Macro Wrap

The DJIA, the S&P500, and the Nasdaq Composite Index rose 0.5%, 0.6%, and 0.8% respectively. The Eurostoxx 50 fell 0.4%. The Dollar Index rose 0.6% to 99.25. EUR-USD fell 70 pips to 1.1370. The US 2Y yield rose 1.5bp to 3.95% and the 10Y yield rose 1bp to 4.45%. The German 10Y yield was flat at 2.53% while the UK 10Y yield fell 3bp to 4.64%. Brent crude oil prices rose 1.6% to USD65.63. Gold fell 0.8% to USD3,353

The OECD slashed its global growth forecasts for the second time this year. The organization now forecasts global growth to ease to 2.9% this year from 3.3% in 2024, and US growth to slow to 1.6% from 2.8% last year and lowered its China GDP forecast by 0.1% each for 2025 to 4.7% and for 2026 to 4.3%. The OECD said that the combination of higher trade barriers and uncertainty is hitting confidence and holding back investment. It also warned that protectionism is adding to inflationary pressures. Sentimentally negative for USD

US President Trump signed an executive order raising steel and aluminium tariffs to 50% from 25% as of 4 Jun. Note that the European Commission earlier said (31 May) that Europe was prepared to retaliate against Trump’s plan to double tariffs on imported steel and aluminium, raising the prospect of an escalating trade fight. Meanwhile, the UK won a reprieve on the US metals tariffs, with levies remaining at the previous rate of 25% to allow the country to work on new terms by the 9 Jul deadline. Sentimentally negative for USD, steel and Aluminium prices

US Job openings increased by 191,000 to 7.391 million in April, showing labour market strength despite trade issues. The OECD cut its 2025 US growth forecast to 1.6% from 2.2% due to policy and tariff concerns. Beijing and Washington accused each other of breaking a trade truce, while Trump's plan to double steel and aluminium tariffs faced EU criticism. sentimentally negative for USD.

Eurozone inflation fell to 1.9% in May 2025 from 2.2% in April, below the 2.0% forecast, marking its first dip below the ECB's target since September 2024. This supports a rate cut, with services inflation at 3.2%, it’s lowest since March 2022, energy prices down 3.6%, and non-energy goods inflation steady at 0.6%.

Bloomberg survey showed OPEC raised oil production by 200,000 b/d in May to 27.54 million b/d, with Saudi Arabia accounting for about half of the increase. Sentimentally negative for crude oil

Economic data watch: ADP Employment Change, CA BoC Interest Rate Decision, US ISM Service PMI.