Relatively quiet start to the week, with USD oil prices, equities and bond yields all trading marginally lower. The USD maintaining last week’s gains as investors awaited key economic data, including Friday’s April jobs report, Q1 GDP, and Wednesday’s PCE inflation gauge. Global stocks held three-week highs Monday on hopes tariff pressures are easing, though uncertainty over U.S. trade policy weighed on the dollar ahead of key earnings, jobs data, and elections in Canada and Australia. Trump’s tariffs on China have caused a 60% drop in cargo shipments, with the effects soon hitting US retailers. By mid-May, companies will struggle to replenish inventories, leading to empty shelves, higher prices, and potential layoffs in trucking, logistics, and retail.
News Headlines. A U.S. strike in Yemen killed 68 and injured 47 at a migrant detention center, amid escalating attacks on Iran-backed Houthis. Trump urged Russia to stop attacks on Ukraine and suggested Zelenskiy may concede Crimea for peace, following their meeting at the Vatican. North Korea confirmed it sent troops and weapons to support Russia in Ukraine, aiding in retaking territory and strengthening ties between the isolated nations. At the UN’s top court, a Palestinian diplomat accused Israel of causing a “man-made catastrophe” in Gaza by killing civilians and targeting aid workers. Israel denies the allegations. Israel struck Beirut’s southern suburbs targeting a Hezbollah missile site despite a five-month ceasefire. Lebanon condemned the attack and urged U.S. and French intervention. A blast at Iran's Bandar Abbas port killed 40 and injured 1,000, possibly due to chemicals used for missile propellant. The closure of the port may impede the export of oil and related products
In currency markets. The BOJ is expected to keep interest rates steady on Thursday, citing caution amid U.S. tariffs and global growth risks. The JPY remains near a two-week low against the US Dollar, as optimism over US-China trade tensions grows. Delayed BoJ rate hikes and rising inflation in Japan may limit further USD/JPY gains. Asian currencies are mixed at the start of the week, with the JPY rising 0.17%, while the CNY and THB drop by 0.15% and 0.31%, respectively. The MYR gains 0.24%. In the commodity-linked currencies, the AUD is up 0.04%, while the NZD falls 0.15%. Emerging market currencies are also directionless, with both the ZAR and MXN flat on the day.
In commodity markets. Despite the explosion in the Iranian port, trading lower amid progress in US-Iran nuclear talks and expectations of increased OPEC+ production. Gold fell from its all-time high as risk aversion eased after Trump softened his stance on China tariffs. All agricultural commodities are trading lower this morning with soybeans down 0.35%, wheat 1.65% and lumber 0.95%.
Current level USD Index 99.334 Down 0.52%
USD/CAD the US Dollar gains on easing US-China trade tensions. Despite China's denial of ongoing tariff negotiations, optimism remains. Canadian are heading to the polls to choose the next government.
Current level USD/CAD 1.3870 Up 0.07%
EUR/CAD remains within the 1.5700-1.5800 range as markets await direction from upcoming tariff news, economic data, and election results.
Current level EUR/CAD 1.5765 Down 0.06%
EUR/USD remains range-bound around as uncertainty surrounds US-China trade talks. Contradictory statements from Trump and Beijing have left investors cautious. While Trump claims positive discussions and calls with Xi, China denies any trade negotiations.
Current level EUR/USD 1.1351 Down 0.12%
GBP/EUR saw slight buying but remains near a three-week low at 1.1750. The Pound underperformed due to UK-US trade deal delays and slower BoE rate cuts, limiting gains. US tariff risks also warrant caution.
Current level GBP/EUR 1.1750 (0.8510) Up 0.35%
GBP/USD starts the week quietly around with the US Dollar holding gains from last week amid uncertainty over US-China trade talks. While UK retail sales rose unexpectedly, boosting GBP, doubts about US-China negotiations keep the USD's safe-haven appeal intact.
Current level GBP/USD 1.3345 Up 0.21%
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