CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.  The majority of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Daily Macro markets update 06/06/2025

Market Report.

🤝 US President Donald Trump and Chinese President Xi Jinping spoke for about 90 minutes on Thursday and agreed that officials from the U.S. and China will meet soon for more trade talks to resolve the ongoing trade war.

🛠️ The call comes after the Trump administration accused Beijing of slow-walking a pledge made in May to approve the export of additional critical minerals, known as rare earths, to the United States.

🌍 The dispute between the U.S. and China over “rare earths” minerals threatened to tear up a fragile trade truce between the two countries. However, it was not clear from either side’s statements that the rare earths issue had been resolved, as China continues to see mineral exports as a source of leverage against the U.S.

📚 China has expressed frustration with the U.S. decision to impose new restrictions on Chinese student visas and semiconductor exports, which it views as punitive actions undermining recent trade progress.

💶 Europe continues to shed monetary ballast in an attempt to revive its slowing economy: The European Central Bank (ECB) announced a 25 basis point interest rate cut, lowering the deposit facility rate to 2% from a mid-2023 high of 4%. One governing council member did not support the decision to cut rates, according to ECB President Christine Lagarde. The ECB revised its inflation expectations downward, now anticipating inflation to average 2% in 2025 compared to a previous forecast of 2.3%, though core inflation was revised upward to 2.4% this year.

📉 The ECB left its growth forecast for 2025 unchanged at 0.9%, citing uncertainty surrounding trade policies and the potential impact on business investment and exports.

⚔️ Epic battle between the US president and his tech mogul televised on social media.

📉 Shares of Tesla plummeted 14% on Thursday, wiping $152 billion off its market capitalization—the largest single-day loss in the company’s history—and dropping its valuation below the $1 trillion benchmark.

💸 The decline came as former President Donald Trump threatened to cancel government contracts for Elon Musk’s companies, intensifying their public feud over the spending bill.

⚡ Trump accused Musk of being “upset” about the exclusion of EV tax credits from the bill and claimed he had curtailed Musk’s influence in federal policy. Trump escalated tensions further, stating, “The easiest way to save billions of dollars in our budget is to cancel Elon’s government subsidies and contracts.”

📊 Musk responded by launching a poll on X, asking if it was time to create a new political party for the “80% in the middle,” and made explosive accusations, including alleging Trump’s name appeared in the Epstein files, which sparked bipartisan calls to release the list.

🎙️ Meanwhile, Trump ally Steve Bannon demanded the government confiscate SpaceX and investigate Musk’s immigration status, calling for his deportation. Musk’s aggressive stance stems from concerns that the spending bill could shrink EV and residential solar tax credits, critical revenue streams for Tesla, which is already grappling with falling sales in key markets and delays in launching a driverless ride-hailing service.

📈 The nonfarm payrolls report on Friday is expected to show job growth of 125,000, down from 177,000 in April. The JP Morgan team estimates that Investors should be hoping for a May jobs report that shows the labor market is holding up, as opposed to a big surprise in either direction.

📉 These are their possible scenarios: An ideal neither too strong nor too weak of 140,000 to 170,000 new jobs would create optimism, likely driving the S&P 500 toward a 1.5% to 2% surge and narrowing much of the gap to its record peak. Conversely, any figure exceeding 170,000 might complicate matters for the Federal Reserve and financial markets by compelling bond markets to reverse yield increases. On the lower end, readings below 100,000 could pressure the index downward by 2% to 3%, intensifying scrutiny of the broader economy for recessionary signals.

🇩🇪 The newly elected German chancellor, who lacks broad popular backing and leads a coalition government, visited the White House yesterday. Merz had clearly followed recommendations to let President Trump speak, perhaps to avoid the publicly damaging encounters that previous visitors to the Oval Office had experienced.

🎥 However, nothing can stop Trump’s verbiage when there are cameras in front of him, and of course, Trump did not disappoint us. Merz acknowledged the upcoming anniversary of D-Day, saying, “Tomorrow is the D-Day anniversary, when the Americans ended a war in Europe.” Trump responded sharply, “That was not a pleasant day for you? This is not a great day,” rubbing Germany’s historic defeat into Merz’s face.

📱 The Daily Economy newspaper claims that Europe is creating a digital Iron Curtain against US technology companies on social media: The EU has created extensive regulatory apparatus to limit and punish American tech giants, rather than producing its own technological alternatives. The Digital Services Act (DSA) aims to control the content and internal functioning of digital platforms, requiring rapid removal of “inappropriate” content and disclosure of algorithm workings. The regulations force structural changes to the design and business models of these tech companies, which is seen as interference by the EU.

Market View:

📉 The confrontation between Trump and Musk caused turbulence yesterday in the US stock markets, with a record drop in Tesla’s market capitalisation. The Mini S&P 500 futures remain stable but are unable to advance beyond 6,000 points. Similarly, the Nasdaq 100 futures show an identical chart pattern, failing to surpass 21,800 and currently trading at 21,670 points.

💵 The confrontations and lack of clarity in the agreement between the United States and China are once again weakening the dollar. The DXY dollar index is attempting to stay above 98.50 points, a level it briefly lost yesterday, and is currently trading at 98.90 points. This caused the EUR/USD pair to approach 1.15 during yesterday’s session, before quickly retreating to the current 1.1430, cooled by the ECB’s announcement of an interest rate cut. The GBP/USD pair also broke recent records, surpassing 1.36 before retreating to the current 1.3540.

🇪🇺 Meanwhile, European equities remain strong, with the DAX 40 trading around the 24,300-point level. The Eurostoxx 50 is more cautious than the DAX but remains relatively strong around the 5,400-point level.

🛢️ Crude oil continues to trade within the range described in our previous report, staying below $66 per barrel, with Brent currently trading at $65.

💰 Gold futures surpassed $3,425 per ounce yesterday but have since retreated to the current $3,385.

₿ Bitcoin fell but regained bullish momentum upon reaching the support zone of $101,500, currently trading at $103,295.

Important Information

ATFX CONNECT EU does not offer services to retail clients. The information and contact details provided on this website are intended for professional clients’ use only.

Important Information

ATFX CONNECT EU does not offer services to retail clients. The information and contact details provided on this website are intended for professional clients’ use only.