2025-06-04 06:16

OECD warns of global economic slowdown due to trade war China tells US to get ties back on "right track" Fed officials cautious on policy outlook amid trade uncertainty June 4 (Reuters) - Gold prices steadied on Wednesday as a somewhat strong U.S. jobs data for April offset the lingering uncertainty over U.S.-China trade relations and global economic concerns. Spot gold was stable at $3,351.49 an ounce as of 0609 GMT. U.S. gold futures also held steady at $3,375. Sign up here. "We potentially see dip-buyers coming back into the picture and... things are still uncertain, especially surrounding the trade relationship between China and U.S. and even in EU and U.S. as well," said Kelvin Wong, a senior market analyst, Asia Pacific at OANDA. However, "the JOLTS job data helped sooth some concerns about the potential economic hit on the U.S. economy from tariffs, which is keeping demand for safety assets for gold in check," said Tim Waterer, chief market analyst at KCM Trade. The White House signaled that President Donald Trump and Chinese President Xi Jinping might engage in talks later this week to address the trade disagreements. The U.S. should create the necessary conditions for bilateral relations to get back onto "the right track," China's Foreign Minister Wang Yi told the U.S. ambassador to Beijing. Job openings in the United States rose in April, though layoffs surged to their highest level in nine months, economic data showed, hinting at softening labor market conditions. Global economic concerns deepened after the Organisation for Economic Cooperation and Development (OECD) warned of sharper-than-expected economic slowdown, as the Trump administration's trade policies weigh heavily on the U.S. economy. "(The OECD report) for sure will be another supporting factor to see safe demand being heated up as well from a medium-term perspective," Wong said. Federal Reserve officials reiterated their cautious policy stance, citing risks from trade tensions and economic uncertainty. Gold tends to perform well during economic uncertainty. Elsewhere, spot silver fell 0.3% at $34.40 an ounce, platinum rose 0.3% to $1,076.86 and palladium lost 0.9% to $1,001.42. https://www.reuters.com/world/china/gold-rises-amid-us-china-trade-uncertainty-softer-dollar-2025-06-04/

2025-06-04 06:10

LITTLETON, Colorado, June 4 (Reuters) - U.S. power producers have lifted output from both fossil fuels and clean energy sources to new highs so far in 2025, on the back of steadily rising energy demand from data centers, businesses and households. Average retail electricity prices have risen in tow, and are hovering near record highs in a majority of U.S. states. Sign up here. Below are five charts on U.S. power generation and electricity prices to help keep track of these key trends. POWERING UP Over the first five months of 2025, U.S. power producers lifted total output by 2% from the same months in 2024 to a new record of 69.3 million megawatt hours (MWh), according to data from LSEG. Generation from both clean and fossil fuel energy sources has scaled new highs so far this year, with clean power output rising by 3% and fossil fuel output by 2% from the same months a year ago. The slightly faster growth pace of clean power production has lifted the clean power share of the U.S. generation mix to a new high of 45%, up from 44% for the same months last year. Natural gas remains the primary power source within the U.S. system, and accounted for around 37% of total power production so far this year. However, a sharp jump in gas prices to two-year highs during the opening months of the year spurred generators to cut back on gas use in some areas, leaving overall gas output roughly 4% lower so far this year. To offset lower gas-powered supplies, power firms cranked coal-fired production 18% higher from the January to May 2024 period to the highest in three years. On the clean energy side, output from solar firms jumped by 34% from the same period in 2024 while wind output climbed 2%. Output from both hydro dams and nuclear plants was roughly 1% lower, LSEG data shows. Electricity production trends from January through April broadly matched those of power generation, although clean electricity output outpaced clean power production thanks to a large swell in utility solar generation. Coal and hydro-powered electricity output have also posted strong year-over-year increases so far in 2025, data from Ember shows. PRICE PULL Average commercial retail electricity prices climbed to new highs across several parts of the country during the opening quarter of the year. Of all U.S. states, Hawaii posted the highest average commercial retail electricity price during January to March, according to the U.S. Energy Information Administration. Hawaii's average of 37.6 cents per kilowatt hour (KWh) during the opening quarter of 2025 was actually 9% less than during the same months of 2024 due to lower crude oil prices, but was still more than twice the national average. The lowest electricity prices this year were recorded in North Dakota, which averaged 7.3 cents/KWh during January to March. The U.S. average commercial retail electricity price during the first quarter of 2025 was around 13 cents/KWh, which was around 4% more than in the same quarter in 2024. The state with the largest year-over-year rise in retail electricity costs was Rhode Island (+24% to 25.3 cents/KWh), followed by Connecticut (+22% to 25.15 cents/KWh). RISING TIDE Climbing electricity costs are not just a recent phenomenon, as average U.S. retail prices have posted increases every year since 2021. However, the extent of cost increases varies widely across the country. California, which has ambitious climate policies and faces a sprawling generation network exposed to floods, wildfires and desert conditions, has seen the steepest climb in electricity costs among all states since 2019. Average electricity costs in California during the first quarter of this year were 62% more than during the opening quarter of 2019, EIA data shows. However, several other major U.S. states have also recorded double-digit electricity price hikes over the same period, including New York (+56%), Pennsylvania (+36%) and Florida (+23%), which all have very different power generation markets. And nearly all U.S. states can expect to see further increases in average retail electricity costs in the months ahead, as electricity prices and demand both tend to hit their annual peaks during the summer air conditioning season. Many states may see a minor retreat in electricity prices again once the summer is over. But with most U.S. utilities on the hook to upgrade transmission networks and boost power generation to keep up with rising energy demand, electricity consumers across the country can expect further increases in their power bills going forward. The opinions expressed here are those of the author, a columnist for Reuters. https://www.reuters.com/markets/commodities/five-charts-key-us-electricity-power-generation-trends-maguire-2025-06-04/

2025-06-04 05:39

US-Europe trade talks progress amid tariff tensions US private sector job growth below expectations European stocks rise, Germany's index hits record high NEW YORK, June 4 (Reuters) - Wall Street wavered and U.S. Treasury yields dropped on Wednesday as investors monitored U.S. trade negotiations and looked ahead to Friday's critical employment report. Tech pushed the Nasdaq modestly higher, while the S&P 500 ended the session essentially flat and the Dow closed slightly lower. Sign up here. The dollar dipped and gold advanced. "The big move in rates is providing a little bit of reprieve if not for stocks directly, at least for some of the bigger narratives around why rates were moving higher," said Ross Mayfield, investment strategy analyst at Baird in Louisville, Kentucky. "There's a bit of relief from the equity markets that there still seems to be an upper range on where rates will go in this kind of environment." U.S.-European trade talks are progressing, Europe's top negotiator said, noting that the doubling of U.S. metals tariffs, which kicked in on Wednesday, is not helping negotiations. China's curbs on critical mineral exports have distressed global automakers, who said shortages threaten to halt global supply chains. With U.S. President Donald Trump and Chinese President Xi Jinping likely to speak soon, Trump called Xi tough in a social media post and "extremely hard to make a deal with," suggesting a swift resolution of trade differences between the world's two largest economies could prove elusive. "Investors are still confident, or at least as confident as they can be, that the administration is not going to let things get too bad. The low on April 8 is not a place that the administration will return to now," Mayfield added. "I don't necessarily think that the TACO (Trump Always Chickens Out) trade is wrong; obviously it's a joke, but there's enough signage that suggests if the administration reverts back to some of their worst tendencies on trade and tariffs, then the market will react in kind," Mayfield said. On the economic front, payrolls processor ADP reported the U.S. private sector added 37,000 jobs last month, or 69.2% fewer than analysts expect the Labor Department's more comprehensive employment report to show on Friday. Additionally, survey data showed the U.S. services sector slipped into contraction last month, while prices paid - an inflation predictor - hit the highest level since November 2022. The Dow Jones Industrial Average (.DJI) , opens new tab fell 91.90 points, or 0.22%, to 42,427.74, the S&P 500 (.SPX) , opens new tab rose 0.44 points, or 0.01%, to 5,970.81 and the Nasdaq Composite (.IXIC) , opens new tab rose 61.53 points, or 0.32%, to 19,460.49. European stocks advanced and Germany's benchmark index touched a record high after Berlin approved a corporate tax relief package, even as survey data showed euro zone business activity stalling and Germany's services sector posted its sharpest contraction in more than two years. MSCI's gauge of stocks across the globe (.MIWD00000PUS) , opens new tab rose 2.85 points, or 0.32%, to 888.75. The pan-European STOXX 600 (.STOXX) , opens new tab index rose 0.47%, while Europe's broad FTSEurofirst 300 index (.FTEU3) , opens new tab rose 9.84 points, or 0.45% Emerging market stocks (.MSCIEF) , opens new tab rose 14.71 points, or 1.27%, to 1,172.84. MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) , opens new tab closed higher by 1.3% to 618.16, while Japan's Nikkei (.N225) , opens new tab rose 300.64 points, or 0.80%, to 37,747.45. The dollar dipped across the board as downbeat economic data suggested softening labor market conditions and the services sector dipping into contraction. The dollar index , which measures the greenback against a basket of currencies including the yen and the euro, fell 0.29% to 98.87, with the euro up 0.36% at $1.1411. Against the Japanese yen , the dollar weakened 0.78% to142.87. Longer-dated U.S. Treasury yields were lower after the softer-than-expected economic data as investors watched for signs of progress in tariff negotiations and looked ahead to the payrolls report. The yield on benchmark U.S. 10-year notes fell 10.1 basis points to 4.359%, from 4.46% late on Tuesday. The 30-year bond yield fell 10.2 basis points to 4.8806% from 4.983% late on Tuesday. The 2-year note yield, which typically moves in step with interest rate expectations for the Federal Reserve, fell 8.6 basis points to 3.871%, from 3.957% late on Tuesday. Crude prices turned lower as U.S. data showed larger-than-expected inventories, adding to supply concerns amid trade tensions and OPEC+ output increases. U.S. crude dipped 0.88% to settle at $62.85 a barrel, while Brent settled at $64.86 per barrel, down 1.17% on the day. Gold prices gained ground, supported by the soft dollar as investors bided their time for trade deals and employment data. Spot gold rose 0.62% to $3,372.86 an ounce. U.S. gold futures rose 0.64% to $3,371.50 an ounce. https://www.reuters.com/world/china/global-markets-wrapup-1-2025-06-04/

2025-06-04 04:35

A look at the day ahead in European and global markets from Ankur Banerjee Today is the deadline for U.S. trading partners to submit their "best offer" to avoid punishing import tax rates, the same day that U.S. duties on imported steel and aluminium kick in, and investors are more jittery than usual. Sign up here. So far, only Britain has struck a preliminary trade agreement with the U.S. during Trump's 90-day pause on a wider array of tariffs. That pause is set to expire in about five weeks and investors have been worried about the lack of progress in hashing out deals. Adding to the angst, Japanese Chief Cabinet Secretary Yoshimasa Hayashi said Tokyo has not received a letter from Washington asking for its best proposals on trade talks. The on-again-off-again tariff pronouncements from Trump this year have investors fleeing U.S. assets and looking for safe havens and alternatives, including gold. They expect trade uncertainties will take a heavy toll on the global economy. The main question in financial markets has been where the money that usually flowed into U.S. assets will end up going. For years, money managers embraced the fatalistic presumption that "there-is-no-alternative" (TINA ... yes, markets love acronyms) but perhaps there are options now. As Manishi Raychaudhuri, the founder and CEO of Emmer Capital Partners Ltd, puts it: While Europe may be the obvious destination, relative value metrics may favour emerging Asia. The data so far does not give a complete picture. But what it does show is investors are lowering their exposure to U.S. assets, and only time will tell where they end up. Asian markets rose on Wednesday, boosted by tech stocks as traders hope a deal could still be possible if and when U.S. President Donald Trump and Chinese leader Xi Jinping talk this week. The spotlight in Asia was also on South Korean assets. Seoul's benchmark share index (.KS11) , opens new tab surged to 10-month top and the currency firmed as liberal presidential candidate Lee Jae-myung's election victory raised expectations for swift economic stimulus and market reforms. European futures point to a slightly higher open ahead of a series of manufacturing data from the region and as the European Central Bank starts its policy meeting. The ECB is all but certain to cut rates on Thursday and stay on its easing cycle as muted wage growth, a strong euro and lukewarm economic growth all point to easing inflation. Data on Tuesday showed euro zone inflation in May eased below the ECB target of 2%. Key developments that could influence markets on Wednesday: Economic events: May PMI data for UK, euro zone, Germany and France Trying to keep up with the latest tariff news? Our new daily news digest offers a rundown of the top market-moving headlines impacting global trade. Sign up for Tariff Watch here. https://www.reuters.com/world/europe/global-markets-view-europe-2025-06-04/

2025-06-04 04:32

TOKYO, June 4 (Reuters) - Japan currently has no plan to issue a central bank digital currency (CBDC) but must continue innovating its payment and settlement system in an increasingly cash-less society, a senior central bank official said on Wednesday. Although banknote issuance remains high in Japan, usage of notes could fall significantly in the future amid rapid digitalisation, said Bank of Japan (BOJ) Executive Director Kazushige Kamiyama. Sign up here. "As such, Japan must consider what steps it can take now to ensure its retail settlement system is convenient, efficient, accessible universally, while being safe and resilient," he said in a speech. While the BOJ currently has no plan to issue a CBDC, it must keep up efforts to enhance the safety and efficiency of Japan's payment and settlement system, Kamiyama said in a meeting with private firms on a pilot programme for developing a digital yen. The BOJ has said no decision has been made yet on whether Japan will actually issue a CBDC, which must be made by the government and parliament. But the central bank has been conducting experiments and exchanging views with private firms on a digital yen, to be ready in case Japan decides to issue a CBDC. CBDCs are back in the spotlight after U.S. President Donald Trump banned work on a digital dollar in one of his first moves after regaining power in January. https://www.reuters.com/technology/japan-must-pursue-payment-innovation-society-becomes-cash-less-boj-official-says-2025-06-04/

2025-06-04 03:22

Q1 GDP +0.2% q/q versus +0.4% Reuters poll forecast Consumers save despite lower borrowing costs, cooling inflation Government spending largest drag on growth since 2017 Swaps imply an 80% probability of a rate cut in July SYDNEY, June 4 (Reuters) - Australia's economy barely grew in the first quarter as consumers stayed stubbornly frugal and government spending, the engine of activity last year, sputtered to a standstill, underlining the need for more policy stimulus. The Reserve Bank of Australia has already cut interest rates twice since February to 3.85% and the minutes of the May policy meeting showed that it was open to an outsized half-point move as U.S. tariffs darkened the outlook for the global economy. Sign up here. "The main takeaway is that the expected tentative recovery in private demand continues to underwhelm," said Pat Bustamante, a senior economist at Westpac. "Without a material pick-up in private demand, the economy could be set for a period of subdued growth." Real gross domestic product (GDP) rose 0.2% in the March quarter, slowing sharply from the 0.6% gain in the previous quarter, Australian Bureau of Statistics data showed on Wednesday. That was below market forecasts of 0.4%. Annual growth flatlined at 1.3%, when analysts had looked for a pick-up to 1.5%, and remained well short of the 2.5% pace that used to be considered "normal". The subdued result had been partly priced in after the weak partial GDP data on Tuesday, which had analysts revising down their forecasts to as low as 0.1%. The Australian dollar was little changed at $0.6466 and three-year bond futures trimmed earlier gains to be flat at 96.67. Swaps imply an 80% probability of a rate cut in July, with a total easing of almost 100 bps priced in to a bottom of 2.85% by early next year. The ABS said government spending was flat to make the largest drag on growth since 2017. Extreme weather events also affected mining, tourism and shipping and reduced domestic final demand and exports, it added. GDP per capita was back in negative terrain, falling 0.2% in the quarter after a small rise previously. "While there may be a temptation to overlook the adverse impacts of the weather, the lack of acceleration in the annual growth rate reinforces the case for the RBA to continue easing," said Tony Sycamore, analyst at IG "We expect the RBA to cut rates by 25 basis points at its meeting in July, bringing it to 3.60%." ANY GROWTH IS WELCOME Treasurer Jim Chalmers on Wednesday welcomed the still positive growth against the uncertain global economic outlook. "With all the uncertainty in the world, any growth is a decent outcome even modest growth is welcome in these global economic circumstances," Chalmers told a press conference. The report showed the household savings ratio jumped to 5.2%, the highest since third quarter 2022, as consumers chose to save rather than spend. That is partly why household consumption edged up a tepid 0.4% in the quarter, adding just 0.2 percentage points to GDP growth despite lower borrowing costs and cooling inflation. "The households are rebuilding their balance sheets but that's not being converted into spending," said Benjamin Picton, a senior macro strategist at Rabobank, who expects a rate cut in July. "I think if we do see a few more rate cuts start to flow through...that should give consumer confidence a bit of a shot in the arm, we think and maybe we'll start to see a bit of a response in household consumption." Measures of inflation in the report showed a continued moderation with the deflator for domestic demand up 0.5% in the quarter, the slowest pace in four years. Australia's disappointing track record on productivity was proving slow to turn around with output per hour flat in the quarter and down 1% for the year. https://www.reuters.com/world/asia-pacific/australia-economy-barely-grows-q1-government-spending-drags-2025-06-04/