Global markets were optimistic following European Commission President Ursula von der Leyen’s success in convincing President Trump to delay the deadline for the European Union (EU) and the U.S. to arrive at an accord to July 9th. The suspension of tariffs by the US Court of International Trade also briefly enthused the markets, which was later reversed by the U.S. Court of Appeals.

Discussion of the ballooning U.S. budget deficit and a poor demand for long term bonds at Japan’s 40-year bonds auction weighed on the sovereign debt markets this week. The tax on passive incomes of foreign investors in the U.S. budget proposal being discussed in the U.S. senate also weighed on market sentiments. Elon Musk completely stepped down from the Trump administration this week to return to managing Tesla and SpaceX. US Treasury Secretary Scott Bessent has hinted that the China-U.S. trade talks are currently stalled, and President Trump and President Xi may need to intervene for the talks to resume.

Global Updates
  • The MSCI All Country World Index was on an upward trend this week as investors were optimistic following President Trump’s agreement to delay the deadline for arriving at an EU-U.S. consensus. The concerns of the ballooning U.S. deficit have also weighed on markets. Fiscal deficit concerns also weighed on the demand for Japan’s long-term bonds.
  • A Bloomberg report has suggested that the European Central Bank is highly likely to cut interest rates two more times this year, in May and in September. Experts and Analysts have advised the ECB to not delay the rate cuts in the interest of market stability.
  • Retails sales declined 1.1% unexpectedly in April in Germany. However, on an annual basis the retail sales rose by 2.3%.
  • National Bank of Canada reported a 56% jump in its higher-than-expected $846.78 million second quarter adjusted profits driven by tariff-based volatility in the markets.
  • The OPEC+ group reaffirmed the production levels determined at its December meeting. The group plans to lower production by 2 million barrels per day till 2026 end. OPEC+ representative will again meet on Saturday to discuss their July production levels. The Iran-U.S. talks, an anticipated future supply glut along with the global economic slowdown have been weighing on crude prices this week.
  • Fiscal deficit concerns also weighed on the demand for Japan’s long-term bonds at an auction of 40-year bonds leading to a sale of $3.46 billion at a below-average bid-to-cover ratio of 2.21.
  • Tokyo Core CPI inflation jumped to 3.6% in May due to food and fuel costs.
  • Japan reported a lower-than-expected 0.9% drops in industrial production in April, bolstered by local demand despite U.S. tariffs. South Korea’s industries on the other hand were subject to energy constraints in April and industrial production dropped by 0.9%.
  • Nippon Steel will be investing $6.05 billion electronic furnaces to reduce carbon emissions in three steel plants in Japan.
  • China has indicated, it is amenable to negotiating supply of rare earths and magnets, which are integral to manufacturing electronic appliances, automobiles and planes. On the other hand, U.S. exporters to China have been required to procure licenses to export ethane and butane to China.
U.S. Equity
  • The S&P 500, Dow Jones and Nasdaq were higher this week after President Trump pushed the deadline for negotiating down the 50% tariffs on EU imports to July 9th, following his conversation with the European Commission President Ursula von der Leyen. Discussions of the U.S. budget deficit estimated to be $ 1.5 trillion this year, raising the total US debt to $ 37 trillion have negatively weighed on market sentiments. The Trump tariffs are currently generating an estimated $ 190 billion in revenues annually and which could offset the tax cuts and reduce the fiscal deficit of the government.
  • Investors are also increasingly apprehensive of the tax on foreign investors’ passive incomes, included in the budget bill, which could impact the U.S. dollar and treasuries.
  • The minutes of the Fed’s last meeting released this week, reaffirmed the Fed’s difficult decision of balancing policies targeted to manage inflation and volatility with policies for economic growth and controlling unemployment. The Fed will wait for the ongoing tariff driven financial and economic uncertainties to abate before employing the monetary tools at its disposal.
  • The US Court of International Trade blocked President Trump’s tariffs this week. This ruling was later temporarily paused by the U.S. Court of Appeals, giving the Trump administration room to approach the Supreme Court.
  • Cantor Fitzgerald has arrived at an agreement to acquire O’Connor Asset Management from UBS. O’Connor has $ 11 billion in assets under management.
  • Nvidia reported a 73% annual growth in its data center business driving up its first quarter revenue by 69% to a higher-than-expected $44.06 billion, resulting in an adjusted EPS of 96 cents. Nvidia reportedly absorbed a $4.5 billion charge due to the government restrictions on exports of AI chips to China. Nvidia’s CEO Jensen Huang expects the export restrictions to further cost the company $8 billion in sales reducing the company’s second quarter sales to $45 billion.
  • Salesforce reported an adjusted net income of $2.5 billion for the first quarter, on a revenue of $9.83 billion which beat estimates. Salesforce raised its fiscal 2026 revenue estimate to the $41 billion-$41.3 billion range.
  • Elon Musk has officially ended his involvement with the U.S. government and will be devoting his time and efforts to Tesla. Tesla has reported a 53% drop in sales for April in the EU and a 46% drop for the January to April period in 2025.
  • Salesforce plans to acquire Informatica for $8 billion. Informatica provides AI enabled data management software.
  • The Financial Times has reported that the Trump Media & Technology Group is seeking to raise $3 billion through convertible bonds and equities to invest in cryptocurrencies.
Fixed Income
  • The Bloomberg U.S. Aggregate Bond Index rose this week.
  • The U.S. 10-year Treasury yield dipped to 4.424% and the yield on the 2-year note also lagged to 947% over the week.
  • The S. Dollar Index depreciated slightly to 99.39 this week.

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