TL;DR

U.S. delays EU tariffs; Fed on hold amid stagflation risk; Bitcoin hits $111K record high.

Highlights

• U.S. delays 50% tariffs on EU goods to July 9; Trump threatens 25% tariffs on Apple products 1.
• Fed’s Kashkari signals no rate changes before September, citing stagflation risk from tariffs and policy uncertainty 2.
• S&P 500 falls, U.S. dollar hits lowest since Dec 2023; Allianz GI, Fed warn of outflows amid clean energy and tariff uncertainty 14.
• Oil rises to $65.15 (Brent) after tariff delay; OPEC+ to decide on July output June 1; U.S. rig count drops 3.
• Bitcoin hits new all-time high at $111,000; Florida proposes eliminating state capital gains tax on crypto and stocks 1013.
• PBOC sets strongest yuan fix since January; yuan, Aussie, pound, and kiwi rally vs USD; Chinese equities gain 4.
• BYD cuts EV prices up to 34%, shares fall 8.25%; overtakes Tesla in April European EV sales 812.
• China’s SAMR proposes new platform fee rules, impacting Meituan , JD.com , PDD ; digital supply chain plan announced 9.
• Germany, U.S., U.K., France lift range limits on weapons for Ukraine; Ukraine faces missile shortages amid intensified Russian attacks 515.
• Trump escalates rhetoric against Putin, signals possible new sanctions after Russian strikes kill 12 in Ukraine 7.
• Israel rejects U.S.-backed Gaza ceasefire plan; Middle East risk persists 6.
• Volvo to cut 3,000 jobs (7% of workforce), mainly in Sweden, citing demand slowdown 16.

Commentary

U.S. markets face a cautious open as trade policy remains in focus. The White House’s decision to delay the 50% tariff on EU goods until July 9 temporarily eases immediate escalation risk, but Trump’s renewed threat of a 25% tariff on Apple products and the lack of progress in negotiations keep uncertainty high 1. The Federal Reserve, with Kashkari signaling no rate moves before September, is sidelined by stagflation concerns tied to tariffs and unpredictable policy, contributing to a risk-off tone in equities and capital outflows as highlighted by Allianz GI and Fed officials 214.

Currency markets are seeing notable shifts. The PBOC’s stronger yuan fix has driven gains in the yuan and other major currencies versus the U.S. dollar, which now sits at its weakest level since late 2023 4. This is supporting Chinese equities, while U.S. assets see outflows as investors weigh both domestic policy volatility and global alternatives 14. Meanwhile, Bitcoin ’s surge to a record $111,000 is fueled by the tariff delay and positive sentiment from Florida’s proposal to eliminate state capital gains tax on crypto and stocks 1013.

Commodities are mixed. Oil prices are firmer after the tariff delay and ongoing geopolitical risks, with Brent above $65 and a U.S. rig count decline lending support 3. However, the upcoming OPEC+ meeting on June 1, where an output increase is possible, could cap further gains 3. In the EV sector, BYD’s aggressive price cuts have triggered a selloff in Chinese auto stocks, even as the company surpasses Tesla in European sales—a sign of intensifying global competition and margin pressure 812.

Geopolitically, the lifting of range limits on Western weapons for Ukraine and intensified Russian attacks highlight ongoing Eastern European risk 515, while Israel’s rejection of a U.S.-backed Gaza ceasefire plan keeps Middle East tensions elevated 6. These developments, alongside U.S. trade talks with South Korea and new regulatory moves in China’s tech and supply chain sectors, add to the cross-currents traders must navigate 919.