Fiat-Chrysler cancels Renault deal

Fiat-Chrysler cancels Renault deal


Reuters this morning reports that rare earth prices have soared 14% since May 20, the day President Xi visited a rare earth plant to hint at his next step in the US-China trade war.

With exports down 3.8% in May, the report says, China “is expected to report a sharper drop in exports for May”, due to US tariffs, and imports are suffering from “weakening domestic demand”.

This morning, the South China Morning newspaper quotes Chinese vice-minister of agriculture and rural affairs, Han Jun, warning American farmers that they risk losing the entire Chinese market, as China diverts its Soybean orders to Brazil.

Australia’s trade surplus disappointingly fell to $4.87 mn in April, generating a 30 pip drop in the AUD.


Factory orders in Germany increased beyond expectations in April, but not sufficiently to push the YoY reading out of its contractionary -5.3%. In the UK, services in May increased to a 3-month high yesterday, but not enough to cushion the pound’s downward trend, ahead of today’s speech by BoE gov. Carney.

Service and composite PMIs in Germany and the EU also exceeded expectations, but not in France, where they rose, but not sufficiently. Spain’s industrial output, on the other hand, shone, providing a 1.7% increase YoY in April, up from its 3% contraction the month before.


With tariffs set to go into effect Monday, US and Mexican officials failed to reach an agreement yesterday. US President Trump tweeted that “progress is being made, but not nearly enough”, generating a reversal in index futures.

The Dow lost 60 points, losing a third of the day’s gains. Talks continue later today. On the data front, mortgage applications last week increased by 1.5% following February’s 3% contraction, but ADP’s employment change reading failed to impress at 27K.

ISM’s non-manufacturing PMI added a percent in May, surprising analysts at 56.9. The FED’s Beige Book shows a modest improvement in economic activity, inflation and employment continuing to disappoint.


WTI yesterday lost a dollar 30 after the EIA reported an immense 6.77 mB stocks increase, a 5-week record jump – putting the price at a 5-month low. It soon recovered 2/3 of the loss and is currently trending sideways in the 51.84 region.


FCM yesterday withdrew its proposal for a merger with Renault citing “stifling” French political interference and pressuring the French carmaker’s shares – and Nissan – down. French budget minister Gerald Darmanin this morning expressed hopes that talks would recommence soon.

Economic Calendar

Today’s Top Economic Events
09:00 AM GMT – UKBoE’s Governor Carney speech
09:00 AM GMT – EUGross Domestic Product & Employment Change (Q1). Interest Rate Decision at 11:45, and Monetary Policy Statement and Press Conference at 12:30
11:30 AM GMT – USChallenger Job Cuts (May). At 12:30: Trade Balance (Apr), Initial & Continuing Jobless Claims (May 24) Nonfarm Productivity (Q1) and Labor Costs
12:30 PM GMT – CanadaImports, Exports & International Merchandise Trade (Apr). at 14:00: Ivey Purchasing Managers Index (May)
22:30 PM GMT – AustraliaAiG Performance of Construction Index (May). Home Loans (Apr) at 01:00 (+1)
23:30 PM GMT – JapanLabor Cash Earnings & Overall Household Spending (Apr). Foreign Reserves (May) at 23:50, and BoJ’s Gov Haruhiko Kuroda speech at 03:50 (+1)

For more, visit our Economic Calendar