Global Highlights This Week: Trump's Tariff Cloud, Nvidia's Earnings Report, and Japan's Government Bond Auction on the Horizon

With U.S. President Trump's sudden escalation of tariff threats last Friday, the rebound in the U.S. stock market over the past one and a half months came to an abrupt halt.

 

This week, in addition to the unpredictable rhetoric from the U.S. President, there are multiple events capable of triggering market volatility, including the Federal Reserve's meeting minutes, Nvidia's earnings report, key U.S. inflation data, and Japan's ultra-long-term government bond auctions.  

 

On Friday, Trump threatened to impose a 50% tariff on the European Union starting June 1 and said he would impose a 25% tariff on smartphone manufacturers like Apple. The market is still waiting to see the likelihood of these threats materializing, as the U.S. government has made too many "flip-flop" decisions recently.  

Multiple indicators also show that U.S. consumers have reached a consensus on the negative sentiment toward Trump's tariffs. According to the latest poll released by Harris Poll, nearly 70% of respondents expect daily necessities to rise in price due to "Trump's tariffs." Meanwhile, 56% of U.S. adults said their household financial situation would be better without the tariff policies.  

 

As an intuitive tool to measure the "scope of Trump's policy overreach," U.S. long-term Treasury yields have become the most critical trading indicator. The Federal Reserve's meeting minutes and PCE inflation data released this week will serve as a window for investors to observe U.S. inflation conditions and how monetary policy makers view tariff-related concerns.  

The U.S. April durable goods orders data released this Tuesday may also attract attention, as it will reflect the impact of tariffs. ING economist James Knightley noted in a report that Boeing only recorded 8 aircraft orders in April, down from 192 in March, which will significantly drag down the durable goods orders data.  

 

As a recent risk factor, this week's U.S. Treasury auctions are skewed toward medium-and short-term bonds, so demand may not be as dismal as last week's long-term Treasury auctions. According to the schedule, $69 billion in 2-year Treasury notes will be auctioned on Tuesday, $70 billion in 5-year notes on Wednesday, and $44 billion in 7-year notes on Thursday. Additionally, $28 billion in 2-year floating-rate Treasury notes will be issued on Wednesday.  

 

Of course, whether issues arise with U.S. Treasuries also depends on developments in Japan. Japan's Ministry of Finance will auction 500 billion yen in 40-year government bonds this Wednesday and issue 2.6 trillion yen in 2-year bonds on Friday.

 

Last week's disastrous 20-year Japanese bond auction has made this week's data particularly closely watched. Bank of Japan Governor Kazuo Ueda will also speak this Tuesday, and the market will closely monitor any mentions of interest rate hikes.  

In the corporate sector, the highlight of the week will be Nvidia's earnings report. The AI giant, which has recently secured frequent large orders, needs to convince the market that its stock price still has room to rise.

 

The market will also focus on how Nvidia assesses the impact of a $5.5 billion inventory charge for H20 chips on its subsequent performance. Jensen Huang lamented this week that Nvidia's market share in China was nearly 95% four years ago but has now fallen to just 50%.  

Additionally, key players in the AI industry chain such as Salesforce, HP, and Dell will also release earnings reports.  

 

In terms of industry catalysts, the Bitcoin 2025 Conference will be held in Las Vegas from Tuesday to Thursday this week. U.S. Vice President Vance and the CEOs of Strategy and Robinhood will deliver keynote speeches.  

Notably, the current U.S. government also appears to be counting on the "crypto sector" to defuse the U.S. Treasury crisis. U.S. Treasury Secretary Besant said in a TV interview on Friday that the Trump administration is "all in" on the cryptocurrency sector and is working to provide a clear regulatory framework for digital asset companies.  

(Bitcoin reached a new all-time high last week)

Besant also reiterated his key prediction that U.S. dollar stablecoins will create $2 trillion in demand for U.S. Treasuries and notes in the short term, far exceeding the current $300 billion scale.  

 

This Wednesday, investment bank Jefferies will hold its annual eVTOL summit, with listed companies such as Horizon Aircraft, Honeywell, and Blade Air Mobility confirmed to attend.  

 

Last Monday, the oil industry also saw the "arbitration of the century." The International Chamber of Commerce Arbitration Court held a closed hearing in London to consider disputes involving ExxonMobil, CNOOC, and Hess. The focus is on whether Chevron's $53 billion acquisition of Hess can avoid the pre-emptive rights of ExxonMobil and CNOOC to Hess's equity in the Guyana oil fields.  

 

Currently, tens of billions of dollars in global markets are involved in arbitrage trading related to this arbitration case. All parties expect the dispute's outcome to be announced in the third quarter of this year.  

 

Overview of Important  Economic Events This Week:

• Monday: U.S. stock markets closed for Memorial Day; Federal Reserve Chair Powell delivers a commencement speech at Princeton University; European Central Bank President Lagarde gives a speech.  
• Tuesday: Bank of Japan Governor Kazuo Ueda speaks; Eurozone May Economic Sentiment Index released; U.S. May Conference Board Consumer Confidence Index released; U.S. April durable goods orders data released.  
• Wednesday: Reserve Bank of New Zealand announces interest rate decision and monetary policy statement; OPEC+ ministerial meeting held; U.S. auctions $70 billion in 5-year Treasury notes and issues $28 billion in 2-year floating-rate Treasury notes; Japan's Ministry of Finance auctions 500 billion yen in 40-year government bonds.  
• Thursday: Federal Reserve releases May monetary policy meeting minutes; U.S. Q1 real GDP annualized quarterly rate revised value released; Bank of Korea announces interest rate decision; U.S. auctions $44 billion in 7-year Treasury notes.  
• Friday: U.S. April core PCE price index released; U.S. May University of Michigan Consumer Sentiment Index final value released; Japan issues 2.6 trillion yen in 2-year government bonds.