OPEC+ announced an increase in oil production. The US and China will hold new trade talks

At the end of Friday, the Dow Jones Index (US30) rose by 0.13% (+1.79% for the week). The S&P500 (US500) Index fell by 0.01% (+2.24% for the week). The Nasdaq (US100) technology Index closed down 0.11% (+2.57% for the week). The US stocks recouped most of their earlier losses in late trading on Friday after Donald Trump said he expected talks with Xi Jinping following accusations that China had violated trade agreements. President Trump said that China had “completely violated” its trade agreement with the US, heightening fears of a protracted dispute. Chipmakers led the decline in the technology sector: Nvidia, AMD, Micron, and Intel fell more than 1.5%. Meanwhile, the Fed’s preferred inflation gauge showed easing price pressures, providing some relief.

The Canadian dollar strengthened above 1.38 per dollar, approaching the seven-month high of 1.37 reached on May 26, as strong data prompted markets to reevaluate the extent of rate cuts by the Bank of Canada. In the first quarter, Canada’s GDP grew by 2.2% year-on-year, significantly exceeding growth expectations of 1.7%. Although much of the support came from strong exports and inventories due to stockpiling ahead of US tariffs, the result was still supported by other data pointing to the resilience of the Canadian economy. Retail sales rose sharply for the second month in a row.

European stock markets were mostly up on Friday. The German DAX (DE40) rose by 0.27% (-0.05% for the week), while the French CAC 40 (FR40) closed down 0.36% (-1.04% for the week), the Spanish IBEX35 (ES35) added 0.25% (-0.75% for the week), and the British FTSE 100 (UK100) closed up 0.64% (+0.38% for the week). Investors welcomed economic data, including favorable inflation data from Germany, Italy, and Spain, which reinforced expectations of an ECB rate cut this week. However, market sentiment was weakened by ongoing trade uncertainty. The Federal Appeals Court overturned a lower court ruling and temporarily reinstated President Donald Trump’s tariffs, a day after they were overturned for exceeding presidential authority.

On Saturday, OPEC+ announced an increase in oil production of 411,000 barrels per day (bpd) in July. The decision was made during a virtual meeting in which member countries, including Saudi Arabia, Russia, Iraq, the UAE, Kuwait, Kazakhstan, Algeria, and Oman, assessed the state of the global market. The group had initially planned a more modest increase of 134,000 barrels per day, but adjusted its strategy, citing “the sustained outlook for the global economy and the current healthy fundamentals of the market, reflected in low oil inventories.” Goldman Sachs expects OPEC+ to complete a 0.41 million barrel per day increase in production in August, which will be the last planned adjustment to the current production strategy.

Asian markets traded without a single trend last week. Japan’s Nikkei 225 (JP225) rose by 2.03%, China’s FTSE China A50 (CHA50) fell by 2.03%, Hong Kong’s Hang Seng (HK50) decreased by 0.92%, and Australia’s ASX 200 (AU200) showed a positive result of 0.89%.

The official PMI Index for China’s manufacturing sector from NBS rose to 49.5 in May 2025 from April’s 16-month low of 49.0, matching market expectations and marking the second consecutive month of decline in business activity. Production volumes recovered (50.7 vs. 49.8 in April), helped by the truce in the trade war and Beijing’s efforts to stimulate domestic demand and strengthen the sluggish economy. The official PMI Index for China’s non-manufacturing sector from the NBS fell to 50.3 in May 2025 from 50.4 in the previous month, falling short of market expectations of 50.6 and marking the lowest level since January.

The Australian dollar rose to around 0.646 on Monday, supported by a weaker US dollar amid investor concerns over US President Donald Trump’s tariff measures. On Friday, Trump announced plans to double tariffs on steel and aluminum imports from 25% to 50% starting June 4. This announcement, along with escalating trade tensions between the US and China, heightened investor concerns about slowing growth and rising inflationary pressures. In Australia, data showed that the manufacturing sector weakened for the second consecutive month in May, falling to its lowest level since February, indicating a slowdown in industrial activity.

Annual inflation in Indonesia fell to 1.60% in May 2025 from an eight-month high of 1.95% in April, as price pressures eased after the Eid al-Fitr celebrations. Inflation remained within the central bank’s target range of 1.5% to 3.5%. Core inflation, which excludes administered and volatile food prices, fell to a four-month low of 2.4% from a 22-month peak of 2.50% in April.