The market movement remains quite stable at the start of European trading on Tuesday (May 13, 2025). As previously highlighted in the Macro Overview, the trade agreement between the United States and China continues to be a major influence on financial markets. Additionally, the release of US inflation data could add volatility to financial markets.
Here are the data from Trading Central:
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- US CPI at 19:30 WIB (year-on-year/April); forecast 2.5% vs previous 2.4%
- Core US CPI at 19:30 WIB (year-on-year/April); forecast 2.8% vs previous 2.8%
GOLD
Gold prices (XAUUSD) trimmed their gains at the beginning of European trading after reaching a daily high of $3,265.63 per troy ounce. Gold still feels the negative sentiment stemming from the US-China trade deal.
The agreement allows the United States to delay its reciprocal tariff policy against China for 90 days.
As a result, the 145% tariff imposed by the US is reduced to 30%, while China has mirrored this by lowering its tariff from 125% to 10%. This trade agreement diminishes Gold’s appeal as a safe haven and puts pressure on Gold prices.
The pressure on Gold could increase further if the US CPI data comes out higher than forecasted. An increase in inflation could lead the Federal Reserve to maintain high interest rates for a longer period, which would present a negative sentiment for Gold.
OIL
Oil prices rose in early European trading, reaching a daily high of $62.45 per barrel. Compared to Monday’s closing, Oil increased by $0.50.
Oil had previously recorded three consecutive days of gains in response to the US-China trade agreement.
This agreement could potentially improve the global economy. A better economy is likely to increase demand for Oil. This positive sentiment is expected to continue influencing Oil prices later tonight.
EURUSD
EURUSD trimmed its gains after hitting a daily high of 1.11245. This movement confirms that the US dollar remains strong following the US-China trade deal, making it difficult for EURUSD to strengthen.
The pressure on EURUSD could intensify if tonight’s US CPI data is released above the forecast.
GBPUSD
GBPUSD managed to rise at the start of the European session, despite labor market data from the UK showing weakness in March. This currency pair reached a daily high of 1.32202 and remains close to that level this afternoon.
Although it remains relatively strong, should the US CPI data be released higher than forecasted, there is potential for GBPUSD to come under pressure again.
USDJPY
USDJPY trimmed its losses after previously reaching a daily low of 147.640. This movement indicates a decline due to profit-taking following an increase of over 3,000 points (300 pips) earlier in the week.
The US-China trade agreement could enhance the American economy in Q2 2025 following a 0.5% quarterly contraction (annualized) in the previous quarter. This provides positive sentiment for USDJPY and could strengthen should the US CPI data exceed forecasts.
Nasdaq
Nasdaq narrowed its declines after hitting a daily low of 20,817 at the start of European trading. The US-China trade agreement still provides positive sentiment for Nasdaq.
However, if US CPI data comes out higher than expected, Nasdaq could experience profit-taking given its current position near the highest levels since early March. Furthermore, accelerating CPI data could lead the Federal Reserve to keep interest rates elevated for a longer period, presenting a negative sentiment for Nasdaq.
