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All major stock markets have had a strong month

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Markets focused on inflation data and ongoing U.S. tariff

issues

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Dollar battling to end 2025's run of monthly losses

By Marc Jones

LONDON, May 30 (Reuters) - World stocks were heading for

their best month since late 2023 on Friday and the dollar was

flirting with its first monthly rise of the year, while traders

waited for key inflation data and assessed the latest in

Washington's to and fro on tariffs.

Markets have been see-sawing all week as investors try to

ride out a rollercoaster news flow after a U.S. court blocked

most of President Donald Trump's tariffs and a federal appeals

court temporarily reinstated them.

An initial fall by European stocks on Friday turned into

0.3%-1% gains despite an unexpected dip in German retail sales

and as Wall Street futures beginning to sag again ahead of U.S.

PCE inflation data due later.

MSCI's main world index is up over 5% this

month while the dollar, which was up 0.3% on

Friday, is tantalizingly close to its first positive month of

2025.

It was helped by benchmark 10-year U.S. Treasury yields

- which are a proxy for U.S. borrowing costs -

rising 0.5 basis points in European trade. They had dipped on

Thursday on soft economic data and a solid 7-year bond auction.

Investors have also been rattled by a little-publicized

provision in Trump's budget bill that would allow the government

to impose taxes of up to 20% on foreign investment.

"A foreign tax provision in the One Big Beautiful Bill Act

is alarming," Brown Brothers Harriman strategist Elias Haddad

said, adding that all the uncertainty raised the risk of the

U.S. entering "a period of stagflation".

Oil prices were on track for a second consecutive weekly

drop on expectations of another OPEC+ output hike, although they

were up on the day and still up for the month as a whole.

Japan's Nikkei saw profit taking overnight after

its near 2% rally the previous day, with investors also

concerned about Japanese debt levels and the impact of tariffs.

The yen appreciated as much as 2% from its low on Thursday

and was changing hands at roughly 144 per dollar in

London. The euro and pound were down 0.3% and 0.1% at $1.13

and $1.34 respectively.

In Asia, Hong Kong's Hang Seng had dropped 1.2%, with

Apple ( AAPL ) suppliers hit by the U.S. tariff reversal. Mainland

Chinese blue chips dipped 0.5% too although both

scored solid monthly gains. Korean stocks have fared even

better, notching up their best month since November 2023 in line

with the main world index.

An index tracking emerging market currencies

meanwhile has also gained about 2% for the month. That is also

its best since November 2023. Soaring gold prices have helped

Ghana's cedi rocket nearly 40% this month.

"Trump's trade agenda remains alive and kicking, with the

legal battle adding yet another layer of uncertainty," said

Rodrigo Catril, senior FX strategist at National Australia Bank.

"The only thing that looks more certain is more

uncertainty," he said.

Despite the courtroom drama, the Trump administration said

negotiations with top trading partners were continuing unabated.

Treasury Secretary Scott Bessent said during an interview

with Fox News that he was scheduled to have talks with a

high-level Japanese delegation later on Friday in Washington,

although he said talks with China were "a bit stalled".

(Additional reporting by Kevin Buckland in Tokyo; editing by

Sophie Walker)