Market performance – as at June 13, 2025
Global equity markets declined over the week ended June 13. Investor sentiment initially improved in response to positive remarks from both the U.S. and China concerning their trade talks that took place in London. U.S. core inflation data remained steady for the third consecutive month thanks to moderation in airfare and energy costs. The S&P/TSX Composite Index gained, led by the Health Care and Energy sectors. U.S. equities moved lower, with weakness in the Financials sector. Yields on 10-year government bonds in Canada rose. The price of oil and gold increased over the week, especially at the end as tensions flared in the Middle East.
U.S. and China edge closer to trade deal
London, England, was the host city for potentially pivotal trade negotiations between the U.S. and China.
The outcome could promote some international trade stability and moderate trade tensions that have been escalating since U.S. President Donald Trump announced sweeping tariffs.
President Trump announced confidence in progress focused on rare earth exports from China to the U.S. and looser restrictions on vital semiconductor components from the U.S. to China.
The U.S. administration is confident that a deal is close, while Chinese authorities were a little more restrained in their enthusiasm.
President Trump has spoken about 55% tariffs on Chinese products, while the U.S. would face 10% tariffs.
Prior to the start of trade talks, data from Chinese customs reflected a 35% decline in exports to the U.S. in May compared to the same period one year earlier.
Total exports for China rose 4.8% in May compared to 8.1% in April on a yearly basis.
OPEC weighs in on oil market
The Secretary-General of OPEC was in Calgary for the Global Energy Show this week and revealed the organization’s forecast for global oil demand.
OPEC expects oil demand to increase strongly by 2050 to exceed 120 million barrels a day.
As such, significant investment in the oil industry is warranted, and the source of demand includes the manufacturing of technology for renewable energy.
Canada’s record-high oil output in 2024 was commended. This level of output was made possible by the completion of the Trans Mountain Pipeline.
The capacity of the original pipeline was tripled, and further capacity increases are in the pipeline for 2027 using techniques to help the crude oil flow more easily.
Global oversupply remains a potential issue, especially given that OPEC is scaling back production cuts this summer. The price of oil moved up at the end of the week, with tensions increasing sharply in the Middle East.
U.S. inflation update released
Core inflation data for May came in at 2.8%, according to the U.S. Bureau of Labour Statistics, which was slightly less than expected.
Economists had been expecting higher prices in May due to the impact of tariffs, but moderating airfare, energy and automotive costs contributed to the decline.
Shelter costs were among the largest drivers of price increases.
The U.S. Federal Reserve Board makes an interest rate decision on Wednesday and will take into account modest producer price inflation as well.
It seems that the impact of tariffs on inflation has been fairly moderate so far. However, the US relies on China quite a bit for major appliances, and in this category, prices rose by 4.3%.
World Bank voices global growth concerns
The World Bank has issued a warning about the potential negative impact on living standards if global growth slows as forecast over the next decade.
Global growth is forecast to be 2.3% in 2025, and almost two-thirds of countries received lower growth forecasts compared to six months ago.
The bank cited the effect of U.S. tariffs on slowing global trade and denting consumer confidence. However, it didn’t go so far as to project a global economic downturn.
The growth forecast for Canada in 2025 stayed the same at 1.4%, but the risk of trade policy on exports and investments was highlighted.
Canadian Prime Minister Mark Carney is among the G7 leaders to gather for a summit in Alberta, Canada, next week. Trade relations with the U.S. will be top of mind.
