Morning wrap (04.06.2025)

Indices from the Asia-Pacific region are trading higher in the range of 0.00–1.20%. The biggest gains are observed on Chinese indices, in the range of 0.30–1.20%. The Australian AU200.cash index is up 0.50%, the Japanese JP225 is rising 0.15%, and the Singaporean SG20cash is trading flat around 0.00%.

Canadian and U.S. sources suggest that a trade deal may be reached before the G7 summit scheduled for June 15. Trump's envoy, Pete Hoekstra, expressed optimism, although he did not provide details. Ottawa appears ready to act, and the next 2–3 days will be crucial.

Despite earlier announcements of tariff hikes, sources suggest Trump is leaning toward de-escalation on multiple trade fronts, not just with Canada. This has raised hopes for reduced tensions ahead of the G7 summit.

Most economists predict that the BoC will keep its main interest rate unchanged at 2.75% during today’s board meeting.

Australia’s gross domestic product rose by just 0.2% q/q in Q1, below the forecast of 0.4%. Annual growth reached 1.3%, with weak public sector and export data dragging down momentum. The data supports the case for a potential rate cut by the RBA.

Despite the disappointing GDP data, the AUDUSD exchange rate only dipped slightly, then rebounded, and remains relatively unchanged on the daily timeframe. Markets had partially priced in the weaker data, considering prior forecast revisions.

Iran has expressed readiness to accept uranium enrichment restrictions on its own territory, which in itself marks progress in negotiations. Brent crude prices fell slightly on the news. However, the market reaction was muted, awaiting concrete action.

Korean stocks are gaining following the victory of opposition leader Lee Jae-myung in the snap presidential elections. Markets welcomed the result as a chance for greater political stability.

Trump plans to invoke the Defense Production Act to accelerate domestic production of critical minerals. The goal is to reduce dependence on China. However, experts note that tangible effects may not materialize for another 5–10 years.