United States
Following a call between US President Trump and European Commission President von der Leyen, Trump announced a postponement of the 50% tariffs announced the day prior, pushing their implementation to early July. This decision helped global risk assets recover some of Friday’s losses.
US equity markets were closed for Memorial Day, but futures markets remained open and posted solid gains. Dow futures rose 1.1%, while S&P 500 futures jumped 1.27%.
The US dollar held steady as investors turned their attention to the tax and spending bill currently moving through the Senate. The bill, in its current form as passed by the House, has raised concerns due to its potential impact on the federal deficit. Speculation is mounting that the Senate may introduce significant amendments to address these concerns and reassure markets.
Europe
European equities rose on Monday after the announcement on Sunday evening that the introduction of tariffs on the European Union would be delayed. The Euro Stoxx 600 gained 0.99% (+5.37 points) to close at 550.5, with all sectors finishing higher. Industrials and healthcare led the advance. Germany’s DAX outperformed regional peers, jumping 1.68%, while UK markets were closed for a bank holiday.
Automotive stocks saw a strong rebound, with the sector rising 1.8%. Mercedes-Benz climbed 2.1%, and Stellantis surged 5%. Defence stocks were also in favour—Rheinmetall rose 3.3% following the launch of its new “Battlesuite” software designed to connect military systems and enhance cybersecurity. Thyssenkrupp rallied 8.8% amid reports it is preparing to spin off its warship division.
Trading volumes were subdued due to public holidays in both the US and UK. In fixed income, German 10-year bond yields were unchanged at 2.56%. The euro gained 0.20% against the US dollar, reaching 1.1385. In a speech, ECB President Christine Lagarde stated that the euro could serve as a credible alternative to the US dollar—provided EU governments strengthen their financial systems and security infrastructure—suggesting it could become a preferred currency for international trade.
Australia
After the US President’s announcement that new tariffs on Europe would be delayed until July 9, the ASX 200 recovered from initial small losses to finish the day essentially unchanged at 8,361, gaining just 0.1 points. By the close of trade, US futures markets had rallied more than 1% from Friday’s close, while the Nikkei also advanced. This cautious optimism was reflected in sector performance, with five sectors rising and six declining. The utilities sector was the weakest performer, while technology led gains, driven largely by company-specific news among the largest stocks in each sector. Most other sectors experienced only marginal movements.
On the positive side, WiseTech formally announced its bid for the US software firm E2open. Investors welcomed the news, sending WiseTech’s shares up 4.70% to $104.75. WiseTech will pay US$2.1 billion for E2open, with the acquisition to be funded through debt. Executive Chairman Richard White explained that the investment aims to connect every step of the supply chain process from order to fulfilment.
Origin Energy, however, announced further earnings setbacks from one of its holdings. The company revised down its guidance due to losses at Octopus Energy, a UK-based firm in which Origin holds shares. The forecast swung from a $100 million profit to a $100 million loss. The downgrade was attributed to lower demand resulting from better-than-expected UK weather and one-off impacts related to the UK government’s price guarantee subsidy. Origin’s shares fell 54 cents, or 4.89%, closing at $10.51.
The materials sector was supported by gains in gold stocks following a rally in gold prices on Friday. Northern Star Resources rose 2.95% to $20.95, while Evolution Mining added 30 cents (+3.42%) to $9.07. In contrast, Rio Tinto’s shares fell 1.53% to $115.21 after reports emerged over the weekend that the Mongolian government has initiated a lawsuit against the company in London, accusing Rio Tinto of political bribery related to its Oyu
Tolgoi copper mine in Mongolia.
Bond yields declined during Monday’s trading session, with the 10-year bond dropping 4 basis points to 4.38%. Meanwhile, the Australian dollar jumped following the tariff delay announcement, trading at 0.6510 against the US dollar during the day on Monday. In overnight trade the AUDUSD has slipped and is at 0.6485. The ASX200 futures moved marginally higher by 0.24% adding 20 points.
Commodities
Gold eased by US$13 (-0.41%) to settle at US$3,343 as the delay in EU tariffs reduced demand for safe-haven assets. Trading activity was subdued due to public holidays, keeping price movements within tight ranges. Despite the short-term pullback, the broader themes of a weaker US dollar and ongoing geopolitical risks continue to support a bullish outlook, with several analysts forecasting higher gold prices in the near term. Silver was flat at US$33.49.
Bitcoin rose 1.5% to US$109,371 as appetite for risk assets picked up.
Copper remained at US$9,610 per tonne with no trading activity due to the holidays. Meanwhile, iron ore extended its recent decline, falling 1.2% to US$96.80 amid persistent concerns over demand.
Oil was steady, with West Texas Intermediate (WTI) closing unchanged at US$61.53. Prices had initially traded higher following the tariff news. Reports suggest OPEC+ may hold its July output meeting earlier than expected. Historically, such early meetings have preceded production increases, and the market anticipates a similar outcome for July.
Economic Calendar
US:
- Durable Goods (Apr) – 10:30pm
- US Home Prices (Mar) – 11:00pm
This article was written by Paul Darwell, Rivkin Securities Pty Ltd. Enquiries can be made via [email protected] or by phoning +612 8302 3632.
