ECB Sees Limited US Policy Divergence; US-South Korea Trade Talks Aim for Tangible Results
Key Takeaways
- Schnabel (ECB) expects US and ECB policy divergence is unlikely to persist.
- South Korea and the US will seek "tangible results" in trade negotiations.
- US and China will resume economic talks in London on June 9, 2025.
- President Trump pressures the Federal Reserve for a full point rate cut.
- China and the EU are nearing a deal on EV minimum prices.
Top Stories
Schnabel: US and ECB policy divergence unlikely to persist.
On June 7, 2025, Isabel Schnabel of the ECB stated that persistent policy divergence between the US Federal Reserve and the ECB is unlikely. She also expects the trade conflict to act as a global shock affecting both demand and supply, with the net effect on inflation depending on which effect is larger.
South Korea, US to seek 'tangible results' in trade.
On June 7, 2025, South Korea announced that President Lee Jae-myung and Donald Trump agreed to pursue "tangible results" in trade negotiations. This follows the US imposing a 25% tariff on all imports from South Korea.
US, China to resume economic talks in London.
On June 6, 2025, President Trump announced that the US and China will hold their second round of economic talks in London on June 9, 2025. The negotiations will cover tariffs and global supplies of rare earth minerals, with the American delegation led by Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick, and United States Trade Representative Jamieson Greer.
Trump pressures Fed for full point rate cut.
On June 6, 2025, President Donald Trump pressured the Federal Reserve to cut interest rates by a full percentage point. He urged Fed Chair Powell to "Go for a full point, Rocket Fuel!" on social media.
China, EU near deal on EV minimum prices.
On June 7, 2025, China's commerce ministry reported that talks with the European Union regarding minimum prices for Chinese-made electric vehicles have "entered final stages." However, further work is needed to finalize the agreement.
Business Insights
Job growth in health, leisure; manufacturing, retail cut jobs.
On June 6, 2025, the Labor Department reported that job growth was primarily in health care, social assistance, and leisure and hospitality. Manufacturing and retail sectors experienced job cuts.
Analysts bullish on Tesla despite Musk-Trump spat.
On June 6, 2025, Jim Cramer stated that Tesla, Inc. (TSLA) is in a tough place. However, analysts remain bullish on Tesla despite a spat between Musk and Trump.
Prada boosts production control with Rino Mastrotto investment.
Global Economy
BoE's Greene: UK disinflation to continue.
On June 7, 2025, Bank of England rate-setter Megan Greene stated that disinflation in the UK is expected to continue. This is despite a near-term acceleration in consumer-price growth.
Fitch lowers Austria's rating to AA from AA+.
On June 6, 2025, Fitch lowered Austria’s rating to AA with a stable outlook, from AA+. The downgrade was attributed to a higher-than-forecast budget deficit, driven by a worse economic environment and overspending at the local government and municipality level.
US-China tensions rise despite positive call.
Reported on June 6, 2025, tensions between the US and China have resurfaced recently, linked to mineral exports and potential visa revocations for Chinese students. This follows accusations from both sides regarding the undermining of a previous trade agreement. Despite this, President Trump described his June 5th call with President Xi as productive, resulting in a positive conclusion for both countries.
Market Watch
Gemini files for US IPO confidentially.
On June 6, 2025, it was published that Gemini has confidentially filed for a US IPO. This comes as crypto markets are heating up.
Trending tickers: ^GSPC, ^DJI, ^IXIC, A, H.
On June 7, 2025, trending tickers included ^GSPC 6000.36 (+1.03%), ^DJI 42762.87 (+1.05%), ^IXIC 19529.95 (+1.20%), A ACHR 10.19 (+8.87%), and H HOOD 74.88 (+3.27%).
Circle stock climbs after IPO debut, surged 200%.
On June 6, 2025, news emerged that Circle Internet Group stock is climbing after its debut. It was also reported that Circle Surged 200% In IPO Debut.
Policy Updates
Tariffs impact: DKNY outlook cut, inflation risk.
On June 6, 2025, it was reported that DKNY's parent company anticipates a tariff hit and is withdrawing its profit outlook. Also reported on the same day, U.S. inflation data could show tariffs feeding into higher prices.
AI Impact
Nvidia stock rises on strong AI demand.
Nvidia stock is rising because Broadcom earnings indicate that AI demand remains strong.
Docusign stock sinks on billings outlook cut.
On June 6, 2025, Docusign stock sank as the firm cut its billings outlook. This was attributed to a switch to an AI platform.
Housing Market
South Florida: 'Epicenter of housing weakness' in US.
As of June 6, 2025, South Florida is emerging as the 'epicenter of housing weakness' in the US. This raises concerns about a potential spread of this trend nationwide.