Today's Update 06-12-2025
Key Points and Metrics
Key Points and Metrics:
Economic Data Releases:
U.S. Economic Data:
Producer Price Index (PPI) - May Report:
PPI MoM:
Actual: +0.1%
Forecast: +0.2%
Previous: -0.5% (Revised to -0.2%)
Core PPI MoM (Excluding Food and Energy):
Actual: +0.1%
Forecast: +0.3%
Previous: -0.4% (Revised to -0.2%)
PPI YoY:
Actual: +2.6%
Forecast: +2.6%
Previous: +2.4% (Revised to +2.5%)
Core PPI YoY:
Actual: +3.0%
Forecast: +3.1%
Previous: +3.1% (Revised to +3.2%)
Jobless Claims:
Initial Jobless Claims:
Actual: 248K
Forecast: 242K
Previous: 247K (Revised to 248K)
Continued Jobless Claims:
Actual: 1.956 million
Forecast: 1.91 million
Previous: 1.904 million (Revised to 1.902 million)
Market Expectations:
Traders see an 80% chance of a Federal Reserve rate cut in September.
Possibility of a second rate cut as soon as October, earlier than previous expectations of December.
Market Movements:
U.S. Stock Futures:
Futures are indicating a lower open, suggesting potential market exhaustion after recent rallies.
U.S. Dollar:
The dollar weakened, nearing its lowest level since 2022.
Treasury Yields:
Yields weakened across the curve ahead of a $22 billion auction of 30-year bonds.
International Relations & Trade:
U.S.-China Trade:
President Trump stated the China deal is "great" and announced intentions to set unilateral tariff rates within two weeks.
Heightened trade tensions as traders react to potential tariff implementations.
European Union:
EU leaders plan to travel to China for a summit on July 24-25 to discuss trade and cooperation.
Iran Tensions:
Iran's Revolutionary Guards conducted military drills focused on enemy movements.
Statements indicating potential responses to perceived threats from Israel.
European Economic Data:
United Kingdom:
GDP Estimate MoM:
Actual: -0.3%
Forecast: -0.1%
Previous: +0.2%
Goods Trade Balance:
Actual: -£23.206 billion
Forecast: -£20.7 billion
Previous: -£19.87 billion
Manufacturing Production MoM:
Actual: -0.9%
Forecast: -0.7%
Previous: -0.8%
Industrial Production MoM:
Actual: -0.6%
Forecast: -0.5%
Previous: -0.7%
Germany:
April current account surplus at €23.515 billion.
Inflation expected at 2.1% in 2025 and 2.0% in 2026 (IFO Institute).
European Central Bank (ECB) Comments:
ECB's de Guindos:
Shifted concern from inflation to slow growth.
Recent developments may dampen growth in the Euro Area.
ECB's Schnabel:
Monetary policy cycle is coming to an end.
Medium-term inflation expected to stabilize at the 2% target.
Financing conditions are no longer restrictive.
Corporate News:
Micron Technology (MU):
Plans to invest approximately $200 billion in U.S. chip manufacturing and R&D.
Adobe Inc. (ADBE):
Upcoming Earnings on June 12th at 16:05 ET.
Expected EPS: $4.97
Expected Revenue: $5.79 billion
Other Notable Information:
Market Sentiment:
Traders fully pricing in two Fed rate cuts this year.
Increased bets on rate cuts following PPI and jobless claims data.
Middle East Developments:
Increased geopolitical tensions impacting oil prices and market risk appetite.
Global Trade Dynamics:
Moody's anticipates U.S.-Vietnam negotiations leading to lower-than-expected tariffs on Vietnamese exports.
Trump Trade Policy Developments
Escalating Tariff Threats:
Trump announces unilateral tariff rates within 2 weeks
Trade letters to be sent to partners in 1-2 weeks
EU likely among "last deals" according to Commerce Secretary Lutnick
Risk-off sentiment building in markets
China Relations:
Trump claims "China deal is great" on Truth Social
Chinese officials maintaining diplomatic tone
PBOC-ECB cooperation agreements signed
Geopolitical Tensions
Middle East Escalation:
Iran announces new uranium enrichment facility
IAEA censures Iran for non-compliance
US personnel relocated from parts of Middle East
Oil markets volatile on tension concerns
Corporate Highlights
Key Earnings:
Adobe (ADBE) reports after close: EPS $4.97 expected, Revenue $5.79B
Micron announces $200B US chip investment
Tech Sector:
AWS preparing AI cloud service Bedrock revamp
ARM's Haas sides with NVIDIA against US export controls
Final Thoughts
Today's data tells a story of shifting monetary policy expectations and escalating trade tensions. The softer-than-expected PPI readings have given the Fed significant cover to cut rates more aggressively, with markets now pricing in two cuts this year instead of the previous expectation of just one.
The UK's economic contraction adds to global growth concerns, while Trump's renewed tariff threats are creating a classic risk-off environment. The dollar's weakness to near two-year lows reflects both dovish Fed expectations and uncertainty around trade policy implementation.
What's particularly interesting is the market's ability to digest both disinflationary data (positive for bonds/negative for dollar) and geopolitical tensions (typically positive for dollar as safe haven) simultaneously. The disinflationary narrative is clearly winning for now.
Keep an eye on tonight's 30-year Treasury auction - it'll be a key test of investor appetite for long-dated debt amid fiscal concerns. Adobe's earnings could also provide insight into enterprise software demand in this uncertain environment.
The next two weeks will be critical as Trump's tariff timeline approaches and markets position for what could be a significant shift in global trade dynamics.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Always do your own research and consider your financial situation before making investment decisions.
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Harry