Good morning. The US dangles the possibility of a trade truce with China. Rachel Reeves may need a £22 billion buffer. And read about a $300 trillion crypto mistake. Listen to the day’s top stories.
— Lily Nonomiya and Teo Chian Wei
US Treasury Secretary Scott Bessent dangled the possibility of extending a pause of import duties on Chinese goods for longer than three months if the country halts its plan for strict new export controls on rare-earth elements. Here’s our explainer on how trade tensions between the world’s biggest economies have flared up again. And America isn’t the only country nervous about China curbs—G-7 ministers are considering a joint response to discourage the country’s planned move to control rare earths.
UK Chancellor Rachel Reeves needs to raise her fiscal buffer fivefold to have a better-than-even chance of avoiding more tax rises and spending cuts in the coming years, according to the Institute for Fiscal Studies. She may need to find as much as £22 billion at the budget next month just to restore the razor-thin £9.9 billion margin she had in March, the think tank said.
Gold rose to a fresh record as heightened trade frictions and bets that the Federal Reserve will press on with monetary easing supported demand. The buying spree has spread to other precious metals, with silver surging more than 3% yesterday. Read about how gold jewelry sales have rebounded as buyers see no end to the blazing rally. Check out our Markets Today live blog for all the latest news and analysis relevant to UK assets.
The 76-year-old Frenchman saw his fortune soar by almost $19 billion yesterday to $192 billion, the second-biggest market-based increase ever for him, according to the Bloomberg Billionaires Index.
The surge was driven by a 12% increase in shares of LVMH—the designer brand company he controls—after it reported better-than-expected quarterly sales.
In a newspaper interview last month, the billionaire lashed out at economist Gabriel Zucman, a proponent of an eponymous wealth tax that has garnered strong support from some of the country’s left-wing political opposition.
Crypto’s recent sell-off revealed that some stablecoins are a lot more risky than they are made out to be, Lionel Laurent writes. It might be just the reminder traders need. With huge pressure on regulators to keep up and onshore perpetual contracts being considered by the US, let’s hope the next crash doesn’t expose more tokenized hedge funds.
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Before You Go
Source: PayPal
Stablecoins issuer Paxosaccidentally minted $300 trillion of PayPal’s PYUSD token before burning them minutes later. The size of the error far exceeds the $2.4 trillion in US dollars in circulation and the entire $3.8 trillion crypto market.
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