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more to come

This article was written by Eamonn Sheridan at www.forexlive.com.

ICYMI, Ukraine used to drones to attack around 40 Russian war planes at 4 military bases. In summary:

• Ukraine says it completed its biggest long-range attack of the war
• Smuggled drones launched a series of strikes on 40 Russian warplanes at four military bases
• 117 drones were used
• striking “34% of [Russia’s] strategic cruise missile carriers”
• estimates of the damage to Russia’s strategic aviation is about US$7bn

The news comes as Russian and Ukrainian negotiators are heading to Istanbul, Turkey, for a second round of peace talks on Monday.

This is via the BBC citing SBU (Security Service of Ukraine)

More:

Four Russian airbases – two of which are thousands of miles from Ukraine – were hit:

• Belaya in Irkutsk oblast (region), Siberia
• Olenya in Murmansk oblast, Russia’s extreme north-west
• Dyagilevo in central Ryazan oblast
• Ivanovo in central Ivanovo oblast

Among the hit Russian aircraft were strategic nuclear capable bombers called Tu-95 and Tu-22M3, as well as A-50 early warning warplanes.

There is a video at that link, above.

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There is little sign of a diminishing in geopolitical tension on this front.

This article was written by Eamonn Sheridan at www.forexlive.com.

China and New Zealand are both closed for public holidays today.

Dragon Boat Festival holiday in China:

• Note that Hong Kong markets are open today.

Kings Birthday holiday in New Zealand.

This article was written by Eamonn Sheridan at www.forexlive.com.

Over the weekend we had the official PMIs from China for May:

• China May Manufacturing PMI rose to 49.5 (prior 49.0), Non-manufacturing 50.3 (prior 50.4)

Note that Chinese markets are closed today, Monday, June 2, 2025, for a holiday. New Zealand markets are also closed today.

The data agenda ahead is lower-tier only:

This article was written by Eamonn Sheridan at www.forexlive.com.

Good morning, afternoon and evening all. Any charts, technical analysis, trade ideas, thoughts, views, ForexLive traders would like to share and discuss with fellow ForexLive traders, please do so:

This article was written by Eamonn Sheridan at www.forexlive.com.

Good morning, afternoon or evening to all ForexLive traders and welcome to the start of the new FX week. Indicative rates, a little change from late Friday, the US dollar just a touch weaker in early going:

• EUR/USD 1.1355
• USD/JPY 143.88
• GBP/USD 1.3457
• USD/CHF 0.8239
• USD/CAD 1.3738
• AUD/USD 0.6441
• NZD/USD 0.5974

Data over the weekend:

• China May Manufacturing PMI rose to 49.5 (prior 49.0), Non-manufacturing 50.3 (prior 50.4)

This article was written by Eamonn Sheridan at www.forexlive.com.

Tesla Under Pressure After NYT Drug Allegations Against Musk – But What Does the Market Tell Us?

A weekend exposé by The New York Times titled “Musk’s Drug Use On Campaign Trail Stoked Concerns” has reignited scrutiny over Elon Musk’s personal habits, reporting that the Tesla and SpaceX CEO frequently travels with a box containing an assortment of drugs, including ketamine, Adderall, MDMA, and psychedelic mushrooms. While Musk has previously stated his ketamine use is medicinal and minimal – aimed at managing depression – the NYT report, citing multiple sources, suggests more extensive and frequent use. Importantly, these are allegations, and there is no confirmed proof that such drug use occurred as described.

Musk responded defiantly on X (formerly Twitter), pushing back against what he called a media smear campaign, arguing that the real focus should be on his accomplishments and companies’ performance. He also reasserted his skepticism about traditional therapy and framed his medical choices as personal and within his rights.

At ForexLive – soon to become investingLive.com – our role isn’t just to highlight headline news. It’s to offer you an edge. We filter, analyze, and frame the news in ways that connect to your portfolio, your trading strategies, and your decision-making across forex, stocks, and broader capital markets. And sometimes, the biggest insight doesn’t come from what’s said, but from what the market does.

Let’s look at the final four hours of Friday’s trading. Tesla closed the day down 3.34%, a sizable drop. But here’s the key: while the Nasdaq 100 futures (NQ) didn’t exactly finish the day bullish, they managed to rise 0.93% in that same late-session window. Even more telling, Nasdaq outperformed Tesla by 1.21% over those final hours.

That kind of relative underperformance at the weekly close – when institutions often reposition – isn’t trivial. It suggests that even as the broader tech sector found late-session bids, Tesla remained under sustained selling pressure. That divergence may indicate the news is being taken seriously by larger players.

We often see wild headlines that spark heated debate – one expert says X, another says Y. What cuts through the noise is price action. And right now, it’s hinting that this controversy might be more consequential than it seems on the surface.

So what’s next? Pre-market activity on Monday will be crucial. A decisive push lower could accelerate losses. On the other hand, if Tesla continues downward momentum, a move toward $320 (about +7.5% from Friday’s close) remains technically plausible – but only if buyers reappear with conviction.

We’ll be watching that junction carefully – and so should you. Have a strong trading week. Trade TSLA stock at your own risk.

This article was written by Itai Levitan at www.forexlive.com.

Data from China’s National Bureau of Statistics (NBS) released on Saturday, May 31, 2025, official May 2025 PMIs

Manufacturing Sector

• PMI: Rose to 49.5 (expected 49.5 and from 49.0 in April); still below the 50 threshold, indicating contraction for a second month. The improvement in May is likely reflecting some thawing in the icy trade war that chilled again this week. Purchasing managers nevertheless took a cautious approach, evidenced by the index remaining in contraction, amid lingering, and proved justified, uncertainties.

• Large enterprises: PMI at 50.7 (expanding, +1.5 pts).

  • Medium-sized: 47.5 (contracting, -1.3 pts).

  • Small enterprises: 49.3 (contracting, but improved +0.6 pts).

• Sub-indices:

  • Production: 50.7 (expanding, +0.9 pts).

  • New orders: 49.8 (contracting, but rebounding +0.6 pts).

  • Raw material inventories: 47.4 (still weak, but decline narrowing).

  • Employment: 48.1 (slightly improved, but below threshold).

  • Supplier delivery times: 50.0 (neutral).

Non-Manufacturing Sector

• Headline PMI: 50.3 (expected 50.6 and slightly down from 50.4 in April, but still expanding).

• Construction activity: 51.0 (moderate growth, down 0.9 pts).

• Services activity: 50.2 (marginal growth, up 0.1 pt).

• High-performing industries: Rail, air transport, postal, telecoms, IT (all above 55.0).

• Weak sectors: Real estate and capital markets (below 50).

• New orders: 46.1 (rising, but still weak).

  • Construction: 43.3 (+3.7 pts).

  • Services: 46.6 (+0.7 pts).

• Input prices: 48.2 (still declining, but at a slower pace).

• Selling prices: 47.3 (decline narrowing).

• Employment: 45.5 (unchanged, remains weak).

• Business expectations: 55.9 (slightly down, but still optimistic).

—

I posted on Friday on promises of more stimulus incoming:

• China expected to announce ‘major financial polices’ on June 18 and 19, 2025

As I said in the post:

• How many times have we been promised big economic announcements from China … only to be disappointed with incremental change?

I suspect as that date approaches excitement and pumping will build, only to be dashed. Enough whining, its the weekend! Have good one and don’t forget to join early on Monday for the market response to all the news the weekend will bring.

This article was written by Eamonn Sheridan at www.forexlive.com.

• US major indices close mixed with the Dow higher, S&P unchanged, and Nasdaq lower.
• Crude oil futures settle at $60.79
• More Japan Akazawa: No change in stance that tariffs, including those on auto, regretable
• Trump: Tariffs are important. He is happy with appeals court decision
• Iran says Pres. Trump threat to destroy Iran’s nuclear facilities is a clear red line
• Baker Hughes oil rig count -4 to 461
• JPM Dimon: US government should get rid of carried interest
• European indices close mostly higher. France’s CAC falls
• WH Chief of Staff Miller:China must show its commitment to rules-based international order
• Japan’s economic minister Akazawa met with US Treasury Secretary Bessent and Lutnick
• Chiina’s spokesperson:Both China and US have maintained communication over concerns
• Atlanta Fed GDPNow growth estimate for Q2 rose to 3.8% from 2.2%
• University of Michigan sentiment for May final 52.2 vs.51.0 estimate
• WSJ Timiraos: This month is good, but what will the impact of tariffs going forward
• US core PCE for April 0.1% vs 0.1% estimate. Core YoY 2.5% vs 2.5% estimate
• Canada GDP Q1 Annualized 2.2% vs 1.7% estimate
• USTR Greer on CNBC: We have tools if the tariff ruling goes the other way.
• US Trade Representative Greer: China behaviour is completely unacceptable
• Trump: China has totally violated its agreement with US
• The USD is mixed vs the 3 major currency pairs with prices near MA levels
• Germany May preliminary CPI (HICP) +2.1% vs +2.0% y/y expected
• Forexlive European FX news wrap: Slow session as we await the US PCE release

The April US core PCE price index, the Federal Reserve’s preferred inflation gauge, rose 0.1% month-over-month, matching expectations. On a year-over-year basis, core PCE increased 2.5%, also in line with forecasts. The prior month’s figures were revised slightly higher, with core PCE YoY adjusted to 2.7% from 2.6%. Headline PCE rose 0.1% m/m and 2.1% y/y, just below the 2.2% forecast, indicating some easing in price pressures. Core PCE excluding food and energy also rose 0.1%, while service prices excluding energy came in flat, down from 0.2% previously. Overall, good data.

In addition to the inflation data, personal income surged 0.8%, beating the 0.3% estimate and continuing a strong two-month trend after a prior upward revision to 0.7%. However, personal consumption rose just 0.1%, down from 0.7% in March, though inflation-adjusted consumption held steady at 0.2%. Strong income bodes well for the consumer.

The caveat for inflation: While the April data shows inflation largely under control, WSJ’s Nick Timiraos noted two headwinds that could push future year-over-year figures higher.

• First, low monthly PCE readings from mid-2024 will soon roll off the 12-month calculation window, mathematically raising YoY comparisons.
• Second, tariffs may introduce new inflationary pressures moving forward.

With a string of soft monthly data starting in May 2024, upcoming MoM prints of 0.2% or more in headline or core PCE would likely lift annual inflation readings further. So it is likely PCE data has reached a low for now. The Fed and the market will have to deal with that dynamic going forward.

The U.S. advance goods trade balance data was also released today for April 2025, and it showed a significant improvement, with the trade deficit narrowing to -$87.6 billion from -$162.3 billion in March (nearly a halving of the prior month), a decrease of $74.6 billion. This marked a substantial reduction compared to the forecasted deficit of $143 billion.

Change in Imports and Exports:

• Exports: Goods exports increased by $6.3 billion to $188.5 billion in April from $182.2 billion in March.

• Imports: Goods imports decreased dramatically by $68.4 billion to $276.1 billion in April from $344.5 billion in March.

Reasons for the Dramatic Change:
The significant improvement in the trade balance was primarily driven by a sharp decline in imports, coupled with a modest increase in exports. While specific reasons for the import drop are not fully detailed in the provided data, it seems tariff induced inventory accumulation may have reached its peak for now at least.

As a result of primarily the trade data, the Atlanta Fed GDPNow growth estimate for Q2 surged to 3.8% from 2.2%.

Later in the morning the Univ. of Michigan consumer sentiment in May held steady at 52.2, matching April’s level and coming in above both the preliminary reading of 50.8 and the 51.0 estimate. This marks a stabilization after four consecutive months of sharp declines. The current conditions index came in at 58.6, slightly below last month’s 59.6, while expectations improved to 47.9 from a preliminary 46.5 and prior 47.3—still the second-lowest reading of the year.

Inflation expectations moderated. One-year inflation expectations declined to 6.6% from the 7.3% preliminary figure (and just above last month’s 6.5%), marking the smallest month-over-month increase since the election. Five-year expectations dropped to 4.2%, down from 4.6% preliminary and 4.4% last month—the first decline since December 2024.

According to survey director Joanne Hsu, sentiment was buoyed late in the month by the temporary pause in some China tariffs, which improved expectations for business conditions. However, these gains were offset by weaker assessments of personal finances, tied to stagnant incomes. Consumers generally remain concerned about the future, and while trade policy clearly influenced sentiment, the tax and spending bill in Congress has yet to register with the public.

IN the farewell press conference to Elon Musk – who sported a black eye that he said was a result of horsing around with his son – President Trump reiterated the importance of tariffs and expressed satisfaction with the recent appeals court decision supporting his position. He commented on Elon Musk’s ongoing involvement with DOGE, calling it “his baby,” and noted that many within the team will stay on. Trump also emphasized that budget cuts will continue in a precise, surgical manner, with the effects expected to become clear in the long term.

On foreign policy, he stated that a Gaza deal is close, and there is a real possibility of a breakthrough with Iran in the near future. Iran has expressed other views, but who really knows. Turning to domestic issues, he expressed his desire to see a larger tax cut in the House bill and suggested that Harvard’s funding should be redirected to support trade schools.

Regarding international relations, Trump described Putin and Zelenskyy as both stubborn. He reported that his recent meeting with Fed Chair Powell went well, and while he expects to speak with President Xi of China, no specific time has been set for that conversation, but he has hope a deal can be made.

The calmer comments on Xi and China during his press conference came after a morning sharply worded post, where President Trump claimed that China was facing grave economic turmoil just two weeks ago, brought on by the high tariffs he imposed, which he said made it “virtually impossible” for China to trade into the U.S.—the world’s largest marketplace. According to Trump, this abrupt economic pressure led to widespread factory closures and even civil unrest in China. Wanting to avoid further destabilization, he said he made a quick deal with Chinese leadership to help prevent a worsening crisis. While this deal initially brought stability, Trump now accuses China of having “totally violated” the agreement, expressing frustration with what he sees as a betrayal despite his efforts to be “Mr. Nice Guy.” His tone suggests a hardening stance on trade enforcement going forward.

Midday, Bloomberg reported that US was mulling wider China tech sanctions with a subsidiary crackdown.

The deals – especially with China and the EU will continue – but once, no new trade deals were completed.

The US stock market closed mixed today but higher for the month.

• Dow Industrial Average, +54.34 points or 0.13% at 42,270.07
• S&P down -0.48 points or -0.01% at 5911.69
• Nasdaq down -62.11 points or -0.22% at 19113.77

The Russell 2000 closed lower by -8.49 points or -0.41% at 2066.26

For the trading week, the indices all closed higher:

• Dow rose 1.60%
• S&P rose 1.88%
• Nasdaq rose 2.01%
• Russell 2000 rose 2.01%

US yields closed lower:

• 2-year yield 3.899%, -3.7 basis points
• 5-year yield 3.959%, -3.8 basis points
• 10-year yield 4.398%, -2.6 basis points
• 30-year yield 4.924%, +0.1 basis point.

This article was written by Greg Michalowski at www.forexlive.com.

The major US stock indices are closing mixed with the Dow modestly higher, the S&P unchanged and the Nasdaq modestly lower.

A snapshot of the closing levels shows:

• Dow Industrial Average, +54.34 points or 0.13% at 42,270.07
• S&P down -0.48 points or -0.01% at 5911.69
• Nasdaq down -62.11 points or -0.22% at 19113.77

The Russell 2000 closed lower by -8.49 points or -0.41% at 2066.26

For the trading week, the indices all closed higher:

• Dow rose 1.60%
• S&P rose 1.88%
• Nasdaq rose 2.01%
• Russell 2000 rose 2.01%

It is also month end and the major indices all closed higher with the Nasdaq index rising over 9.5%

• Dow rose 3.94%
• S&P rose 6.15%
• Nasdaq rose 9.56%
• Russell 2000 rose 5.20%

Finally, for the first 5 months of the 2025 year:

• Dow is down -0.64%
• S&P is down -0.51%
• Nasdaq is down -1.02.

Although lower, major indices are well of the lows reached in early April.

This article was written by Greg Michalowski at www.forexlive.com.

Crude oil futures are settling at $60.79. That’s down $0.15 or -0.25% on the day.

For the week, the price fell -1.59%. For the year, the price fell -15.43%

This article was written by Greg Michalowski at www.forexlive.com.

More from Japan Akazawa:

• No change in stance that tariffs, including those on auto parts, regretable.
• Aim to complement US, Japan strength in chips

This article was written by Greg Michalowski at www.forexlive.com.