### Asian Markets Mixed; Concerns Rise Over Chinese Manufacturing Slowdown

Asia-Pacific markets showed mixed performance on Tuesday as fresh data from China revealed a significant contraction in manufacturing activity for May. According to a private survey, the Caixin/S&P Global manufacturing purchasing managers' index (PMI) registered a concerning 48.3, the weakest figure since September 2022. This result sharply missed the Reuters' forecast of 50.6 and slid down from April’s 50.4—deeper into contraction territory, predominantly affected by a sharp decrease in new export orders.

The Chinese government retaliated against U.S. accusations of violating a trade agreement, shifting the blame for the trade deal's shaky status onto the U.S. Washington's recent move to consider doubling steel tariffs to 50% drew criticism from the European Union. An EU spokesperson stated that such a measure would undermine its ongoing negotiations with the U.S., and the bloc was prepared to enforce countermeasures if necessary.

Japan's Nikkei 225 index pared earlier gains, ending up just 0.2%, while the broader Topix index decreased 0.12% amidst volatile trading. In contrast, Australia's S&P/ASX 200 index climbed 0.42%, briefly touching a nearly four-month high earlier in the session. The latest data showed Australia's seasonally adjusted current account deficit for the first quarter of 2025 reached AU$14.7 billion ($9.53 billion), higher than economists’ prediction of AU$13.1 billion but showing improvement from the previous quarter’s AU$16.3 billion deficit.

Hong Kong's Hang Seng Index saw a rise of 1.55%, while Mainland China's CSI 300 index inched up by 0.21%. South Korean markets remained closed for polling day activities.

In the U.S., major stock futures dipped despite Wall Street closing June’s first trading session on a positive note. The S&P 500 added 0.41%, closing at 5,935.94, while the Nasdaq Composite rose 0.67% to finish at 19,242.61. The Dow Jones Industrial Average inched up by 35.41 points, or 0.08%, to settle at 42,305.48.

Currency movements highlighted investor caution. As the U.S. dollar index rose 0.27% to 98.85 by 11.05 a.m. Singapore time, the Japanese yen weakened by 0.29% against the dollar to 143.10 following comments from Bank of Japan Governor Kazuo Ueda on potential interest rate hikes. The offshore Chinese yuan dropped 0.17% to 7.1959 against the greenback. Meanwhile, the Malaysian ringgit appreciated by 0.21% to 4.2440 against the dollar, opposite to movements of the Singapore dollar and Thai baht which depreciated by 0.15% and 0.28%, respectively.

Commodities reflected the market's trepidations. Spot gold traded at $3,374.16 per ounce, swinging between gains and losses due to fluctuating global trade tensions and U.S. dollar volatility. In Australia, gold stocks like Genesis Minerals surged, benefiting from gold's rise, while mining and energy stocks, such as Rio Tinto, BHP Group, and Fortescue, also saw gains.

U.S. crude oil futures reacted positively, with a notable increase of over 3% in afternoon trading after OPEC+ announced it would maintain a steady production increase, calming fears over a potential acceleration in output. The West Texas Intermediate contract for July rose by $2.06 to $62.85 per barrel, while the Brent contract for August gained $2.05 to reach $64.83 per barrel. OPEC+, spearheaded by Saudi Arabia, intends to boost output by 411,000 barrels per day in July, marking the third consecutive month of such increases.

These developments underscore the interconnectedness of global markets and the far-reaching impacts of trade policies and economic data.