AMERICAS Trump and Xi's big chat
LONDON, June 3 (Reuters) - What matters in U.S. and global markets today
The dollar and U.S. Treasuries found their footing on Tuesday after a rough start to the week, but stocks remained edgy due to a mix of trade war concerns and spluttering factory activity.
I'll discuss this and all of today's market news below. And for today's deep dive, I'll explain why market fears are growing that the 'new cold war' could be turning hot.
Today's Market Minute
* Dutch far-right leader Geert Wilders' PVV party left the governing coalition on Tuesday, in a move that is set to topple the right wing government and will likely lead to new elections.
* Saudi Arabia and Russia had to reach a difficult compromise on OPEC+ policies on Saturday as Riyadh pushed to accelerate oil output increases while Moscow argued for a pause, four OPEC+ sources with knowledge of the talks said.
* Surging government debt levels are becoming a pressure point for big economies and bond investors have their sights on those not doing enough to improve their finances.
* BP has jumped from crisis to crisis in recent years, severely eroding its stature as one of the world's leading oil companies. The British firm may finally need to accept that it is no longer a true oil major and can't keep managing cash like one. Read the latest from Reuters columnist Ron Bousso.
* Headwinds from tariffs, bond yields and 'stagflation' are gathering force, but corporate America could not be in better shape to face the economic storm that may be building. Read the latest from Reuters columnist Jamie McGeever.
Trump and Xi's big chat
The weekend saw testy bilateral exchanges between Washington and Beijing, as well as a doubling of U.S. steel tariffs to 50%. But hopes for some easing in Sino-U.S. tensions were stoked by news that President Donald Trump and Chinese leader Xi Jinping were scheduled to hold a call as soon as this week.
If they jump on the phone this Thursday, they could rope in German Chancellor Friedrich Merz - who will be meeting Trump that day in Washington - for a trilateral discussion among the world's three biggest economies.
There's clearly some urgency in Washington to get bilateral talks on track with time running out on its 90-day pause of reciprocal tariffs imposed on April 2.
A draft letter sent to negotiating partners showed the Trump administration wants countries to provide their best offer on trade negotiations by Wednesday as officials seek to accelerate talks with multiple partners. Perhaps pointedly, European Union sources said they had not received the letter.
Meanwhile, the tariff war's negative impact on global manufacturing is starting to show.
U.S. factory activity contracted for a third straight month in May, and suppliers took the longest time in nearly three years to deliver inputs, potentially signalling looming shortages of some goods. The reading was the lowest in six months and missed expectations.
Additionally, China's factory activity in May shrank for the first time in eight months, a private-sector survey showed on Tuesday, indicating U.S. tariffs are now starting to directly hurt the manufacturing superpower.
The Organisation for Economic Cooperation and Development's latest global outlook, meantime, now expects world growth to slow more than the group expected only a few months ago, as the fallout from the trade war takes a toll on the U.S. economy.
The slowing economic pulse helped keep a lid on Treasury yields, with 30-year bonds falling below 5% again.
And the greenback (.DXY), opens new tab perked up from Monday's six-week lows.
Helping to drive both those moves were surprisingly soft euro zone inflation numbers for May, which increased the likelihood of another European Central Bank interest rate cut this week - and possibly more ahead.
Headline euro zone inflation fell below the ECB's 2% target last month, slowing to 1.9% from 2.2% in April. That was below forecasts, amid falling oil prices and service sector inflation as well as the strong euro . Core rates dropped sharply to as low as 2.3%.
Next up is this week's sweep of U.S. labor market reports. April job openings due out later on Tuesday are expected to slip further from last month.
Ahead of the open, U.S. stock futures were back in the red after the S&P 500's late session recovery on Monday, led in part by big tech and oil stocks.
Crude oil prices sustained the bulk of Monday's gains after the OPEC+ meeting this weekend resulted in less significant output hikes than feared.
Taiwan's TSMC (2330.TW), opens new tab, meantime, said on Tuesday that even though U.S. tariffs were having some impact on the company, it is continuing to benefit from the strong demand for artificial intelligence tools.
Be sure to check out today's column, where I look into the increasingly bellicose political rhetoric around the world, as countries engage in a new arms race and multiple conflicts escalate.
Today's events to watch
* U.S. April factory goods orders (10:00 AM EDT) U.S. April JOLTS job openings (1000EDT)
* Federal Reserve Board Governor Lisa Cook, Dallas Fed President Lorie Logan and Chicago Fed President Austan Goolsbee speak;
* U.S. corporate earnings: Crowdstrike, Hewlett Packard, Dollar General
* OECD Ministerial Council Meeting 2025 in Paris
* Italy's Prime Minister Giorgia Meloni meets French President Emmanuel Macron in Rome
Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, opens new tab, is committed to integrity, independence, and freedom from bias.
($1 = 0.8738 euros)
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Belfast Telegraph
30 minutes ago
- Belfast Telegraph
Popular Co Antrim restaurant announces closure after 60 years serving ‘incredible community'
The Go Sun Chinese restaurant, an institution in Ballymena since 1966, will cease trading in July after nearly six decades of serving the town. It was founded by the late Louis Sung and his wife Choi Lin who moved to Ballymena from Hong Kong in 1965. Go Sun was seen as a pioneer of Chinese cuisine in the region. The restaurant added a new cultural dimension to the local culinary scene which was dominated by European cuisine. Over the decades, the restaurant was refurbished, but always remained a firm favourite with locals and visitors alike, serving generations of families and introducing many to Chinese cuisine for the very first time. Louis and Choi Lin raised their family — Stanley, Susan, Suzie, Sophie and Stephen — within the Ballymena community, becoming a familiar and well-respected part of local life. Beyond their restaurant business, the Sung family played an active role in the local and wider Chinese community. Louis Sung was a key figure in organisations such as the Chinese Welfare Association, supporting fellow immigrants and championing cultural representation across Northern Ireland. Following the passing of Louis Sung in September 2023, the family has continued to run the business with the same commitment to quality and community spirit. On Wednesday evening, Louis' son Stanley announced the family's decision to close the restaurant next month. In a heartfelt message to patrons, Stanley Sung said: 'After 60 wonderful years of proudly serving the incredible community, it is with a heartfelt bittersweet announcement that we are closing the Go Sun in four weeks' time. 'For over two generations of the Sung family, the people of Ballymena have accepted and welcomed us into their community. 'We have been privileged and blessed to have served our loyal customers and friends as they chose the Go Sun to celebrate many of life's milestones and to share their stories. News Catch Up - Thursday 5 June 'We also want to thank our amazing staff who came and went over the years, working alongside the family throughout all the highs and the lows. 'As the doors of the Go Sun close and an era ends, we want to say a massive thank you to all the people who have made it possible, for the wonderful support and mostly for all the fantastic memories.'
Rhyl Journal
31 minutes ago
- Rhyl Journal
Fact check: More people leave than arrive on current youth mobility schemes
Asked 'how do you know there will be fewer people coming here than leaving?' Mr Reynolds said: 'Well, I've got 13 schemes in action already and that's the evidence of them.' He later added: 'I tell you the evidence of the current schemes just so you know is that they're a net negative on immigration.' Around 24,400 youth mobility visas were issued to people wanting to come to the UK in 2024. Although figures are patchy for how many Britons go abroad, data from just three countries – Australia, New Zealand and Canada – suggests that 68,495 British citizens travelled to those countries in 2024 (the Australian data is for the 12 months to the end of June 2024). That would suggest that Mr Reynolds is right. However it does not take into account that Britons going abroad on these temporary visas will sooner or later come back, as will those who come to the UK. It is also not clear that this pattern will repeat in any similar deal with the EU. The UK population is much larger than those of Australia, New Zealand and Canada, so there are more Britons who can go to those countries than can come here. With the EU that is reversed. How many people come to the UK on a youth mobility visa? Government data shows there were 24,437 people who were handed a youth mobility visa last year. Most of these were from one of the 13 countries with which the UK has a reciprocal arrangement. A small handful of visas – 131 in total – were for people from countries other than the 13. The Migration Observatory at the University of Oxford has suggested that these are the result of errors in data recording, or due to people having dual nationalities. The top three countries that sent people to the UK on youth mobility visas between January and December 2024 were Australia (9,754 visas), New Zealand (4,304 visas) and Canada (3,060 visas). How many Britons go abroad on youth mobility type schemes? Figures are patchy on how many British people have gone abroad on a youth mobility scheme. The Department for Business and Trade was unable to share data. Australia publishes a twice-yearly report into what it calls its working holiday visa programme. That is the Australian equivalent to the UK's youth mobility scheme. The latest such report covered the 12 months to the end of June 2024. That report showed that Australia issued 48,973 working holiday visas to UK citizens. Data from New Zealand is available on the website of the Ministry of Business, Innovation and Employment. Using its migration data explorer produces a spreadsheet which shows that there were 9,486 working holiday visas granted by New Zealand to UK citizens in between January and December 2024. Canadian data does not appear to be publicly available, but the figures were provided to the PA news agency by the Canadian Department for Immigration, Refugees and Citizenship. The data shows that in 2024 there were 9,972 work permits issued to UK and UK overseas territories citizens under the country's working holiday scheme, and a further 64 people had their permits extended. How do incoming youth mobility visas compare to outgoing? Net migration is a figure which subtracts the number of people coming into the country from the number of people leaving. The data cited above suggests that while 9,754 Australians came to the UK on youth mobility visas, 48,973 Britons went in the opposite direction. It must be noted that the time periods measured here are different, the Australian data is for the 12 months ending June 2024, while the UK data is for the 12 months ending December 2024. Meanwhile the data suggests that 4,304 New Zealanders came to the UK while 9,486 Britons went in the other direction. Data further shows that 3,060 Canadians came to the UK in 2024, while 9,972 Britons went in the other direction. This suggests that for each of these three countries the youth mobility schemes are – as Mr Reynolds suggested – reducing net migration. In fact Australia alone appears to receive twice as many Britons (48,973) as all people who the UK receives from all 13 countries added together (24,437). However, it should be noted that because youth mobility schemes are time-limited, Britons going abroad and people who have come to the UK on such visas will eventually be forced to return. This means the UK's inbound migration figures should take into account not just Australians and Canadians – for example – coming to the UK, but also Britons returning from Australia and Canada after their youth mobility visas expire. If it is assumed that everyone returns then over a longer time frame the youth mobility programmes will have a neutral impact on net immigration because every Briton who leaves the UK will come back and every non-Briton who comes to the UK will leave. This does not take into account the people – both Britons abroad and non-Britons in the UK – who apply for a different visa to stay in their adopted country. Do these conclusions also apply to the EU scheme? The impact on net migration of the potential EU scheme will depend on the details of the agreement between London and Brussels. Madeleine Sumption, director at the Migration Observatory, told the PA news agency that the size of the cap on the programme would be vital for the impact on net migration. She said the fact the UK sends more people to Australia, Canada and New Zealand than it receives from them 'probably results from the fact that the UK has a much larger population than they do, so we just have more young people potentially interested in moving'. With the EU scheme, Ms Sumption said, the population sizes are flipped – that is to say the EU's population is much bigger than the UK, leaving more young people who might be willing to come here. Therefore the smaller the cap on the number of visas is, the more likely both the EU and UK will fill their quotas. If both fill their quotas – and the quotas going both ways are the same – then the impact on net migration will be zero. However if the cap is large then it is more likely that there will not be as many Britons going to Europe as are coming in the opposite direction, which will bring up net migration. But, as with the existing schemes, both Britons in Europe and Europeans in the UK will eventually have to leave unless they find another visa, which over the long run should mean that the programme has a neutral impact on net migration. BBC – Today, 19/05/2025 Migration Observatory – What is the Youth Mobility Scheme and how does it work? (archived) – Entry clearance visas granted outside the UK (archived page and spreadsheet, using tab Data_Vis_D02) Australian Department of Home Affairs – Visitor visa statistics (archived) Australian Department of Home Affairs – Working Holiday Maker visa program report (archived) New Zealand Ministry of Business, Innovation and Employment – Migration data explorer (archived page and downloaded spreadsheet. To download the correct spreadsheet, instructions can be found at (archived): In dataset select 'W1 work decisions', in time period select 'calendar year' and in variables select 'application substream', 'application criteria' and 'decision type') Canadian data provided to PA news agency (archived) Madeleine Sumption profile (archived)
Leader Live
31 minutes ago
- Leader Live
Trump ‘disappointed' with Musk after he turned on the Republican tax bill
Mr Trump suggested the world's richest man misses being in the White House and has 'Trump derangement syndrome'. This spending bill contains the largest increase in the debt ceiling in US history! It is the Debt Slavery Bill. — Elon Musk (@elonmusk) June 4, 2025 The Republican president reflected on his break-up with Mr Musk in front of reporters in the Oval Office as the Space X owner continued a storm of social media posts attacking the president's 'Big Beautiful Bill' – and warning it will increase the federal deficit. 'I'm very disappointed in Elon,' Mr Trump said. 'I've helped Elon a lot.' Mr Musk has called Mr Trump's big tax break bill a 'disgusting abomination'. As Mr Trump spoke to reporters at the White House on Thursday, Mr Musk was watching. 'False,' he fired back on his social media platform as the president continued speaking. 'This bill was never shown to me even once and was passed in the dead of night so fast that almost no one in Congress could even read it!'
