Morning Commentary: Friday 27th June

Ahead of the expiration of President Trump’s 90-day pause on ‘reciprocal’ tariffs on July 9th, the White House has signaled that the deadline is “not critical” and plans to reach agreements with 10 major trading partners over the next two weeks. U.S. Secretary of Commerce Howard Lutnick said that a U.S.-China trade truce has been reached, with China agreeing to deliver rare earth metals. The deal was signed two days ago.

The risk-on mood is picking up across the markets. S&P 500 futures are trading at 6205.5, near new record highs. Spot gold fell $30 overnight and is now trading back below the $3,300 per ounce level.

Back here in the UK, GBP/USD is trading at the 1.37 handle, around the strongest levels since the start of 2021. Although the bulk of the gains this year stem from general dollar weakness rather than a reflection of a robust economy, growth in the UK has been muted, and inflation has remained sticky at 3.4%.

On the economic calendar today, we have France’s CPI and PPI at 7:45 a.m., and the U.S. Core PCE Price Index at 1:30 p.m.—the Fed’s preferred inflation indicator in recent years. The year-on-year figure is estimated to rise to 2.6%, compared to 2.5% previously.

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