EU AUTOMOTIVE: Motability (MOTOPG: A2/A-) S&P cut to A-

• Still well bid, Treasury futures pare back recent gains after latest flash S&P PMI levels, Mfg higher than expected vs. lower than expected Services and Composite figures.
• Jun'25 10Y currently +12.5 at 111-06 after climbing to intraday high of 111-18.5 on WSJ China tariff story. Curves retain flatter profiles: 2s10s -10.596 at 47.369, 5s30s -9.010at 79.319.
• Cross asset: BBG US$ index climbing +2.65 at 1224.27; stocks gaining: S&P eminis +172.25 at 5487.0

• Trump's administration is reportedly considering "slashing" its steep tariffs on Chinese imports by more than half in some circumstances, according to WSJ sources. The piece writes that Trump has not yet made a final determination, with discussions remaining fluid and several options still on the table.
• The piece writes that tariffs are likely to come down to between roughly 50-65% and is considering a tiered approach as proposed late last year - effectively dropping tariffs on items the US does not deem a threat to national security.

Speaking at the Atlantic Council in Washington, D.C., European Commissioner for Economy and Productivity Valdis Dombrovskis says that the EU "is not giving up on its closest, deepest and most important trade partnership: the one with the US". Livestream of Q&A here. Dombrovskis: "The EU stands by its existing trade partnerships and intends to deepen them...But we will also seal new partnerships across the world to strengthen our economic security at home."

• Dombrovskis says that the EU's 'first preference is to reach a negotiated settlement with the US over trade'.
• Says the EU would welcome more clarity from the US side with regard to their expectations of what a deal could entail.
• Following the news that US firms Apple and Meta have been hit with fines for non-compliance with the Digital Market Act, Dombrovskis says that the fines are focused on those two companies, and that the area around the DMA and trade are not related. However, there may be some concerns in the EU that the US could launch a knee-jerk reaction to the rulings that impacts on the prospect of a trade deal.