More signs of progress in U.S. trade talks made it to the headlines on Wednesday, but risk assets traded mixed while individual driving factors came in play.
In particular, crude oil took a couple of hits from surprise gains in stockpiles while gold continued to shed its earlier safe-haven gains on the improving global outlook.
Here are headlines you may have missed in the last trading sessions!
Headlines:
- Japanese producer price index down from 4.3% to 4.0% y/y as expected in April
- U.S. API crude oil inventories: +4.287M (-2.4M expected)
- Australia Wage Price Index for March 31, 2025: 0.9% q/q (0.8% q/q forecast; 0.7% q/q previous); 3.4% y/y (3.2% y/y forecast; 3.2% y/y previous)
- Tether reportedly purchased more than 4,800 BTC before price broke above $100K
- OPEC+ report revealed that member nations added only 25,000 barrels a day in April (138K barrels a day expected)
- Australia Home Loans for March 31, 2025: -2.5% q/q (-1.2% q/q forecast; 4.2% q/q previous)
- White House announced that President Trump has secured deals with Qatar totaling more than $243.5B
- Bloomberg News reported that the U.S. engaged in talks with Asian emerging economies, triggering speculations of openness to weaker USD
- Germany Consumer Prices Index growth rate Final for April 2025: 0.4% m/m (0.4% m/m forecast; 0.3% m/m previous); 2.1% y/y (2.1% y/y forecast; 2.2% y/y previous)
- ECB official Nagel: June’s rate decision still depends on incoming data, euro to strengthen as reserve currency in the coming months
- BOE official Mann highlighted U.K. labor market resilience, defending her vote to keep rates unchanged last week
- China New Loans for April 2025: 280.0B (1,000.0B forecast; 3,640.0B previous)
- Fed official Jefferson said that current moderately restrictive policy is a good position to respond to recent economic developments, labor market solid and tariffs could boost inflation
- Fed official Goolsbee explained that it will take time before current inflation factors are reflected in actual data, reinforcing central bank’s wait-and-see stance
- U.S. MBA Mortgage Applications for May 9, 2025: 1.1% (11.0% previous)
- Canada Building Permits for March 2025: -4.1% m/m (-0.3% m/m forecast; 2.9% m/m previous)
- Canada New Motor Vehicle Sales for March 2025: 189.3k (129.0k forecast; 125.4k previous)
- U.S. EIA Crude Oil Stocks Change for May 9, 2025: 3.45M (-2.03M previous)
Broad Market Price Action:
Dollar Index, Gold, S&P 500, Oil, U.S. 10-yr Yield, Bitcoin Overlay Chart by TradingView
Markets once again started the day on a relatively calm note while waiting for more global trade developments, although there was a slight risk-off lean despite another round of positive updates.
The White House reported that Trump was able to secure more than $200 billion worth of deals with Qatar plus a fancy new plane to boot, but higher-yielding assets appeared to shrug off the news.
Instead, WTI crude oil sustained its bearish trajectory following the release of the API private inventory report that revealed a surprise build in oil stockpiles, before staging another leg lower during the New York session with the EIA report printed similar results.
Bitcoin was also on the back foot, despite reports that companies like Tether and Strategy had been piling on their BTC holdings and Trump emphasizing that he’s “a big crypto fan,” leading BTC/USD to fall through the $104K barrier once more and edge close to $103,500 by session’s end.
Gold, which was already shedding more safe-haven winnings in the early trading sessions on account of global trade improvements, saw an even steeper drop around the start of the U.S. session while Fed officials reinforced how current restrictive monetary policy is appropriate.
On the flip side, Treasury yields cheered these relatively hawkish to neutral commentary, which favored waiting for incoming data to reflect stronger inflation trends and likely tilted the odds away from additional Fed easing anytime soon.
U.S. equity indices, which saw some gains led by tech sector shares, closed mixed as the Dow fell 0.21% while the S&P 500 rose a modest 0.10% and the Nasdaq caught a 0.72% win.
FX Market Behavior: U.S. Dollar vs. Majors:
Overlay of USD vs. Major Currencies Chart by TradingView
Most USD pairs had a rangebound performance during the Asian trading session, with the exception of USD/JPY which had already been giving in to bearish pressure early on. AUD/USD also drew some support from stronger than expected quarterly wage growth but soon returned to sideways price action for the remainder of the session.
A Bloomberg News report citing that U.S. officials had engaged in talks with Korea and other Asian emerging nations fueled speculations that the Trump administration could be open to a weaker U.S. dollar as part of trade negotiations, likely the main catalyst for the broad-based USD drop at the start of the London session.
Profit-taking soon followed and buoyed the dollar back to positive territory against most of its rivals, except the stronger JPY benefitting from positive sentiment in Asia, with relatively hawkish Fed commentary from the likes of Jefferson and Goolsbee sustaining the dollar’s rebound.
By session’s end, USD closed mostly higher, particularly against AUD (0.75%) and NZD (0.59%), but was unable to land back in the black against JPY (-0.53%).
Upcoming Potential Catalysts on the Economic Calendar:
- Germany Wholesale Prices at 6:00 am GMT
- U.K. Industrial Production at 6:00 am GMT
- U.K. GDP at 6:00 am GMT
- U.K. Balance of Trade at 6:00 am GMT
- Japan Machine Tool Orders at 6:00 am GMT
- Swiss Producer & Import Prices at 6:30 am GMT
- France Consumer Prices Index (Final) at 6:45 am GMT
- Euro area GDP Growth Rate (2nd Est) at 9:00 am GMT
- Euro area Industrial Production at 9:00 am GMT
- ECB official Guindos’ Speech at 10:15 am GMT
- Canada CFIB Business Barometer at 11:00 am GMT
- U.K. NIESR Monthly GDP Tracker for April 2025 at 12:00 pm GMT
- Canada Housing Starts at 12:15 pm GMT
- Canada Wholesale Sales at 12:30 pm GMT
- Canada Manufacturing Sales at 12:30 pm GMT
- U.S. Retail Sales at 12:30 pm GMT
- U.S. Producer Price Index at 12:30 pm GMT
- U.S. Weekly Initial Jobless Claims at 12:30 pm GMT
- U.S. Empire State Manufacturing Index at 12:30 pm GMT
- U.S. Philly Fed Manufacturing Index at 12:30 pm GMT
- U.S. Industrial Production and Capacity Utilization Rate at 1:15 pm GMT
- BOE MPC Member Dhingra’s Speech at 2:00 pm GMT
- U.S. Business Inventories at 2:00 pm GMT
- FOMC Member Barr’s Speech at 6:05 pm GMT
- Canada’s Annual Budget Report coming up
- New Zealand’s BusinessNZ Manufacturing Index at 10:30 pm GMT
It’s shaping up to be a big day for the U.S. dollar since a handful of top-tier data points covering consumer spending, inflation, jobs and manufacturing activity will be released during the U.S. session.
Prior to that, the U.K. quarterly GDP report and trade balance could also catch market attention, along with final CPI and GDP readings from the eurozone.
As always, stay nimble and don’t forget to check out our Forex Correlation Calculator when taking any trades!