PPI Shows Companies Eating Tariff Costs, Bloomberg Finds

Economic

Summary:

"Core goods were the main source of price pressures in May, suggesting that companies may be eating some of the added costs from tariffs."

Earlier today, when analyzing the latest PPI data, we concluded that - at least so far - it is companies that are eating tariffs costs, not passing them on to consumers. In a subsequent report, Bloomberg agrees.

Echoing what we said, Bloomberg writes that the details from the PPI report were less benign than the headline number suggests, as "core goods were the main source of price pressures in May, suggesting that companies may be eating some of the added costs from tariffs."

The increase is particularly visible in finished goods, and specifically durable consumer goods. This category just posted its largest increase since 2023.

But while that is bad news for companies, it is good news for consumers. As Bloomberg further explains, the fact that core goods continue to be a source of disinflation in consumer prices but a source of persistent inflation in producer prices hints at pressure on corporate margins. That can also be gleaned simply from the fact that PPI is running higher than CPI, just as we highlighted earlier.

It certainly should explain "why stocks aren’t over the moon with this report", even if it is good news for consumers as it means that, so far, it is corporations (with or without the benefits of Chinese suppliers) who are footing the cost of Trump's trade war.

Source: Zero Hedge

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Daniel Carter

Political

Economic

Reynolds, who met this week with US Commerce Secretary Howard Lutnick, expressed optimism during a meeting with reporters Thursday about the prospects of reaching an agreement over the UK's car industry.

When asked whether that could come as soon as this week, he said: “I’m very hopeful. It was a specific area of conversation on Tuesday in that bilateral meeting. We are ready to go on our side.”

The comments indicate that there's been some progress in the UK's effort to finalize the terms of a trade deal with the US, which has threatened to impose punitive tariffs on imports from around the world. While the UK in May became the first to announce the outlines of a pact with the US, the details were left up to future negotiations.

Earlier on Thursday, Lutnick said he was similarly hopeful that certain parts of a UK trade deal would become active “in the coming days.”

“We agreed to implement our historic trade deal as soon as possible, starting with the agreed quotas for UK autos, and US beef and ethanol,” he wrote on social media site X.

The tentative agreement initially hashed out between President Donald Trump and Prime Minister Keir Starmer included cutting the US's 27.5% tariff on cars imported from the UK to 10% for the first 100,000 vehicles, prompting relief from high-end British manufacturers such as Jaguar Land Rover.

But the promised elimination of tariffs on UK steel, which currently stand at 25%, is proving trickier to negotiate. While the levy is currently half the 50% the US has placed on all other nations, UK manufacturers have already complained that their orders from the US have dried up and Trump has warned he could increase the UK's tariffs if a deal isn't reached by early next month.

The May agreement struck between the UK and US said the Trump administration would have to be satisfied around the ownership of the UK steel sector. Currently, Chinese operator Jingye Group still owns one of the UK's largest producers, British Steel, though the UK government took operational control of the struggling company earlier this year.

Reynolds said the US had raised the UK's wresting control of British Steel from Jingye in a “strong and affirmative way.” He added that the hurdles to agreeing a deal on steel were now “not about who owns it — it's the melt and pour rules.”

Under previous trade agreements, the US has insisted that steel must be melted and poured in the UK. That requirement is becoming increasingly difficult to fulfill because British Steel is the only producer that still has blast furnaces, after Tata Steel UK closed its own down last year. Tata's electric arc furnace is not due to be usable until late 2027.

Those melt and pour rules are still “part of the discussion that we're having with them,” Reynolds said, adding that he wanted to ensure the reduction to zero tariffs “is something that applies to every bit of the UK steel industry.”

Source: Bloomberg Europe

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Thomas

Economic

U.S. President Donald Trump on Thursday said he would not fire Federal Reserve Chair Jerome Powell, adding that he "may have to force something" as part of his ongoing push for the central bank to lower rates.

"Raise your rates. You don't have to keep them up here. If it's going to go up, I'm okay with you raising--but it's down, and we're going out to financing, and I may have to force something," he said at the White House.

Trump last week had said that a decision on the next Fed chair would come very soon.

Speaking at the White House on Thursday, Trump slammed the Fed chair over the lack of rate cuts, calling him a numbskull but adding: "I'm not going to fire him."

Trump also said he was unhappy about rising oil prices.

Source: Yahoo Finance

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Adam

Forex

The dollar (DX=F) has sunk to its lowest in three years as rapidly changing U.S. trade policy unsettles markets and expectations build for Federal Reserve rate cuts, fuelling outflows from the world's biggest economy.

With the dollar down almost 10% against a basket of major currencies this year, other countries around the globe are grappling with unanticipated FX moves that are having a knock-on impact on economic growth and inflation.

"There's clearly solid dollar selling," said Kit Juckes, chief FX strategist at Societe Generale.

Here's a look at some of the biggest movers:

CROWN JEWELS

Scandinavia's currencies are the standout performers against the dollar so far in 2025. The Swedish crown is up 14%, its best performance at this point in the year against the U.S. currency in at least 50 years. Norway's crown is up nearly 12%, its best run since 2008.

Highlighting just how much of this strength stems from dollar weakness, Sweden's crown is up only 4% against the euro and Norway's just 1.8%.

Sweden is expected to cut rates this month as inflation and its economy slow, yet its currency shows no signs of weakening. In Norway, lower oil prices often temper the crown, but that dynamic has also been upended by its relationship with the dollar.

SAFE-HAVEN WOES

The euro, Swiss franc and Japanese yen are also among the biggest beneficiaries of the dollar's fall from grace, up roughly 10% each so far this year.

But this comes at a price.

Swiss inflation turned negative in May, marking the first decline in consumer prices for more than four years. The surge in the franc reduces the price of imported goods, and piles pressure on the central bank to cut rates back below 0%.

European Central Bank rate setters will also have a wary eye on the single currency, which at around $1.1572 is at its highest since 2021.

"In my heart-of-hearts we are going to get to $1.20 but we shouldn't get there too fast because it's deflationary," said SocGen's Juckes.

Even after the recent surge, the yen remains down almost 30% from end-2020 levels, leaving Japan to try to balance the negatives of a stronger currency with the need to demonstrate in trade talks with Washington that it is not seeking an unfair advantage from its longer-term weakness.

FACTORY ASIA

For years, Asian investors parked trillions of dollars in U.S. assets such as Treasuries. U.S. President Donald Trump's April 2 "Liberation Day" fired the starting gun for that capital to start flowing back to the world's manufacturing powerhouses, boosting their currencies.

Taiwan's dollar surged 10% over two days in May and is up nearly 12% this year, while the Korean won has gained around 10%.

Singapore's dollar, Malaysia's ringgit and Thailand's baht are all up 6% too, but China's yuan - arguably the most exposed to tariffs - has only appreciated by about 2% offshore, hemmed in by the central bank's guardrails around its onshore counterpart.

China wasn't labelled a manipulator in the U.S. Treasury's latest currency report, but the lag in the yuan will not have gone unnoticed in Washington.

OUTLIER

Argentina's peso is an outlier, down around 15% against the dollar and one of this year's weakest performers.

The reasons are domestic with the introduction of a new exchange rate regime in April allowing the peso to float freely within a gradually expanding band that started between 1,000-1,400 pesos per dollar.

Still, the chaotic crash feared by some has been avoided and a recent $20 billion loan agreement with the IMF is positive.

In contrast, Mexico's peso, which was under particular pressure at the start of the year from U.S. trade policy, has bounced back to near its strongest levels since August. While it could gain further if tariff spats are resolved, it is also sensitive to the U.S. economic outlook.

STERLING

Softer data has raised the prospect of Bank of England rate cuts and capped sterling's recent rally to more than three-year highs against the dollar.

The pound is up almost 9% this year and analysts say foreign buyers may be rushing to snap up UK Plc before any further dollar weakness makes future transactions more expensive.

More than $10 billion in bids for British companies were announced on Monday, this year's busiest day, according to Dealogic data.

Analysts do, however, expect sterling to underperform other major currencies bar the dollar, given fiscal worries and weakening growth.

"Sterling is less appealing than others (currencies) and the macro risks are elevated," said Lloyds FX strategist Nick Kennedy.

source : Reuters

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Gerik

Economic

Forex

Global Shifts Triggered by Dollar’s Weakness

The U.S. dollar's rapid depreciation—driven by shifting trade policies under President Trump and growing consensus on upcoming Fed rate cuts—has triggered notable realignments in currency markets. The ICE Dollar Index (DX=F) has dropped to 97.46, pushing other currencies sharply higher in relative terms.

Among the standout performers are the Swedish and Norwegian crowns. Sweden’s currency has surged 14% year-to-date, the strongest half-year performance in half a century. Norway’s crown follows closely with a 12% gain. Yet, against the euro, their appreciation is far more subdued—underscoring that their strength is more about U.S. dollar fragility than domestic economic momentum.

Safe-Haven Gains Come with Deflationary Costs

The euro, Swiss franc, and Japanese yen have all gained roughly 10% this year. However, these gains bring side effects. Swiss inflation turned negative in May, raising the specter of deflation and possibly pushing the Swiss National Bank to consider rate cuts into negative territory once again. The European Central Bank, too, now watches the euro’s rise warily, fearing it could dampen inflation and hurt exports.

Despite its appreciation, the Japanese yen remains 30% weaker than its end-2020 value, leaving Japan caught between the optics of a stronger currency and its historical export competitiveness. With U.S.-Japan trade talks ongoing, Japan is navigating a delicate balance between monetary policy and geopolitical signaling.

Capital Flows Rebalance Toward ‘Factory Asia’

Asian economies are witnessing a reversal of capital flows that long favored U.S. Treasuries. Taiwan’s dollar soared 10% in two days in May alone and has appreciated 12% this year. The Korean won has gained similarly, and Southeast Asian currencies—including Singapore’s dollar, Malaysia’s ringgit, and Thailand’s baht—are up around 6%.

However, China’s yuan lags behind, with only a 2% gain offshore. This reflects tight central bank management and sensitivity to U.S. tariffs. While not branded a currency manipulator in the latest Treasury report, China’s cautious approach is likely a strategic hedge amid ongoing trade friction.

Argentina stands as the outlier, with its peso down 15% following April’s adoption of a new floating regime. The slide has been orderly, and recent support from the IMF ($20 billion) provides a backstop. Mexico’s peso, conversely, has rebounded to near yearly highs as tariff concerns fade and investor confidence returns, making it a barometer of sentiment toward U.S.-Latin America trade ties.

Sterling’s Strength Tempered by Domestic Risks

The British pound has risen nearly 9% against the dollar, buoyed by merger activity and relatively strong capital inflows. Yet, expectations of rate cuts from the Bank of England and persistent fiscal concerns have capped further gains. Analysts suggest sterling could underperform compared to other majors, as macro risks—including softening GDP—remain elevated.

The dollar’s decline is less about the strength of other economies and more about weakening confidence in U.S. monetary and fiscal direction. The anticipated Fed rate cuts, coupled with a chaotic and uncertain trade regime, are undermining the dollar’s status as a global safe haven. While beneficiaries range from Scandinavia to Southeast Asia, the sharp moves are also triggering headaches—from deflation in Switzerland to inflation management in Japan and China.

If this trend persists, it may compel policymakers worldwide to reevaluate interest rate paths and currency interventions—reshaping global monetary coordination in the second half of 2025.

Source: Reuters

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Warren Takunda

Cryptocurrency

Key points:

Bitcoin hits its anticipated $107,000 low before heading higher as US inflation data boosts bulls.

US dollar strength suffers as inflation continues to slow beyond expectations.

BTC price expectations include new all-time highs before the end of the month.

Bitcoin bounced near $107,000 at the June 12 Wall Street open as slowing US inflation data punished the dollar. Bitcoin Bulls Halt $4K BTC Price Dip as US Dollar Hits New 3-Year Lows_1

Bitcoin Bulls Halt $4K BTC Price Dip as US Dollar Hits New 3-Year Lows_1

BTC/USD 1-hour chart. Source: Cointelegraph/TradingView

US PPI beat sparks Bitcoin relief bounce

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD bucking a day of downside after reaching $106,600 on Bitstamp.

Fresh strength followed promising numbers from the US Producer Price Index (PPI), which came in below expectations to show the lowest increase since September 2024.

That trend itself repeated results from the Consumer Price Index (CPI) the day prior — a double tailwind for crypto and risk assets.

As Cointelegraph reported, cooling inflation notionally gives the Federal Reserve room to lower interest rates faster and sooner, something which would aid liquidity inflows to crypto and risk assets.

The Fed has remained hawkish in its stance on policy for 2025, however, despite protests from US President Donald Trump. Bitcoin Bulls Halt $4K BTC Price Dip as US Dollar Hits New 3-Year Lows_2

Bitcoin Bulls Halt $4K BTC Price Dip as US Dollar Hits New 3-Year Lows_2

Fed target rate probabilities (screenshot). Source: CME Group

A look at the latest data from CME Group’s FedWatch Tool now shows markets pricing in the next Fed rate cut at its September meeting. The June 18 meeting of the Federal Open Market Committee (FOMC) remains tipped to offer no change in rates.

As a result of the inflation numbers, US dollar strength took a fresh hit, with the US dollar index (DXY) dropping to its lowest levels since March 2022. Bitcoin Bulls Halt $4K BTC Price Dip as US Dollar Hits New 3-Year Lows_3

Bitcoin Bulls Halt $4K BTC Price Dip as US Dollar Hits New 3-Year Lows_3

US dollar index (DXY) 1-month chart. Source: Cointelegraph/TradingView

Commenting on the current mood, trading firm QCP Capital remained focused on the US-China trade deal while concluding that the trend overall favored crypto bulls.

“Despite a modest pullback, macro conditions remain constructive for further institutional engagement and capital deployment into digital assets,” it summarized in its latest bulletin sent to Telegram channel subscribers.

$116,000 June BTC price target in play

Bitcoin traders were meanwhile uncertain about short-term BTC price action after BTC/USD fell nearly $4,000 in 24 hours.

“At this point I'm fairly certain that if price breaks either the current monthly high or low, that it will keep trending that direction for the rest of June (and possible beyond),” popular trader Daan Crypto Trades predicted in part of his latest analysis on X. Bitcoin Bulls Halt $4K BTC Price Dip as US Dollar Hits New 3-Year Lows_4

Bitcoin Bulls Halt $4K BTC Price Dip as US Dollar Hits New 3-Year Lows_4

“Eyes on those levels.”BTC/USD 1-day chart. Source: Daan Crypto Trades/X

Previously, market participants had anticipated a drop to $107,000, with notorious Hyperliquid trader James Wynn forecasting the day’s bounce zone.

“As of now, structure is still bullish. Bitcoin rejected local supply & is now pushing into demand around 106-107K,” fellow trader Killa continued in his own X post.

“This is quite a important level in terms of market structure, if we are unable to hold, we likely fill the CME gap below.”BTC/USD chart. Source: Killa/X

Killa added that he expected new all-time highs of up to $116,000 to come before the end of June.

Source: Cointelegraph

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Adam

Economic

Stocks

In May, three stocks that released earnings stood out due to their massive sales beats. These names are mid-cap companies with market capitalizations between $2 billion and $10 billion.

Companies of this size are typically less covered by Wall Street analysts, creating larger opportunities for earnings surprises. Indeed, these companies surprised, leading to huge moves in shares.

TMDX’s Sales Rout Forecasts, Boosts Full Year Guidance

One stock that markets have had a love-hate relationship with over the last 52 weeks or so is TransMedics Group (NASDAQ:TMDX). The healthcare company has beaten sales estimates and seen shares rise afterward in three out of its last four releases. However, the one time that the company missed estimates over this period resulted in dire consequences for the stock.

After the company’s Q3 2024 release came out at the end of October 2024, shares dropped 30% in one day.

Luckily for shareholders, TransMedics delivered in its latest release. The company’s Q1 2025 sales came in at over $143 million, around 16% higher than the $123 million analysts expected. This resulted in revenue growth of over 48%, massively faster than the approximately 27% analyst forecasts implied.

This revenue beat enabled the company to post adjusted earnings per share (EPS) of $0.70, more than twice the expected amount. TransMedics also increased the midpoint of its full-year revenue guidance by $34 million, adding fuel to its fire.

The company’s current full-year revenue forecast of $575 million implies growth of 30% compared to 2024. Shares rose nearly 20% in the day following the release. As of the June 10 close, the stock remains down around 20% from its all-time high closing price reached in August 2024.

ECG: +20% Sales Beat, Backlog Up 41% on Data Center Demand

Next up is Everus (NYSE:ECG). This mid-cap construction services stock also handily beat expectations on sales, posting revenue of nearly $827 million in Q1. This was around $150 million higher than forecasted, resulting in a sales beat of over 22%. Sales growth was 32%, approximately four times faster than the Wall Street-anticipated growth of 8%. Aided by this topline number, the company’s non-adjusted EPS rose by 31% to $0.72. Analysts thought the figure would decline by 22% to $0.43.

Shares rose 17% on the day after the results. Although analyst coverage on this stock is relatively light, those that do cover it see a solid amount of upside in shares. Stifel Nicolaus and DA Davidson both raised their targets after the results. The average of their targets is just under $70, implying upside in shares of 16% from their June 10 closing price.

Stifel noted the 41% increase in the company’s order backlog as a reason for boosting its target to $70. The company’s backlog of $3.1 billion is slightly more than all the revenue generated over the last 12 months. This should help give the company a revenue floor going forward, providing it with a solid opportunity to continue growing sales strongly.

The company’s Electrical and Mechanical (E&M) backlog grew particularly fast at 46%. This was largely due to demand from data center buildouts, showing that the company is participating in this growing part of the economy.

Excelerate’s LNG Business Booms in Q1

Last up is Excelerate Energy (NYSE:EE). Excelerate works in the liquefied natural gas (LNG) industry. It has one of the largest fleets of floating storage and regasification units (FSRUs) in the world. FSRUs are massive vessels that can not only transport LNG but can also convert it back into gas and deliver it to land-based receiving terminals.

The company’s Q1 sales were $315 million, beating estimates of $208 million by over 51%. Revenues grew by over 57%, compared to expectations of just 4% growth. Shares rose 10% afterward.

Jefferies recently initiated the stock with a $39 price target, implying upside of nearly 27% from its June 10 closing price. This reflects the rising global demand for LNG and the expectation that the company’s vessels will receive more valuable contracts once their current agreements expire.

However, others fear that LNG supply will significantly outstrip demand by 2030. This would put downward pressure on prices, potentially hurting Excelerate’s investment thesis.

Overall, these three stocks had some of the most impressive sales beats in the market in May. Everus stands out in particular due to its rapid backlog growth, which creates an opportunity for sustained sales growth going forward.