle of policy easing. Investors are no longer expecting a move to be made in July. The final move is more likely to occur in October or in December. On the commodities market, oil prices are slightly lower than last week but they will likely rise by a large amount this week due to supply concerns. U.S. Crude Futures fell 0.4% to $63.12 per barrel, but rose 3.8% in the past week. Gold prices rose 0.4%, to $3,366.78 per ounce. They are up 2.3% for the week.
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Indian dealers offer steeper discounts on ASIA GOLD as price rally dampens demand
The gold discounts in India reached their highest level in over a month this week, due to a rise in prices that were near record highs. Meanwhile, the rising rates in other major Asian cities also dampened demand. On Friday, domestic gold prices traded at around 98.300 rupees for 10 grams, having rebounded from a monthly low of 90.890 rupees and approaching the all-time record of 99.358 rupees. Indian dealers were forced to offer discounts due to the price spike Up to $56 per ounce less than official domestic prices. This includes a 6% duty on imports and a 3% tax on sales. Prices have increased, which has really affected demand. "Harshad Ajmera, wholesaler JJ Gold House of Kolkata, said that there were few buyers this week. The monsoon, which started earlier than usual in India this year, is usually a time when gold demand in India remains low. A Mumbai-based bullion seller with a private banking firm said that jewellers have stopped making purchases due to the lean season. They also don't wish to accumulate high-cost inventories. Dealers in China, the world's largest gold consumer, charged premiums between $10 and $14 per ounce above the global benchmark spot rate. Last week, gold bullion was traded at par or a $15 premium. Hugo Pascal is a precious metals dealer at InProved. He said that the increased gold price has negatively affected Chinese demand. In Hong Kong, gold In Singapore, the price was $0.30 to $1.30 higher. Gold traded at par prices with a premium of $2.50. We've also seen wholesalers selling due to high prices, said Brian Lan. In Japan, bullion Traded anywhere between a discount or premium of $0.5 over spot prices.
US stocks rise, Treasury yields fall as investors focus on tariff talks and jobs data
Investors watched the U.S. Trade Negotiations and awaited Friday's important employment report.
The dollar fell and gold remained unchanged.
Ross Mayfield is an investment strategy analyst with Baird, based in Louisville, Kentucky. He said that the big rate move has provided some relief, if not directly for stocks, then at least to those who have been trying to explain why rates are moving up. The equity markets are relieved that rates still seem to have a range of possible increases in this type of environment.
U.S.-European
The top European negotiator noted that trade talks were progressing. He also pointed out that the U.S. tariffs on metals have doubled since Wednesday. This is not helping negotiations. China's restrictions on vital mineral exports has caused concern among global automakers. They warn that shortages could disrupt global supply chains.
Trump, who is expected to meet with Chinese President Xi Jinping soon, called Xi "extremely difficult to deal with" in a post on social media. This suggests that a quick resolution to trade disputes between the two world's largest economies may prove elusive.
Investors remain confident, or as confident as possible that the administration will not let things go too far. Mayfield said that the administration would not return to its low point of April 8.
I don't think that it is necessary to believe in the existence of God.
(Trump always chickens out) trade is wrong. Obviously, it's just a joke. But there are enough signs that suggest if the Trump administration returns to their worst tendencies in terms of trade and tariffs then the market would react accordingly," Mayfield said.
ADP, a payroll processor, reported that the U.S. Private Sector added 37,000 new jobs in the last month. This is 69.2% less than what analysts expected to see on Friday from the Labor Department, which will release a more comprehensive report. Survey data also showed that the U.S. service sector contracted last month. Prices paid, an inflation indicator, reached their highest level since November 20,22.
The Dow Jones Industrial Average increased 18.57 points or 0.04% to 42,537.23. The S&P 500 gained 12.69 points or 0.21% to 5,982.97, and the Nasdaq Composite rose 84.52 or 0.44% to 19,483.48.
After Berlin approved a tax relief package for corporations, European stocks rose and Germany’s benchmark index reached a new record high. This was despite survey data showing that euro zone business activity is stagnating and Germany’s services sector has posted its biggest contraction in over two years.
The MSCI index of global stocks rose by 4.25 points or 0.48 percent to 890.15.
The pan-European STOXX 600 Index rose by 0.47% while Europe's broad FTSEurofirst 300 Index rose by 9.84 points or 0.45%.
Emerging market stocks increased 14.85 points or 1.28% to 1,172.98. MSCI's broadest Asia-Pacific share index outside Japan closed up 1.33% at 618.30. Japan's Nikkei gained 300.64 points or 0.80% to 37,747.45.
Dollars fell across the board, as a series of downbeat economic reports suggested a softening in labor market conditions. The services sector also showed signs of contraction.
The dollar index (which measures the greenback in relation to a basket of currencies, including the yen, euro and pound sterling) fell by 0.38%, falling to 98.79. At $1.1421, the euro rose 0.45%.
The dollar fell 0.82% against the Japanese yen to 142.82. The yields on longer-dated U.S. Treasury bonds fell after the weaker-than-expected data. Investors waited for any signs of progress with tariff negotiations, and also looked forward to the payrolls report.
The yield on the benchmark 10-year U.S. notes dropped 9.5 basis points from 4.46% to 4.365% late on Tuesday.
The 30-year bond rate fell by 9.5 basis points, from 4.983% to 4.8877% late on Tuesday.
The yield on the 2-year note, which is usually in line with expectations of interest rates for the Federal Reserve fell by 8.2 basis points, from 3.957% to 3.875%, late Tuesday.
Crude oil prices fell as U.S. inventories were higher than expected, adding to the supply concerns amid tensions in trade and OPEC+ production increases.
U.S. crude fell 0.88%, settling at $62.85, while Brent closed at $64.86 a barrel, down by 1.17% for the day.
The gold price rose, supported by a soft dollar. Investors waited for employment and trade data.
Spot gold increased 0.7% to $3.375.59 per ounce. U.S. Gold Futures increased 0.64% to an ounce of $3,371.50.
(source: Reuters)