William C.

Purchases for defense and infrastructure programs drove the fastest pace of German factory orders in 2 years. This included a 30.2% increase in the manufacture of fabricated metal products and 11.5% rise in machinery and equipment. Excluding large scale orders, new orders rose 0.9% m/m, still a solid number as orders for electrical equipment gained 9.8% and computer, electronic and optical products gained 5.7%. The gains elsewhere offset a 6.3% decline in automotive orders. 

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The sudden spotlight on molybdenum comes amid a broader reckoning over critical minerals and national security. China’s Ministry of Commerce framed its new export controls on molybdenum, tungsten and other metals as necessary to “safeguard national security interests.” But in Washington, the move was seen as a calculated response in the tit-for-tat economic standoff between the two powers. China is by far the world’s largest producer of molybdenum, mining an estimated 110,000 metric tons last year – over one-third of global output. It also sits atop the largest reserves. By controlling exports, Beijing can tighten the spigot on a material vital to U.S. defense manufacturing, sending a pointed message about Western trade pressure.

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Current market volatility highlights how consistently tail risks are underpriced during calmer periods. While black swan events are, by definition, unpredictable, their impact doesn’t have to be unmanaged. Robust, systematic risk management isn’t about forecasting shocks—it’s about building resilience to withstand them. #currency #riskmanagement

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⚠️ #Tariffs Deadline Looms: Vietnam Deal Signals Rising Costs As the July 9, 2025, tariff deadline under President Trump approaches, markets brace for impact. Only two trade agreements have been finalized—with the UK and Vietnam—yet the Vietnam deal remains underexamined despite its significant implications for trade flows and consumer prices. The U.S.-Vietnam framework imposes a 20% tariff on Vietnamese exports to the U.S., down from a proposed 46%, and a steep 40% tariff on goods transshipped through Vietnam, explicitly targeting Chinese products rerouted to evade U.S. tariffs. This structure aims to curb the $122 billion U.S. trade deficit with Vietnam but will likely elevate costs for low-value-added imports, such as electronics and apparel, impacting U.S. consumers and supply chains. On a weighted average basis, U.S. import tariffs have surged from 2% in 2024 to 13% as of June 2025. These costs will likely be absorbed by a combination of U.S. companies, through compressed margins, and consumers, via higher prices, with the exact split depending on market dynamics and price elasticity. Nike's investors won't be pleased about this deal! #Economy #Markets #Investing

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In this week’s BWR, the Central Bank of Russia’s ‘experimental legal regime’ has demonstrated a proof-of-concept solution for bypassing Western sanctions. The A7A5 ruble-backed stablecoin relies on a native-built ecosystem for cross-border payments. USD-backed Tether stablecoin (USDT) is vital to A7A5’s success and also its vulnerability. The technology behind it can also be used to rebuild collapsed economies: think Cuba and Venezuela. https://lnkd.in/ediwUYTp

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We expect EM sovereign hard-currency gross issuance to decline slightly to US$253.7bn in 2026 from US$268.0bn in 2025; this would be the second-highest gross EM sovereign issuance behind 2025. Net issuance declines by ~US$21.1bn to US$161.8bn. We expect issuance for IG-rated sovereigns to decline by US$18.9bn led by a reduction in issuance from Mexico. HY-rated sovereign issuance should increase, in our view, by US$4.7bn to US$80.4bn, which would be the highest historically, helped by more sovereigns regaining market access. At a sovereign level, at least eight look set to issue more than US$10bn.

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Bloomberg reported: “𝘉𝘳𝘢𝘻𝘪𝘭𝘪𝘢𝘯 𝘮𝘢𝘳𝘬𝘦𝘵𝘴 𝘴𝘭𝘶𝘮𝘱𝘦𝘥 𝘛𝘶𝘦𝘴𝘥𝘢𝘺 𝘰𝘯 𝘢 𝘱𝘰𝘭𝘭 𝘵𝘩𝘢𝘵 𝘴𝘩𝘰𝘸𝘦𝘥 𝘗𝘳𝘦𝘴𝘪𝘥𝘦𝘯𝘵 𝘓𝘶𝘪𝘻 𝘐𝘯𝘢𝘤𝘪𝘰 𝘓𝘶𝘭𝘢 𝘥𝘢 𝘚𝘪𝘭𝘷𝘢 𝘢𝘩𝘦𝘢𝘥 𝘪𝘯 𝘯𝘦𝘹𝘵 𝘺𝘦𝘢𝘳’𝘴 𝘦𝘭𝘦𝘤𝘵𝘪𝘰𝘯.” This ‘slump’ included falling Brazilian real futures on #CME, what continued after Tuesday’s settle. And this fall went into overdrive mode during the Brazilian night: a 5 percent drop within 15 minutes. This sell-off recovered before Wednesday’s opening of the Brazilian markets. No doubt, some of the participants that sold will regret they did so hastily. No doubt, various other participants regret they didn’t seize the opportunity to buy. And no doubt, CME market supervision will have observed this short term volatility. But they didn’t intervene. We fully understand this. Nothing went wrong. The market reacted to news. One could say, it overreacted. But that’s standard human behaviour. People often overreact. People often lose patience. However, that doesn’t qualify them incapacitated. The market participants selling sold at prices they wilfully offered. And other participants just as wilfully took those offers. The quick recovery of the Brazilian real futures demonstrated that the market as a whole is healthy. My firm belief: The market as a whole is healthy because the exchange as a facilitator respects the choices wilfully made by the participants that trade the markets on the exchange. Sometimes, exchanges do not. On Thursday, we offered to sell Arabica Coffee on #ICE at 317. Immediately after the opening auction, one or more other participants wilfully took our offer. Only the thinness of the fibre connection withheld us from a hand shake, as is standard in this electronic age. But then ICE intervened. While no participants had been trading at 314 – or had come close to trading at 314 during the opening auction – ICE had determined that 314 was the ‘fair value’ on the opening. Our wilfully agreed trades were therefor considered unrepresentative and adjusted to 315.25. As if this wasn’t already absurd enough: the first traded price after our 317 was 316.4. This was not considered to be an unrepresentative trade. So, our price was adjusted to a level even lower than a level that was considered representative! At times we long for the old days: two participants make a deal and shake hands.  

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🔔 A dive into the markets –May 30, 2025 1.    US exceptionalism under pressure Key takeaways ➡️ Trade war: Trump opened a new phase in the trade war, releasing letters outlining steep tariffs against major trading partners effective from August 1. A new 50% tariff on copper. ➡️ Macro: the Big Beautiful Bill makes winers and losers. The US economy still in good shape, but cracks looming. The labour market remains solid, but signs of cooling are emerging. Consumer spending remains uncertain. Weak US retail sales and manufacturing output point to softening economy. The Big Beautiful Bill is posing a threat to America’s energy future and growth. Inflation outlook uncertain. FED waiting for more clarity. ➡️ Corporate outlook: Q2 earnings estimates revised down. Decent forecasts for the months ahead, which we take with a bit of caution. Valuations not cheap. 2.    INVESTMENT CONCLUSIONS ➡️ US equities - Underweight maintained. The sharp rebound in equities since the Liberation Day turmoil suggest investors have not really been pricing in the risks that are coming to the surface. ➡️ US fixed income. While bonds offer attractive absolute yields, we think investors are not well rewarded for taking duration risk in the current environment. We continue to favour Credit over Government bonds as their shorter duration characteristics offer better protection against interest rates volatility. Corporate Investment Grade and High yield remain supported by strong fundamentals and low default rates. Selectivity needed. 3.      HOW TO PLAY IT? To implement our views, we use a mix of active funds and index trackers to build a well-diversified portfolio in terms of geography and asset classes. We allocate asset across selected strategies from: Aquila AM, AXA IM, Aberdeen, Blackrock, Candriam, Evli, FranklinTempleton, JPMorgan, Jupiter, Muzinich, NeubergerBerman, Nomura, AmplegestOcto, IVO, WisdomTree, iShares, Amundi. More information on request 👉 We invite you to read the full report inside for more detailed information. 👉 Extended asset allocations and model portfolios are available on request. ❗ For professional investors only. ❗ No investment advice. Do your own research. Investing can lead to substantial losses   #macroeconomics #japan #europe #US #china #India #tariffs #assetallocation #equities #bonds #fundselection #geopolitics #inflation #interestrates #centralbanks #funds

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China ramps up efforts to establish Hong Kong gold hub with major moves in public, private miners and new market infrastructure | Kitco News https://lnkd.in/duhM6UFH

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The Financial Times Sunday has a great overview of China’s economy and its challenges by Eswar Prasad. I see growing risk that the US makes China’s currency a focal point in 2026, and pushes harder for reforms in China including a RMB revaluation of some kind. Treasury’s next FX report is due and could set the stage for such actions. Meanwhile, balance of payments-driven tariffs are a likely tool for the US if the Supreme Court Court strikes down reciprocal “Liberation Day” tariffs. It’s worth thinking through what this could mean for markets more generally if it happens. https://lnkd.in/eWmVPJSn

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𝑼.𝑺. 𝒈𝒓𝒐𝒘𝒕𝒉 𝒇𝒐𝒓𝒆𝒄𝒂𝒔𝒕 𝒄𝒖𝒕 𝒔𝒉𝒂𝒓𝒑𝒍𝒚 𝒃𝒚 𝑶𝑬𝑪𝑫 𝒂𝒔 𝑻𝒓𝒖𝒎𝒑 𝒕𝒂𝒓𝒊𝒇𝒇𝒔 𝒔𝒐𝒖𝒓 𝒈𝒍𝒐𝒃𝒂𝒍 𝒐𝒖𝒕𝒍𝒐𝒐𝒌 Economic growth forecasts for the U.S. and globally were cut further by the Organisation for Economic Co-operation and Development as President Donald Trump’s tariff turmoil weighs on expectations. The U.S. growth outlook was downwardly revised to just 1.6% this year and 1.5% in 2026. In March, the OECD was still expecting a 2.2% expansion in 2025. The fallout from Trump’s tariff policy, elevated economic policy uncertainty, a slowdown of net immigration and a smaller federal workforce were cited as reasons for the latest downgrade. Global growth, meanwhile, is also expected to be lower than previously forecast, with the OECD saying that “the slowdown is concentrated in the United States, Canada and Mexico,” while other economies are projected to see smaller downward revisions. “Global GDP growth is projected to slow from 3.3% in 2024 to 2.9% this year and in 2026 ... on the technical assumption that tariff rates as of mid-May are sustained despite ongoing legal challenges,” the OECD said. It had previously forecast global growth of 3.1% this year and 3% in 2026. “The global outlook is becoming increasingly challenging,” the report said. “Substantial increases in barriers to trade, tighter financial conditions, weaker business and consumer confidence and heightened policy uncertainty will all have marked adverse effects on growth prospects if they persist.” Frequent changes regarding tariffs have continued in recent weeks, leading to uncertainty in global markets and economies. Some of the most recent developments include Trump’s reciprocal, country-specific levies being struck down by the U.S. Court of International Trade, before then being reinstated by an appeals court, as well as Trump saying he would double steel duties to 50%. The OECD adjusted its inflation forecast, saying “higher trade costs, especially in countries raising tariffs, will also push up inflation, although their impact will be offset partially by weaker commodity prices.” The impact of tariffs on inflation has been hotly debated, with many central bank policymakers and global analysts suggesting it remains unclear how the levies will impact prices, and that much depends on factors like potential countermeasures. The OECD’s inflation outlook shows a notable difference between the U.S. and some of the world’s other major economies. For instance, while G20 countries are now expected to record 3.6% inflation in 2025 — down from 3.8% in March’s estimate — the projection for the U.S. has risen to 3.2%, up from a previous 2.8%. U.S. inflation could even be closing in on 4% toward the end of 2025, the OECD said.

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Headline: Yen Carry Trade Unwind – Impact on Mining 🫵 The fallout 👉 Yen surge (USD/JPY 161 → ~150-155) and BoJ tightening to 0.5% are forcing $1–2T+ of deleveraging. 👉 Mining stocks (GDX, ASX miners, TSX juniors) are among the hardest-hit leveraged risk assets – down 12–25% in three weeks, underperforming the metals themselves. 👉 Base-metal miners (copper, nickel, iron ore) crushed by falling prices and EM currency collapses (Chile, Peru, Brazil, Australia). 👉 Gold miners sold off sharply despite flat-to-higher gold price; lagging spot gold by 8–12% due to forced liquidation. 🫵 Blowback 👉 Cost inflation spike Stronger yen raises capex/opex for Japanese-linked projects; weaker EM currencies inflate USD-denominated debt and diesel/equipment costs. 👉 Liquidity drought Project finance, streaming/royalty deals, and junior equity raises frozen as carry-funded capital flees. 👉 Bright spot Gold and critical-minerals exposure (lithium, rare earths) will rebound fastest once deleveraging exhausts; majors with strong balance sheets (Newmont, Barrick, BHP core assets) best positioned. 🫵 Bottom line for mining The sector is in the eye of the carry-trade storm. Expect another 6–12 months of pain and forced restructuring, followed by a sharper bifurcation between surviving Tier-1 assets and the rest.

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🔴 $40 Billion. That’s Taiwan’s answer. President Lai Ching-te just unveiled a supplementary defense budget that rewrites the island’s security calculus — and global risk models. 🟠 2027 is the deadline. Not for peace, but for peak military readiness. Three years to transform deterrence into doctrine. In defense planning, that’s lightning speed. 🟡 The context: This isn’t routine spending. It’s a strategic hedge against escalating Chinese pressure. For finance pros, it’s a geopolitical risk premium made tangible — a line item that signals where capital flows must now factor in contingency planning. 🟢 Market tremors: Defense contractors, rare earth supply chains, semiconductor resilience — all get repriced. Asia’s risk-free rate suddenly looks like an oxymoron. 🔵 Investment lens: Taiwanese equities, USD-denominated defense bonds, and NATO+ allies’ military tech suppliers face asymmetric upside. But the real alpha? Supply chain redundancy plays as multinationals diversify away from concentrated China exposure. 🟣 The question: Is $40 billion enough to shift the correlation between Taiwan’s economy and its survival risk? Or is this the first of many budgets that will dwarf traditional fiscal metrics? #Taiwan #China #GeopoliticalRisk #DefenseSpending #GlobalMarkets #EmergingMarkets #MilitaryBudget #PortfolioManagement #MacroEconomics #LinkedInFinance

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The Chinese Renminbi continues to act as an anchor for EMFX: => The daily fix is being guided stronger despite the tariffs and geopolitical noise (we moved to the 7.16/USD handle today vs. 7.21/USD around the liberation day) => RMB spot has been trading close to the daily fix for some time now => This is a departure from China’s response during the first trade war (back in 2018), when China let the renminbi weaken to compensate for a loss of competitiveness. And it reflects some fundamental changes in China, including less dependency on the U.S. in foreign trade and reducing some negative domestic tail risks (real estate and local governments’ “hidden debt”).

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