Stay informed with today’s key macroeconomic and market highlights from the U.S., Japan, Germany, and global equity markets.
🇺🇸 U.S. Manufacturing Remains in Contraction
The Philadelphia Fed Manufacturing Index held steady at -4.0 in June 2025, unchanged from May and below market expectations of -1. This marks another month of subdued regional manufacturing activity.
Key Highlights:
- New orders stayed positive but weakened.
- Shipments improved and turned positive.
- Employment fell sharply, reaching its lowest level since May 2020, signaling a drop in factory jobs.
- Price pressures eased slightly but remain historically high.
- Outlook: Business optimism is waning, with fewer firms expecting growth in the next six months.
👉 Takeaway: Continued weakness in manufacturing could influence the Fed’s policy stance going forward.
🇯🇵 Japan Inflation Eases, Core CPI Surges
Japan’s annual inflation rate fell slightly to 3.5% in May 2025, down from 3.6% in the previous two months. However, core inflation (excluding fresh food and energy) rose to 3.7%, the highest in over two years.
Breakdown:
- Declines in prices for clothing, healthcare, and household goods.
- Housing, recreation, and communications saw rising costs.
- Rice prices skyrocketed over 100% year-over-year, showing limited impact from government price controls.
👉 Takeaway: Inflation remains a concern ahead of Japan’s summer elections, adding complexity to BoJ policy decisions.
🇩🇪 German Producer Prices Drop Sharply
Germany’s Producer Price Index (PPI) fell 1.2% year-over-year in May 2025, marking the third straight month of decline and the sharpest drop since September 2024.
Details:
- Energy prices fell sharply:
- Electricity: -8.1%
- Natural gas: -7.1%
- Heating oil: -10.2%
- Excluding energy, producer prices rose 1.3% YoY.
- Monthly PPI dropped 0.2%, better than the expected 0.3% decline.
👉 Takeaway: Cooling input prices support the ECB’s disinflation narrative but won’t remove all pressure from sticky core inflation.
📊 U.S. Markets Set for a Lower Open
After Wednesday’s Juneteenth holiday, U.S. stock futures point to a slightly lower open as investors react to:
- Ongoing geopolitical tensions in the Middle East.
- President Trump’s delayed decision on Iran, while strikes from Israel continue.
- Oil prices retreat, weighing on energy stocks.
- CarMax expected to open 10%+ higher after strong earnings.
- Triple Witching Day could increase market volatility.
👉 Takeaway: Risk appetite remains fragile. Expect choppy trading as geopolitical uncertainty and technical factors weigh on sentiment.
📌 Final Thoughts
Economic data continues to paint a mixed global picture—slowing growth, sticky inflation, and rising geopolitical risks. Investors should brace for near-term volatility and monitor central bank signals closely.
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