Optimism regarding a potential trade agreement between the United States and China has caused significant volatility in the European trading session on Wednesday (May 7, 2025). As mentioned in the previous Macro Overview, U.S. Treasury Secretary Scott Bessent revealed that he and U.S. Trade Representative Jamieson Greer will meet with Chinese representatives in Switzerland this week.<\/p>\n
This statement is expected to influence market movements this evening. Furthermore, attention will also be focused on the Federal Reserve’s upcoming monetary policy announcement scheduled for Thursday at 1:00 AM WIB. The Fed is anticipated to maintain its interest rates at 4.25%-4.5%, with little indication of interest rate cuts in the near future.<\/p>\n
Following the release of solid U.S. labor market data last Friday, the likelihood of the Fed cutting rates in June has fallen to around 30%, a significant decrease from approximately 60% prior to that data release, according to CME Group\u2019s FedWatch tool.<\/p>\n
GOLD<\/strong> This situation has diminished gold’s appeal as a safe haven<\/em>, subsequently causing its price to drop. Furthermore, downward pressure on gold may worsen if the Fed signals no plans for imminent rate cuts, only to reduce rates twice this year, or maintain the current plan.<\/p>\n OIL<\/strong> If a deal is reached, it could lead to reduced import tariffs, thereby potentially improving the global economy and subsequently increasing oil demand.<\/p>\n Tonight, the release of U.S. inventory data at 9:30 PM WIB will be a key driver for oil prices. Forecast<\/em> data from Trading Central suggests a decrease in inventories by 2.5 million barrels for the week ending May 2.<\/p>\n Should the actual data come in lower than forecast<\/em>, oil may receive additional positive sentiment.<\/p>\n EURUSD<\/strong> All eyes are now on the Fed’s interest rate announcement. The U.S. dollar could strengthen again if the Fed indicates that rate cuts are not imminent, putting the EURUSD at risk of further downward pressure.<\/p>\n GBPUSD<\/strong> This downward pressure could increase if the Fed suggests it will not be aggressive in cutting rates this year.<\/p>\n USDJPY<\/strong> This sharp increase indicates that the U.S. dollar is strong amid easing trade war tensions. In addition to the upcoming U.S.-China trade negotiations, President Donald Trump earlier hinted at potential trade agreements with India, South Korea, and Japan.<\/p>\n Positive sentiment for USDJPY may increase if the Fed signals no immediate plans to cut interest rates.<\/p>\n Nasdaq<\/strong> If the Fed indicates that rate cuts will not occur in the near term, there is a potential for Nasdaq to experience profit-taking.<\/p>\n Optimism regarding a potential trade agreement between the United States and China has caused significant volatility in the European trading session on Wednesday (May 7, 2025). As mentioned in the previous Macro Overview, U.S. Treasury Secretary Scott Bessent revealed that he and U.S. Trade Representative Jamieson Greer will meet with Chinese representatives in Switzerland this […]<\/p>\n","protected":false},"author":4,"featured_media":21041,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5170,142],"tags":[5175,5174,5176,5178,5177,5168],"class_list":["post-57864","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-daily-summary","category-news","tag-cls10","tag-eurusd","tag-gbpusd","tag-nq","tag-usdjpy","tag-xauusd"],"yoast_head":"\n
Gold prices (XAUUSD) have experienced volatility after plummeting nearly $70 or 700 pips to $3,360.22 per troy ounce this morning. Although gold briefly attempted to rebound to $3,400, it was unsuccessful, indicating considerable pressure resulting from the trade negotiation plans between the U.S. and China.<\/p>\n
Oil prices (CLS10) retraced early gains during the European trading session after briefly rising to $60.22 per barrel. The oil market also received a positive sentiment from hopes surrounding the U.S.-China trade agreement.<\/p>\n
The EURUSD pair has shown volatility at the start of European trading, reacting to higher-than-forecast<\/em> factory orders data from Germany, while eurozone retail sales fell short.<\/p>\n
The GBPUSD pair continued its decline at the beginning of European trading, hitting a daily low of 1.33226. The pair is under pressure from hopes of a U.S.-China trade agreement, which has bolstered the U.S. dollar.<\/p>\n
The USDJPY currency pair continued to rise at the beginning of European trading, reaching a level of 143.445. Compared to Tuesday’s close, USDJPY gained 1.096 points (109.6 pips).<\/p>\n
The Nasdaq index reduced its gains at the start of the European trading session after previously hitting a level of 20,126. This indicates that market participants are awaiting the Fed’s monetary policy announcement.<\/p>\n