EMEA Morning Briefing : Investors Await Outcome of U.S.-China Trade Talks

MARKET WRAPS

Watch For:

U.K. unemployment; trading update from FirstGroup

Opening Call:

European stock futures edged higher, tracking gains by Asian stock benchmarks. The dollar strengthened; Treasury yields were mixed; oil futures gained, and gold fell.

Equities:

European stock futures were slightly higher early Tuesday as the focus remains on the U.S.-China trade talks in London. The talks are continuing for a second day.

Stocks have been slowly grinding higher in recent weeks, with investors' hopes on trade buoyed by steps that Trump has taken to reduce some tariffs. At the same time, investors widely expect tariffs to create at least a modest drag on economic growth in the coming months.

"Right now, I think the path of least resistance [for stocks] is up," said Matthew Tuttle, chief executive of Tuttle Capital Management." But, he added, "I think as we start approaching the all-time highs again, we'll probably see some resistance."

Global markets face a major inflation test this week with updates on U.S. consumer and producer price inflation due Wednesday and Thursday, respectively.

Forex:

Many non-U.S. investors aren't taking the risk of a prolonged period of dollar weakness seriously, Insight Investment's Francesca Fornasari said. These investors are insufficiently hedged for this risk.

"U.S. assets make up a large proportion of many indices and our sense is that many investors have significant unhedged currency risk," the head of currency solutions at the asset manager said.

She warns that it is "quite possible" that President Trump's administration could "openly call for a weaker currency."

Bonds:

Investors will be closely watching the moves in U.S. Treasurys as they assess the week's wave of inflation data. Starting on Tuesday, the U.S. Treasury will auction $97 billion in three-year and 10-year notes, as well as a further $22 billion in 30-year bonds.

The 10-year and 30-year auctions, scheduled for Wednesday and Thursday, respectively, have the potential to move markets.

Overall demand will reflect investors' view of both inflation risks and the Trump administration's plans for taxes and spending.

Energy:

Oil gained amid optimism over U.S.-China trade talks. There are hopes of a deal, which could lower risks to global growth and help underpin oil demand, Exness' Li Xing said.

However, a lack of a clear outcome could weigh on the oil market. Also, worries continue over China's slowing exports and falling imports, including those of crude oil, the financial markets strategist added.

Metals:

Gold weakened as traders eyed the U.S.-China trade talks being held in London. Investors are awaiting clarity on these talks, FFA Kings' Fadi Al Kurdi said, adding that the negotiations have kept risk sentiment relatively underpinned, curbing the upside potential for gold.

At the same time, gold's price downside may be limited with U.S. fiscal worries still a headwind for the dollar.

--

Copper declined, but prices may remain stable pending any developments in the U.S. trade policy, Nanhua Futures analysts said. China's weaker industrial activity has weighed on import volumes.

Imports could remain volatile amid persistent internal and external headwinds over the coming months, ANZ research analysts said.

TODAY'S TOP HEADLINES

Trump's Immigration Plans Meet a Powerful Adversary: Unions

LOS ANGELES-Unions, which have felt conflicted lately over how to deal with Trump, found an issue this past weekend over which to confront him: immigration.

It came after the head of the state's biggest union was arrested here for allegedly obstructing federal agents from conducting an immigration raid. The union says he was "peacefully observing." David Huerta, president of Service Employees International Union California, appeared in court Monday afternoon. He was released on $50,000 bail.

Silver and Platinum Surpass Gold's 2025 Returns

Silver and platinum are seeing a run-up in prices while gold prices idle.

This year's returns on silver, at 26.8%, have inched slightly above gold, according to the prices of two popular exchange-traded funds, the iShares Silver Trust and SPDR Gold Shares, as of Monday's trading.

Europe Is Pricier This Summer. Its Stocks Aren't.

Foreign stocks have rallied sharply in 2025. For U.S. investors, they could still be attractive bargains, thanks in part to generous dividends and share buybacks.

So far this year international stocks are handily beating their U.S. counterparts, with the MSCI EAFE index of developed country stocks returning 19%, compared with 2.5% for the S&P 500.

Ad Forecaster Cuts Industry Outlook as Trade Upheaval Risks Five-Year 'Chilling Effect'

A major advertising forecaster said global trade disruptions and economic deglobalization have led it to cut ad revenue growth expectations for 2025 to 6%, excluding U.S. political spending, from its December prediction of 7.7%.

WPP Media, a unit of London-based advertising giant WPP that was formerly called GroupM, said global ad revenue in 2025 will reach $1.08 trillion, in a report published in the U.K. on Tuesday. But the uncertainty of the moment is a drag on both business and consumer investment, WPP Media said, leading to the firm's reduced expectations.

Warner Bros. Discovery Seeks Ban on Creditor Cooperation in Corporate Split

Creditors of Warner Bros. Discovery are consulting with advisers after the entertainment company proposed to ban investor cooperation pacts as part of its plan to separate itself into two new public businesses.

After Warner announced Monday that it would split its streaming, studio and production business from its cable networks, bondholders have zeroed in on provisions in the company's offer that would prohibit them from entering into cooperation agreements with each other in the future. Law firm Akin Gump Strauss Hauer & Feld is organizing bondholders to push back against Warner's proposal and negotiate better terms, people familiar with the matter said.

FTC Seeks Information From Top Advertising Agencies as Part of Ad-Boycott Probe

The Federal Trade Commission is asking some of the world's largest ad companies for information as part of an investigation into whether advertising and advocacy groups violated antitrust laws by coordinating boycotts of certain sites, including Elon Musk's X.

The FTC on Monday sent requests for information to agencies including Omnicom Group, WPP, Dentsu, Havas, Interpublic Group, Publicis Groupe and Horizon Media, a spokesman for the FTC confirmed.

Write to [e-mail]

Expected Major Events for Tuesday

04:30/NED: Apr Manufacturing output

05:00/FIN: Apr Industrial Production

06:00/SWE: Apr New orders & deliveries in industry

06:00/SWE: Apr Industrial Production Index

06:00/GER: 1Q Labour cost index

06:00/ROM: Apr International trade

06:00/NOR: May PPI

06:00/NOR: May CPI

06:00/DEN: May CPI

06:00/UK: May UK monthly unemployment figures

07:00/SVK: Apr Industrial production

07:00/AUT: Apr Production Index

07:00/SWI: May Consumer Sentiment Index

07:00/CZE: May CPI

07:00/CZE: Apr Import & export price indices

08:00/BUL: Apr Industrial Production

08:00/ITA: Apr Industrial Production

08:30/UK: 1Q Mortgage Lenders and Administrators Return (MLAR) statistics

09:00/CYP: Apr Foreign Trade (provisional)

09:00/GRE: May CPI

09:00/LUX: Apr Industrial Production

09:00/GRE: Apr Industrial Production Index

09:00/MLT: Apr Industrial Production Index

15:59/UKR: 1Q GDP

All times in GMT. Powered by Onclusive and Dow Jones.

Write to us at [e-mail]

We offer an enhanced version of this briefing that is optimized for viewing on mobile devices and sent directly to your email inbox. If you would like to sign up, please go to https://newsplus.wsj.com/subscriptions.

This article is a text version of a Wall Street Journal newsletter published earlier today.

(END) Dow Jones Newswires

06-10-25 0015ET