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Via RealInvestmentAdvice.com,

The graph below provides a clearer understanding of the US fiscal deficit.

First, focus on the red line below, graphing the ratio of federal debt to GDP.

Note that it is at the same level today as it was in 2021. Similarly, before the pandemic, it had been relatively flat for seven years. This highlights that the deficit problem we have today was exacerbated by recession-prompted fiscal stimulus and the temporary decline in GDP.

To illustrate this more clearly, we created the green line.

This version of the debt-to-GDP ratio assumes zero change in the ratio during recessions. Moreover, it uses the same growth rates as the all-inclusive debt-to-GDP ratio to calculate the growth for periods outside of recession.

As the green line indicates, the ratio today is the same as it was over 10 years ago. Furthermore, it is close to levels seen in the mid-1990s. The takeaway from comparing the two lines is that the ratio of debt to GDP follows a stairstep pattern.

It’s generally flat during periods of growth, while it accelerates during recessions.

The point in playing with the data is not to belittle the deficit problem. Instead, we think it’s essential to acknowledge that the deficit problem is primarily associated with recessionary stimulus. Thus, maybe we should consider how we spend stimulus funds during recessions. In particular, might a focus toward productive stimulus during recessions provide a greater long term economic boost?

Still, if there is no recession in the near future, we might find that today’s deficits are not significantly worsening as some pundits lead us to believe.

Might they be too focused on the deficit amount stated in dollars, rather than as a ratio to our ability to pay for it, i.e., economic growth?

Authored by Maryanne Demasi via The Brownstone Institute,

Just three weeks after Dr Vinay Prasad assumed oversight of vaccines at the FDA, Moderna’s latest Covid-19 vaccine, mNEXSPIKE®, received full approval.

For those who had hoped the mRNA platform would be shelved, the decision landed like a gut punch.

Approved on 31 May 2025, the next-generation shot is intended for adults over 65, as well as individuals aged 12 to 64 with at least one risk factor for severe illness.

And it came under the watch of a man who had spent years demanding greater scientific rigour from the agency.

Prasad had been among the FDA’s most outspoken critics during the pandemic, repeatedly condemning its reliance on surrogate endpoints—such as antibody levels—rather than hard clinical outcomes like reduced hospitalisation or death.

And he didn’t just say it once. He drove the point home, over and over.

“Showing boosters improve neutralizing antibodies or other laboratory measures is not what we need,” he posted on X in July 2022.

“We need randomized control trials powered for clinical endpoints showing boosters improve outcomes that people care about.”

In January 2023, he co-signed a formal Citizen Petition to the FDA stating, “This immunobridging surrogate endpoint has not been validated to predict clinical efficacy.”

Then in March 2023, he made his position even clearer on Substack. “I don’t care about transient antibody titer levels,” he wrote.

But mNEXSPIKE® appears to have been approved primarily using exactly those kinds of data—measures of immune response, not measures of meaningful outcomes.

So, how do we square that?

Technically, the approval aligns with the policy Prasad outlined in a recent New England Journal of Medicine article. 

There, he proposed a two-track system—no further vaccine approvals for healthy adults without RCTs showing clinical benefit—but for older adults and at-risk individuals, immunobridging data could still be acceptable.

So yes, by that standard, mNEXSPIKE® fits the rules.

But it doesn’t erase the discomfort. Because for years, Prasad insisted those very shortcuts—approving Covid vaccines based on antibody levels instead of clinical outcomes—were scientifically flimsy.

Now, under his watch, those same shortcuts are back in play.

When Robert F. Kennedy, Jr. was appointed HHS Secretary, reform didn’t just seem likely—it felt imminent.

Many expected the mRNA shots would be pulled from the market, or at the very least, that new approvals would be frozen until stronger evidence emerged.

Instead, we’ve seen a flood of high-production videos and polished slogans about “restoring public trust.”

To many observers, it looks like transparency on the surface, but business as usual underneath.

Of course, no one said this would be easy.

Having worked in government as a political adviser, I know how hard it is to shift systems that are not only slow and bureaucratic but deeply enmeshed with commercial interests. And no sector is more heavily invested in mRNA than biotech.

This isn’t just about Covid anymore. The pharmaceutical industry has poured billions into mRNA vaccines for RSV, flu, HIV, cancer, and more. Entire product pipelines are now staked on the assumption that the technology is here to stay.

Pulling the plug wouldn’t just alter public health policy—it would tank portfolios, gut R&D budgets, and unleash a political and financial firestorm from some of the most powerful corporate interests on earth.

That’s the kind of pressure Prasad is under now. That’s the reality Kennedy’s team has stepped into.

This is no longer science versus ideology. It’s science versus entrenched industry power.

And many are beginning to worry we’re watching the same playbook unfold—just with better branding.

That’s not what MAHA supporters or vaccine-injured families were hoping for. They’re not asking for tweaks. They want the shots gone. Not revised. Not updated—just gone.

But political reality rarely keeps pace with public demand. Even the most determined reformers can’t move faster than the machinery they’re trying to dismantle.

So where does that leave us?

Facing the hardest task of all—staying in the fight.

Progress may feel glacial, but it is underway.

The CDC has removed routine Covid-19 vaccine recommendations for healthy children and pregnant women.

Prasad’s new framework has halted low-risk approvals unless backed by RCTs.

Yes, the mRNA platform is still alive - and still fiercely protected - but reform was never going to be easy. And it was never going to come all at once.

Republished from the author’s Substack

India's central bank shocked markets this morning when it slashing interest rates (in a 5:1 vote) by a deeper-than-expected half a percent - the third cut in a row - and the largest rate cut since the covid crash, amid falling inflation and lower growth in Asia's third largest economy. It also spiked the amount of liquidity available in the system to kickstart moribund lending. 

The repo rate - the level at which the central bank lends money to commercial banks, influencing borrowing costs for home and car loans - now stands at 5.5%, the lowest in three years, following two previous 25bps reductions in April and February.

Explaining the rationale for the cut, RBI governor Sanjay Malhotra said growth is "lower than our aspirations" and the bank felt it was "imperative to stimulate domestic consumption and investment" amid rising global uncertainties.

Data released last week showed that India's economy grew by 6.5% in the previous financial year ending March. The world's (newly) most populous country remains the world's fastest expanding major economy, although growth has sharply dropped from the 9.2% high recorded in financial year 2023-24. Meanwhile, retail prices in India have slowed faster than expected to 3.16% in April - the lowest in six years - and below the RBI's 4% target, driven down by falling food prices.

RBI has now forecast lower inflation than earlier projected for the year ahead. Inflation for Fiscal Year 2026 has been revised down to 3.7% from 4%, with Q1 (April- June) projected at just 2.9%. Growth forecast remains unchanged at 6.5%. This growth is well below the 8% growth the RBI aspires for.

There was another big surprise in today's announcement: alongside the greater than expected cut, the central bank changed its monetary policy stance from "accommodative" to "neutral", indicating that further rate cuts will depend on how India's growth-inflation dynamic evolves, a move which was viewed as hawkish, and sparking a sharp curve steepening. 

The change in stance suggests the bar for further rate cuts is now higher. As the RBI noted, after 100bps of cuts since February, policy space is now limited.

However, fuller granaries due to a better-than-expected monsoon, weaker prices of commodities like oil - of which India is a net importer - as well as a strong currency are likely to help keep India's inflation in check in the months ahead, allowing the RBI to keep rates low.

The RBI also unexpectedly cut the Cash Reserve Ratio (CRR) rate starting September 2025 , which is set to release INR2.5tn into the banking system. With liquidity already in surplus, overnight rates may now move closer to the SDF, 25bps below the repo rate.

Credit growth remains weak at 9.8% YoY (vs 19.5% a year ago). The CRR cut, to be implemented in four 25bps tranches starting September, aims to improve credit transmission. The Governor noted that announcing the schedule in advance is meant to reassure banks of the RBI’s commitment to supporting liquidity

Some more details from Goldman Sachs:

• Policy rate - lowered by 50bp with a 5:1 vote: The RBI MPC voted 5:1 to lower the policy repo rate by 50bp to 5.50% at the June meeting, vs. an expectation of a 25bp repo rate cut. External Member Bhattacharya voted for a 25bp repo rate cut. Consequently, both the marginal standing facility (MSF) rate and the standing deposit facility (SDF) rate were lowered by 50bp each to 5.75% and 5.25%, respectively.
• Policy stance changed to 'neutral': The MPC changed its policy stance back to 'neutral' from 'accommodative'. The Governor clarified that "after having reduced the policy repo rate by 100 bps in quick succession since February 2025, under the current circumstances, monetary policy is left with very limited space to support growth". We interpret this as the end of the current rate easing cycle with repo rate at 5.50% -- implying ~1% real policy rate on a one-year forward inflation forecast. The RBI may not want the ex-ante real rate below 1%, in our view, especially when the growth outlook is balanced. We had been forecasting a 5.50% repo rate marking the end of the cycle, with 25bp rate cuts each in June and August meetings, but the RBI got there a meeting faster than we expected.
• Growth forecast retained at 6.5% yoy for FY26: The RBI retained their growth forecast at 6.5% yoy for FY26 (GSe: 6.2% yoy), noting strong agricultural sector growth and rural demand, and a resilient services sector underpinning a recovery in urban demand. However, the Governor highlighted downside risks to growth from US "reciprocal" tariff-related uncertainty and prolonged geopolitical tensions.
• Inflation forecast lowered by 30bp to 3.7% yoy for FY26: The RBI lowered its inflation forecast by 30bp to 3.7% yoy (GSe: 3.6% yoy) (Exhibit 1). The Governor highlighted that there is “greater confidence of headline inflation remaining below the target of 4% over the course of the year”. Food inflation is likely to remain benign given higher wheat and pulses (legumes) production. Additionally, Indian Meteorological Department’s expectations of an above-normal monsoon bode well for the production of summer crops. However, the Governor also highlighted upside risks to the inflation outlook from weather and US “reciprocal” tariff-related uncertainty.

• Banking system liquidity:  The RBI announced a cut in the cash reserve ratio (CRR) of 100bp to 3.0% of net demand and time liabilities (NDTL) in four tranches from September to November to ease banking system liquidity further. As per the RBI’s estimate, this measure is expected to release durable liquidity of INR 2.5tn (0.7% of GDP) into the banking system.
• The Governor said that the RBI “remains committed to provide sufficient liquidity to the banking system". With durable liquidity already in surplus in recent months, overnight rates have traded on an average ~20bp below the repo rate from April to June (Exhibit 2), resulting in a significant easing in financial conditions. As a result, overnight rates have come off by more than 150bp from mid-January to now.

India's lower borrowing costs will have a positive growth impact due to improved purchasing power for households, lower input costs for companies and lower debt servicing costs for the government. They will also help homebuyers and a struggling real estate sector.

"This effectively lowers the cost of borrowing, making home loan EMIs [mortgage payments] easier on the pocket and thereby directly improving affordability for buyers. This can potentially boost demand in the Indian real estate sector, especially in affordable and mid-income segments. Affordable housing faced the sharpest pandemic fallout, with sales and new launches shrinking in the top 7 cities," Anuj Puri, chairman of ANAROCK Group, said.

Predictably, Indian markets rallied sharply post the rate cut announcement. 

Looking ahead, Goldman expects the RBI to stay on hold for the rest of the year unless growth slows sharply. The front end of the IGB curve should remain supported by strong liquidity and favorable demand-supply dynamics. The bank favors 2Y IGB and expect the IGB curve to steepen.

With the jobs whisper number of 110K flirting dangerously close with a sub 100K print, one which both JPM and Goldman said could spark a waterfall selloff in stocks, moments ago the BLS reported that in May the worst case scenario was averted, with the US adding a modest 139K, which while below last month's print, was above the median consensus of 126K, and well inside the estimated range of 75K to 190K.

That was the good news; the bad news is virtually all historical data points during the Trump admin were revised lower, with April revised 30K lower from 177K to 147K, and March revised 65K lower from 185K to 120K. Worse, every single month under the Trump admin has been revised lower. 

Turning to the unemployment rate, there were no surprises here: consensus expected an unchanged 4.2% print from April, and got just that. The unemployment rate has so far held at 4.2 percent in May and has remained in a narrow range of 4.0% to 4.2% since May 2024. The number of unemployed people, at 7.2 million, changed little over the month.

Among the major worker groups, the unemployment rates for adult men (3.9 percent), adult women (3.9 percent), teenagers (13.4 percent), Whites (3.8 percent), Blacks (6.0 percent), Asians (3.6 percent), and Hispanics (5.1 percent) showed little or no change over the month. 

The unemployment rate was the result of a modest increase in the number of unemployed people (from 7.166 million to 7.237 million) while the labor force declined by ~600K, from 171.135 million to 170.510 million. More importantly, the disconnect between the Household survey and Establishment survey is back, as the number of employed workers plunged tumbled by 696K, even as payrolls reportedly rose.

Some more qualitative details from the report:

• The number of people jobless less than 5 weeks increased by 264,000 to 2.5 million in May. The number of long-term unemployed (those jobless for 27 weeks or more) decreased over the month by 218,000 to 1.5 million. Both measures were little changed over the year. The long-term unemployed accounted for 20.4 percent of all unemployed people in May. 
• In May, the employment-population ratio declined by 0.3 percentage point to 59.7 percent. The labor force participation rate decreased by 0.2 percentage point to 62.4 percent. 
• The number of people employed part time for economic reasons, at 4.6 million, changed little in May. These individuals would have preferred full-time employment but were working part time because their hours had been reduced or they were unable to find full-time jobs. 
• In May, the number of people not in the labor force who currently want a job was little changed at 6.0 million. These individuals were not counted as unemployed because they were not actively looking for work during the 4 weeks preceding the survey or were unavailable to take a job. 
• Among those not in the labor force who wanted a job, the number of people marginally attached to the labor force, at 1.6 million, changed little in May. These individuals wanted and were available for work and had looked for a job sometime in the prior 12 months but had not looked for work in the 4 weeks preceding the survey. The number of discouraged workers, a subset of the marginally attached who believed that no jobs were

Next, turning to earnings, we find that May average hourly earnings actually printed stronger than expected, rising 0.4% MoM, double the 0.2% expected, and up from the 0.2% in April. On an annual basis, earnings rose 3.9%, also above the 3.7% consensus, and unchanged from the upward revised April print of 3.9%. 

Average hourly earnings for all employees on private nonfarm payrolls rose by 15 cents, or 0.4 percent, to $36.24 in May. Over the past 12 months, average hourly earnings have increased by 3.9 percent. In May, average hourly earnings of private-sector production and nonsupervisory employees rose by 12 cents, or 0.4 percent, to $31.18. 

There were also no surprises in the number of hours worked: In May, the average workweek for all employees on private nonfarm payrolls was 34.3 hours for the third month in a row. In manufacturing, the average workweek was little changed at 40.1 hours, and overtime was unchanged at 2.9 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls remained at 33.7 hours in May. 

Here is the breakdown of jobs by industry: 

• Health care added 62,000 jobs in May, higher than the average monthly gain of 44,000 over the prior 12 months. In May, job gains occurred in hospitals (+30,000), ambulatory health care services (+29,000), and skilled nursing care facilities (+6,000).
• Employment in leisure and hospitality continued to trend up in May (+48,000), largely in food services and drinking places (+30,000). Over the prior 12 months, leisure and hospitality had added an average of 20,000 jobs per month.
• In May, social assistance employment continued to trend up (+16,000), reflecting continued growth in individual and family services (+16,000).
• Federal government employment continued to decline in May (-22,000) and is down by 59,000 since January. (Employees on paid leave or receiving ongoing severance pay are counted as employed in the establishment survey.)

Employment showed little change over the month in other major industries, including mining, quarrying, and oil and gas extraction; construction; manufacturing; wholesale trade; retail trade; transportation and warehousing; information; financial activities; professional and business services; and other services.

Last but not least, there was acute softness in both the breakdown between full and part-time workers, where the former tumbled by 623K and the latter increased by 33K

Finally, the number of native-born workers tumbled by 444K, while foreign-born workers also dropped by 224K, and easing back from the record set two months ago.

Overall, this was a poor jobs report if one ignores the headline which will surely be revised to a sub-100K print in the next month or two.

After Thursday's grand meltdown between Elon Musk and President Donald Trump over the Big Beautiful Bill, it looked like things were set to simmer down - with Musk posting several things on X that suggested he was open to a path forward, while the Trump White House had scheduled a call with Musk, Politico reported. 

On Friday morning, however, it was clear that Trump isn't ready to mend fences - he doesn't want to talk to Musk, and is looking to sell his Tesla - while Musk spent the morning (so far) making clear that Congress needs to fix government spending or America is going to be in a world of hurt. 

"I’m not even thinking about Elon. He’s got a problem. The poor guy’s got a problem," Trump told CNN in a brief phone call. When asked if he had a call with Musk, Trump replied "No. I won’t be speaking to him for a while I guess, but I wish him well."

To recap:

• Earlier in the week, Musk came out against the 'Big Beautiful Bill' - which raises the debt ceiling by $5 trillion, and either raises the deficit by $2.4 trillion, or lowers it by $1.4 trillion - depending on who you believe, and fails to address any of the waste, fraud and abuse found by DOGE. 

• Thursday morning, Trump was asked about Musk's opposition to the bill, telling reporters on Thursday that he's 'very disappointed in Elon,' and that Musk only opposes the bill because they eliminated electric vehicle tax credits from it.

• Trump then suggested he might pull government funding from Musk's companies such as SpaceX, which owns the only operational US spacecraft capable of transporting astronauts to and from the International Space Station. 

"The easiest way to save money in our Budget, Billions and Billions of Dollars, is to terminate Elon’s Governmental Subsidies and Contracts. I was always surprised that Biden didn’t do it!" -President Donald Trump via Truth Social

• Musk went ballistic - announcing he would 'immediately' decommission the Dragon program (which he later walked back Thursday night), proposed a new political party (that's still his pinned post on X), endorsed another Trump impeachment, and said Trump is 'in the Epstein files,' which is why they haven't been released. 

Peacemakers emerged - such as former State Department official Mike Benz, who defended Musk and called for the two to patch things up...

Elon Was Always The Secret Weapon Behind Trump 2.0 pic.twitter.com/ii1HBqTKza

While two attorneys associated with the Epstein case(s) flatly denied Trump had anything to do with Epstein's sex-trafficking operation.  

Just confirming what we already knew. pic.twitter.com/ooZNVwHsjn

“The only thing that I can say about President Trump is that he is the only person who, in 2009... is the only person who picked up the phone and said, let’s just talk."

"[Trump] was very helpful... and gave no indication whatsoever that he was involved in anything untoward… pic.twitter.com/u0FKJrWKej

On Friday, Musk re-posted the following posts and clips making his case; 

"The Federal Government today pays more in interest on the debt than we do in budget for the Department of Defense. We pay $1.2B a year in JUST interest on debt. Total government spending is about $7T. Interest payments are $1.2T. DOD is $800B a year. Total debt is $35T and it… pic.twitter.com/fPg3Xo5dkZ

Jesse Watters: “The media said that Musk was the co-president… The media said Trump was doing favors for Elon Musk. Well, if you look at this big, beautiful bill, there’s no favors for Elon Musk in it at all”

pic.twitter.com/9Py3TM5Zkl

It’s a borrowing limit. It’s not a function / it’s a rule violated by a weak Congress regularly… https://t.co/4KEkl8aIKz

This is why Republicans will likely lose the House in 2026 and then Democrats will spend two years investigating and impeaching President Trump.

Trump and the Republicans in Congress need to deliver. We want budget cuts. We want agencies shut down. We don't want big govt. https://t.co/3T3uheQEyf

While Trump (as noted above) isn't ready to have a phone call with Musk to hash things out.

Meanwhile, DOGE chief architect Joel Fishback slammed Musk and said he's stepping away from the effort following Musk's comments, Politico reports.

"The truth is that Elon set expectations that he relayed to the president, me, and the country that he did not come close to fulfilling. That’s disappointing, but okay," said Fishback. "What’s not okay is his baseless personal attacks against President Trump."

To be continued...

S&P 500 futures rose 0.4% as Tesla shares rebounded 4% in premarket on signs that the spat between President Donald Trump and Elon Musk is cooling. Market gains had little conviction as traders brace for Friday’s main event: a pivotal payrolls report (full preview here) that’s likely to set the direction of travel for markets. Nasdaq futures also add 0.5% even as Broadcom shares fall 3% in premarket after giving a a lackluster revenue forecast for the current quarter. European stocks are little changed. Bond yields are 1-2bp lower; the USD is higher; the yen dropped after BBG reported that Bank of Japan officials are likely to discuss slowing their pullback from buying government bonds at a policy meeting later this month. Commodities are mostly higher: Gold climbs $6 to around $3,358/oz while silver tops $36/oz. WTI falls 0.6% to $63 a barrel. Bitcoin rises 3%. Macro headlines were largely muted overnight; All eyes on NFP today.

In premarket trading, Mag7 stocks are higher, led by Tesla, whose shares are set to rebound, rising 4.9% premarket, after plunging on Thursday as the feud between Elon Musk and President Donald Trump showed signs of de-escalation (Amazon +1%, Meta +0.8%, Apple +0.6%, Alphabet +0.6%, Nvidia +0.5%, Microsoft +0.4%). 

• Broadcom (AVGO) dropped 3% after the company gave a lackluster revenue forecast for the current quarter, suggesting that the AI spending frenzy isn’t as strong as some investors anticipated. Lululemon added to the gloom after its latest earnings report highlighted the risk posed by new tariffs and exacerbated concerns about slowing growth.
• Docusign (DOCU) shares are down 18% after the e-signature software company gave a second-quarter billings outlook that is weaker than expected.
• Lululemon (LULU) shares plunge 21% after the upscale athletic clothing company cut its earnings per share forecast for the full year.

Markets are still reveberating from the spat between Trump and Musk in which Trump proposed cutting off the billionaire’s government contracts. Musk, who sparked the public feud by criticizing Trump’s signature tax bill, later signaled that he’s keen to dial down the hostility. White House aides have reportedly scheduled a call with the world’s richest person for Friday in an effort to cool things down. Their public back-and-forth triggered the most spectacular real-time destruction of wealth ever, with $34 billion erased from Musk’s net worth. Tesla shares are rebounding in premarket, after tanking 14% Thursday.

“Futures are edging higher, perhaps as Musk has started to suggest on X that he would be open to a cooling-off period in his war of words with the President,” said Jim Reid, global head of macro research and thematic strategy at Deutsche Bank AG.

Moves in other asset clases were more muted as traders awaited Friday’s nonfarm payrolls report for fresh insight on how the Trump administration’s trade war is affecting the economy. Turning to today's main event, economists see payrolls rising by 125,000 after job growth in March and April exceeded projections. The unemployment rate is seen holding at 4.2%.  Weak payrolls data would be bad news for markets, with a big miss potentially sending stocks down 1.5%, according to Goldman Sachs traders (full preview here). A softening labor market would support expectations that the Federal Reserve will cut interest rates at least twice this year.

“Investors are getting used to all the noise and are looking at concrete matters like the jobs report or budget,” said Mabrouk Chetouane, head of global market strategy at Natixis Investment Managers. “There is a cooling trend in the labor market, which I expect will show this afternoon. That should further reinforce our call for two or three cuts from the Fed this year.”

Meanwhile, BofA’s Michael Hartnett is warning that global stocks are close to triggering sell signals as both fund inflows and market breadth are running too hot. The strategist said inflows to stocks and high-yield bonds have totaled 0.9% of AUM in the past four weeks. The sell signal will be set off if that exceeds 1%. 

European equities are little changed as investors search for fresh catalysts on trade negotiations between the US and China and look ahead to a key US jobs report. The real estate and health care sectors outperform, while consumer shares are among the biggest laggards. Among individual movers, Adidas and Puma fall after Lululemon’s disappointing quarter fueled concerns over rising competition and tariffs. Here are the biggest European movers:

• Chemring gains for an 18th straight day, rising as much as 5.1% following an upgrade to buy at Berenberg which gives the UK defense firm a clean sweep of positive analyst ratings
• Galderma shares gain as much as 3.3%, to the highest level since February after Kepler Cheuvreux initiated coverage of the Swiss pure play dermatology group with a recommendation of buy and a new street high price target.
• Demant shares jump as much as 6.7% as the stock trades for the first time since being upgraded to buy at Citi.
• Huber + Suhner shares rise as much as 4.6% after Berenberg said the Swiss electrical products manufacturer is especially well-positioned for growth as it started coverage with a buy rating.
• Canal+ rises as much as 8.1%, reaching highest since mid December, after the media and entertainment company confirmed its full-year expectations and said it has reached an agreement with France’s cinema agency to settle a tax dispute.
• Recordati shares gain as much as 3.4% to a three-month high after JPMorgan lifted its price target on the stock, saying the Italian pharmaceutical company’s growth outlook is “strong and sustainable,” even before more M&A activity.
• Norwegian salmon stocks gaining after a broad cross-party agreement to delay any sweeping changes to the licensing system for several years, according to a statement from the parties after markets closed on Thursday.
• European athleisure stocks fall as US-listed Lululemon posted a second straight disappointing quarter, fueling concerns around the impact of rising competition and new tariffs.
• Allegro shares drop after two of its major holders — investment vehicles of Cinven and Permira Holdings, sold a 5.2% stake in the company.
• PostNL falls as much as 12.5% as Kepler Cheuvreux analyst Marc Zeck downgraded his recommendation from hold to reduce.
• Dassault Systemes shares decline as much as 2.5% after the company said it aims to double its non-IFRS diluted EPS by 2029, pushing out a more ambitious 2028 goal.
• Polish banking stocks fall after Szymon Holownia, the leader of junior coalition party Polska 2050, told Polsat News that he wants to include a windfall tax on lenders into a renegotiated coalition agreement.

Earlier in the session,  Asian stocks traded in a tight range as a much-anticipated call between Donald Trump and China’s Xi Jinping offered little details on how trade negotiations would progress. The MSCI Asia Pacific Index was little changed. Indian stocks rose after the central bank cut interest rates more than projected and unexpectedly reduced the cash reserve ratio for banks. Gauges in Hong Kong fell, while those in Japan rebounded. Markets in Indonesia, Philippines and South Korea were closed for holidays.

In rates, treasuries edge higher ahead of the jobs report, with US 10-year yields falling nearly 2 bps to 3.37%. Bunds outperform their US peers, pushing German 10-year borrowing costs down 5 bps to 2.54%.

In FX, the Bloomberg Dollar Spot Index rises 0.2%. The Japanese yen and Swedish krona are the weakest G-10 currencies, falling 0.4% each. The euro dips 0.3% with little reaction seen after euro-area GDP was revised up for the first quarter. ECB policymakers largely stuck to Thursday’s messaging after they cut rates by a quarter point. USDJPY rose 0.4% to 144.08 after BBG reported that Bank of Japan officials are likely to discuss slowing their pullback from buying government bonds at a policy meeting later this month.

In commodities, gold climbs $6 to around $3,360/oz while silver tops $36/oz. WTI falls 0.6% to $63 a barrel. Bitcoin rises 3%.

Looking at today's calendar, the payrolls numbers are due at 8:30 a.m., while consumer credit data is due later in the day. The Fed’s Bowman is scheduled to give a speech on supervision and regulation.

Market Snapshot

• S&P 500 mini +0.5%
• Nasdaq 100 mini +0.5%
• Russell 2000 mini +0.6%
• Stoxx Europe 600 little changed
• DAX -0.2%, CAC 40 little changed
• 10-year Treasury yield -1 basis point at 4.38%
• VIX -0.3 points at 18.18
• Bloomberg Dollar Index +0.2% at 1210.26
• euro -0.3% at $1.1413
• WTI crude -0.5% at $63.03/barrel

Top Overnight News

• Elon Musk signaled he would move to cool tensions with US President Donald Trump, after differences between the two exploded Thursday into an all-out public feud.
• White House aides scheduled a call with Elon Musk today to take down the temperature after a public feud erupted with Donald Trump. Musk signaled he’s open to cooling tensions. Premarket, Tesla shares (+4.3%) pared some of yesterday’s plunge. Musk also backed off on a threat to decommission SpaceX’s Dragon spacecraft. BBG
• In the midst of the trade war and administration efforts to disentangle the U.S. and Chinese economies, US pharma companies have simultaneously supercharged their interest in China-based biotechs, announcing what are likely to be the biggest deals ever for the rights to experimental medicines invented by Chinese companies. Barron’s
• The US Treasury called on the BOJ to raise rates to strengthen the yen, making a remarkable policy recommendation in its semiannual currency report. Japan’s finance ministry said it doesn’t comment on the views of a foreign government. BBG
• Expectations in the market are intensifying that the Japanese government may adjust debt issuance as soon as next month by increasing sales of shorter maturity securities and trimming offerings of longer-dated ones to prevent a further rise in yields. BBG
• The European Central Bank is approaching the end of its interest-rate cuts, according to two Governing Council members, as others declared inflation has been vanquished.
• The Reserve Bank of India cut its key policy rate on Friday by an unexpectedly sharp 50 bps to 5.5%, its lowest level in nearly three years, as tepid inflation allowed the bank to focus on spurring economic growth. Nikkei
• Iran orders thousands of tons of ballistic missile material from China as Tehran looks to rebuild its arsenal and provide more weapons to proxies in the Middle East. WSJ
• We estimate nonfarm payrolls rose by 110k in May, below consensus of 125k and the three-month average of +155k. On the positive side, big data indicators suggested a healthy pace of job creation. On the negative side, trade policy uncertainty was very high across the survey period and we expect another 10k decline in federal government payrolls from workforce reductions. GIR
• The ECB is approaching the end of its interest-rate cycle, Madis Muller said. Fellow Governing Council member Yannis Stournaras told BTV that the bank should take a break to give officials a chance to assess recent shocks. BBG
• Trump told Senate Republicans he’s open to a SALT cap below the $40,000 in the House-passed tax bill. BBG

Tariffs/Trade

• German Chancellor Merz said Europe is looking for more independence from China and tariffs are having a "terrible" impact on German automakers, while the Chancellery and White House agreed to even closer cooperation on trade talks, according to CNN. Merz also commented that US tariffs are threatening our economy and we are looking for ways to bring them down, according to a Fox News interview. German Chancellor Merz said this US admin is open for discussions, and hearing other opinions; no doubts US will stick with NATO
• Canadian PM Carney spoke with Chinese Premier Li Qiang and exchanged views on bilateral relations, while they emphasised the importance of engagement and both leaders agreed to regularise communication channels between Canada and China. Furthermore, they also discussed trade between the two nations and Carney’s office stated that both governments committed to collaborating on addressing the fentanyl crisis.
• Chinese Premier Li held talks with Canadian PM Carney, according to Xinhua; China willing to safeguard multilaterals and free trade with Canada. There is 'great potential' for cooperation between China & Canada. Both should strengthen cooperation in clean energy, climate change, and innovation.
• Japan's government said trade negotiator Akazawa met with US Commerce Secretary Lutnick and Akazawa strongly sought a review of US tariffs, while they discussed non-tariff barriers and trade expansion.

A more detailed look at global markets courtesy of Newsquawk

APAC stocks traded mixed following the subdued handover from the US where a stunning online bust-up between US President Trump and Elon Musk overshadowed the recent call between President Trump and Chinese President Xi in which the leaders agreed to start a new round of talks ASAP. ASX 200 saw two-way, rangebound trade as outperformance in the energy and utilities sectors was counterbalanced by losses in gold miners and the top-weighted financial industry, while a lack of pertinent data releases also contributed to the uneventful picture. Nikkei 225 gained with the index supported by recent currency weakness although further upside was capped following disappointing Household Spending data which showed a steeper-than-feared M/M decline and a surprise Y/Y  contraction. Hang Seng and Shanghai Comp were indecisive despite the recent phone call between US President Trump and Chinese President Xi which the White House had been touting throughout the week, while Xi reiterated calls for the US to handle the Taiwan issue with caution.

Top Asian News

• RBI cut the Repurchase Rate by 50bps to 5.50% (exp. 25bps cut) and changed its stance to neutral from accommodative, while it cut the Standing Deposit Facility Rate and Marginal Standing Facility Rate by 50bps each to 5.25% and 5.75%, respectively. RBI Governor Malhotra said growth remains lower than aspirations and it is important to stimulate growth, as well as noted that front-loading rate cuts to support growth was felt necessary. Malhotra also stated that inflation has softened significantly over the last six months and inflation is likely to undershoot the full-year target at the margin, while he noted that monetary policy has limited space left to support growth and they retained the FY26 Real GDP growth forecast at 6.5%. Furthermore, the RBI Governor announced to cut the Cash Reserve Ratio by 100bps in four equal tranches, which will release INR 2.5tln, as well as noted that they will continue to monitor and take measures as necessary and that the CRR cut is to reduce the cost of funding of banks and help accelerate policy transmission.
• PBoC set USD/CNY mid-point at 7.1845 vs exp. 7.1935 (Prev. 7.1865).
• Japan's former top FX diplomat says narrowing US-Japan rate gap will likely support the yen at around 135-140 against USD by year-end.

European bourses - Flat/lower trade across Europe following the fallout of the dramatic Trump-Musk spat, but with traders setting their sights on the US jobs report due 13:30 BST/08:30 EDT. On the week, futures of the broad Stoxx 600 and Euro Stoxx 50 indices are currently poised for a second week of gains, though not by much at this stage, and will depend on how the aforementioned data comes in. European sectors - Sectors display a mixed picture with the breadth of the market also narrow, with no real bias. Top gainers at the time of writing include Health Care (+0.6%), Energy (+0.5%), and Retail (+0.3%); losers include Basic Resources (-0.9%), Industrial Goods and Services (-0.4%), and Media (-0.3%). European movers - HSBC (+0.3%) chairman Mark Tucker will step down on September 30th. Adidas (-1.3%), JD Sports (-0.5%), and Puma (-1.6%) are all slipping after US apparel maker Lululemon (LULU) saw its shares tumble by over 20% in extended trading. Airbus (-0.9%) confirmed that it delivered 51 jets in May (-4% Y/Y),

Top European News

• UK government unveiled new concessions to private equity firms regarding its tax break crackdown in which it proposed changes to tax treatment of carried interest that will make the regime less onerous, according to FT.
• ECB's Holzmann says "I dissented" at the rate decision on Thursday (as expected)Lowering rates at a time of high savings and low investments ha no effect except a monetary effectCurrently expansive in monetary policyLagarde said we are at the end of the cycle, wanted to discuss whether that is the caseCurrent nominal neutral rate is around 3%
• ECB's Muller said ECB can be happy with inflation where it is; and he agrees with ECB President Lagarde that cycle almost finished. Hard to say what's coming next on rates.
• ECB's Villeroy said the ECB has won the battle against inflation in Europe, and we will not again see the low rates we saw a few years ago, and added that French inflation is now under control but debt remains a serious issue, "France cannot continue like this", according to Bloomberg.
• ECB's Simkus said interest rates are now at neutral; its important to keep full flexibility, according to Reuters. Stournaras said the best thing for the ECB is to wait and see, ECB rate cutting is nearly done, ECB has achieved a soft landing, and ECB may cut if the economy weakens and inflation falls. Stournaras noted of downside risks to growth, and the bank is "quite" confident in its forecasts, and said he's afraid the Dollar may lose some of its status.
• Bundesbank semi-annual report: German recovery delayed further; economy to tread water in 2025; German GDP to stagnate in 2025, grow by 0.7% in 2026. Increased defence, infrastructure spending to significantly increase growth by the end of 2027. German exports will decline significantly in 2025, increase only slightly next year.
• Italian Stats Bureau ISTAT cut Italy's 2025 GDP growth to 0.6% from 0.8% forecast in December.
• SNB noted that it does not engage in any manipulation of the CHF; does not seek to prevent adjustments in the balance of trade or to gain unfair competitive advantages for the Swiss economy. In addition, the use of FX market interventions may be necessary under certain circumstances to ensure appropriate monetary conditions. SNB monetary policy is geared towards the needs of Switzerland.

FX

• USD - USD is slightly firmer in what has ultimately been a week of losses for DXY. Attention now is firmly fixated on today's NFP report which is set to see payroll growth slow to 130k from 177k and unemployment rate hold steady @ 4.2%. As it stands, the next 25bps cut is not fully priced until September with 54bps of loosening seen by year-end. DXY is towards the top end of yesterday's 98.35-98.94 range.
• EUR - EUR is trivially softer vs. the USD after gaining yesterday on account of the ECB rate decision which saw policymakers pull the trigger on a 25bps rate cut, whilst noting that policy is "well-positioned"; suggesting that the ECB could be nearing or at the end of its cutting cycle. ECB speak this morning hasn't shifted the dial with policymakers signalling flexibility going forward, whilst acknowledging progress on inflation. EUR/USD is contained within yesterday's 1.1404-1.1495 range.
• JPY - JPY is the laggard across the majors following disappointing Household Spending data. Subsequently, USD/JPY briefly made its way back onto a 144 handle with a current session peak @ 144.13, stopping shy of the WTD high @ 144.39. On the trade front, Japan's government said trade negotiator Akazawa met with US Commerce Secretary Lutnick and Akazawa strongly sought a review of US tariffs. Elsewhere, Japan's former top FX diplomat says narrowing US-Japan rate gap will likely support the yen at around 135-140 against USD by year-end.
• GBP - GBP is softer vs. the broadly firmer USD with UK-specific newsflow on the light side ahead of next week's UK spending review. On which, UK Chancellor Reeves reaffirmed she will not have a UK budget like October's again, but can't rule out any tax changes over the next four years. For today's agenda, BoE Chief Economist Pill is due to speak @ 13:00BST, but given the subject matter of "AI and Households", it is unclear how much he will touch on monetary policy. After printing a multi-year high yesterday @ 1.3616, Cable has since retreated and moved back below the 1.3550 mark.
• Antipodeans - Antipodeans are steady vs. the USD following a light data docket and relevant newsflow overnight. Both continue to keep an eye on US-Sino relations following the Xi-Trump call yesterday given their trade exposure. However, the readout had little follow-through into either currency. AUD/USD has moved back onto a 0.64 handle and pulled back from yesterday's YTD peak @ 0.6538. NZD/USD has also retreated from yesterday's YTD high @ 0.6080 but is still holding above the 0.60 mark.
• NBP's Litwiniuk said they need to be cautious regarding the disinflation path; MPC can return to the subject of cuts in July or September; rates can still be cut by 100-125bps this year.

Treasuries

• USTs - USTs are a touch higher ahead of the US jobs report and following yesterday's ECB-led losses which outmuscled a spike higher in weekly claims metrics. As it stands, the next 25bps cut is not fully priced until September with 54bps of loosening seen by year-end. Sep'25 USTs are currently within yesterday's 110.23+ to 111.14+ range. From a yield perspective, the US curve is fractionally in bull flattening mode, whilst the 10yr yield has moved back to the 4.37% after venturing as low as 4.318% yesterday.
• Bunds - Bunds are attempting to atone for yesterday's losses which were seen in the wake of the ECB rate decision. Sep'25 Bunds have been as high as 130.72 but are still some way away from yesterday's peak @ 131.47. The 10yr yield is back below the 2.55% mark after climbing as high as 2.581% yesterday.
• Gilts - Gilts are currently being led by the upside in German paper as UK-specific newsflow remains light ahead of next week's UK spending review. Sep'25 Gilts have been as high as 92.31 but still have some ground to cover before approaching yesterday's best @ 92.63. The 10yr yield currently sits just above the 4.6% mark and within yesterday's 4.557-4.648% range.

Commodities

• Crude Futures - Subdued trade amid a firmer Dollar and overall cautious risk tone heading into the US jobs report before the weekend. Contracts saw a leg lower likely on technicals as WTI dipped under USD 63.00/bbl at the same time as Brent fell under USD 65.00/bbl, although prices thereafter stabilised. News flow has been light for the complex, with nothing major to report in geopolitics either.
• Precious Metals - Spot gold and silver are largely treading water amid a lack of catalysts during the European morning in the run-up to the US jobs report. Spot gold currently resides in a current USD 3,351.49-3,375.29/oz range, well within yesterday's USD 3,338.29-3,403.15/oz parameter.
• Base Metals - Mixed trade across base metals, in fitting with the cautious risk tone ahead of the US jobs report, with the Trump-Xi phone call doing little to keep broader prices underpinned during this session. 3M LME copper dipped back under USD 9,700/t to trade in a USD 9,659.00-9,768.00/t range at the time of writing. Dalian iron ore futures rose to a one-week peak overnight with traders citing strong Chinese demand coupled with some optimism following the Trump-Xi call, with the front-month contract ending daytime trade +0.9%.
• HSBC expects OPEC+ to accelerate supply hikes in August and September; weaker fundamentals after the summer, raise downside risks to the Bank's USD 65/bbl brent forecast from Q425.
• LME has intervened to make Mercuria roll its "huge" position in aluminium, according to Bloomberg.
• India's Mines Minister said exploring critical mineral assets in Australia, Argentina and Chile.
• EU Ags Commissioner said EU-Ukraine trade has reverted to conditions of pre-war trade deal, after the expiry of wartime exemptions; could conclude a longer-term trade arrangement by summer. New EU-Ukraine trade arrangement will be in between the quotas under pre-war trade deal and war-time exemptions

Geopolitics: Middle East

• Israel assured the US it won't strike Iran unless talks fail, according to Axios.
• Iran is said to have ordered material from China that could make hundreds of ballistic missiles, according to Wall Street Journal.
• "Lebanese Army: Israel's continued violation of the agreement may push us to freeze cooperation with the monitoring committee regarding site inspection", via Al Hadath.

Geopolitics: Ukraine

• Ukraine said Russia launched a drone and missile attack with explosions and air defence activity heard over Kyiv.
• Russian Deputy Minister of Foreign Affairs Ryabkov said returning to the arms control agreement with the US is becoming less and less realistic amid the US' Golden Dome project.
• EU is weighing adding Russia to its money laundering 'grey list', according to FT.
• French Minister for Europe and Foreign Affairs hopes the European Commission will put new Russian sanctions package before the end of June, according to Reuters.

US Event Calendar

• 8:30 am: May Change in Nonfarm Payrolls, est. 126k, prior 177k
• 8:30 am: May Change in Private Payrolls, est. 120k, prior 167k
• 8:30 am: May Change in Manufact. Payrolls, est. -4.5k, prior -1k
• 8:30 am: May Unemployment Rate, est. 4.2%, prior 4.2%
• 8:30 am: May Average Hourly Earnings MoM, est. 0.3%, prior 0.2%
• 8:30 am: May Average Hourly Earnings YoY, est. 3.7%, prior 3.8%
• 3:00 pm: Apr Consumer Credit, est. 10b, prior 10.17b

Central Banks 

• 10:00 am: Fed’s Bowman Gives Speech on Supervision, Regulation

DB's Jim Reid concludes the overnight wrap

Markets had a volatile session yesterday, as they grappled with a barrage of news that each pushed in different directions. Those included positive US-China headlines amid a call between Trump and Xi, a hawkish ECB decision and more weak data from the US. But the most remarkable was an extraordinary war of words between Trump and Elon Musk that ultimately left risks assets losing ground. Tesla’s shares plunged by -14.26%, while the S&P 500 fell -0.53% despite earlier briefly moving into technical bull market territory as it climbed just over +20% since its recent low on April 8.

The dramatic feud between the US President and the world’s richest man emerged after Trump said during a meeting with Germany’s chancellor Merz that he was “disappointed” and “surprised” in Musk’s recent criticism of the Republicans’ budget bill, with Musk responding on X by suggesting that Trump would have lost the election without his support. The war of words then escalated on social media, with Trump posting that “The easiest way to save money in our Budget, Billions and Billions of Dollars, is to terminate Elon’s Governmental Subsidies and Contracts”, while Musk posted that Trump’s tariffs “will cause a recession in the second half of this year” and responded “yes” to a suggestion that Trump should be impeached.

Following the Trump-Musk spat, Tesla’s shares slumped -14.26%, which together with a -3.55% decline on Wednesday marked its worst two-day decline (-17.30%) since 2020. The feud also weighed on US risk assets more broadly, with the S&P 500 (-0.53%) seeing ten of its eleven sector groups move lower on the day. Meanwhile, the VIX volatility index rose +0.87pts to 18.48, having been earlier on course to fall to its lowest level since late March. The tech mood has stayed subdued overnight as Broadcom’s results delivered a lackluster revenue forecast. The chipmaker, which is now the 7th largest company in the S&P 500 and around $300bn of market cap ahead of Tesla, saw its shares slide by more than -4% after-hours. However S&P 500 (+0.25%) and NASDAQ 100 (+0.14%) futures are edging higher, perhaps as Musk has started to suggest on X that he would be open to a cooling-off period in his war of words with the President.

Earlier on in the session we had seen a clear risk-on move on both sides of the Atlantic as a surprise Trump-Xi call raised the prospect of fresh US-China talks, leading to growing optimism that trade tensions would ease. The news of a call by Chinese state media led to an immediate jump in US equity futures. Shortly after, the rally got a further boost after Trump posted that it was “a very good phone call” which “resulted in a very positive conclusion for both Countries.” In the post, it said that their respective teams would soon meet, and also that “There should no longer be any questions respecting the complexity of Rare Earth products.” So that helped to boost market optimism, particularly after Trump had posted the previous day that Xi was “VERY TOUGH, AND EXTREMELY HARD TO MAKE A DEAL WITH!!!”.

The trade headlines outweighed an initial negative reaction to the latest weekly US jobless claims, which added to fears that the US labour market was finally deteriorating after Liberation Day. Initial jobless claims (one of the most timely indicators we get) moved up to 247k in the week ending May 31 (vs. 235k expected), reaching their highest level since October. Moreover, that followed the very soft ADP report the previous day, which had private payrolls up by just +37k in May. The one caveat to the claims data is that seasonals tend to boost the number a bit at this time of the year. However it’s not the only evidence of a slightly weakening labour market. So that’s really heightened the focus on today’s jobs report for May, as any softness there would really magnify those fears. In terms of what to expect, our US economists forecast nonfarm payrolls to come in at +125k, dipping down from the +177k in March, with the unemployment rate remaining at 4.2%.

Those competing factors drove a big turnaround for US Treasuries yesterday. They initially fell back, with the 10yr yield hitting an intraday low of 4.31% just after the claims data. But the hawkish ECB decision and the Trump-Xi call led to a significant turnaround, with the 10yr yield ultimately closing up +3.7bps at 4.39%. The moves were even larger at the front-end of the curve, with the 2yr yield up +5.4bps to 3.92% as investors dialled back the likelihood of Fed rate cuts.
Meanwhile in Europe, the ECB was the biggest market driver yesterday. They cut rates by 25bps as expected, taking the deposit rate down to 2%. But significantly, President Lagarde signalled that they had “nearly concluded” the easing cycle, suggesting that policy rates weren’t likely to go much lower from here. She also signalled little urgency to cut rates, saying that the current level left them “in a good position to navigate the uncertain conditions that will be coming up.” As such, the ECB appears to be saying that it may have now reached the appropriate level of rates, a stronger message than a soft signal of a pause our European economists had expected. That said, our economists see expected soft growth in H2 and more significant disinflation than projected by the ECB as still favouring some further easing. See their full reaction here.

Lagarde’s comments immediately drove a clear market reaction, with another 25bp ECB cut now being less than fully priced, the 2yr German yield surging +7.8bps on the day and the euro itself strengthening +0.25%. Several other details also fed into the hawkish narrative, with the policy statement saying that although trade uncertainty would be a short-term drag, “rising government investment in defence and infrastructure will increasingly support growth over the medium term.” Later in the day, Bloomberg also reported that ECB officials thought a pause at the next meeting in July was the most likely scenario, with mixed views on whether another rate cut was likely after that. By the close, yields on 10yr bunds (+5.2bps), OATs (+4.7bps) and BTPs (+3.5bps) had all moved higher. Otherwise, equities ended the day higher with the STOXX 600 up +0.16%, but that was mainly thanks to the Trump-Xi call, as the index had been in negative territory after the hawkish ECB news.

In Asia markets are relatively subdued this morning. The Nikkei (+0.24%) has risen a little on weak Japanese economic data that might delay further rate hikes by the BOJ (more below). Meanwhile, the CSI (-0.12%) and the Shanghai Composite (-0.06%) are struggling to gain traction while the Hang Seng (-0.21%) and the S&P/ASX 200 (-0.19%) are seeing minor losses.

Coming back to Japan household spending (-0.1% y/y) unexpectedly fell in April, attributed to consumers curbing spending due to rising prices. This contrasted sharply with market expectations of a +1.5% gain following the previous month's +2.1% increase.

Elsewhere yesterday, data showed the US trade deficit narrowed sharply to $61.6bn in April, reflecting the impact of the new tariffs. That was the smallest monthly deficit since September 2023, and a huge decline from the prior month's $138.3bn trade deficit. Given that lower imports mechanically add to GDP, this is expected to lead to a strong bounceback in GDP for Q2 after the Q1 contraction. Indeed, the Atlanta Fed’s latest GDPNow estimate is pointing to annualised growth of +3.8% in Q2.

To the day ahead now, and the main highlight will be the US jobs report for May. Over in Europe, there’s also Euro Area retail sales for April, and German and French industrial production for April. Otherwise, central bank speakers include ECB President Lagarde, and the ECB’s Holzmann, Simkus and Centeno.

Tokyo-based ispace Inc.'s second uncrewed lunar landing attempt ended in failure on Friday, as its Resilience lander crashed during the final descent phase. The lunar mishap marks another setback for the Japanese firm.

"As of 8:00 a.m. on June 6, 2025, mission controllers have determined that it is unlikely that communication with the lander will be restored and therefore completing Success 9 is not achievable. It has been decided to conclude the mission," ispace wrote on X. 

As of 8:00 a.m. on June 6, 2025, mission controllers have determined that it is unlikely that communication with the lander will be restored and therefore completing Success 9 is not achievable. It has been decided to conclude the mission.

“Given that there is currently no… pic.twitter.com/IoRUfggoiQ

The mission, which was positioned as a pivotal moment for Japan's entry into lunar exploration and a cornerstone for its commercial space ambitions, has sidelined moon missions from the company for now. The loss follows a failed 2023 mission due to a software error.

Meanwhile, Texas-based rivals Intuitive Machines Inc. and Firefly Aerospace Inc. have already achieved lunar landings. Firefly became the first private company to successfully land a functioning spacecraft on the moon in March, while Intuitive Machines managed a hard touchdown—but its lander lost functionality just hours later.

Ispace provided color on the sequence of events that led to the failed landing:

ispace engineers at the HAKUTO-R Mission Control Center in Nihonbashi, Tokyo, transmitted commands to execute the landing sequence at 3:13 a.m. on June 6, 2025. The RESILIENCE lander then began the descent phase. The lander descended from an altitude of approximately 100 km to approximately 20 km, and then successfully fired its main engine as planned to begin deceleration. While the lander's attitude was confirmed to be nearly vertical, telemetry was lost thereafter, and no data indicating a successful landing was received, even after the scheduled landing time had passed.

Based on the currently available data, the Mission Control Center has been able to confirm the following: The laser rangefinder used to measure the distance to the lunar surface experienced delays in obtaining valid measurement values. As a result, the lander was unable to decelerate sufficiently to reach the required speed for the planned lunar landing. Based on these circumstances, it is currently assumed that the lander likely performed a hard landing on the lunar surface.

After communication with the lander was lost, a command was sent to reboot the lander, but communication was unable to be re-established.

In markets, iSpace shares in Tokyo crashed on Friday, closing down nearly 29%... What goes up must come down.

Earlier, Ispace CEO Takeshi Hakamada held a news conference following news of the failed landing attempt. He compared iSpace to SpaceX: "SpaceX has also failed several times, but now SpaceX occupies the launching market."

Ispace CFO Jumpei Nozaki recently told CNN that the company has already secured funds for a third attempt at landing a craft on the lunar surface.