France May Toughen Stance On Israel If It Continues Blocking Gaza Aid

Latest news on the Israeli-Palestinian conflict

Political

Summary:

France could harden its position on Israel if it continues to block humanitarian aid to Gaza, French President Emmanuel Macron said on Friday.

France could harden its position on Israel if it continues to block humanitarian aid to Gaza, French President Emmanuel Macron said on Friday, reiterating that Paris was committed to a two-state solution to resolve the Israel-Palestinian conflict.

"The humanitarian blockade is creating a situation that is untenable on the ground," Macron said at a joint press conference in Singapore with Prime Minister Lawrence Wong.

"And so, if there is no response that meets the humanitarian situation in the coming hours and days, obviously, we will have to toughen our collective position," Macron said, adding that France may consider applying sanctions against Israeli settlers.

"But I still hope that the government of Israel will change its stance and that we will finally have a humanitarian response".

Under growing international pressure, Israel partially ended an 11-week long aid blockade on Gaza last week, allowing a limited amount of relief to be delivered under a system that has been heavily criticised.

Macron said Paris is committed to working towards a political solution and reiterated his support for a two-state solution to the Israel-Palestinian conflict.

The existence of a Palestinian state "is not just simply a moral duty but also a political necessity," Macron told reporters in Singapore, in comments broadcast on French TV.

Macron is leaning towards recognising a Palestinian state, diplomats and experts say, a move that could infuriate Israel and deepen Western splits.

French officials are weighing up the move ahead of a United Nations conference, which France and Saudi Arabia are co-hosting between June 17-20, to lay out the parameters for a roadmap to a Palestinian state, while ensuring Israel's security.

Israel launched its campaign in Gaza in response to a Hamas attack in its south on October 7, 2023, that killed some 1,200 people and saw 251 hostages taken into Gaza, according to Israeli tallies.

The war since then has killed more than 54,000 Palestinians, Gaza health authorities say.

Source: Reuters

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Economic

Commodity

Gold Declines Amid Market Uncertainty and Awaited U.S. Economic Data

Gold prices experienced a decline on Friday, tracking an almost 2% loss for the week, as investors awaited crucial economic data from the U.S. The precious metal fell by as much as 0.8% ahead of the release of the personal consumption expenditures (PCE) price index, which is the Federal Reserve’s preferred inflation measure. Market participants are looking to the report for signs of consumer spending and wage growth in April, which could offer further clues on how President Trump’s trade war is influencing the broader U.S. economy.

The sell-off was partially driven by technical factors, with gold failing to break through a key near-term resistance level of $3,328 in recent trading sessions. According to Kelvin Wong, senior analyst at Oanda Asia Pacific, the technical pullback added to the downward pressure, particularly as investors wait for more clarity on the inflation outlook and trade developments.

Uncertainty Surrounding U.S. Tariff Policies Continues to Support Gold’s Haven Appeal

Despite the pullback this week, gold’s appeal as a safe-haven asset remains intact. The precious metal’s value is supported by ongoing uncertainty surrounding President Trump’s tariff agenda. On Thursday, a U.S. federal appeals court temporarily reinstated the tariffs that had been threatened by an earlier court ruling, providing a reprieve for Trump’s trade policies. This uncertainty, combined with tensions between the U.S. and China, has heightened market jitters and bolstered demand for gold as a hedge against economic instability.

Trade negotiations with China have stalled, according to U.S. Treasury Secretary Scott Bessent, while diplomatic tensions have resurfaced with the U.S. revoking Chinese student visas and introducing new restrictions on chip design software sales. These developments add to concerns about the future trajectory of U.S.-China relations, further reinforcing the demand for gold as a store of value.

Gold’s Long-Term Outlook Remains Positive Amid Inflation Concerns

Goldman Sachs remains optimistic about gold’s role as an inflation hedge in long-term portfolios. The investment bank highlighted gold’s potential alongside crude oil to act as a safeguard against inflation, particularly in light of ongoing geopolitical tensions and economic uncertainty.

As of 1:40 p.m. in Singapore, spot gold was trading down 0.5% at $3,300 per ounce. Other precious metals, including silver, palladium, and platinum, also saw declines in line with the broader market sentiment. The Bloomberg Dollar Spot Index rose slightly, reflecting fluctuations in the dollar as the market anticipates the upcoming U.S. economic data.

The recent dip in gold prices is tied to market anticipation of U.S. economic data and ongoing uncertainties surrounding trade policies. While the short-term outlook remains volatile, gold’s status as a haven asset remains strong, supported by persistent concerns over inflation and geopolitical tensions. Investors will likely continue to monitor U.S. economic indicators closely for further signals on the impact of tariffs and the broader economic climate.

Source: Bloomberg

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Glendon

Economic

Forex

(May 30): US President Donald Trump’s administration insists his tariffs are here to stay, one way or another.

The White House spent Thursday triaging the fallout from a pair of rulings that suspended the bulk of his tariffs, imposed under an emergency authority that the courts say he overstepped. A federal appeals court temporarily paused that decision in order to hear arguments, though it could ultimately back the original ruling and block Trump’s tariff policy.

While Trump has vowed to appeal all the way to the Supreme Court if needed, the message from his top aides has been that the president will not be denied his tariff push, and would simply turn to other authorities if needed.

“There’s no Plan B. It’s Plan A,” Peter Navarro, one of Trump’s most hawkish trade advisers, told reporters on Thursday. “Plan A encompasses all strategic options.”

Possible alternatives include Section 232 and 301 powers, which Trump has used previously, or so-called Section 122 powers, which are heavily restricted. He could also seek congressional approval, though that option would be labourious and steal precious Senate floor time from other priorities like judicial nominations and his signature “one big, beautiful” tax bill.

Trump imposed wide-ranging tariffs on nearly every country using the International Emergency Economic Powers Act, or IEEPA, which the landmark trade court ruling on Wednesday evening focused on. Using the IEEPA is essentially a shortcut that allowed Trump to declare an emergency and seize unilateral tariff authority that has historically rested with Congress.

“He wanted to use the sweeping powers of the IEEPA,” Commerce Secretary Howard Lutnick said in a Fox News interview aired on Thursday evening. “Now, he has many, many other laws and authorities that he can use, and he will take them out if he needs to, but right now, he likes the sweeping authority because it lets him deal with everybody who treats us unfairly.”

If Trump’s appeals fail, he may be forced to pivot to other powers to resuscitate his “Liberation Day” tariffs, including those paused at 10% pending negotiations ahead of a July deadline. Also struck down were tariffs related to fentanyl.

Section 122 would allow the president to impose tariffs of 15% — higher than his paused 10% rate, but well below rates of up to 50% he initially announced — and only for as long as 150 days.

Navarro acknowledged on Thursday that it was under consideration but appeared disinterested. “Section 122 only gives you 150 days,” he said in a Bloomberg Television interview. “So there’s your answer right there.” The Wall Street Journal reported late on Thursday that the option was under consideration.

Trump has already used Section 232 powers to enact tariffs on steel, aluminium and automobiles, all of which were enacted based on investigations that predated his current term. He has launched other investigations to add other tariffs under the same authority, including on semiconductors and a raft of consumer electronics that carry them, pharmaceutical drugs, copper and other products.

White House Press Secretary Karoline Leavitt pointed to Section 232 powers as a warning to nations that might see the court setback as leverage.

“These other countries should also know, and they do know, that the president reserves other tariff authorities, Section 232, for example, to ensure that America’s interests are being restored around the world,” she said.

Asked to elaborate on whether that means he would launch new Section 232 probes or fast-track existing ones, she demurred. “I am just simply stating the fact that the president has other legal authorities he can use to implement tariffs, and the administration is willing to use those,” she said.

Leavitt also called on the Supreme Court to side with the administration and codify the wide-ranging IEEPA powers, accusing the courts of overreach. “The Supreme Court must put an end to this for the sake of our Constitution and our country,” she said.

Navarro also pointed to Section 301 powers, which Trump has used against China and which require labourious investigations akin to the 232 probes, and to Section 338 powers. The 338 powers hail from a 1930 law that allows a president to impose tariffs of up to 50% on countries that discriminate against the US; they have never been enacted, according to the Congressional Research Service.

One option Trump has publicly discussed — but not embraced — would be to send his tariff plans to Congress. Republicans only narrowly control the House and Senate, leaving little room to spare if the central pillar of his international economic agenda came up for a vote.

“The horrific decision stated that I would have to get the approval of Congress for these tariffs,” Trump wrote in a Thursday evening Truth Social post. “In other words, hundreds of politicians would sit around DC for weeks, and even months, trying to come to a conclusion as to what to charge other countries that are treating us unfairly.”

While the court cases continue, Navarro signalled the White House may reveal its intentions shortly, saying that US Trade Representative Jamieson Greer will outline the administration’s response to recent tariff rulings the “next day or two”.

Source: Theedgemarkets

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Economic

New Export Licence Requirement Disrupts U.S.-China Ethane Trade

U.S. exports of ethane, a key petrochemical feedstock, have encountered new challenges after the U.S. Commerce Department mandated that companies seek licenses to ship ethane and other goods to China. This move follows an earlier restriction on Chinese imports of U.S. goods, including ethane and butane, and revokes previously granted licenses for some suppliers. The latest action adds to the growing uncertainty surrounding Chinese purchases of U.S. ethane, a market that reached a record high of 492,000 barrels per day in 2024, nearly half of total U.S. ethane exports, according to the U.S. Energy Information Administration.

Ethane is an important feedstock for Chinese petrochemical producers, and any disruption in its supply could have significant consequences for the industry. Despite an existing 125% tariff on U.S. goods, China had previously waived the tariff for petrochemical companies that rely on U.S. ethane, further highlighting the importance of this trade. The U.S. government’s new export control policies are seen as a key factor contributing to market instability.

Impact on Shipping and Supply Chains

The new export restrictions have already led to delays in shipments, with at least two Very Large Gas Carriers (VLGCs) waiting at U.S. ports to load ethane for China. Additionally, 15 more tankers are en route to or are waiting off the U.S. Gulf Coast to load approximately 284,000 barrels per day of ethane for June. This bottleneck illustrates the immediate logistical challenges arising from the new licensing requirement.

Ethane importers, such as Chinese petrochemical company Satellite Chemical, are cautiously monitoring the situation, uncertain about whether exporters can secure the necessary licenses to continue shipments. Analysts have warned that if the restrictions persist, Chinese petrochemical plants could face critical shortages of feedstock, potentially halting production on various projects.

Market Reactions and Potential Consequences

The disruption has already affected stock prices, with shares of ethane importers like Satellite Chemical and Wanhua Chemical dropping 3.1% and 1.3%, respectively. Despite having sufficient stocks in the short term, Chinese producers are at risk of facing supply shortages if these export restrictions persist, which could lead to project delays and higher operational costs.

Julian Renton, an analyst at East Daley Analytics, highlighted that the immediate impact on Chinese firms could be minimal due to existing stockpiles, but longer-term consequences could be significant if the restrictions hold. U.S. producers, for their part, rely heavily on China as a market for natural gas liquids like ethane, which are in surplus domestically but face limited demand within the U.S.

Uncertainty in Global Ethane Supply and Future Trade Relations

This latest development marks another phase in the ongoing trade tensions between the U.S. and China, complicating an already volatile global energy market. The potential for supply disruptions has led to heightened concerns within the petrochemical industry, with some companies like Ineos exploring alternative markets for their ethane cargoes.

The situation remains fluid, and the outcome will likely depend on whether the U.S. government provides further clarity on the licensing process or if China adjusts its approach to the tariffs and licensing requirements. For now, both sides are navigating a complex landscape of trade regulations that could have lasting effects on global petrochemical supply chains.

The U.S. decision to require licenses for ethane exports to China has introduced a new layer of uncertainty into the global petrochemical market. While Chinese companies may have sufficient stockpiles to weather short-term disruptions, prolonged supply shortages could stifle production and delay key projects. As tensions continue to escalate between the U.S. and China, both governments will need to address the regulatory hurdles to prevent further instability in the vital ethane trade.

Source: Reuters

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Economic

Nomura's Commitment to U.S. Growth Amid Market Uncertainty

Nomura Holdings, Japan's largest investment bank and brokerage, remains dedicated to growing its business in the United States, despite recent market volatility triggered by trade tensions and the imposition of sweeping tariffs in April. CEO Kentaro Okuda made this commitment during an investor relations event in Tokyo, emphasizing that while the U.S. market has been the epicenter of global tariff-induced uncertainty, it remains one of the most important regions for business opportunities.

In the fiscal year ending March 2025, the U.S. market accounted for 14% of Nomura’s pre-tax income, underlining its strategic importance to the firm. Okuda’s remarks reflect Nomura’s long-standing ambition to establish itself as a global player, and its continued focus on the U.S. market amid broader economic challenges.

Strategic Moves and Acquisitions

Nomura has been actively pursuing opportunities to expand its global footprint, including its acquisition of the U.S. and European public asset management businesses from Australian Macquarie Group for $1.8 billion—its largest acquisition to date. While previous acquisitions, such as assets purchased from Lehman Brothers in 2008, have yielded mixed results, Nomura’s ongoing investments signal its confidence in long-term growth in the U.S.

However, despite this focus, Christopher Willcox, head of wholesale and chairman of Nomura's asset management division, acknowledged that the dominance of the U.S. market in recent years could be unhealthy. Willcox expressed optimism about the potential benefits of a market rebalancing towards Europe and Asia, which could provide Nomura with further growth opportunities outside of the U.S.

Navigating Market Volatility and Global Trade Risks

The recent wave of market volatility, fueled by U.S.-China trade tensions and global tariff negotiations, has raised questions about the safety and stability of U.S. assets. Despite this uncertainty, Nomura continues to see significant potential in the U.S., driven by both its economic size and the range of business opportunities it offers. The firm’s strategic focus on the U.S. market will likely continue, even as it explores diversification in Europe and Asia to balance its global portfolio.

Nomura’s commitment to expanding its U.S. business highlights its long-term strategic vision despite current market uncertainties. With a significant presence in the U.S. and recent acquisitions strengthening its global standing, Nomura’s leadership is betting on continued growth in one of the world’s largest and most dynamic markets, while also preparing for a potential shift in focus towards Europe and Asia as part of a broader diversification strategy.

Source: Reuters

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Daniel Carter

Economic

Data Interpretation

Gross domestic product fell by 0.2% in the three months through March from the previous quarter when output grew a revised 0.5%, according to seasonally adjusted data published by Statistics Sweden Friday. The figure was below the median estimate of analysts for a 0.1% gain and a flash indicator which signaled output was unchanged.

The first contraction since the fourth quarter of 2023 suggests that an economic recovery in Sweden is faltering despite a series of rate cuts by the Riksbank, just as the global economy is dented by intense uncertainty over the direction of US trade and security policy. While underlying price pressure has also remained stubbornly elevated in Sweden, the data may raise expectations for another reduction in borrowing costs next month.

“Economic activity was weak in Q1 and forward looking signals subdued growth Q2 as well,” said Anders Bergvall, senior economist with Svenska Handelsbanken AB, who also pointed out that household consumption was “significantly weaker” than the Riksbank’s forecast. “Hence, today's outcome supports our view that the Riksbank will cut rates in June.”

The statistics office said the decline was driven by investments, but “strong net exports offset this and helped keep GDP growth around the zero mark.”

Traders in overnight swaps still price in 12 basis point of cuts by the June meeting, the same as on Wednesday. The krona, which has been the best performer this year versus the dollar and the euro in the G-10 space of major currencies, briefly weakened after the release, trading little changed at 10.8656 versus the euro at 8:46 a.m. in Stockholm.

In neighboring Finland, GDP adjusted for seasonal swings stagnated in the first quarter from the prior period, when it grew a revised 0.2%. A flash estimate had indicated an expansion of 0.1%. Output from the forest industry grew, while other manufacturing contracted, and a downturn construction deepened further, the statistics office said.

Source: Bloomberg Europe

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Economic

Appeals Court Halts Trade Court Ruling on Trump’s Tariffs

On Thursday, a federal appeals court granted the Trump administration’s request to temporarily pause a ruling by the U.S. Court of International Trade, which had struck down most of President Donald Trump’s tariffs. The appeals court’s decision allows the tariffs to remain in effect for now, providing the administration with additional time to appeal the decision. The court noted that it would consider further motions related to the case while the legal process continues.

The administration had informed the U.S. Court of Appeals for the Federal Circuit that it would seek emergency relief from the U.S. Supreme Court if the trade court’s ruling was not promptly stayed. The lower court’s ruling had invalidated a significant portion of the tariffs that Trump had implemented as part of his broader strategy to reshape international trade.

Implications for Trade Agenda and Negotiations

The trade court’s ruling had the potential to undermine a central pillar of Trump’s economic strategy—the use of tariffs to alter global trade dynamics. The decision destabilized Trump’s approach, and he quickly condemned the ruling, arguing that it could undermine presidential power and harm the U.S. economy. Trump expressed concern that if allowed to stand, the ruling would dramatically weaken the executive branch’s authority on trade matters.

Trump trade advisor Peter Navarro remarked that even if the administration lost the case, they had other means to impose tariffs. Nonetheless, the ruling appeared to weaken the U.S. negotiating position in ongoing trade talks.

The case is expected to advance rapidly, with both sides bracing for a swift escalation. The appeals court has given the plaintiffs—who include state attorneys general and domestic businesses—one week to respond to the government’s request for a longer stay. The government has until June 9 to file its reply. Given the high stakes, both the Trump administration and the plaintiffs appear prepared for the case to move quickly through the legal system, with the possibility of it reaching the U.S. Supreme Court.

Response from Legal Experts and Plaintiffs

Jeffrey Schwab, a lawyer representing the business plaintiffs challenging the tariffs, described the appeals court’s decision as a procedural step. He expressed confidence that the Federal Circuit would ultimately deny the government’s motion for a longer stay, emphasizing the significant harm the tariffs are inflicting on U.S. businesses. Schwab and other critics of the tariffs argue that the trade measures are causing irreparable damage and are unsustainable in the long term.

The temporary reinstatement of Trump’s tariffs underscores the ongoing legal battle surrounding his administration's trade policies. While the appeals court’s decision provides temporary relief for the Trump administration, the case is expected to proceed rapidly, potentially culminating in a Supreme Court ruling that could have lasting implications for U.S. trade authority and international relations.