Market Information Tuesday 3 June 2025

China’s manufacturing sector contracted sharply in May, with the Caixin PMI plunging to 48.3—its lowest since September 2022—underscoring weakening global demand amid renewed U.S. tariff pressure. Export orders fell at their highest pace in nearly a year, while domestic demand softened, and employment declined. Despite temporary tariff pauses and modest policy easing by Beijing, deflationary pressures, a deepening property slump, and sluggish consumer spending continue to weigh on the economy. Analysts warn that without bold reforms, particularly to stimulate consumption, China may struggle to regain stable momentum in the face of both internal and external headwinds.

U.S. manufacturing sentiment continued to deteriorate in May, with the ISM index signalling a third straight month of contraction as companies cited rising costs and operational disruption from shifting trade policies. The unpredictable tariff landscape, including sudden increases and reversals, is eroding business confidence and squeezing profit margins—particularly in sectors like chemicals and paper. The dollar slid to near three-year lows against sterling, reflecting mounting investor concern over the economic fallout and fiscal sustainability, while rising Treasury yields hint at growing unease over U.S. debt levels amid expansive budget plans.

U.S. stock futures edged lower Tuesday morning following a strong start to June, as renewed trade tensions between the U.S., China, and the EU weighed on sentiment. Despite geopolitical friction and tariff threats, markets managed to close higher Monday, buoyed by investor optimism and seasonal tailwinds. Analysts pointed to historically strong performance in early summer as a reason for staying invested, even amid ongoing volatility. Meanwhile, cybersecurity ETFs hit all-time highs, and investors are now turning their attention to upcoming corporate earnings and key economic data releases for further direction.

The 6M Euribor increased with 1 basis point to 2.07% compared to previous business day. The 10Y Swap increased with 2 basis points to 2.52% compared to previous business day.

In the attachment, today’s market data on money and capital market rates as well as other rates are presented.