MNI US OPEN - Some Trade Deals Could Be By Friday
EXECUTIVE SUMMARY:
- SOME TRADE DEALS MAY COME AS SOON AS THIS WEEK
- TAIWAN TALK DOWN TWD VOLATILITY, BLAME LARGE SPECULATION
- EU SET TO PROPOSE BAN ON RUSSIAN GAS IMPORTS
- UK HOLIDAY KEEPS PRICE ACTION THIN
Figure 1: Volatile travel services pressures headline Swiss inflation
NEWS
US (BBG): Trump Suggests Some Trade Deals May Come as Soon as This Week
President Donald Trump suggested that his administration could strike trade deals with some countries as soon as this week, offering the prospect of relief for trading partners seeking to avoid higher US import duties. “It could very well be,” Trump told reporters on Sunday when asked whether any trade agreements were coming this week. He didn’t specify any countries.
US (BBG): Trump Plans 100% Levy on Foreign Films, Deepening Trade War
President Donald Trump announced Sunday that he plans to impose a 100% tariff on films produced overseas, extending his restrictive trade policies on US imports to the entertainment sector for the first time.
ECB (BBG): ECB’s Panetta Says Protectionism Threatens to Weaken Prosperity
European Central Bank Governing Council member Fabio Panetta said a new wave of protectionism could damage economies around the world. “Openness to trade has benefited both advanced and developing nations, reducing inequality and lifting hundreds of millions of people out of extreme poverty,”
EU/RUSSIA (BBG): EU Set to Propose Banning Russian Gas Imports by End of 2027
The European Union is set to propose measures to ban Russian gas imports by the end of 2027, as the bloc pushes to sever ties with the country that was once its biggest energy supplier. Despite efforts to cut purchases following Moscow’s invasion of Ukraine, cheap Russian gas imports are proving hard to eliminate at a time when the 27-nation bloc is struggling to lower energy prices.
AUSTRALIA (BBG): Albanese’s Win Offers Rare Chance to Fix Australia’s Economy
Prime Minister Anthony Albanese shocked Australia by securing an historic win in Saturday’s election. Now the question is whether he’ll use that mandate to push through tough measures to overhaul the nation’s economy. For years, previous administrations have shied away from tackling politically difficult issues such as removing tax incentives for investment property and cutting red tape to improve housing supply.
US/CHINA (BBG): Trump Trade Adviser Warns UK Against China Ties, Telegraph Says
US President Donald Trump’s trade adviser warned the UK against deepening trade ties with China, potentially complicating tariff talks between Washington and London. Speaking to the Telegraph, Peter Navarro said the UK “has been an all too compliant servant of the Chinese Communist Party because of the string-laden gifts that China gives as a way of spreading its soft power.”
TAIWAN (BBG): Taiwan CBC Asks Analysts Not to Comment Speculatively on FX Mkt
Taiwan’s central bank urges analysts not to “comment speculatively” on the foreign exchange market, Governor Yang Chin-long says at a briefing. The central bank has stepped in to smooth FX market in the past two sessions, and reiterates it will do so again if exchange rate fluctuations threaten market stability: Yang
TAIWAN (BBG): Taiwan Regulator Summons Life Insurers as Soaring Currency Bites
Taiwan’s markets regulator is meeting some of the island’s largest insurers as a skyrocketing local currency piles pressure on hundreds of billions of dollars in US bond investments. The Financial Supervisory Commission has asked some life insurance firms, among the biggest Asian holders of US debt, to discuss how the rapidly strengthening Taiwan dollar has impacted their operations, people familiar with the matter said.
HONG KONG (BBG): Hong Kong Sells HK$56.1b in Further Bid to Defend Currency Peg
The Hong Kong Monetary Authority sold HK$56.1 billion into the banking system to prevent the currency from strengthening beyond its permitted trading band, according to an alert on HKMA’s page on Bloomberg.
ROMANIA (BBG): Romanian Far-Right Election Win Prompts Premier’s Offer to Quit
Romania’s prime minister plans to offer his resignation Monday after a far-right opposition leader who aligned himself with Donald Trump scored a resounding first-round victory in the Black Sea nation’s presidential election.
EUROPEAN INFLATION: Swiss April CPI Below Consensus
Swiss CPI inflation printed below consensus at 0.0% in April (vs 0.2% cons; 0.3% prior), and 0.0% M/M. Core CPI also printed below consensus, at 0.6% Y/Y (vs 0.8% cons; 0.9% prior).
- This means inflation started off Q1 well below the 0.3% Y/Y SNB expectation for this quarter. Note that Chairman Schlegel has mentioned in the last press conference that negative inflation would not be totally outside of expectations if it only persists for single months (as opposed to quarters, the SNB's reference period for their official forecasts).
- The main categories appear to indicate that the headline drop vs March was relatively broad-based on first sight:
- Domestic 0.8% vs 1.0% prior
- Imported -2.5% vs -1.7% prior
- Services 1.4% vs 1.6% prior
- Goods -2.0% vs -1.6% prior
- Energy and fuels -7.8% vs -7.1% prior
- Housing rental inflation did not see its quarterly price update this month (due May).
BONDS: Initial resistance in Bund Holds, Focus on the US ISM Today
- A lighter start for the German Bund and wider EGBs, the UK Markets are closed for their Bank Holiday, and Investors are turning their attention towards the FOMC on Wednesday, and will remain attentive to any Tariffs news.
- The initial small resistance noted at 131.16 Today has held, so far printed a 131.14 high.
- European peripheral spreads are closer to flat on the Margin.
- The Swiss CPI came below consensus earlier but had no impact on Govies, even the Swissy (CHF) now trades at higher level post the Inflation Data.
- There's still some Focus on the Data front for Today, the US services PMI will be final reading, but some attention on the US ISM services and its components.
- ECB Stournaras will speak at Forum in Athens later today.
FOREX: Greenback Edges Lower in Partial Reversal of Friday Rally
- The greenback is modestly softer against all others in G10, as markets partially retrace the phase of USD strength posted into the Friday close. EUR/USD is back above the $1.13 handle, which is helping support EUR/GBP above 0.8500. Trade deals and negotiations remain a key focus this week, as reports circulate deals could be announced by Friday. Japan, India and South Korea are seen among the nations with the most advanced negotiations.
- Meanwhile, after an extended period of consolidation, AUD/USD is gaining following the surprisingly strong showing for Anthony Albanese in the weekend's general elections. The price action puts the rate above the 200-dma and a close above would be the first since November last year. 0.6550 is the next key level here, marking the 61.8% retracement of the downleg posted off the late September low.
- JPY is among the strongest currencies in G10, benefiting from the modest pullback for US equity futures as well as firmer regional APAC currencies. The run higher in TWD has seen the central bank respond with a press conference today which, while not disclosing any new measures, saw the central bank talk down speculation that Taiwan would settle for a firmer currency at the request of the US.
- US ISM services data is the scheduled highlight Monday, with central bank speak quiet as the Fed remain inside their pre-meeting media blackout.
EQUITIES: Friday Rally Strengthens S/T Bull Cycle for Stocks
The latest recovery in the e-mini S&P reinforces current bullish conditions.The contract has traded through the 50-day EMA, at 5620.87. A continuation of the bull phase would expose 5837.25 next, the Mar 25 high and a bull trigger. Eurostoxx 50 futures maintain a positive tone and Friday’s rally strengthens the current bull cycle. The contract has cleared both the 20- and 50-day EMAs, and attention is on 5263.01, a Fibonacci retracement point.
- Dow Jones mini down 262 pts or -0.63% at 41200
- S&P 500 mini down 45.5 pts or -0.8% at 5665.25
- NASDAQ mini down 181.25 pts or -0.9% at 20024.25.
COMMODITIES: M/T Bearish WTI Trend Continues
A medium-term bearish trend in WTI futures remains intact and last week’s sell-off reinforces this theme. The move down signals the end of the correction between Apr 9 - 23. Gold is trading closer to its recent lows and a corrective cycle remains in play for now. The yellow metal has breached the 20-day EMA. A continuation lower would highlight a deeper retracement and open the 50-day EMA, at 3115.11.
- WTI Crude down $1.11 or -1.9% at $56.9
- Natural Gas up $0.07 or +1.82% at $3.694
- Gold spot up $39.01 or +1.2% at $3273.76
- Copper up $7.1 or +1.52% at $474.65
- Silver up $0.37 or +1.16% at $32.373
- Platinum up $2.32 or +0.24% at $968.34
| Date | GMT/Local | Impact | Country | Event |
| 05/05/2025 | 1345/0945 | *** |  US | S&P Global Services Index (final) |
| 05/05/2025 | 1345/0945 | *** | US | S&P Global US Final Composite PMI |
| 05/05/2025 | 1400/1000 | *** | US | ISM Non-Manufacturing Index |
| 05/05/2025 | 1530/1130 | * | US | US Treasury Auction Result for 26 Week Bill |
| 05/05/2025 | 1530/1130 | * | US | US Treasury Auction Result for 13 Week Bill |
| 05/05/2025 | 1700/1300 | *** | US | US Note 03 Year Treasury Auction Result |
| 06/05/2025 | 0130/1130 | * |  AU | Building Approvals |
| 06/05/2025 | 0145/0945 | ** |  CN | S&P Global Final China Services PMI |
| 06/05/2025 | 0145/0945 | ** | CN | S&P Global Final China Composite PMI |
| 06/05/2025 | 0545/0745 | ** |  CH | Unemployment |
| 06/05/2025 | 0645/0845 | * |  FR | Industrial Production |
| 06/05/2025 | 0715/0915 | ** |  ES | S&P Global Services PMI (f) |
| 06/05/2025 | 0715/0915 | ** | ES | S&P Global Composite PMI (final) |
| 06/05/2025 | 0745/0945 | ** |  IT | S&P Global Services PMI (f) |
| 06/05/2025 | 0745/0945 | ** | IT | S&P Global Composite PMI (final) |
| 06/05/2025 | 0750/0950 | ** | FR | S&P Global Services PMI (f) |
| 06/05/2025 | 0750/0950 | ** | FR | S&P Global Composite PMI (final) |
| 06/05/2025 | 0755/0955 | ** |  DE | S&P Global Services PMI (f) |
| 06/05/2025 | 0755/0955 | ** | DE | S&P Global Composite PMI (final) |
| 06/05/2025 | 0800/1000 | ** |  EU | S&P Global Services PMI (f) |
| 06/05/2025 | 0800/1000 | ** | EU | S&P Global Composite PMI (final) |
| 06/05/2025 | 0830/0930 | ** |  GB | S&P Global Services PMI (Final) |
| 06/05/2025 | 0830/0930 | *** | GB | S&P Global/ CIPS UK Final Composite PMI |
| 06/05/2025 | 0900/1100 | ** | EU | PPI |
| 06/05/2025 | - | US | FOMC Meeting | |
| 06/05/2025 | 1230/0830 | ** |  CA | International Merchandise Trade (Trade Balance) |
| 06/05/2025 | 1230/0830 | ** | US | Trade Balance |
| 06/05/2025 | 1255/0855 | ** | US | Redbook Retail Sales Index |
| 06/05/2025 | 1400/1000 | * | CA | Ivey PMI |
| 06/05/2025 | 1700/1300 | ** | US | US Note 10 Year Treasury Auction Result |
