Germany’s stock market was on the rise after chancellor Friedrich Merz unveiled a €46 million boost for corporates in Europe’s biggest economy, with tax breaks and accelerated depreciation on the cards to reverse the contraction.
Trade talks between the US and the European Union are off to a good start according to the bloc’s Maros Sefcovic and US Trade Representative Jamieson Greer, although the latest steel tariffs threw a spanner in the works. Separately, the White House is seeking to renegotiate some of the Joe Biden-era grants to semiconductor firms.
Meanwhile, stock markets on Wall Street nudged higher with tech stocks on the rise as soft services activity and employment figures pushed down yields on Treasuries as investors ponder whether the Federal Reserve will need to cut rates.
And New Zealand’s Commerce Commission has put the spotlight on supermarket suppliers covering the retailers’ costs and payments for promotions to level the playing with smaller operators.
Going for growth
Germany’s DAX 30 climbed 0.8% after the country’s government announced a major package to provide relief to struggling companies, offering depreciation options of as much as 30% a year for three years, and an annual reduction to the corporate tax rate by one percentage point from 2028 until it reaches 10% by 2032.
The European powerhouse is facing its third year of economic contraction for the first time in its post-war history.
Meanwhile, shares of conglomerate Thyssenkrupp gained 3% after it announced plans to spin out 49% of its defence division, TKMS, to shareholders.
Across the Atlantic, stock markets edged higher with the S&P 500 up 0.2% in late trading with tech stocks driving gains.
Weaker than services activity and private sector hiring saw a rally in bonds as the yield on 10-year Treasuries fell 9 basis points to 4.37%, with investors weighing up the prospect of the Fed having to cut interest rates further.
“US economic data was weaker than expected and adds to the evidence that activity is slowing following the tariff shock,” Bank of New Zealand senior interest rate strategist Stuart Ritson said in a note. “US Treasury yields fell sharply in response as the market priced additional easing by the Federal Reserve.”
The kiwi dollar rose to 60.32 US cents at 7am in Auckland from 59.97 cents yesterday.
The clampdown on federal government spending may undermine the data underpinning those decisions, with the Wall Street Journal reporting that the Bureau of Labor Statistics cutting back the number of businesses surveyed in its monthly inflation report.
Late night scrolling
US President Donald Trump reiterated his call for Fed chair Jerome Powell to cut interest rates in a post on Truth Social, having earlier taken to the platform to bemoan how tough his Chinese counterpart Xi Jinping is in pursuing a trade deal ahead of an expected call between the superpowers' leaders.
The White House’s deadline for countries to make their best offers to take trading relationships forward was Wednesday in the US, while trade talks with the European Union had a solid start despite last week’s hiking of steel import levies. New Zealand hasn’t engaged, opting instead to accept the 10% tariff.
Trump’s administration is also renegotiating some grants issued to semiconductors under the previous regime.
Meanwhile, New Zealand’s Commerce Commission put the spotlight on two behaviours it believes are reinforcing the positions of the major supermarket operators and large suppliers, and stifling competition. The regulator is proposing changing the grocery supply code to reduce the payments supermarkets to charge suppliers, and urged firms to scale back funding for promotions to improve pricing transparency.
Local data today include March quarter building work put in place.
Reporting by Paul McBeth. Image from Elina J. Pilz on Unsplash.
