(The opinions expressed here are those of the author, a

columnist for Reuters)

By Mike Dolan

LONDON, May 30 (Reuters) - What matters in U.S. and

global markets today

By Mike Dolan, Editor-At-Large, Financial Industry and Financial

Markets

This week's U.S. tariff whiplash has left financial markets

dazed, as anxiety about foreign capital taxes and fresh rate cut

hopes add to the confusion. June promises to be a tense month in

an already turbulent year.

It's Friday, so today I'll provide a quick overview of

what's happening in global markets and then offer you some

weekend reading suggestions away from the headlines.

Today's Market Minute

* A federal appeals court temporarily reinstated the most

sweeping of President Donald Trump's tariffs on Thursday, a day

after a U.S. trade court ruled that Trump had exceeded his

authority in imposing the duties and ordered an immediate block

on them.

* The Trump administration's trade war has cost companies more

than $34 billion in lost sales and higher costs, according to a

Reuters analysis of corporate disclosures.

* The safety of Germany's gold reserves held overseas and in New

York in particular, until recently mainly a talking point for

the country's far-right party and gold bugs, is becoming a

matter of public debate with Donald Trump back in the White

House.

* While we may not see a full-blown debt crisis in the U.S.,

there's a growing sense that "the fiscal" matters for markets

more now than it has for decades. Reuters columnist Jamie

McGeever explores the assumptions baked into the current U.S.

debt and deficit projections.

* Reuters columnist Gavin Maguire explains why developers and

exporters of natural gas should be alarmed by the decline in

thermal coal exports coming out of Indonesia.

Tariffs return along with capital tax fears

A federal appeals court temporarily reinstated the most

sweeping of Donald Trump's import tariffs late on Thursday.

Allowing the stay while the case progresses, the court

ordered the plaintiffs in the cases to respond by June 5 and the

administration by June 9. Trump has promised to take the matter

all the way to the Supreme Court.

Thursday's rally in stocks and the dollar faded

quickly, with many investors convinced the administration would

seek other routes to impose the levies even if it loses its

case.

The whole episode raises as many questions as answers, not

least regarding when tariffs will be imposed and which ones will

eventually come to pass. This heightens business uncertainty as

much as it offers any marginal relief.

Countries in bilateral trade talks may be emboldened to

avoid making concessions until there is more clarity around the

legal issue, meaning we could see a shortening of the already

narrow six-week negotiating period left before July 9's

re-imposition of "reciprocal tariffs".

Meanwhile, there are also questions over the U.S. fiscal

bill now heading through the Senate, including how much delayed

or reduced tariffs will impact revenue estimates and deficit

calculations.

What's more, investors are increasingly concerned about

provisions in the bill - namely Section 899 - that allow the

administration to impose taxes of up to 20% on foreign asset

holdings. Some fear this could cause the tariff war to morph

into a capital war, unnerving overseas investors anew.

Resorting to non-tariff threats would only up the ante in

tough trade talks with Europe, which is already countering with

threats against U.S. tech firms.

On top of all this, we have next month's annual Treasury

review of overseas currency manipulation.

In short, we could soon seen more trade weapons drawn into

the fray.

There's even growing angst overseas that foreign holdings of

gold at the U.S. central bank could be at risk.

But amid all the speculation, U.S. Treasuries rallied

sharply on Thursday.

Some of that was down to signs of weakening economic

activity, with weekly jobless claims rising, pending homes sales

weakening and first quarter GDP revisions cutting consumer

spending estimates and showing a drop in corporate profits.

That was enough to nudge Federal Reserve easing hopes back

up, with futures now pricing in two full rate cuts by yearend.

The drop in Treasury yields was helped by a robust auction

of 7-year notes, which Morgan Stanley said left primary dealers

with just 4.8% of the paper, the lowest primary dealer takedown

on record for any Treasury auction.

Amid all this, Trump called Fed Chair Jerome Powell to the

White House on Thursday for their first face-to-face meeting

since he took office in January. He told the central bank chief

he was making a "mistake" by not lowering interest rates.

Underscoring its independence, the Fed issued a statement

after the meeting saying it "will set monetary policy, as

required by law, to support maximum employment and stable prices

and will make those decisions based solely on careful,

objective, and non-political analysis."

The April reading for the Fed's favored inflation gauge is

due for release on Friday.

Ahead of the open, U.S. stock futures were back

slightly in the red, 10-year Treasury yields flirted

with their lowest in a fortnight and the dollar was

firmer after Thursday's sharp reversal.

Elsewhere, European stocks were higher, but

Japan's Nikkei relapsed more than 1%. Tokyo core

inflation readings for May came in higher than forecast at 3.6%,

the most in two years, upping speculation that there will be

more Bank of Japan interest rate hikes ahead.

European inflation updates for this month were much softer,

buoying hopes of further European Central Bank easing as the ECB

gets set to meet again next week.

Weekend reading suggestions

Here are some articles away from the day-to-day headlines

that you may find interesting.

* GENDER Z: In democracies worldwide, a political gender divide

is intensifying among Gen Z voters, with young men voting for

right-wing parties and young women leaning left, a break from

pre-pandemic years when both tended to vote for progressives.

Reuters' Heejung Jung, Mark Bendeich and Thomas Escritt examine

this trend.

* RESERVE SWITCH: Just over half of 88 central bank reserve

managers said they expected the pace of reserve diversification

to accelerate over the next 12 months, according to the annual

HSBC Reserve Management Trends survey. Almost 80% of respondents

thought de-dollarisation was increasing, though on a gradual

basis.

* DEFENSE HELP WANTED: While the European Union's 800 billion

euro defense spending push is expected to create hundreds of

thousands of jobs over the next decade, specially trained AI

engineers, data scientists, welders and mechanics are in short

supply. Reuters' Michael Kahn, Christoph Steitz, Dominique

Patton spoke to more than a dozen companies, recruiters and

workers who said that along with hiking wages and benefits, arms

makers are poaching from other sectors.

* MGGA: Making Germany Grow Again is the theme of an IMF podcast

with Ulrike Malmendier, a professor at University of California,

Berkeley and member of the German Council of Economic Advisors.

Malmendier explains how ageing Germany needs to attract more

skilled migrants, rethink its capital markets and pensions

system and address energy supply problems in order to resume its

role as Europe's powerhouse economy.

* FUZZY FEDSPEAK: Households and professional forecasters often

hear Federal Reserve speeches on inflation and monetary policy

in different ways, according to a paper on Fed communications

published on CEPR's VoxEU site.

* EV EVERGRANDE?: An intensifying auto industry price war in

China has stoked fears of a long-anticipated shake-out in the

world's largest car market. Reuters' Norihiko Shirouzu reveals

how steep price cuts may signal a potential tipping point, where

weaker players can no longer sustain deepening losses.

* 'SACRIFICE RATIOS' AND PRICE LEVEL: Central bank research show

how 'sacrifice ratios' - or output losses per inflation

reduction - were historically low during post-pandemic monetary

tightening. But it ignores politically toxic price level

increases, something that should be included in the list of

'tradeoffs' assessed when conducting policy, according to an

NBER paper by economists Kristin Forbes, Jongrim Ha and Ayhan

Kose.

* DOLLAR SACRIFICE?: Donald Trump's erratic U.S. trade threats

against Europe and de-funding of universities are the sorts of

policies that come at a price, not least damaging the dollar's

cyclical and structural outlook. Writing on Project Syndicate,

former Goldman Sachs global economist and UK Treasury minister

Jim O'Neill explains why he thinks the implications for the

future of American power are profound.

* DRONE WARS: Indian and Pakistani militaries have deployed

high-end fighter jets, conventional missiles and artillery

during decades of clashes, but the four days of fighting in May

marked the first time New Delhi and Islamabad utilized unmanned

aerial vehicles at scale against each other. Read the

fascinating report by Reuters' Devjyot Ghoshal, Ariba Shahid and

Shivam Patel.

* INDUSTRIAL POLICY REDUX: Government subsidies, investment

incentives, and other industrial-policy actions have almost

quadrupled since 2017 - mostly in critical industries such as

defense, chips and high-end equipment, according to research

from the consulting firm McKinsey.

Chart of the day

Companies are struggling to give guidance on the rest of the

year's earnings given the high level of uncertainty related to

U.S. tariff policy.

Today's events to watch

* U.S. April personal consumption and spending and personal

consumption expenditures inflation gauge (8:30 AM EDT), April

international goods trade (8:30 AM EDT), April wholesale/retail

inventories (8:30 AM EDT), May Chicago business survey (9:45 AM

EDT) University of Michigan final May household sentiment survey

(10:00 AM EDT); Canada Q1 GDP revision (8:30 AM EDT)

* San Francisco Federal Reserve President Mary Daly, Dallas

Fed President Lorie Logan, Atlanta Fed chief Raphael Bostic and

Chicago Fed boss Austan Goolsbee all speak.

* U.S. corporate earnings: Marvell Technology

Opinions expressed are those of the author. They do not reflect

the views of Reuters News, which, under the Trust Principles, is

committed to integrity, independence, and freedom from bias.