- Major US indices close higher to start the new week
- US extends tariff pause on some Chinese goods through to August 31
- Crude oil futures and settle at $62.52
- Trump Administration: We want countries “best offer” by Wednesday in tariff talks
- US deal with Iran allows them to enrich Uranium at low levels
- Ukraine Zelenskyy: Confirms Russia /Ukraine have agreed to exchange 1000 servicemen
- Fed’s Goolsbee: So fare we’ve had excellent inflation reports
- BOE Mann: Must consider interactions of QT and rate decisions
- Russia outlines in a memorandum the plans for cease-fire with Ukraine
- European indices close the day mixed
- Atlanta Fed GDPNow growth estimate for Q2 rises to 4.6% from 3.8%
- More Logan:With oil down, there is a risk of lower production, cap invest from energy cos.
- CNBC: Trump and XI to speak this week, but not today
- Fed’s Logan: Despite the uncertainty, the US economy is resilient
- US construction spending for April -0.4% versus 0.3% estimate.
- US ISM manufacturing index for May 48.5 versus 49.5 estimate
- US S&P global manufacturing PMI for May 52.0 versus 52.3 preliminary
- Canada S&P Global May manufacturing PMI 46.1 versus 45.3 in April
- Global Markets Brace for Impact: Central Bank Rate Cuts and Jobs Reports Await
- J.P. Morgan Dimon: US deficit, debt is a big deal
- Kickstart the new trading day, week, & month w/ technical look at EURUSD, USDJPY & GBPUSD
- ForexLive European FX news wrap: A brand new month but same old story for the dollar
- 17 out of 23 economists expect the BoC to cut at least twice more this year
The USD moved lower on the back of concerns about tariff wars, especially with China. Trump last week accused China of breaking the trade deal.
China firmly rejected the claim and countered that it was the United States that breached the deal. The Chinese Ministry of Commerce stated that the U.S. had implemented several “discriminatory restrictive” measures against China, including:
-
Issuing guidance on AI chip export controls
-
Halting sales of chip design software to China
-
Revoking visas for Chinese students
China asserted that these actions seriously undermine the consensus reached at the Geneva economic and trade talks and damage China’s legitimate rights and interests.
Late Friday, President Trump announced that the United States will double tariffs on imported steel and aluminum from 25% to 50%, effective June 4, 2025. This increase applies broadly to imports from all countries, including China. The move aims to bolster the domestic metal industry and reduce reliance on foreign suppliers.
Later today, the White House said we want countries “best offer” by Wednesday in tariff talks.
And you wonder why the USD was hit?
The USD is trading down the most vs the NZD (-1.33%) and the AUD (-1.00%). The greenback did the best vs CAD at -0.21% after a new move to the lowest level since October 2022 failed. The dollar was down -0.62%vs the GBP adn teh -0.83% vs the EUR.
The US yields moved higher on the day with the 2 yhear up 2.0 bps at 3.938%. The 10 year yield moved up 2.6 bps at 4.443%.
The US stocks did erase early declines which was confusing unless you believe that all will pass over time. The Nasdaq led the way with a gain of 0.67%. The S&P was up 0.41% while the Dow rose 0.08%.
The ISM manufacturing index today stayed below 50 at 48.5 vs 49.5 last month. Construction spending also was weaker at -0.4% vs +0.3% estimate. The prior month was revised lower to -0.8% vs -0.5%. That data supports a lower dollar.
And to add more confusion in the “witches brew” that defines the markets (or doesn’t), the Atlanta Fed GDPNow forecast for Q2 growth continued the surged to 4.6% from 3.8% in its current guesstimate. Recall first quarter GDP was at -0.2%.
This article was written by Greg Michalowski at www.forexlive.com.