UK To End Ban On Retail Investors Buying Crypto Exchange-traded Notes

Cryptocurrency

Summary:

Britain's financial regulator is to remove a ban on consumers buying crypto exchange-traded notes (ETNs), ditching its previous position of wanting to keep them out of the hands of retail investors.

The Financial Conduct Authority said on Friday that allowing retail investors to buy ETNs would support growth and competitiveness, in the latest sign that the UK is shifting its approach to crypto as the government seeks to grow the economy and support a digital assets industry.

Last year the FCA had approved the launch of crypto ETNs for professional traders but banned retail investors from access, calling the products "ill-suited" because of "the harm they pose".

"We want to rebalance our approach to risk and lifting the ban would allow people to make the choice on whether such a high-risk investment is right for them given they could lose all their money," David Geale, executive director of payments and digital assets at the FCA, said in a statement on Friday. The proposal will now go out for consultation.

Britain in April published draft laws for bringing cryptocurrencies under compulsory regulation for the first time, aligning it with the United States' approach, rather than the European Union, which has built rules tailored to the industry.

To be sold to individual consumers, the ETNs will need to be traded on an FCA-approved investment exchange, the regulator said.

A ban on retail investors trading cryptoasset derivatives would remain, the watchdog added.

Source: Yahoo Finance

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Damon

Economic

German Chancellor Friedrich Merz's meeting with U.S. President Donald Trump was dramatically overshadowed by the U.S. leader's spat with Elon Musk. But it was still seen as a win for Merz.

"Being sidelined is not necessarily always a bad thing," Carsten Brzeski, global head of macro at ING, told CNBC on Friday. "In fact, it might have even helped Merz as the Musk distraction was also deviating attention away from more controversial topics.

It was a high-stakes trip for Merz, who is just a few weeks into his chancellorship, especially given the treatment other leaders have gotten from Trump in the Oval Office in recent months.

As such, Merz is unlikely to be disappointed about the outcome — especially given the potential downsides.

"Having avoided an escalation in the Oval Office is already an achievement these days," Brzeski added.

A full agenda

Merz arrived in D.C. with a full agenda that ranged from strengthening relations between the U.S. and Germany, to tariffs — which could significantly impact key German industries — as well as U.S. support for Ukraine in its war with Russia and higher NATO defense spending.

While we don't know what was discussed behind closed doors, Merz was seemingly able to address most of these points with Trump, political strategist Julius van de Laar told CNBC's "Squawk Box Europe" on Friday.

What Germany's Merz wants to tackle in Trump meeting

"I think what Friedrich Merz got across is that he hopes that the U.S. president will continue to support Ukraine," he said, noting that the issue had gathered momentum recently given several significant attacks. Merz was able to pick up on this, and draw links to the anniversary of D-Day a day after their meeting.

"And he said the United States played a great role in ... freeing Europe from the Nazi regime back then, and so he's hoping that Donald Trump will ... say we're going to get engaged again and help Europe become free of dictatorship," van de Laar said.

Merz making this point was important in the context of highlighting the U.S-German relationship, according to Jackson Janes, senior resident fellow at the German Marshall Fund. Speaking to CNBC's "Squawk Box Europe," he also pointed out that Trump was gifted his grandfather's birth certificate by Merz, "making the point 'you have a relationship with Germany in your own family.'"

German Chancellor Friedrich Merz presents US President Donald Trump with what Merz said was the birth certificate of Trump's grandfather, who was born in 1869, during a bilateral meeting in the Oval Office of the White House in Washington, DC, on June 5, 2025.

Janes also noted that Merz highlighting Germany's plans for higher defense spending would have marked a positive note in the discussion.

Germany recently changed its fiscal rules to allow for higher defense spending, and Merz's government seems to be making it a priority. The chancellor has promised a financial push to boost the German military, and the country's foreign minister has suggested support for Trump's proposal that NATO members spend 5% of their gross domestic product on defense.

Germany backs Trump's push for 5% NATO defense spending target

Meanwhile, the sensitive topic of Germany's far-right party, the Alternative fuer Deutschland, was seemingly avoided. Officials in the Trump administration have in recent weeks come out in support of the party after German intelligence services classified it as a "proven right-wing extremist organization."

This led to clapbacks from German politicians, with Merz himself warning the U.S. not to get involved. The classification of the AfD is currently on hold amid a legal challenge.

'A home run' for Merz

All in all, Merz's visit to D.C. was seen as "a home run or a hole in one," van de Laar said.

ING's Brzeski also suggested that the trip laid good foundations between the leaders. "There seems to be some common grounds between Trump and Merz, which could be the seeds for a more constructive relationship," he said.

Merz even appeared to get some compliments from Trump, with the president commending him for his English skills and saying that while "difficult," the German leader was a "very good man to deal with."

Following the meeting, Merz appeared satisfied, saying in a social media post that the atmosphere was "really good," and that the two have much in common. "I am coming back with the feeling that we can speak on the phone any time," he said, according to a CNBC translation.

But even an in-person reunion might not be too far off: a Trump trip to Berlin is already being planned, Merz told German media.

Source: CNBC

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Manuel

Economic

China–U.S. Trade War

President Donald Trump said his Chinese counterpart Xi Jinping had agreed to restart the flow of rare-earth materials, as negotiators from the two nations prepare to resume trade talks on June 9 in London.

The developments come as the world’s two largest economies look to resolve a simmering dispute over tariffs and technology that has unnerved markets. Trump and Xi held a 90-minute call on Thursday that saw the two agree to defuse growing tensions spurred by concerns over the flow of critical minerals needed by American firms.

US Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick and US Trade Representative Jamieson Greer are set to meet Monday “with Representatives of China, with reference to the Trade Deal,” Trump said Friday on social media. “The meeting should go very well.”

Earlier talks between the two countries in Switzerland in May resulted in a tariff truce between Beijing and Washington that set the stage for further discussions on trade. But negotiations between the rivals stalled after the Geneva meeting, with both sides accusing the other of violating the agreement that brought down duties from massive highs.

The US expressed concerns over the lack of rare-earth magnets essential for American electric vehicles and defense systems, while China bristled at fresh US restrictions on artificial intelligence chips from Huawei Technologies Co., as well as other advanced technologies and crackdowns on foreign students in the US.

Asked Friday if Xi had agreed to restart the flow of rare-earth minerals and magnets, Trump told reporters on Air Force One: “Yes he did.”

China also approved temporary export licenses to critical mineral suppliers to major US automakers, Reuters reported earlier.

But questions remain about what Trump conceded to Xi in their call, which the US president had eagerly sought. The Chinese Foreign Ministry in a statement said that Trump told Xi Chinese students are welcome to study in the US, and Trump later said it would be his “honor” to welcome them.

The call between Trump and Xi generated some hope on Wall Street for lower duties between the US and China, although investor optimism was limited, citing the lack of details on key matters and the thorny issues that await negotiators.

The inclusion of Lutnick in the new round of talks may signal that Trump is willing to reconsider some of the technology curbs that threaten to hobble China’s long-term growth ambitions.

Source: Bloomberg

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Manuel

Central Bank

The Federal Reserve announced on Friday that Michael Horowitz will serve as the central bank's new inspector general.

Horowitz, who most recently served as the Justice Department's inspector general, or IG, replaces Mark Bialek, who retired in April after serving in that role since 2011. As Fed IG, Horowitz is also responsible for serving as the independent watchdog of the Consumer Financial Protection Bureau.

While serving as the DOJ's watchdog, Horowitz also chaired a committee of 21 federal inspectors general charged with overseeing $5 trillion in relief spending tied to the COVID-19 pandemic. He also chaired the Council of the Inspectors General on Integrity and Efficiency and has been a member of the U.S. Sentencing Commission.

Earlier, he served as an assistant U.S. attorney in the Southern District of New York and was chief of its public corruption unit.

The Fed's IG is unusual among government watchdogs for being selected by the chair of the central bank. Some senators, who contend that arrangement makes it impossible for the IG to conduct real oversight over the central bank, have introduced legislation that would have the president select the IG, who would then be subject to Senate confirmation.

The central bank IG was most prominently in the public's eye in the aftermath of the central bank's trading controversy, which saw the office weigh in on the propriety of some Fed officials' trading activities. Bialek, the former IG, faced a tough hearing in Congress in 2023 and generated controversy over his defense of his high level of compensation.

Source: Reuters

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Manuel

Stocks

Economic

The U.S. stock rebound has driven key indexes to the cusp of record levels, with fresh economic data and trade and fiscal policy developments set to test whether equities will get an extra push higher in the near term.

A monthly U.S. inflation report headlines the events for markets in the coming week.

Equities have bounced back from a steep fall in April, sparked by concerns about the economic fallout from President Donald Trump's tariff plans. Stocks ended the week on a high note, with the S&P 500 closing on Friday above 6,000 for the first time since late February, buoyed by a monthly U.S. jobs report that calmed worries about the economy.

The benchmark S&P 500 ended on Friday 2.3% off its record closing high from February.

"I'd still say it's a cautious tone" in the market, said Jim Baird, chief investment officer with Plante Moran Financial Advisors. Despite a "recovery off the lows, I still think it's a market that is looking for greater clarity."

Some uncertainty stems from how the U.S. economy is weathering the shifting trade backdrop. Trump has eased back on some of the harshest tariffs since his April 2 "Liberation Day" announcement sent stocks tumbling, but investors are waiting to see how other levies may be rippling through the economy.

The consumer price index report for May, due on Wednesday, could give insight into the tariff impact at a time investors are wary of any flare-ups in inflation.

"Consumers are feeling the impact of higher prices and if there are indications that near-term inflation could re-accelerate, that is going to put further pressure on discretionary spending and ultimately could lead to a more pronounced slowdown in growth," Baird said.

The CPI report will be one of the last key pieces of data before the Federal Reserve's June 17-18 meeting. The U.S. central bank is widely expected to hold interest rates steady at that meeting, but traders are pricing in nearly two 25-basis point cuts by the end of the year.

"If we see inflationary data that defies what people are concerned about based on this tariff talk and it comes in cooler, then that could also be a catalyst to at least test those old highs," said Jay Woods, chief global strategist at Freedom Capital Markets.

For the year, the S&P 500 is up 2%. But the index has stormed back over 20% since April 8, at the depth of the stock market's plunge on concerns over the tariff fallout.

Investors also are grappling with uncertainty over a sweeping tax-cut and spending bill under review in the U.S. Senate. Wall Street is monitoring how much the legislation could stimulate economic growth, but also inflate the country's debt burden as widening fiscal deficits have become a central concern for markets in recent weeks.

"As debt increases, it has a greater negative impact on growth," said Kristina Hooper, chief market strategist at Man Group.

The legislation also appeared to be the source of a severe rift between Trump and Tesla chief Elon Musk, which weighed on stock indexes. Former Trump ally Musk called the bill at the heart of Trump's agenda a "disgusting abomination," while Trump said he was "disappointed" by the billionaire's public opposition.

Trade talks also remain at the forefront of markets, with a 90-day pause on a wide array of Trump's tariffs set to end on July 8. Trump said on Friday three of his cabinet officials will meet with representatives of China in London on Monday to discuss a trade deal.

"When it comes to policy from Washington, D.C., there are still big question marks," said Bob Doll, chief investment office at Crossmark Global Investments.

Source: Reuters

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Manuel

Economic

Forex

Treasuries slumped after stronger-than-expected US job and wage growth prompted traders to trim bets that the Federal Reserve will cut interest rates this year.

The Friday selloff lifted yields across maturities by as much as 12 basis points, led by shorter-dated tenors more sensitive to Fed rate changes. The benchmark 10-year note’s rate rose 12 basis points to 4.51%, and yields across the spectrum once again exceeded 4%. Traders Reel In Fed Cut Bets as Strong Job Data Drags on Bonds_1

Traders Reel In Fed Cut Bets as Strong Job Data Drags on Bonds_1

Interest-rate swaps showed traders now see a roughly 70% chance of a quarter-point rate cut by September, compared with a probability of about 90% on Thursday. The amount of easing priced in for the year declined to about 43 basis points, fewer than two quarter-point cuts.

“You are seeing a little bit of the bond market reaction here of pricing out a bit of the expectations in terms of the Fed,” Jeffrey Rosenberg, portfolio manager at BlackRock Inc., said on Bloomberg Television. “The big takeaway is a slowing-but-still strong labor market.”

Nonfarm payrolls increased 139,000 last month after a combined 95,000 downward revisions to the prior two months. The median forecast of economists was for an increase of 126,000. The unemployment rate held at 4.2%, while hourly wages picked up.

Gains for US equities also curbed demand for bonds. The S&P 500 rose about 1%.

Following the job report, President Donald Trump urged the Fed to cut rates by a full point, intensifying his pressure campaign against Chair Jerome Powell.

Fed policymakers have said they are waiting for more data before lowering rates as they balance the risks of still elevated inflation and a potential economic slowdown. Officials have said it could take months to gain clarity on the economic impacts of sweeping policy changes, particularly around trade.

Consumer price index data for May, scheduled to be released June 11, is expected to slow acceleration, according to the median economist estimates in a Bloomberg survey. The overall rate is seen rising to 2.5% from 2.3%, the core rate to 2.9% from 2.8%.

Fed officials traditionally observe a communications blackout beginning the second Saturday before a meeting, a period that begins June 7. Also ahead next week are Treasury auctions of three- and 10-year notes and 30-year bonds, whose expected yields are higher as a result of Friday’s selloff.

This week’s data has painted a mixed picture of the job market amid the uncertainties of the Trump administration’s tariff wars. ADP private-sector payrolls showed hiring decelerated in May to the slowest pace in two years, while job openings unexpectedly rose in April.

“There’s nothing here to change the status quo for the Fed,” said Ed Al-Hussainy, a rates strategist at Columbia Threadneedle Investment, referring to Friday’s report. “Some downside bets on Fed cuts this summer will likely come out.”

Economists at Citigroup — whose Fed policy forecast was among the most dovish on Wall Street — revised it based on the jobs report. They expect a rate cut in September versus July previously, and at each of the subsequent four meetings through March.

That remains a notably dovish call. The most common forecast among major Wall Street banks is for just one cut this year, in either September or December.

Traders are still wagering on policymakers keeping rates on hold at their June 17-18 gathering, and see only about 12% odds of a move in July.

“The jobs number takes June and July off the table,” said Kevin Flanagan, head of fixed income strategy at WisdomTree. “We continue to play this waiting game and with no visible slowing in jobs, the market now turns to focusing on whether the disinflation trend continues with CPI next week.”

What Bloomberg strategists say...

“While the initial bond reaction has focused on the earnings beat (and possibly the marginal headline beat), in aggregate this data doesn’t really move the needle on our understanding of the labor market.” — Cameron Crise, Markets Live Blog macro strategist

In the currency market, a Bloomberg gauge of the dollar rose to the day’s high after the release of the report, trimming its loss this week to 0.4%.

The Treasury selloff undermined popular wagers that longer-term yields would continue rising more than shorter-term ones. Based on expectations for Fed rate cuts capping short-term yields and for persistent budget deficits causing investors to demand higher long-term yields, so-called curve-steepening trades have been working since March.

This week, however, the gap between five- and 30-year yields narrowed about 12 basis points, the most since October.

Source: Bloomberg

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Manuel

Economic

Political

U.S. President Donald Trump is not interested in talking with Elon Musk, a White House official said on Friday, signaling the president and his former ally might not resolve their feud over a sweeping tax-cut bill any time soon.

The White House official, speaking on condition of anonymity, said no phone call between Trump and the Tesla CEO was planned for the day. Earlier, a different White House official had said the two were going to talk.

In interviews with several U.S. media outlets, Trump said he was focused on other matters.

"I'm not even thinking about Elon. He's got a problem, the poor guy's got a problem," he told CNN.

Trump may get rid of the red Tesla Model S that he bought in March after showcasing Musk's electric cars on the White House lawn, the official said.

Musk, for his part, did not directly address Trump but kept up his criticism of the massive Republican tax and spending bill that contains much of Trump's domestic agenda.

On his social-media platform X, Musk amplified remarks made by others that Trump's "big beautiful bill" would hurt Republicans politically and add to the nation's $36.2 trillion debt. He replied "exactly" to a post by another X user that said Musk had criticized Congress and Trump had responded by criticizing Musk personally.

People who have spoken to Musk said his anger has begun to recede and they think he will want to repair his relationship with Trump, according to one person who has spoken to Musk's entourage.

The White House statements came one day after the two men battled openly in an extraordinary display of hostilities that marked a stark end to a close alliance.

Tesla stock (TSLA.O), rose on Friday, clawing back some losses from Thursday's session, when it dropped 14% and lost $150 billion in value, the largest single-day decline in the company's history.

Musk's high-profile allies have largely stayed silent during the feud. But one, investor James Fishback, called on Musk to apologize.

"President Trump has shown grace and patience at a time when Elon’s behavior is disappointing and frankly downright disturbing," Fishback said in a statement.

Musk, the world's richest man, bankrolled a large part of Trump's 2024 presidential campaign. Trump named Musk to head a controversial effort to downsize the federal workforce and slash spending.

Trump feted Musk at the White House a week ago as he wrapped up his role as head of the Department of Government Efficiency. Musk cut only about half of 1% of total spending, far short of his brash plans to axe $2 trillion from the federal budget.

Since then, Musk has denounced Trump's tax-cut and spending bill as a "disgusting abomination." His opposition is complicating efforts to pass the bill in Congress where Republicans hold a slim majority.

Trump's bill narrowly passed the House of Representatives last month and is now before the Senate, where Republicans say they will make further changes. Nonpartisan analysts say the measure would add $2.4 trillion in debt over 10 years.

House Speaker Mike Johnson said he has been texting with Musk and hopes the dispute is resolved quickly.

"I don't argue with him about how to build rockets and I wish he wouldn't argue with me about how to craft legislation and pass it," Johnson said on CNBC.

'VERY DISAPPOINTED'

Trump had initially stayed quiet while Musk campaigned to torpedo the bill, but broke his silence on Thursday, telling reporters he was "very disappointed" in Musk.

Musk, who spent nearly $300 million in last year's elections, said Trump would have lost without his support and suggested he should be impeached.

Trump suggested he would terminate government contracts with Musk's businesses, which include rocket company SpaceX and its satellite unit Starlink.

The billionaire then threatened to decommission SpaceX's Dragon spacecraft, the only U.S. spacecraft capable of sending astronauts to the International Space Station. Musk later backed off that threat.

Musk had been angered when Trump over the weekend revoked his nomination of Musk ally Jared Isaacman to head the U.S. National Aeronautics and Space Administration. Two sources with direct knowledge of the dispute said White House personnel director Sergio Gor had helped turn Trump against the Isaacman by highlighting his past donations to Democrats.

Musk and Gor had been at odds since the billionaire criticized Gor's pace of hiring at a March cabinet meeting, the two sources said.

A White House spokesperson, Steven Cheung, praised Gor's efforts to staff the administration but did not address his relationship with Musk.

A prolonged feud could make it harder for Republicans to keep control of Congress in next year's midterm elections if Musk withholds financial support or other major Silicon Valley business leaders distance themselves from Trump.

Musk had already said he planned to curtail his political spending, and on Tuesday he called for "all politicians who betrayed the American people" to be fired next year.

His involvement with the Trump administration has provoked widespread protests at Tesla sites, driving down sales while investors fretted that Musk's attention was too divided.

Source: Reuters

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