Market Quick Take – 6 June 2025

Market drivers and catalysts

• Equities: Trump-Musk feud hits Tesla; ECB cuts rates; investors await US payrolls
• Volatility: VIX rebounds to 18.5; short-term hedging rises ahead of data
• Digital assets: BTC, ETH dip; IBIT sees outflow; network activity stays strong
• Fixed Income: European rates rise on ECB guidance
• Currencies: EUR rally post-ECB fizzles, USD mostly sideways ahead of jobs data.
• Commodities: Strong week across energy and metals with silver hitting a 13-year high
• Macro events: US Nonfarm Payrolls & Unemployment Rate

Macro data and headlines

• Risk sentiment was pressured by a public feud between US President Trump and Elon Musk, which began when Musk pushed to “kill” Trump’s signature “Big Beautiful bill”. After a series of heated exchanges on Thursday with Musk calling for Trump's impeachment and Trump threatening to cut off Musk's government contracts, Musk eventually signaled a willingness to cool off and take a step back.
• Trump announced a positive phone call with Chinese President Xi, focused mainly on trade. Their teams will meet soon at a location to be decided. The call lasted about 1.5 hours.
• ECB cut key interest rates by 25 bps, citing updated forecasts. Inflation is close to the 2% target, projected at 2.0% in 2025, 1.6% in 2026, and 2.0% in 2027. The suggestion by ECB president Lagarde that the ECB is nearing the end of its rate cutting cycle saw short European rates jump higher as the market priced less easing from the ECB into the forward curve, as the market now sees higher odds of a July pause and that the next rate cut may be the last.
• US initial jobless claims rose by 8,000 to 247,000 in the week ending May 31, exceeding expectations of 235,000 and marking the highest level since October 2024, hinting at labour market softening.
• The US Treasury Department, in its first semiannual report on US trading partner’s currency practices since Trump’s inauguration, did not label any country a “currency manipulator”, although China was cited for its “lack of transparency”. The report warned that the treasury would be more vigilant on currency polices in the future, with Treasury Secretary Scott Bessent saying that “We will continue to strengthen our analysis of currency practices and increase the consequences of any manipulation designation.”

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Macro calendar highlights (times in GMT)

0600 – Germany April Industrial Production, Trade Balance
0900 – Eurozone Q1 GDP
1230 – US May Nonfarm Payrolls Change, Unemployment Rate
1230 – US May Average Hourly Earnings
1230 – Canada May Unemployment Rate

ECB Speakers: Holzmann (0800), Lagarde (0830), Simkus (0845), Centeno (1000)

Earnings events

Next week

• Wednesday: Oracle, Inditex
• Thursday: Adobe, Kroger

For all macro, earnings, and dividend events check Saxo’s calendar.

Equities

• US: US equities declined as trade optimism faded and political tensions flared. The S&P 500 fell 0.5%, the Dow lost 107 points, and the Nasdaq 100 dropped 0.8%, largely due to Tesla’s 14% plunge after Trump threatened to revoke government contracts with Musk’s companies. The Trump-Xi call failed to deliver concrete progress, leaving investors cautious. Meanwhile, Lululemon and Docusign sank in post-market trading after weak guidance. Jobless claims rose to an eight-month high, adding to concerns about labor market softening ahead of the May jobs report, which is expected to show a slowdown in hiring.
• Europe: European stocks traded in a narrow range as investors digested the ECB’s widely expected 25bp rate cut and a sharply lowered inflation forecast for 2026. The DAX edged up 0.19%, while the CAC 40 dipped 0.18%. Sentiment remained cautious as the Trump-Xi call provided little clarity on trade, and new data showed ongoing weakness in the Eurozone’s construction sector. However, German factory orders surprised on the upside, and UK fintech Wise surged 7% after upbeat results and a planned US listing. Investors are focused on US payrolls data as a potential catalyst for Fed policy.
• UK: The FTSE 100 added 0.11%, reaching its second-highest close ever, buoyed by gains in mining stocks and a rally in Wise. However, midcaps underperformed as Wizz Air slumped nearly 28% on profit warnings. New car registrations rebounded, and construction PMI data showed the slowest pace of contraction since January, offering some relief. Investors largely stayed on the sidelines ahead of the US jobs report and in response to global trade uncertainties, with attention now shifting to fresh catalysts next week.
• Asia: Asian markets moved sideways as investors awaited more clarity on US-China trade talks. Japan’s Nikkei rose 0.4% after soft household spending data tempered rate hike fears, while Hong Kong’s Hang Seng slipped 0.4% following an underwhelming Trump-Xi call. Tesla’s rout weighed on its Asian suppliers. Chinese markets remained flat as traders awaited domestic economic data, and Indian stocks gained after a bigger-than-expected RBI rate cut. Overall, sentiment in Asia remains fragile, with markets sensitive to both trade news and central bank policy signals.

Volatility

Volatility picked up as equity jitters resurfaced before the US payrolls report. The VIX rose 4.9% to 18.48, rebounding from recent lows but still below last week’s levels. Short-dated measures like VIX9D also ticked higher, and VVIX at 93 suggests more hedging but not outright panic. The market remains alert to economic data and trade headlines, with option activity showing investors preparing for both potential volatility spikes and a possible return to calmer conditions if jobs data meets expectations.

Digital Assets

Crypto prices eased alongside equities, with Bitcoin down to $103,135 (-1.5%) and Ether at $2,463 (-1.9%). IBIT spot ETF fell 3% after its first major outflow since April, and ETHA also dropped 3.7%. Despite the pullback, options markets remain positive—IBIT call premiums still outpace puts, indicating most traders see the move as a routine pause, not the start of a deeper decline. Meanwhile, on-chain data shows robust Bitcoin network activity, with wallet creation and large holder accumulation both surging, pointing to sustained investor interest under the surface.

Fixed Income

• European short rates backed up sharply on the ECB’s guidance that it is nearing the end of its rate cutting cycle, a the 2-year German Schatz rose 7 basis points to 1.87% At the longer end of the curve in Europe, yields rose as well after a dip earlier in the day, as the German 10-year Bund closed the day up 5 basis points a 2.58%, the highest close in two weeks.
• US treasury yields fell to new lows since early May on the US jobless claims posting their worst reading this year, but then rose all along the curve in late trading, with the 10-year treasury benchmark closing the day up a few basis points at 4.39% after the 4.31% intraday low.

Commodities

• The sector was heading for its best week in five months ahead of the US jobs report, with the BCOM Index up 3%, led by strong and broad gains across the energy sector; precious metals, where silver and platinum both broke higher; and industrial metals due to a jump in HG copper prices.
• Silver trades up 9% on the week, jumping to the highest level since 2012, driven by technical momentum buying above USD 35, broad industrial metal strength on improving fundamentals, and broader investor interest due to its recent relative cheapness to gold.
• Platinum resumed its rally, also rising 9% on the week to reach a three-year high amid a tightening supply outlook supporting emerging investor interest for a metal that in ten years has gone from parity to trade at a 3-1 ratio to gold.
• HG copper also recorded a strong week, supported by a US tariff-focused widening of the premium over London, where LME-monitored stockpiles continue to fall—down 50% year-to-date—and tentative signs of improving trade ties between the US and China.

Currencies

• The euro strengthened sharply on the ECB guidance that it is nearing the end of its rate cutting cycle, but the rally stumbled later in the session, particularly against the US dollar after the EURUSD nearly rallied to 1.1500 post-ECB, with the retreat seeing the pair trading at 1.1430 this morning in Europe
• USDJPY has changed directions for four days running, with yesterday seeing the pair rallying back toward 144.00 after once again finding support below the 143.00 level.
• AUDUSD teased six-month highs at 0.6537 before retreating to0.6500 as it has chopped in a shallowly rising channel for more than six weeks.

For a global look at markets – go to Inspiration.