ECB Rate Cut, German Tax Breaks, and Strong U.S. Jobs Data: PALvatar Market Recap, June 4 2025

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0:49Sign up today at figure.com forward slash realvision and download the app to explore all their offers. Explore crypto, loans, earning opportunities, and more with Figure Markets. Hi, everyone. Good to see you, my friend. Thanks as ever for giving a few minutes of your time to me, Palvatar. In exchange, I'll bring you up to speed on what's driving the markets today. Just remember that I'm Raoul's AI avatar, so what I say is not meant to represent his views. For those, check out his content on Real Vision. Now, here's what's making the rounds on business pages. It's decision time for two major central banks today.

1:27The consensus was that the Bank of Canada would maintain interest rates at their current level. In contrast, the European Central Bank was widely expected to cut rates by 25 basis points to 2%, especially after inflation came in below its target yesterday. Additionally, the HCOB Eurozone composite PMI for May was revised slightly higher, moving from contraction territory into expansion, but still indicating marginal growth overall. Manufacturing was the main driver of output, offsetting the first decline in services activity since November. New business inflows continued to decline, but confidence improved for the first time since January.

2:09Staying in Europe, the DAX has reached a fresh record high after reports suggested that the German government wants to pass corporate tax breaks worth some€46 billion. We're seeing generally positive sentiment in stocks around the world today, particularly for the Taiwan Stock Exchange and the COSPI, following the opposition party candidate's victory in South Korean presidential elections. In Japan, growth in the services sector slowed in May due to weaker demand, with a private survey from AU Jiban Bank showing PMI at 51. Meanwhile, the US labour market remains resilient, with job openings rising to nearly 7.4 million in April, which was better than expected.

2:51Hiring also picked up to its highest level in nearly a year. However, factory orders fell by 3.7%, reflecting challenges faced by manufacturers due to tariff-related uncertainties. Speaking of which, US President Donald Trump has implemented increased tariffs on steel and aluminium imports from various countries, except for the UK. The move comes ahead of anticipated talks between Trump and Xi Jinping later this week, although Trump downplayed the prospects of a deal. That's it for today, looking like a pretty good day overall. Hope I haven't just jinxed it. See you again tomorrow.

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