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  • Open Terms Newsletter – May 24–31, 2025

Open Terms Newsletter – May 24–31, 2025

May 31, 2025

Table of Contents

  • Our Week in the Market

  • Yield Curve’s Revenge

  • Tariffs & Tribulations

  • What to Look Forward To Next Week

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Our Week in the Market

Equities:

  • S&P 500: +1.17% – best week in a month, boosted by tech optimism and tariff pauses.

  • Nasdaq: +1.09%, Dow: +1.10%.

  • Top sectors: Real Estate (+2.12%); laggards included Energy (–0.86%).

  • Emerging markets struggled (–1.84%), weighed by China's slump.

Bonds:

  • Treasury yields dipped: 2-year (–5 bps), 10-year (–10 bps).

  • Soft economic data fueled Fed pause speculation.

Commodities:

  • Oil dropped under $66 amid OPEC+ uncertainty.

  • Precious metals slipped on recession-inflation confusion.

FX:

  • USD slightly stronger, but down five months straight.

  • Euro supported by ECB rate-cut hopes.

Yield Curve’s Revenge

  • Headline: After two years upside-down, the U.S. yield curve just un-inverted.

  • Meaning: Historically signals recession within six months.

  • 10-year yield: 4.41%, comfortably above 2-year (3.89%).

  • Implication: Either an economic miracle or a Fed pivot is imminent.

  • Inflation watch: April CPI at 2.1%—lowest of the year but might rebound.

Tariffs & Tribulations

  • Legal Drama: Court struck down Trump-era China tariffs; immediate appeal filed.

  • Good Cop: Trump delays EU tariffs, easing market jitters.

  • Bad Cop: Criticizes China over Phase One trade violations, stirring new tensions.

  • Global Reaction: EU cautiously cooperative; China hints retaliation.

What to Look Forward To Next Week

  • Mon, June 2: Apple WWDC (AAPL)—new product announcements.

  • Wed, June 4: Eurozone CPI (Eurostat)—watch for ECB cues.

  • Thu, June 5: ECB Policy Decision—expected rate cut.

  • Fri, June 6: U.S. Nonfarm Payrolls—Fed clues in jobs report.

  • Fri, June 6: RBI Rate Decision (India)—third straight cut anticipated.

Stay sharp, stay informed, and enjoy your weekend. We'll catch you next week—market rollercoaster and political circus included.

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