United States

• The US Court of International Trade ruled that the bulk of Trump’s new import taxes were issued illegally because the administration wrongfully invoked an emergency law to justify them. While a federal appeals court temporarily paused the ruling from taking effect, the case will likely end up before the US Supreme Court.
• The Fed held rates at 4.25% - 4.5%, a ‘wait-and-see’ approach.
• The S&P 500 Index gained 6% in May as investors continued to look past trade policy confusion together with strong company earnings. Government long bonds sold off, after Moody’s stripped the US of its triple-A credit rating and ongoing worries about the US budget deficit. The Bloomberg Global Aggregated Bond Index subsequently dropped 0.4%

UK/Europe

• The Bank of England (BoE) cut its key policy rate by a quarter of a percentage point to 4.25%.
• Industrial production in the Euro-area improved noticeably in March 2025, suggesting that the sector is emerging from a two-year recession. Germany’s industrial output surged by 3.1% m/m.

Asia

• • In a surprising turn of events China and the US concluded a deal to reduce trade tariffs for the next 90 days as they continue to move towards reaching a more nuanced trade deal.
• The People’s Bank of China cut the one and five-year loan prime rates.
• Japan’s economy shrank for the first time in a year, contracting 0.2% in the March quarter as exports declined sharply. On a year-on-year basis, however, Japan’s GDP expanded 1.7%.

South Africa

• Finance Minister, Enoch Godongwana, presented a less controversial SA Budget ‘version 3.0’, which includes some ‘budget cuts’ but also lower revenue forecasts. Government debt as a percentage of GDP is expected to increase to 77.4% in 2025/2026.
• The SARB announced a 25bp cut to the benchmark repo rate. The prime lending rate now stands at 10.75%.
• The FTSE/JSE All Share Index was up more than 3% in May, with contributions from all major sectors. The biggest contribution came from platinum stocks such as Implats and Northan Platinum Holdings, which were up more than 10%.
• Investors are piling into debt after SARB Governor, Lesetja Kganyago, argued strongly for a reduction of the inflation target down to 3%. Yields on 10-year government bonds dropped 40 basis points, with the JSE All Bond Index up 2.7% in May.