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Authored by Bradley Peak via CoinTelegraph.com,

Is Tether MiCA compliant?

The EU’s new Markets in Crypto-Assets regulation, better known as MiCA, is the first major attempt by a global economic power to create clear, region-wide rules for the crypto space, and stablecoins are a big focus.

MiCA mandates best practices. If a stablecoin is going to be traded in the EU, its issuer has to follow some stringent rules:

1. You need a license

To issue a stablecoin in Europe, you must become a fully authorized electronic money institution (EMI). That’s the same kind of license traditional fintechs need to offer e-wallets or prepaid cards. It’s not cheap and it’s not quick. 

2. Most of your reserves have to sit in European banks

This is one of the most controversial parts of MiCA. If you issue a “significant” stablecoin — and Tether’s USDT certainly qualifies — at least 60% of your reserves must be held in EU-based banks. The logic is to keep the financial system safe. 

3. Full transparency is non-negotiable

MiCA requires detailed, regular disclosures. Issuers have to publish a white paper and provide updates on their reserves, audits and operational changes. This level of reporting is new territory for some stablecoins, especially those that have historically avoided public scrutiny.

4. Non-compliant coins are getting delisted

If a token doesn’t comply, it won’t be tradable on regulated EU platforms. Binance, for example, has delisted USDT trading pairs for users in the European Economic Area (EEA). Other exchanges are following suit.

The European Securities and Markets Authority (ESMA) clarified that people in Europe can still hold or transfer USDT, but it can’t be offered to the public or listed on official venues. 

In other words, you might still have USDT in your wallet, but good luck trying to swap it on a regulated platform.

Key reasons why Tether rejects MiCA regulations

Tether is unique in that it has explained why it wants nothing to do with MiCA regulations. The company’s leadership, especially CEO Paolo Ardoino, has been pretty vocal about what they see as serious flaws in the regulation, from financial risks to privacy concerns to the bigger picture of who stablecoins are really for.

1. The banking rule could backfire

One of MiCA’s most talked-about rules says that “significant” stablecoins — like Tether’s USDt  — must keep at least 60% of their reserves in European banks. The idea is to make stablecoins safer and more transparent. But Ardoino sees it differently.

He’s warned that this could create new problems, forcing stablecoin issuers to rely so heavily on traditional banks could make the whole system more fragile. 

After all, if there’s a wave of redemptions and those banks don’t have enough liquidity to keep up, we’d witness a struggling bank and a stablecoin crisis simultaneously.

Instead, Tether prefers to keep most of its reserves in US Treasurys, assets it says are liquid, low-risk and much easier to redeem quickly if needed.

2. They don’t trust the digital euro

Tether also has a broader issue with the direction Europe is heading, especially regarding a digital euro. Ardoino has openly criticized it, raising alarms about privacy. 

He has argued that a centrally controlled digital currency could be used to track how people spend their money, and even control or restrict transactions if someone falls out of favor with the system.

Privacy advocates have echoed similar concerns. While the European Central Bank insists that privacy is a top priority (with features like offline payments), Tether isn’t convinced. In their eyes, putting that much financial power in the hands of one institution is asking for trouble.

3. Tether’s users aren’t in Brussels. They’re in Brazil, Turkey and Nigeria

At the heart of it, Tether sees itself as a lifeline for people in countries dealing with inflation, unstable banking systems and limited access to dollars. 

These are places like Turkey, Argentina and Nigeria, where USDT is often more useful than the local currency.

MiCA, with all its licensing hoops and reserve mandates, would require Tether to shift focus and invest heavily in meeting EU-specific standards. That’s something the company says it’s not willing to do, not at the expense of the markets it sees as most in need of financial tools like USDT.

Did you know? Turkey ranks among the top countries for cryptocurrency adoption, with 16% of its population engaged in crypto activities. This high adoption rate is largely driven by the devaluation of the Turkish lira and economic instability, prompting citizens to seek alternatives like stablecoins to preserve their purchasing power.

What happens when Tether doesn’t comply with MiCA

Tether’s decision to skip MiCA didn’t exactly fly under the radar. It’s already having real consequences, especially for exchanges and users in Europe.

1. Exchanges are dropping USDT

Big names like Binance and Kraken didn’t wait around. To stay on the right side of EU regulators, they’ve already delisted USDT trading pairs for users in the European Economic Area. Binance had removed them by the end of March 2025. Kraken followed close behind, removing not just USDT but also other non-compliant stablecoins like EURT and PayPal’s PYUSD.

2. Users are left with fewer options

If you’re in Europe and holding USDT, you’re not totally out of luck; you can still withdraw or swap it on certain platforms. But you won’t be trading it on major exchanges anymore. That’s already pushing users toward alternatives like USDC and EURC, which are fully MiCA-compliant and widely supported.

Even major crypto payment processors are pulling support, leaving users with fewer options for spending their crypto directly.

3. A hit to liquidity? Probably.

Pulling USDT from European exchanges could make the markets a bit shakier. Less liquidity, wider spreads and more volatility during big price moves are all on the table. Some traders will adjust quickly. Others? Not so much.

Did you know? Tether (USDT) is the most traded cryptocurrency globally, surpassing even Bitcoin in daily volume. In 2024, it facilitated over $20.6 trillion in transactions and boasts a user base exceeding 400 million worldwide.

Tether vs MiCA regulation

Tether may be out of sync with the EU, but it’s far from retreating. If anything, the company is doubling down elsewhere, looking for friendlier ground and broader horizons.

Firstly, Tether’s picked El Salvador as its new base, a country that has fully embraced crypto. After getting a digital asset service provider license, the company is setting up a real headquarters there. Ardoino and other top execs are making the move too.

Moreover, after banking over $5 billion in profits in early 2024, Tether is putting its capital to work:

• AI: Through its venture arm, Tether Evo, the company has picked up stakes in firms like Northern Data Group and Blackrock Neurotech. Tether has also launched Tether AI, an open-source, decentralized AI platform designed to operate on any device without centralized servers or API keys. The goal is to use AI to boost operations and maybe build some new tools along the way.

• Infrastructure and AgTech: Tether invested in Adecoagro, a company focused on sustainable farming and renewable energy. It’s a surprising move, but it fits Tether’s bigger strategy of backing real-world, resilient systems.

• Media and beyond: There are also signs Tether wants a footprint in content and communications, signaling it’s thinking far beyond crypto alone.

Tether’s MiCA exit highlights crypto’s global regulatory chaos

Tether walking away from MiCA is a snapshot of a much bigger issue in crypto: How hard it is to build a business in a world where every jurisdiction plays by its own rulebook.

The classic game of regulatory arbitrage

This isn’t Tether’s first rodeo when it comes to navigating regulations. Like many crypto companies, they’ve mastered the art of regulatory arbitrage, finding the friendliest jurisdiction and setting up shop there. 

Europe brings in strict rules? Fine, Tether sets up in El Salvador, where crypto is welcomed with open arms.

However, it does raise questions. If big players can simply move jurisdictions to dodge regulations, how effective are those rules in the first place? And does that leave retail users protected or just further confused?

A crypto world that’s all over the map

The bigger issue is that the global regulatory landscape is incredibly fragmented. Europe wants full compliance, transparency and reserve mandates. The US is still sending mixed signals. Asia is split; Hong Kong is pro-crypto, while China stays cold. 

Hong Kong has also passed the Stablecoin Bill to license fiat-backed issuers and boost its Web3 ambitions. Meanwhile, Latin America is embracing crypto as a tool for financial access.

For companies, it’s a mess. You can’t build for one global market; you must constantly adapt, restructure or pull out entirely. For users, it creates massive gaps in access. A coin available in one country might be inaccessible in another just because of local policy.

As a final thought: Tether’s resistance to MiCA seems to be more than just a protest against red tape. 

It’s making a bet that crypto’s future will be shaped outside Brussels, not inside it.

Authored by Stacy Robinson via The Epoch Times,

The U.S. Attorney’s Office announced on May 22 that it had arrested a woman for assaulting then-interim U.S. Attorney Ed Martin.

Emily Gabriella Sommer, 32, allegedly spat on Martin while he was conducting a television interview. The incident was caught on camera. 

According to a statement from the District U.S. Attorney’s Office, Sommer approached Martin while he was standing outside its headquarters in Washington, cursing at him.

“Martin turned to face Sommer. Sommer then said, ‘Are you Ed Martin? You are. Ed Martin.’ Sommer lunged at Martin and spit on his shoulder,” the statement said.

Sommer cursed at Martin again as she turned and walked away, shouting,

“You are a disgusting man. ... My name is Emily Gabriella Sommer, and you are served.”

Following the incident, Sommer allegedly replied to numerous posts on Martin’s X account, taking responsibility for the incident. According to court documents, she posted the same message in each reply.

“ED, that was me that spit in your face today ... that absolutely definitely spit in your face on camera. Hi, hello,” the posts read. 

Martin, the former chair of the Missouri Republican Party, was appointed as interim U.S. attorney for the District of Columbia earlier this year by President Donald Trump. 

Trump nominated him for the position on a permanent basis, but had to rescind the offer after some GOP senators refused to support him. 

Sen. Thom Tillis (R-N.C.) told reporters on May 6 that he would not vote to confirm Martin because they disagreed on the treatment of individuals accused of rioting at the Capitol building on Jan. 6, 2021. 

Tills said Martin seemed “like a good man” and that he’d made a good case that some of these individuals had been “over-prosecuted,” but also said there was “friction” on which individuals should be prosecuted. 

“If Mr. Martin were being put forth as a U.S. attorney for any district except the district where Jan. 6 happened, the protests happened, I’d probably support him,” Tillis said. 

“But not in this district.” 

For his part, Martin had a sense of humor about the setback. 

He posted on X a picture of himself dressed as pope with the words “Plot twist,” since Trump’s announcement was made on the same day the Vatican was in the process of electing Pope Leo XIV.  

On May 13, Martin announced that Trump had appointed him to a dual role in the Department of Justice as “pardon attorney” and director of the Weaponization Working Group, which will investigate government prosecutorial overreach.

In Goldman's latest global steel outlook, analysts Aurelia Waltham, Eoin Dinsmore, and others highlight a key inflection point: China's share of global steel production has declined for the first time in over two decades, reversing a multi-decade expansion period. 

"After more than two decades of China increasing its share of global steel production, we believe this structural trend has now come to an end as China's domestic demand continues to falter and barriers to steel exports intensify," Waltham and her team wrote in a note published on Friday morning.

The analysts noted that their global steel supply and demand model forecasted a 3% and 4% year-over-year increase in ex-China steel demand for 2025 and 2026, respectively. As Chinese steel exports are expected to decline, ex-China crude steel production is projected to rise by 3% in 2025 and 8% in 2026. 

"While we are bearish on US and European steel prices on the three-to-six month horizon, we expect a re-acceleration in demand growth and lower Chinese steel exports to provide price upside in 2026," Waltham said. 

They outlined the biggest risk to their forecast of China losing global market share:

We see the biggest risk to our call that China will start to lose market share of global steel production to the rest of the world over the next two years being indirect[1] Chinese steel exports continuing to climb, pushing down rest of world apparent steel demand. This would likely see China steel demand from the manufacturing sector exceeding our current expectations, preventing a decline in Chinese steel output and apparent domestic demand, while at the same time meaning rest of world steel production growth would fall below end use consumption growth. However, this would be at odds with China's policy to reduce steel output.

Following a 25-year expansion that saw China increase its share of global steel production from approximately 15% in 2000 to about 55% by 2020, analysts now forecast a decline to about 50% by 2026.

China's steel production for 2025 already peaked in March. 

Key takeaways about China's declining influence in global steel markets: 

• Peak Reached: China's steel production likely peaked in March 2025 and is expected to decline by 2–3% YoY through 2026.

• Domestic demand slowdown: A continued decline in construction activity, especially new housing starts (forecasted to drop 24% in 2025), will more than offset gains from manufacturing (e.g., autos and appliances).

• Export headwinds: Chinese finished and semi-finished steel exports are forecast to drop 33% YoY in 2026, from 12% to under 8% of ex-China steel consumption.

• Policy risk: If exports or output stay elevated, the Chinese government may impose mandated production cuts (likely via emissions controls) in Q4 2025 to meet policy targets.

China's economy is still a mess. Property sector will continue to weigh on steel demand. 

However, the analysts view a rebound in ex-China steel:

• Ex-China growth: Production outside China is expected to rise 3% in 2025 and 8% in 2026, helped by recovering demand and lower competition from Chinese exports.

• Regional demand: Demand in the U.S., EU, and India will gradually improve. Apparent demand outside China is forecast to rise 3–4% annually into 2026.

Global Steel Price Outlook: 

• Near-term weakness: U.S. and European prices face further downside in the next 3–6 months due to lackluster demand and high inventories.

• 2026 upside: Prices are forecast to rise in 2026 as Chinese exports fall and global demand picks up, particularly in Asia and the EU. Anti-dumping measures and trade friction will help contain Chinese supply abroad.

European Steel Price Forcast

US Hot Rolled Coil Price Forecast

The long-standing concern over China flooding global markets with steel may finally be easing—a shift that could pave the way for Western producers to ramp up output. We anticipate this trend will be evident in the U.S amid President Trump's 'America First' era. 

Despite the plunge in homebuilder confidence, US New Home Sales soared in April to 743k SAAR...

The 10.9% MoM surge in sales in April (versus a 4.0% MoM expected decline) was bolstered by a big downward revision in March from +7.4% MoM to just +2.6%...

This is the biggest beat since August 2022... and the second big downward revision in a row...

Meanwhile, the median new home sales price decreased 2% from a year ago to $407,200 (on an annual basis, prices have largely been retreating over the past 12 months) and is now back below existing home sale prices...

This month, 34% of builders reporting cutting prices, the largest share since December 2023, according to recent data from the National Association of Home Builders.

The surge in new home sales comes as mortgage rates tumbled...

So, don't hold your breath for a recovery - rates are rising once again!

It was set to be a relatively quiet day, with stock futures unchanged, yields modestly lower, bitcoin just shy of record highs... and then Trump woke up. 

First, in a post on his Truth Social just after 7:20am ET, the clearly angry president said that unless iPhone that are sold in the US are not also built in the US, then a "Tariff of at least 25% must be paid by Apple to the U.S."

The comment immediately wiped out tens of billions in value from AAPL stock, which tumbled $10 to $193, or more than 4%...

... and while the news also dragged broader futures lower, Trump saved his second market punishment for 25 minutes later when at 7:45am ET, the president doubled down on his post-awakening stream of Truth Social consciousness and wrote that he is "recommending a straight 50% Tariff on the European Union, starting on June 1, 2025. There is no Tariff if the product is built or manufactured in the United States." 

His ire was likely triggered by overnight reports that EU talks with the US had gone nowhere, which is why he said that Europe's "powerful Trade Barriers, Vat Taxes, ridiculous Corporate Penalties, Non-Monetary Trade Barriers, Monetary Manipulations, unfair and unjustified lawsuits against Americans Companies, and more, have led to a Trade Deficit with the U.S. of more than $250,000,000 [sic] a year, a number which is totally unacceptable."

The post slammed S&P futures which were already reeling from the AAPL news, and spoos tumbled about 100 points lower from where they were just minutes earlier.

The news also slammed bond yields, the euro, European stocks, crude, and bitcoin...

... while gold was the only asset that rose on the renewed trade war escalation.

VIX spiked back above pre-Liberation Day lows...

Now, we wait to see if 'retail' will step back in to save the day (because macro hedge funds have been positioning for just this kind of Trump-driven turmoil)

The sudden shift in Trump's temperament, not to mention markets, underscores the ongoing risk that shifts in US policy can abruptly upend market dynamics at short notice. Markets had rebounded in recent weeks on optimism that Trump was softening his approach to the tariffs and investor attention had shifted to concerns about the ballooning US debt and deficits.

“It’s going to keep markets on edge,” said Aneeka Gupta, head of macroeconomic research at Wisdom Tree UK Ltd. “Markets were hoping news on tariffs had abated until at least the 90-day pause expired, but that’s clearly not the case. Uncertainties are here to stay. We’re in for a period of very high volatility.”

The rest of this post was going to be the a recap of the overnight news, but obviously none of that matters now that Trump decided to take a nuke to newsflow and blow everything up.

As US traders were scrambling to pick up the pieces of wtf just happened, European stocks were dumping, while traders ramped up bets on further ECB monetary easing after dire wage data earlier. Money markets priced in 65 bps of additional easing in 2025, which implies three quarter-point rate cuts at the ECB’s remaining five scheduled decisions is most likely. Traders favored just two such reductions before Trump’s social media posts. 

“I think a lot of people see it as just another Trump tweet, which can be cancelled by another one in a few hours or a few days,” David Kruk, head of trading at La Financiere de L’Echiquier. “I don’t think a lot of European investors are selling on the news.” The same can no be said for US - or certainly crypto investors - who clearly relish this kind of rollercoaster idiocy.

Kruk said the bigger issue for investors remains the budget credibility of the US. Bond markets this week have jolted after Moody’s Ratings stripped the US of its top credit rating and the House’s approved a tax bill that is likely to increase the debt burden.

This week’s selloff in long-dated Treasuries presents a “great entry point” for buyers with the 30-year yield above 5%, according to Bank of America Corp. strategist Michael Hartnett.

The US government is likely to heed warnings from bond vigilantes, who are “incentivized to punish the unambiguously unsustainable path of debt and deficit,” the strategist said.

The Stoxx 600 is little changed as gains in mining and travel shares are offset by losses in insurance and consumer products. Here are the biggest European movers (or at least until the Trump tweets):

• GSK shares climb as much as 1.3% after the British drugmaker won US approval for Nucala as an add-on treatment for some patients with chronic obstructive pulmonary disease (COPD).
• Lundbeck shares rise as much as 5.7% after Kepler Cheuvreux initiated coverage on the stock with a buy recommendation, saying the valuation doesn’t reflect the “full value” of the Danish pharma company’s late-stage pipeline.
• PVA TePla gains as much as 12% after Deutsche Bank raises recommendation on the chip equipment firm to buy from hold, seeing the firm positioned to deliver structurally higher returns from 2026 onwards.
• AJ Bell shares jump as much as 10%, the most in a year, after the investment platform beat expectations in the first half and said annual results should come in above guidance. Shares are now trading at their highest level since December.
• PolyPeptide shares jump as much as 11%, among the top performers in the Swiss Performance Index on Friday morning, after the Swiss contract development and manufacturing organization secured additional financing under its revolving credit facility.
• Azimut gains as much as 5.3%, the most in more than a month, after the Italian asset manager raised its profit outlook for the year and flagged a deal with private equity fund FSI for a digital bank called TNB.
• European mining stocks are the best performers in Europe’s Stoxx 600 benchmark on Friday, as a Treasuries selloff eased, lifting base metals prices.
• KGHM gains as much as 4.2% as Poland’s plans to lower copper tax is set boost the metal producer’s output.
• Thule gains as much as 7.7% after Nordea upgrades to buy from hold, saying the year-to-date drop in the Swedish outdoor equipment maker’s share price offers an attractive entry point.
• Yellow Cake shares jump as much as 8.3%, climbing to its highest level since January, amid reports US President Donald Trump will sign multiple nuclear-related executive actions as soon as Friday.
• Games Workshop shares fall as much as 4.1%, slipping further from a recent record high, after the maker of the Warhammer tabletop game gave a trading update, with analysts pointing to a sparser games release slate for next year and several headwinds, including tariffs.
• Matas falls as much as 11% after full-year earnings from the Danish cosmetics retail group disappointed. DNB Carnegie analysts noted a “soft set of results,” that fell short on several key metrics, including revenues.

Asian equities rebounded, putting them on track for a sixth week of gains, as risk appetite recovers on encouraging progress in trade negotiations. The MSCI Asia Pacific index rose as much as 0.7%, with Japanese shares including Nintendo, Mitsubishi Heavy and Hitachi among the biggest boosts. The Philippines’ stock benchmark jumped 1.7%, recouping Thursday’s loss spurred by a call for the cabinet to quit. Stocks also advanced in India. Investors are looking past worries over US fiscal deficit that had weighed on regional equities throughout the week. Assurances of open communication between US and China also helped lift sentiment. 

In FX, the Bloomberg Dollar Spot Index eyes its lowest close since December 2023 as it falls 0.5% on concerns over the US fiscal outlook. The drop accelerate after Trump's tweets. The Swedish krona leads G-10 currencies against the greenback, rising 1%. The pound adds 0.6%, briefly touching a fresh three-year high of $1.35. The euro also climbs 0.6%. Meanwhile, mainland Chinese shares bucked the trend, falling 0.8%. Benchmarks in Taiwan and South Korea also ended slightly lower. 

In rates, treasuries extdended their gains, with the 10Y sliding as low as 4.45% after hitting 4.62% yesterday, before moving modestly higher. 30-year yields fell 2 bps to 5.02% having reached 5.15% during Thursday’s session. Longer dated maturities also outperform in Europe with UK and German 30-year borrowing costs falling 2-3 bps each.

In commodities, oil prices are of course in the red, with WTI falling 0.3% to $61 a barrel, because Trump wants to make sure there is zero capex in the shale patch and watch production crater, sending oil to triple digits in a year or so when the bullwhip effect from his punitive policies finally catches up. Spot gold climbs $39 to around $3,333/oz. Bitcoin is steady just above $111,000.

On today's calendar we get New Home Sales and the Kansas Fed.

Market Snapshot

• S&P 500 -1.5%
• Nasdaq 100 mini -1.8%
• Stoxx Europe 600 -2%;
• 10-year Treasury yield -5 basis point at 4.48%
• VIX 24.54
• Bloomberg Dollar Index -0.5% at 1214.85
• euro +0.5% at $1.1337
• WTI crude -0.5% at $60.9/barrel

Top Overnight News

• Trump threatens Apple with 25% tariffs, EU with 50% tariffs
• Trump is to sign orders to boost nuclear power as soon as Friday and will invoke a wartime act over US uranium independence, according to sources.
• Trump’s trade negotiators are pushing the EU to make unilateral tariff reductions on US goods, saying without concession the bloc will not progress in talks to avoid additional 20% “reciprocal” duties. FT
• Bank of Japan Governor Kazuo Ueda said on Thursday the central bank will closely monitor market moves as yields on super-long Japanese government bonds (JGB) reached record highs this week. RTRS
• The U.S. and China agreed to keep lines of communication open, following a call between senior officials Thursday, signaling continued high-level engagement as both sides work toward a broader deal. CNBC
• China has lowered the ceilings on deposit rates, three banking sources with direct knowledge of the guidance said on Friday, as authorities seek to protect banks' profit margins and discourage savings. RTRS
• Big investors say they are diversifying their bond portfolios to include greater exposure to markets outside the US as Trump’s trade war and the country’s growing deficit erode the appeal of the world’s biggest debt market. FT
• Japan’s key inflation gauge accelerated to 3.5% in April, the fastest clip in more than two years, fueled by rising food and energy costs. BBG
• Germany’s Q1 GDP is revised higher from +0.2% Q/Q to +0.4% thanks to a rush of activity as companies attempted to get ahead of Trump’s tariffs. WSJ
• UK retail sales gained 1.2% in April, continuing a surprisingly strong start to the year. Consumer confidence rose to -20 in May, GfK said, also beating estimates. BBG
• Big US banks (including JPM, BAC, C, and WFC) are exploring whether to team up to issue a joint stablecoin, a step intended to fend off escalating competition from the cryptocurrency industry. WSJ
• BofA Flow Show: USD 1.8bln outflows from US equities, USD 4bln from Japanese equities, inflows into European equities for a six week, EM saw largest inflow in 14 weeks

Tariffs/Trade

• US Deputy Secretary of State Landau spoke with Chinese Vice Foreign Minister Ma on Thursday and acknowledged the importance of the bilateral relationship to the people of both countries, while they discussed a wide range of issues of mutual interest and agreed on the importance of keeping open lines of communication.
• US President Trump is pushing the EU to cut tariffs or face extra duties with US negotiators to tell Brussels they expect unilateral concessions, while USTR Greer is preparing to tell EU counterpart Sefcovic that recent "explanatory note" falls short of US expectations, according to FT.
• Japanese PM Ishiba said he held a call with US President Trump in which they discussed tariffs, diplomacy and security, while there might be an occasion where he visits the US for in-person talks with Trump. Furthermore, Ishiba said there are no changes to Japan's stance on US tariffs and demand for the elimination of tariffs, nor to Japan's policy of talking with the US on creating US jobs.
• Japan’s chief tariff negotiator Akazawa reiterated there is no change to stance on requesting elimination of US tariffs, but noted they aim to reach an agreement, while he plans to visit the US around May 30th for the fourth round of trade talks, according to sources cited by Reuters.
• Japan is to reportedly propose investments by Nippon Steel (5401 JT) in tariff talks with the US, according to NHK.

A more detailed look at global markets courtesy of Newsquawk

APAC stocks were mostly in the green albeit with gains in the region capped following the indecisive performance stateside where participants digested PMI data and the House approved US President Trump's tax bill to send it to the Senate. ASX 200 eked mild gains as the strength in real estate, energy, tech, telecoms and financials was partially offset by losses in defensives and miners. Nikkei 225 returned to above the 37,000 level with the index unfazed by the firmer-than-expected Core CPI data, while Japanese Economy Minister Akazawa is visiting the US for a third round of talks and is reportedly planning to visit again late next week for a fourth round of discussions. Furthermore, Japanese PM Ishiba had a call with US President Trump and discussed US tariffs, diplomacy and security although no major developments were announced. Hang Seng and Shanghai Comp gained but with advances in the mainland limited in the absence of any fresh significant macro drivers, although there were some talks between the US and China at a deputy ministerial level, in which the US Deputy Secretary of State spoke with his Chinese counterpart on Thursday and discussed a wide range of issues of mutual interest. The two agreed on the importance of keeping open lines of communication.

Top Asian News

• China reportedly lowers deposit rate ceiling to protect banks' interest margins, according to Reuters sources.
• Philippine Central Bank Governor said they are looking at cutting holdings of US Treasuries, while he added they are looking at two more rate cuts which would not necessarily be consecutive and noted that a rate cut is on the table for June.
• Indian economic growth is on track, according to Reuters sources.
• Fast Retailing (9983 JT) 6M (JPY): Net Profit 233.57bln, +19.2% Y/Y, Op. Profit 304.22bln, +18.3% Y/Y; affirms FY24/25 outlook.
• China Vice Premier He Lifeng says China's economy continues to show an upward trend; growth potential of the primary, secondary and tertiary industries are being released, via Xinhua; The economy has shown great resilience and vitality

European bourses opened incrementally firmer and trudged higher throughout the morning - though more recently, some downside has been seen to display a mixed picture in Europe. European sectors opened without a clear bias, but have since moved to a strong positive direction. Basic Resources tops the pile, joined closely by Travel & Leisure and then Healthcare. Retail lags. US equity futures are flat/modestly firmer, following similar price action seen in Europe. Docket ahead is lacking in terms of Tier 1 data, but the focus will be on Fed speak from Musalem and Cook.

Top European News

• ECB's Rehn said a June rate cut is appropriate if backed by data, via Kathimerini.
• ECB's Stournaras said he sees a June rate cut and then a pause, via Kathimerini
• EU confirms it will soon delay bank trading rules by one year, according to Bloomberg.
• UK's OFGEM says from 1 July to 30 September 2025 price for energy for the typical household will go down by 7% to GBP 1,720/yr; this is 9% higher than the price cap set for the same period last year.

FX

• This week's downtrend for the USD has resumed. For today's session, the calendar is light in terms of tier 1 data but Fed's Goolsbee, Musalem, Schmid and Cook are all due on the speaker slate. DXY has just slipped below the bottom end of Thursday's 99.44-100.11 range.
• EUR is capitalising on the softer USD with EUR/USD back on a 1.13 handle. Today's detailed release of Q1 German GDP exceeded expectations but failed to engineer much in the way of additional support from the EUR given that the beat was attributed to front-loading ahead of expected tariff actions by the Trump admin. On the trade front, the FT has reported that US President Trump is pushing the EU to lower tariffs or face additional duties with US negotiators to tell Brussels they expect unilateral concessions. On the speaker front, ECB dove Stournaras has stated that he sees a June rate cut and then a pause, whilst Rehn has backed a June rate reduction, data permitting. The pair was little moved to the latest ECB Wage Tracker. EUR/USD currently around 1.1337.
• JPY is out-muscling the USD in the wake of hot Japanese core inflation data overnight. ING writes that "Excluding both fresh food and energy, core-core inflation rose to 3.0%, suggesting that underlying inflation will remain above the BoJ's target of 2.0%". On the trade front, Japan’s chief tariff negotiator Akazawa reiterated there is no change to the stance on requesting the elimination of US tariffs. However, he noted they aim to reach an agreement and plans to visit the US around May 30th for the fourth round of trade talks. USD/JPY currently sits within Thursday's 142.80-144.40 range.
• GBP stronger vs. the broadly weaker USD with Cable at its highest level since February 2022 - today's peak at 1.3491. Sentiment for the GBP has been underpinned by a strong showing for UK retail sales in April (M/M 1.2% vs. exp. 0.2%, prev. 0.1%). BoE's Pill is due to speak later in the session, however, he gave quite an extensive explanation over his dissent earlier in the week and therefore is unlikely to add much more that will be of use to markets.
• Antipodeans are both at the top of the G10 leaderboard alongside a pick-up in risk sentiment with newsflow otherwise light.
• PBoC set USD/CNY mid-point at 7.1919 vs exp. 7.2151 (Prev. 7.1903).

Fixed Income

• USTs are on a firmer footing, venturing as high as 110.03+ with the next target coming via Wednesday's peak at 110.10+. After a soft start to the week on account of the Moody's downgrade and concerns over the deficit impact of Trump's Tax/Spending Reconciliation bill, US paper is attempting to recover off the lows. Fresh US newsflow is relatively light after yesterday's passage of Trump's bill, which will now move to various Senate committees before being debated and voted on by the Senate floor. Today's Fed docket includes remarks from Goolsbee, Musalem, Schmid and Cook.
• German paper is on the front foot and tracking gains in global peers. Downticks from a better-than-expected outturn for German GDP proved to be fleeting with the beat attributed to front-loading ahead of expected tariff actions by the Trump admin. On the trade front, the FT has reported that US President Trump is pushing the EU to lower tariffs or face additional duties with US negotiators to tell Brussels they expect unilateral concessions. Note, USTR Greer and EU Trade Commissioner are set to meet in June. ECB speak and the latest ECB Wage Tracker today has had little impact on Bunds. Jun'25 Bund is currently sitting just above Thursday's best at 130.00 but down from its earlier session peak at 130.28.
• Gilts are higher despite a strong showing for UK retail sales in April (M/M 1.2% vs. exp. 0.2%, prev. 0.1%). BoE's Pill is due to speak later in the session, however, he gave quite an extensive explanation over his dissent earlier in the week and therefore is unlikely to add much more of note. After hitting a fresh MTD low on Thursday at 90.10, Gilts have ventured as high as 90.73.

Commodities

• Another subdued session for the crude complex despite the slide in the dollar and a revision higher in German Q1 GDP, with sentiment capped by Thursday's source reports that OPEC+ members are discussing whether to agree to another output hike of 411k BPD in July. In other news, the US-Iran nuclear talks will be going ahead today from 12:00 BST/ 07:00 EDT, although views heading into the meeting are rather pessimistic, with Iran suggesting any deal which includes zero enrichment will not go ahead. Most recently, the complex has lifted off worst levels but still resides in negative territory.
• Precious metals are mixed with the yellow metal underpinned by the softer dollar and ongoing tariff uncertainty. Spot gold gradually rebounded from yesterday's trough and returned to above the USD 3,300/oz level in APAC hours amid the cautious risk tone. Spot gold currently resides in a USD 3,287.07-3,334.46/oz range.
• Copper futures traded rangebound and were kept afloat alongside the mildly positive sentiment during the Asia-Pacific trade. 3M LME copper remains north of USD 9,500/t in a USD 9,502.80-9,598.95/t range.
• Russia's Arctic LNG 2 plant has shut down its first production train, according to Reuters sources.
• Japan's Steel Industry Head says Japan must urgently take trade measures against rising steel shipments from China.

Geopolitics

• Russian Foreign Minister says work on the memorandum leading to a ceasefire in Ukraine is at an advanced stage; will hold a second round of direct negotiations with Ukraine.
• Iran-US nuclear talks reportedly set to begin at 12:00 BST/07:00 EDT, according to IRNA.
• "Member of the Security Committee of the Iranian Parliament: The fifth round of negotiations will not reach a result", according to Al Arabiya.

US Event Calendar

• 5:00 am: Apr F Building Permits, est. 1412k, prior 1412k
• 10:00 am: Apr New Home Sales, est. 695k, prior 724k
• 10:00 am: Apr New Home Sales MoM, est. -4.01%, prior 7.4%

Central Banks :

• 8:30 am: Fed’s Goolsbee Appears on CNBC
• 9:35 am: Fed’s Musalem, Schmid Speak in Fireside Chat
• 12:00 pm: Fed’s Cook Gives Speech on Financial Stability

DB's Jim Reid concludes the overnight wrap

After a heavy selloff on Wednesday, markets began to stabilise again over the last 24 hours, despite investors’ ongoing fears about the fiscal situation. In particular, long-end Treasury yields started to fall again, with the 30yr yield (-4.3bps) moving down to 5.05%, whilst the dollar index (+0.37%) also recovered. But even so, there were still several signs of concern, as the 30yr Treasury yield had moved as high as 5.15% on an intraday basis, and a similar pattern was being echoed globally. For example, Japan’s 30yr yield (+3.3bps) moved up to 3.18% yesterday, the highest since that maturity was first issued in 1999. And in the UK, the 30yr yield (+3.2bps) moved up to 5.55%, closing just shy of its highest level since 1998.

Those moves came as the US House of Representatives narrowly passed the tax bill yesterday, with an incredibly tight 215-214 margin in favour. As a reminder, that would extend the Trump tax cuts from his first term, which are currently due to expire at the end of this year, and it also includes a $4tn increase in the debt ceiling. However, there’s still some way to go before passage, as it also has to pass the Senate, which is expected to make changes to the bill. For instance, fiscal hawks in the Senate are unhappy about some of the measures, with Senator Rand Paul having said “I’m not voting to raise the debt ceiling $4 trillion to $5 trillion”, whilst Senator Ron Johnson has described the deficits from the House bill as “completely unacceptable”.

The Republicans have a slightly more comfortable margin in the Senate of 53-47, but they can still only afford to lose 4 votes, and both chambers of Congress need to pass the same version of the bill before it can become law. So any changes made by the Senate will have to be re-voted on by the House, where it already passed by just one vote. 

Treasury Secretary Bessent has previously set a goal of July 4 for the bill to be signed, and Trump said in a post that “it’s time for our friends in the United States Senate to get to work, and send this Bill to my desk AS SOON AS POSSIBLE! There is no time to waste.” Another effective deadline is the late summer anyway, as the CBO have estimated that the debt ceiling will become an issue around August-September again, so Congress would need to raise the limit by then to avoid default.

Despite the fiscal concerns, US equities were comparatively resilient, with the S&P 500 (-0.04%) stabilising after its sharp -1.61% decline on Tuesday. That said, there was a late slump, with the index down -0.6% in the final 30 minutes of trading, having been in positive territory for much of the session. And nearly two-thirds of the S&P 500’s constituents declined, with defensive sectors including utilities (-1.41%) and healthcare (-0.76%) underperforming. Moreover, it would have been a larger decline had it not been for the Magnificent 7 (+0.78%), which outperformed after three consecutive declines.

One factor helping US assets to stabilise was some stronger US economic data, which continued to point away from a recession. For instance, the flash composite PMI for May was up to 52.1, up from 50.6 in April, and above the 50-mark that separates expansion from contraction. Moreover, the weekly initial jobless claims also remained in their recent range, coming in at 227k over the week ending May 17 (vs. 230k expected). So again, that showed no sign of a deterioration in the labour market, with the numbers still within their pre-Liberation Day range.

The rally also got a fresh boost from the decline in bond yields, with the 2yr Treasury yield (-2.8bps) falling back to 3.99%, whilst the 10yr yield (-7.0bps) fell back to 4.53%. In part, that followed comments from Fed Governor Waller, who suggested that if the tariffs were closer to 10% and that was done by July, then the Fed would be well placed “to kind of move with rate cuts through the second half of the year”.

In other Fed-related news, yesterday evening the US Supreme Court said that the Federal Reserve was an exception when it comes to the President’s ability to remove officials, referring to the Fed as a "uniquely structured, quasi-private entity" that was different to other independent agencies. So that offered a bit more certainty on the position of senior Fed officials, and whether Chair Powell might be removed before his term as Fed Chair ends in May 2026.

Back in Europe, the last 24 hours saw a much weaker performance, with the STOXX 600 (-0.64%) posting its biggest decline in over 6 weeks. That came amidst a disappointing set of economic data, with the flash PMIs narrowly falling into contractionary territory. For example, the Euro Area composite PMI was down to 49.5 in May (vs. 50.6 expected), which is the first sub-50 reading since December. So even though the data wasn’t showing an aggressive contraction, it added to the signs that the Euro Area economy had lost momentum since Liberation Day, leading to a bigger risk-off move. That was echoed in the country prints as well, with the composite PMIs in Germany (48.6), France (48.0) and the UK (49.4) also coming in below the 50 mark. Nevertheless, it wasn’t all bad news, and in Germany the Ifo’s business climate indicator rose to an 11-month high of 87.5 in May (vs. 87.3 expected).

That backdrop saw European equities lose ground across the board, whilst sovereign bond spreads also widened. So even as 10yr bund yields (-0.3bps) came down slightly, those on 10yr OATs (+1.0bps) and BTPs (+0.9bps) moved higher. So it also meant that the Italian 10yr spread over bunds moved back above 100bps, after recently falling below that mark for the first time since 2021.

Overnight in Asia, the mood has become more positive overnight given the recovery in US Treasuries. So that’s supported gains across the board, including for the Nikkei (+0.61%), the Hang Seng (+0.58%), the CSI 300 (+0.30%) and the Shanghai Comp (+0.08%). The one exception to that is the KOSPI (-0.04%), which has posted a very modest decline. But looking forward, US and European equity futures are also in positive territory, with those on the DAX (+0.10%) and the S&P 500 (+0.05%) both slightly higher.

The other main news overnight has been the latest CPI print from Japan. It showed headline CPI remaining at +3.6% in April (vs. +3.5% expected). Moreover, the core measure of inflation (excluding fresh food) was up to +3.5% (vs. +3.4% expected), which was its fastest level since January 2023. The Japanese Yen has strengthened +0.42% against the US Dollar this morning, although much of that has been driven by dollar weakness, with the dollar index down -0.30% overnight.

Elsewhere, one asset that continued to outperform was Bitcoin, which moved up to another record high of $111,092 yesterday. On the theme of cryptocurrencies, Marion Laboure put out a note yesterday on the GENIUS Act, which would establish rules around stablecoins.  

To the day ahead now, and data releases include UK retail sales for April, French consumer confidence for May, and US new home sales for April. Central bank speakers include the Fed’s Musalem, Schmid and Cook, and the ECB’s Lane.

A third consecutive night of air attacks across Russia and Crimea saw the Russian military intercept more than 100 drones sent from Ukraine, Russia’s Defense Ministry said early Friday.

The ministry cited that inbound drone action was seen in the skies of Kursk, Oryol, Tula, Bryansk, Ryazan, Belgorod, Ivanovo, Vladimir, Voronezh and Lipetsk. Dozens were intercepted over many of these territories.

While no fatalities from these overnight attacks emerged, the regional governor of Lipetsk oblast, which lies south of Moscow, said eight bystanders were injured by falling debris after drones were intercepted.

In that instance, the UAVs appeared to be targeting a battery manufacturing facility used by the Russian military. Ukraine has sent hundreds of drones this week against military-industrial bases as well as cities, villages, and residential neighborhoods - even airports.

The Russian Defense Ministry has said 485 Ukrainian drones were intercepted over the past three days, from Monday through Thursday. At least 60 have been downed over Moscow oblast.

Moscow Sheremetyevo Airport, via Skytrax

Ukraine officials are touting that the new drone strategy is focused on swarming Russia with kamikaze drones in order to destabilize the country by crippling infrastructure and weaking government control, with a focus on airport and travel disruptions.

Already the past week has seen suspension of flights across four major Moscow airports, and at hubs elsewhere in the country. Ukrainian media reports the following:

Ukrainian drones have forced at least 217 temporary airport closures across Russia since Jan. 1, independent Russian outlet Novaya Gazeta Europe reported on May 14, citing data from Russia's state aviation agency Rosaviatsia.

The figure already surpasses the combined total for all of 2023 and 2024, underscoring Kyiv's growing ability to put pressure on Russia, even in areas far from the border with Ukraine.

According to Serhii Bratchuk, spokesperson for the Ukrainian Defense Army's Southern Division, the surge in disruptions reflects a strategic shift in Ukraine's drone campaign.

Bratchuk described that "Moscow is the biggest aviation hub in the Russian Federation — flights go everywhere, not only across Russia, but worldwide," he told the Kyiv Independent.

"This is about the potential disintegration of Russian regions and the weakening of internal control," he laid out. "Aviation is not a cheap industry, and losses are incurred — by airports, by airlines — and it also has a psychological effect on passengers and cargo clients."

The Ukrainian military spokesman continued, "These disruptions are not accidental. They are part of a pressure campaign against logistics, air defense systems, and public morale."

Ukrainian drones attacked the famous Russian "Patriot Park" located in Kubinka near Moscow.

The "Patriot Park" is a complex themed around Russian military equipment and the Soviet Union's victory in World War II. It's the biggest facility of its kind in Russia. pic.twitter.com/YxYiP31pSj

"The Russian population has to pay for this war," the official emphasized. "Sleeping in tents at the airport is not the highest price, but it does affect morale."

But President Putin has responded this week by ordering the Russian Army to begin establishing a buffer zone along the border and inside Ukraine, which looks to including Russia's military expanding into Sumy and other areas. At this point the prospect of US-sponsored peace settlement looks far away in terms of being a practical achievable reality.

OnlyFans' parent company, Fenix International Ltd., is in talks to sell the porn-driven platform, built for creators, to a U.S.-based investor group at a potential valuation of around $8 billion, according to Reuters, citing three sources familiar with the matter.

The sources said the group is led by Forest Road Company, a Los Angeles-based investment firm. They noted that Forest Road executives explored taking OnlyFans public via an SPAC in 2022. 

The sources noted that other potential buyers have been discussing an OnlyFans acquisition with Fenix, though no additional details were provided about their identities. They added that a deal could be reached within weeks.

Here's more from Reuters:

The London-based company has drawn interest from several suitors in recent months.

Talks have been held at least since March, the people said. Three sources said a deal could be reached in the next week or two. The sources also cautioned that there was no certainty a deal will be struck and requested anonymity ahead of an official announcement.

According to publicly available data, Ukrainian American Leonid Radvinsky owns Fenix.

British filings showed that Radvinsky had paid himself at least $1 billion in dividends since buying OnlyFans in 2018.

OnlyFans surged in popularity during the Covid pandemic by allowing adult content creators to monetize their subscribers, reported $6.6 billion in revenue for the year ending November 2023—up from $375 million in 2020. Radvinsky's company takes about a 20% cut of creators' earnings. 

Reuters noted, "Porn makes OnlyFans untouchable for many big banks and investors ... because due diligence might find illegal content such as child sexual abuse material, trafficking victims and nonconsensual porn." 

China’s top EV battery maker CATL did not disclose how much it received in state subsidies in its latest full-year report—just before raising $5.3 billion in a secondary share listing in Hong Kong this week.

Previously, CATL had reported this data in line with mainland Chinese disclosure rules. Listed in Shenzhen since 2018, the company became dual-listed in Hong Kong on Tuesday, according to Nikkei Asia.

The most recent subsidy figure available is from the first half of 2024: 3.84 billion yuan ($532 million)—the highest among all A-share companies during that period. Despite not reporting second-half subsidies, this was still the second-largest full-year subsidy total, behind only Sinopec (4.06 billion yuan).

Nikkei Asia writes that CATL received more in the first half of 2024 than BYD, Great Wall Motors, and SAIC Motor did for the entire year. It was also the top subsidy recipient in 2023.

These figures come from Wind data and were verified by Nikkei Asia through company filings.

CATL’s reports categorize subsidies under “other income,” specifically “government subsidies.” In interim reports, the amounts match exactly—3.84 billion yuan in 2024 and 2.85 billion in 2023. In its full-year 2023 report, “other income” totaled 6.26 billion yuan, with 5.72 billion attributed to subsidies.

In 2024, “other income” rose 59% to 9.96 billion yuan, but without a breakdown, suggesting additional undisclosed subsidies in the second half of the year.

CATL declined to comment to Nikkei Asia about the missing figures or the change in disclosure. Executives, including Chairman Robin Zeng Yuqun, took no questions at the Hong Kong listing ceremony—a growing trend among mainland firms listing there.

Grant Thornton, CATL’s auditor since 2018, also did not respond to Nikkei Asia. In a press release, it said it helped CATL “navigate complexity” between Shenzhen and Hong Kong regulations, adding: “Grant Thornton China delivered tailored solutions, including financial statement audits.”

Beyond CATL, the list of top subsidy recipients reflects Beijing’s strategic priorities. While state oil giants Sinopec and PetroChina lead for energy security reasons, the inclusion of EV players like BYD, Great Wall, SAIC, and GAC signals strong government support for the electric vehicle industry.

By Oliver Darcy of Campus Reform

In a recent interview, a well-known professor who taught at Columbia University for 46 years questioned whether or not President Obama actually attended the Ivy League school.

Prominent Columbia professor Henry Graff says he isn’t sure President Obama ever attended the Ivy League school.

“I taught every significant politician that ever studied at Columbia,” said Columbia Emeritus Professor of History Henry Graff, in an interview last week with Wayne Root, a contributor at The Blaze. “Between American History and Diplomatic History, one way or another, they all had to come through my classes.”

“Not Obama,” he continued. “I never had a student with that name in any of my classes. I never met him, never saw him, never heard of him.”

Graff alleged that “none of the other Columbia professors knew him either” and said he is “very upset” to hear Obama referred to as a graduate of Columbia University.

“I am angry when I hear Obama called ‘the first President of the United States from Columbia University,’” he said. “I don’t consider him a Columbia student. I have no idea what he did on the Columbia campus. No one knows him.”

Graff is the recipient of the Kaul Foundation Award of Excellence in the field of education, an honor that is tied to a prize of $100,000. He is the author of multiple books and is known for teaching the first course on the history of the Presidency.