MORNING BRIEFING - USA/Asia -2-

DJ MORNING BRIEFING - USA/Asia

The morning market overview, compiled by Dow Jones Newswires:

TOPIC OF THE DAY I

China apparently reserves the right to tighten its easing of rare earth export restrictions again. Beijing will limit rare earth export licenses for US automakers and other manufacturers to six months, people familiar with the matter said. Chinese negotiators agreed to the temporary restoration of export licenses during negotiations in London. The agreement in London is intended to ease trade tensions between the two countries and maintain an agreement reached in Geneva in May. In return, according to the informants, US negotiators agreed to relax some of the recent restrictions on the sale of industrial goods such as aircraft engines and related products. This also applies to the export of ethane, which is needed in plastics production. Details of the agreement are still being worked out, the informants said. The White House declined to comment.

TOPIC OF THE DAY II

Amid tensions in the Middle East, the US is reducing its presence in parts of the region to the most essential personnel. The State Department announced that it had ordered the withdrawal of all non-essential personnel from the US Embassy in Baghdad and authorized the withdrawal of non-essential personnel and family members from Bahrain and Kuwait. At the same time, Defense Secretary Pete Hegseth authorized the voluntary departure of military personnel from across the Middle East. US troops stationed in the region were not affected. US President Donald Trump said on the podcast "Pod Force One" that he was "less confident" of reaching an agreement on Iran's nuclear program, fueling fears that diplomatic efforts could collapse. The sixth round of talks is scheduled for this weekend in Oman. Iranian Defense Minister Amir Aziz Nasirzadeh said on Wednesday that "some say that if negotiations fail, the situation could escalate into a conflict. If a conflict is imposed on us, all US bases are within our reach and we will boldly attack them in the host countries," Nasirzadeh warned.

OUTLOOK COMPANY +

2:00 p.m. US/Blackrock Inc, Investor Day

22:05 US/Adobe Inc, 2Q results

ECONOMIC OUTLOOK

 - US
14:30 Initial applications for unemployment benefits (week)
FORECAST: 246,000
previously: 247,000

Producer prices May
FORECAST: +0.2% y/y
previously: -0.5% vs. Vm
Core rate (excluding food and energy)
FORECAST: +0.3% y/y
previously: -0.4% y-o-y

OVERVIEW OF INDICES

 last +/- %
E-Mini Future S&P-500 6,010.75 -0.3%
E-Mini Future Nasdaq-100 21,820.50 -0.3%
S&P/ASX 200 (Sydney) 8,584.70 -0.1%
Nikkei-225 (Tokyo) 38,199.91 -0.6%
Hang-Seng (Hongk.) 24,183.85 -0.8%
Shanghai-Comp. 3,403.26 +0.0%
Kospi (Seoul) 2,914.94 +0.3%

FINANCIAL MARKETS

EAST ASIA (HISTORY)

Inconsistent - According to market participants, developments surrounding Iran caused uncertainty. The reason for this is that the sixty-day deadline set by President Trump for the country's approval of a new nuclear agreement expires on the reporting date. The US has now recalled all unnecessary staff from the US embassy in neighboring Iraq and unnecessary personnel from Bahrain and Kuwait. According to the Wall Street Journal, the Iranian defense minister warned: "If a conflict is imposed on us, all US bases are within our grasp, and we will boldly attack them in the host countries." Another slowing factor is that, according to US President Donald Trump, the US plans to send letters with conditions for trade agreements to dozens of other countries in one to two weeks. At the same time, it remains unclear what the framework agreement between the US and China reached in London actually means, especially since China has so far offered little comment on the matter.

WALL STREET

 INDEX last +/- % absolute +/- % YTD
DJIA 42,865.77 -0.0% -1.10 +0.8%
S&P 500 6,022.30 -0.3% -16.51 +2.1%
NASDAQ Comp 19,615.88 -0.5% -99.11 +2.1%
NASDAQ 100 21,860.80 -0.4% -81.12 +4.4%

Sales data
Wednesday Tuesday
NYSE turnover (shares) 1.07 billion 1.01 billion
Winners 1,292 1,768
Losers 1,467,994
Unchanged 88 86

Slightly lighter – Favorable inflation data and the framework agreement in the trade dispute between the US and China fizzled out, especially since almost nothing concrete was announced regarding the latter. Traders spoke of disillusionment because the agreement barely went beyond the Geneva Agreement, which had already been reached earlier and which did not last long. Another source of disappointment was that China apparently reserves the right to tighten the easing of rare earth exports again. Another negative reaction was the fact that the US appeals court had upheld Trump's reciprocal tariffs pending final clarification. Meta shares fell by 1.2 percent. According to sources, the company is in advanced talks to invest around $14 billion in Scale AI and hire the startup's CEO. Lockheed Martin lost 4.2 percent. According to a report, the US Air Force is ordering significantly fewer F-35 fighter jets than planned for 2024. Video game retailer Gamestop reported declining sales but remained in the black. The share price of the "meme veteran" fell by 5.4 percent. General Motors rose by 1.9 percent. The automaker is spending $4 billion to produce more vehicles in the US and thus reduce its burden of tariffs.

US BONDS

The yield on ten-year U.S. Treasury bonds fell 6 basis points to 4.42 percent after U.S. consumer prices rose slightly less than expected in May, fueling speculation of interest rate cuts.

CURRENCY

 last +/- % 00:00 Wed, 9:10 % YTD
EUR/USD 1.1524 0.3 1.1488 1.1406 +10.4%
EUR/JPY 165.77 -0.2 166.05 165.61 +1.6%
EUR/GBP 0.8482 0.0 0.8478 0.8471 +2.3%
GBP/USD 1.3586 0.3 1.3548 1.3465 +7.8%
USD/JPY 143.85 -0.5 144.54 145.19 -7.9%
USD/KRW 1,357.95 -0.9 1,369.71 1,372.88 -7.6%
USD/CNY 7.1748 -0.2 7.1865 7.1784 -0.4%
USD/CNH 7.1839 -0.2 7.1968 7.1887 -1.9%
USD/HKD 7.8486 -0.0 7.8488 7.8493 +1.0%
AUD/USD 0.6501 -0.0 0.6502 0.6508 +5.4%
NZD/USD 0.6037 0.1 0.6028 0.6026 +8.2%
BTC/USD 107,887.00 -0.6 108,536.95 109,622.35 +17.8%
YTD based on the previous day's closing price

Interest rate cut speculation following lower-than-expected US inflation in May weighed on the dollar. The dollar index fell by 0.4 percent, while the euro rose to its highest level in almost a week. In Asian trading on Thursday, the yen and franc were in demand as safe havens. This is due to the heightened threat level in Iran, as a deadline set by President Trump for concluding nuclear talks is expiring and there are new threats from Israel and Iran.

++++ RAW MATERIALS +++++

OIL

 last VT closing +/- % +/- USD % YTD
WTI/Nymex 67.95 69.12 -1.7% -1.17 -10.0%
Brent/ICE 69.49 70.78 -1.8% -1.29 -11.0%
YTD based on the previous day's closing price

Crude oil prices rose sharply by over 5 percent in US trading. Hopes for an end to the trade dispute between China and the US, which could then lead to increased demand, the stalled negotiations on a nuclear deal between the US and Iran, according to Trump, and a more significant decline in crude oil inventories in the US than expected, provided bullish price signals. This was driven by developments in Iran, where the deadline set by the US for agreeing on a new nuclear deal expires on Thursday. In Asia-dominated trading on Thursday, oil prices are recovering somewhat more significantly.

METALS

 last previous day +/- % +/- USD % YTD
Gold 3,374.80 3,358.45 +0.5% +16.34 +26.6%
Silver 31.62 31.57 +0.2% +0.05 +14.7%
Platinum 1109.09 1096.44 +1.2% +12.65 +22.5%
Copper 4.83 4.81 +0.3% 0.01 +18.9%
YTD based on the previous day's closing price

The price of gold climbed 0.8 percent in May, fueled by the prospect of falling interest rates following US price data. Additional momentum came from the weaker dollar. The price continues to rise in the Asian-dominated market, where gold is sought after as a safe haven in light of tensions surrounding Iran.

REPORTS SINCE THE PREVIOUS DAY, 8 PM

USA - Trade Relations

(MORE TO FOLLOW) Dow Jones Newswires

June 12, 2025 01:43 ET (05:43 GMT)

DJ MORNING BRIEFING - USA/Asia -2-

US Ambassador to Canada Pete Hoekstra has hinted at the possibility of a breakthrough in US-Canada trade talks at the G7 summit beginning this weekend in Alberta, Canada.

ORACLE

achieved double-digit revenue growth in the fourth quarter and is targeting even greater growth for the current fiscal year. The cloud services company now expects revenue of $67 billion. This would be an increase of 16 percent over the previous year and more than $1 billion higher than previously estimated. In the fourth quarter, Oracle increased revenue by 11 percent to $15.9 billion, exceeding analysts' forecasts of $15.58 billion. Earnings in the fourth quarter amounted to $3.43 billion (previous year: $3.14 billion), adjusted for earnings of $1.70 per share. Analysts had expected $1.64.

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(END) Dow Jones Newswires

June 12, 2025 01:43 ET (05:43 GMT)

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