From the persistent climb in oil futures to murmurs of a historic mega-merger between Shell and BP plc, the morning news reads like a prelude to a deeper transformation in how the world produces, trades, and argues over energy. At the center of it all is oil. Prices have ticked upward for two straight sessions, buoyed by falling U.S. inventories and ongoing geopolitical uncertainty. Yet even as markets cheer, a sense of anxiety undercuts the rally. The fear of an eventual oversupply looms large, echoing past cycles of boom and bust.

Such a deal between Shell and BP would signal the biggest consolidation in Big Oil since Exxon and Mobil merged a quarter-century ago. It would also be a glaring contradiction to the climate pledges both firms have made in recent years. Fossil fuel companies, under regulatory siege and investor pressure, are seeking refuge in size. With scale comes lobbying power, market control, and the ability to buy time before the renewable reckoning arrives. 

Meanwhile, the Trump administration is turning the transatlantic climate agenda into a battleground. In new trade negotiations, U.S. representatives are reportedly targeting the European Union's greenhouse-gas regulations, accusing them of protectionism, according to the Wall Street Journal. It's an audacious move, to say the least.

Meanwhile, trade doves fluttered in from Washington and Beijing with word that the U.S.-China tariff war is thawing; Commerce Secretary Howard Lutnick even promised ten more mini-truces "imminently." The S&P 500 edged toward fresh highs while Europe - still digesting slower growth and faster inflation - lagged behind.

But Friday's U.S. inflation data introduced an unsettling note. The core Personal Consumption Expenditures (PCE) price index - a favored inflation metric for the Fed - rose 2.7% year-over-year in May, overshooting expectations of 2.6%. Even more troubling, the monthly increase hit 0.2%, double the forecasted 0.1%. Personal spending, meanwhile, fell 0.1% compared to the expected rise. The mixed signals complicate the case for rate cuts: inflation may be stickier than hoped, and consumers - who've powered the post-COVID economy - are beginning to tap the brakes. For Fed watchers, the path to easing just became a little foggier.

On the trading floor, the glow-ups belonged to tech's usual aristocracy. Nvidia kept its crown as the nation's biggest company, while Palantir has doubled this year. Nike jumped almost ten percent after forecasting only a modest revenue slip. Core Scientific soared on takeover gossip, while Coinbase drifted lower.

Policy machinery keeps grinding. On Capitol Hill, Treasury Secretary Scott Bessent quietly euthanized the “revenge tax” on foreign firms after G-7 partners promised not to clobber U.S. champions with extra levies. China dangled expedited rare-earth exports as a goodwill gesture. 

In the Asia-Pacific region, Japan's Nikkei 225 had its best week in two months, nearing records set in summer 2024, with a 1.4% gain to round off the week. By contrast, the China-US trade deal hasn't had much impact on mainland Chinese and Hong Kong markets, which ended slightly in the red. South Korea is ending the week on a weaker note, though Tuesday's surge should secure a fifth straight week of gains. Australia has slipped slightly, while India is marginally higher.
 
In Europe, leading indicators are bullish, with the Stoxx Europe 600 up 0.8%. Futures on Wall Street haven't reacted much to inflation data and remain slightly up.

Today's economic highlights:

On today's agenda: in the United States, the Core PCE Price Index MoM and YoY, personal income, consumer spending, and the University of Michigan sentiment. In Japan, the unemployment rate, retail orders, and retail sales; in France, economic confidence, the harmonized CPI of the EU, and the PPI; in the eurozone, economic confidence. See the full calendar here.

  • Dollar index: 96,860
  • Gold: $3,277
  • Crude Oil (BRENT): $66.90 (WTI) $65.54
  • United States 10 years: 4.25%
  • BITCOIN: $106,850

In corporate news:

  • Unilever has acquired Dr Squatch for $1.5 billion.
  • Barclays faces a lawsuit due to connections with Epstein.
  • Visma has chosen London over Amsterdam for its IPO.
  • Apple is altering its App Store policies to comply with an EU antitrust order.
  • Novo Nordisk has partnered with WeightWatchers to expand access to Wegovy.
  • Siemens Gamesa and Siemens Energy are reducing dependence on Chinese rare earths by shifting production to the US and Europe.
  • Nike's shares are rising, despite a smaller-than-expected revenue drop, after the group announced it's reducing its dependence on Chinese manufacturing .
  • Germany's data watchdog asked Apple and Google to drop AI startup DeepSeek from their German app stores over unlawful transfers of user data to China.
  • Meta Platforms accused EU antitrust officials of discriminating against its pay-or-consent advertising model despite extensive compliance changes.
  • Li Auto cut its Q2 delivery target to about 108 000 vehicles after a sales-system upgrade, preparing for the Li i8 launch.
  • The United States and China agreed on a framework to speed rare-earth exports to the U.S., easing supply-chain pressures on manufacturers.
  • RTL Group will buy Sky Deutschland from parent Comcast for up to €527 million, combining streaming and sports rights for 11.5 million subscribers.
  • Amentum completed the $360 million sale of its Rapid Solutions unit to Lockheed Martin, sharpening its focus on technology services.
  • J.M. Smucker pledged to eliminate FD&C artificial colours from its consumer food products by 2027 and from school offerings by 2026.
  • Xiaomi's new YU7 SUV racked up almost 289,000 first-hour orders, threatening Tesla's Model Y on both price and specs.
  • U.S. officials told consultancies including McKinsey and Boston Consulting Group to justify federal contracts and propose cost savings.
  • Cloud-computing firm CoreWeave is close to buying bitcoin miner Core Scientific after an earlier bid was rejected.
  • Anna Wintour will step down as editor-in-chief of American Vogue while staying in charge of global Vogue content for Condé Nast.
  • Walgreens Boots Alliance narrowed losses and grew sales thanks to its U.S. healthcare segment and cost cuts ahead of a planned privatization.
  • Shell formally denied being in takeover talks with rival BP.

Analyst Recommendations:

  • Affiliated Managers Group, Inc.: Goldman Sachs upgrades to buy from neutral with a price target raised from USD 197 to USD 218.
  • Alphabet Inc.: BNP Paribas Exane downgrades to neutral from outperform with a target price reduced from USD 213 to USD 172.
  • Amazon.com, Inc.: BNP Paribas Exane upgrades to outperform from neutral with a price target raised from USD 200 to USD 254.
  • Autodesk, Inc.: Berenberg upgrades to buy from hold with a target price raised from USD 325 to USD 365.
  • Boeing: Rothschild & Co Redburn upgrades to buy from neutral with a price target raised from USD 180 to USD 275.
  • Crispr Therapeutics Ag: Clear Street LLC downgrades to hold from buy with a target price of USD 45.
  • Estee Lauder: HSBC upgrades to buy from hold with a price target raised from USD 80 to USD 99.
  • Franklin Resources, Inc.: Goldman Sachs upgrades to buy from neutral with a target price raised from USD 22.50 to USD 29.
  • Nike, Inc.: HSBC upgrades to buy from hold with a target price raised from USD 60 to USD 80.
  • The Trade Desk, Inc.: Evercore ISI upgrades to outperform from in-line with a target price of USD 90.
  • Amazon.com, Inc.: BNP Paribas Exane upgrades to outperform from neutral with a price target raised from USD 200 to USD 254.
  • Boeing: Rothschild & Co Redburn upgrades to buy from neutral with a price target raised from USD 180 to USD 275.
  • Coinbase Global, Inc.: Cmb International Capital Corp Ltd maintains its buy recommendation and raises the target price from USD 325 to USD 413.
  • Meta Platforms, Inc.: Piper Sandler & Co maintains its overweight recommendation and raises the target price from USD 650 to USD 808.
  • Micron Technology, Inc.: CTBC Securities Investment Service Co LTD maintains its add recommendation and raises the target price from USD 81 to USD 142.
  • Microsoft Corporation: BNP Paribas Exane maintains its outperform recommendation and raises the target price from 500 to USD 606.
  • Nike, Inc.: Barclays maintains its equalweight recommendation and raises the target price from 53 to USD 64.
  • Roblox Corporation: Wells Fargo maintains its overweight recommendation and raises the target price from USD 78 to USD 116.