Summary
Consumer confidence in the USA is expected to have declined marginally, while in France and Germany it is projected to increase slightly, though both countries remain with an overall negative outlook. French inflation is anticipated to rise to 2.5% in June from 2.3% in May. Economic sentiment in the Euro area may have improved slightly, with stable services sentiment but worsening industrial sentiment. In Korea, industrial production is seen rising by 4.9% in May, a slower annual increase, whereas Japan's industrial production continues to decline. Singapore's industrial production is expected to have expanded by nearly 3% in May. Mexico's trade balance likely improved to a small deficit, and the US goods trade deficit is projected to improve slightly to $95 billion. Central banks in Turkey and Mexico are expected to keep interest rates unchanged at 50% and 11% respectively, despite differing inflation rates. Argentina's economic activity likely fell by nearly 10% in April, but consumer confidence is expected to have grown in May.
The Baker Hughes oil rig count fell by three to 485, while WTI averaged $81.2, up $3. The IEA's medium-term oil market outlook projects slight oil demand growth before stagnation and decline by 2030, driven by reduced oil use in power plants, a shift to electric vehicles, and efficiency gains. Despite previous underinvestment concerns, the IEA now predicts a surplus in global oil supply, leading to unprecedented spare capacity. This bearish outlook suggests significant market adjustments, including potential asset sell-offs by oil companies to prevent oversupply.
De-industrialization is evident in the OECD, particularly in Germany and Japan, with manufacturing sectors struggling. US manufacturing output peaked in December 2007 and has stagnated since, despite low interest rates. Tariffs are increasingly used to influence trade and industrial capacity, with China demanding the removal of the EU's latest tariff on Chinese EVs. The US Treasury has highlighted discrepancies in China’s reported trade surplus, prompting scrutiny from the IMF, which calls for China to scale back policies supporting priority sectors to enhance productivity and ease trade tensions.
