Markets Brace for Tariffs, Rate Moves & Slowing Growth

Weekly Outlook

What Happened This Week?

1. New orders for major U.S.-manufactured capital goods saw their largest drop in six months in April with core capital goods orders falling 1.3% and durable goods orders declining 6.3%.
2. This decline suggests a weakening in business spending on equipment at the start of the second quarter.
3. The decrease is attributed to growing economic uncertainty, likely due to tariffs.
4. U.S. consumer confidence rose in May to 98, breaking a five-month streak of declines.
5. Tariffs remain a primary concern for US consumers regarding their views on the economy, as they worry that tariffs could lead to higher prices and could negatively impact the economy.
6. Australian consumer inflation remained at 2.4% year-on-year in April, holding steady from March's figure.
7. This rate was higher than the median forecast of 2.3% but remained within the central bank’s target band of 2-3%.
8. The trimmed mean measure of core inflation saw an annual increase to 2.8% in April, up from 2.7% in the previous month.
9. New Zealand's economy is recovering from a period of contraction, but potential global economic growth reduction due to recent international developments is expected to affect the country’s economic growth.
10. Inflation remains within the RBNZ target range between 1 and 3%.
11. The RBNZ lowered its Official Cash Rate (OCR) by 25 basis points to 3.25%.
12. The FOMC minutes show that Federal Reserve officials had continued worries about the direction of fiscal and trade policy.
13. There were fears that tariffs could worsen inflation, therefore complicating the interest rate policy direction.
14. Ultimately, the FOMC decided to keep interest rates unchanged and that the best option was to adopt a “wait-and-see” attitude.
15. President Donald Trump met with Federal Reserve Chair Jerome Powell at the White House.
16. He expressed his view that the central bank chief was making a "mistake" by not cutting interest rates.
17. The U.S. economy contracted by 0.2% in the first quarter, a smaller decline than the initial 0.3%.
18. The primary reason for this economic slowdown was a surge in imports, driven by consumers purchasing goods from abroad before President Donald Trump's tariffs took effect.
19. Additionally, consumer spending, a key indicator of economic health, was revised downwards.
20. Both South Korea and Mexico lowered their growth forecasts for 2025 and 2026, mostly due to uncertainty surrounding Trump’s tariffs.
21. The South Korean central bank lowered its key rate by 25 basis points to 2.5%.
22. JPMorgan analysts anticipate European equities may outperform U.S. equities for the next 12 to 18 months.
23. The Trump’s tariffs saga continues this week, as a federal appeals court has temporarily stopped a lower court's ruling that would have canceled most of President Donald Trump's tariffs at the Trump administration's request.
24. Corporate profits experienced their largest decline in over four years during the first quarter 2025, falling by $118.1 billion.
25. The decrease was primarily driven by nonfinancial domestic industries.
26. Tokyo's core inflation reached a two-year high at 3.6%, pressuring the central bank to consider further interest rate hikes.
27. Japan's industrial production decreased by 0.9% in April, reversing a 0.2% rise in March.
28. Companies anticipate a 9.0% rebound in output during May. However, a further drop of 3.4% is expected in June.
29. 240,000 new unemployment benefit claims were filed this week, an increase from 226,000 the previous week.
30. Continuing unemployment claims rose to 1.92 million, reaching their highest level since 2021.
31. While tariffs imposed earlier this year have raised concerns about the labor market, they have not yet led to significant job losses.

This Week’s Market Movers

Forex

1. ​​The EUR/USD pair remained largely unchanged, experiencing a volatile week.
2. Similar to the EUR/USD, most Forex pairs involving the USD also saw significant volatility.
3. The USD/JPY pair rose this week, following two consecutive weeks of decline.
4. The USD/MXN is down for the 5th month in a row.

Commodities

1. Oil prices are down for the second week in a row, losing more than 2%.
2. Coffee prices have been losing more than 10% over the last 3 weeks.
3. Sugar prices are trading at their lower prices since July 2022.
4. Oats prices are up more than 5%, hovering around their highest level of the year.
5. Cocoa prices down more than 17% in the last 2 weeks.

Indices

1. Foreign portfolio investors (FPIs) have recorded $2.6 billion in net foreign inflows into the Indian market in May.
2. FPI buying in May is set to reach its highest monthly total since September 2024, when Indian benchmark indexes reached record highs.
3. Domestic institutional investors (DIIs) have been net buyers of Indian shares for eight consecutive sessions.
4. The Nifty 50 has increased by over 2% this month, positioning the index for its third consecutive monthly increase.
5. The Japan 225 index has risen by over 2.7%, after its first bearish week that ended a six-week bullish streak.
6. The ASX index has risen for eight consecutive weeks, which marks an almost 18% gain since its low point in April.

Shares

Tops

1. Hologic: +15.28%
2. Intuit: +14.30%
3. Warner Bros. Discovery: +12.24%
4. Raizen: +11.80%
5. Seagate Technology Holding: +11.37%
6. Assai: +10.39%

Flops

1. Copart: -15.61%
2. PDD Holding: -15.27%
3. Dekers Outdoor Corporation: -13.09%
4. HP: -12.46%
5. Texas pacific Land Corporation: -10.66%
6. MicroStrategy: -10.30%
7. Auto Trader Group: -10.21%

This Week’s News to Follow

Monday 02 June

1. 02:00 PM - American ISM Manufacturing PMI (May)
2. Previous: 48.7
3. Forecast: 48.7

Tuesday 03 June

1. 01:30 AM - Australian RBA Meeting Minutes
2. 01:45 AM - Chinese Caixin Manufacturing PMI (May)
3. Previous: 50.4
4. Forecast: 50.6
5. 09:00 AM - European Inflation Rate YoY Flash (May)
6. Previous: 2.2%
7. Forecast: 2%
8. 02:00 PM - American JOLTs Job Openings (April)
9. Previous: 7.192M
10. Forecast: 7.05M

Wednesday 04 June

1. 01:30 AM - Australian GDP Growth Rate QoQ (Q1)
2. Previous: 0.6%
3. Forecast: 0.5%
4. 01:45 PM - Canadian BoC Interest Rate Decision
5. Previous: 2.75%
6. Forecast: 2.75%
7. 02:00 PM - American ISM Services PMI (May)
8. Previous: 51.6
9. Forecast: 52

Thursday 05 June

1. 01:30 AM - Australian Balance of Trade (April)
2. Previous: A$6.900
3. Forecast: A$6.7B
4. 12:15 PM - European Deposit Facility Rate
5. Previous: 2.25%
6. Forecast: 2%
7. 12:15 PM - European ECB Interest Rate Decision
8. Previous: 2.40%
9. Forecast: 2.15%
10. 12:30 PM - Canadian Balance of Trade (April)
11. Previous: C$-0.51B
12. Forecast: C$0.1B
13. 12:45 PM - European ECB Press Conference
14. 02:00 PM - Canadian Ivey PMI s.a (May)
15. Previous: 47.9
16. Forecast: 48.2

Friday 06 June

1. 06:00 AM - German Balance of Trade (April)
2. Previous: €21.1B
3. Forecast:
4. 12:30 PM - Canadian Unemployment Rate (May)
5. Previous: 6.9%
6. Forecast: 7.0%
7. 12:30 PM - American Non Farm Payrolls (May)
8. Previous: 177K
9. Forecast: 130K
10. 12:30 PM - American Unemployment Rate (May)
11. Previous: 4.2%
12. Forecast: 4.2%

Major Earnings Reports to Watch

Wednesday 04 June

1. Dollar Tree

Thursday 05 June

1. Broadcom

Source: Trading Economics, TradingView, and ActivTrades’ Data as of May 30 2025

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