The hysteria pervading financial markets has dissipated somewhat over the past few days. US stock indices have enjoyed three consecutive days of gains and the same is true for many European markets, which have all but fully recovered from the tariff fear induced selloff. The latter half of the week has provided grounds for optimism with regards to establishing new trade agreements between the US and various parts of the world. Treasury Secretary Scott Bessent, who had previously urged countries to come forward “with their A game”, announced yesterday that South Korea had done just that, stating that a trade deal was moving along quickly. While some parts of the world are eager to re-establish strong trading arrangements, the US and China remain stubbornly at odds.
Economic data from the United States continues to send out mixed signals. Data published on Wednesday revealed that the manufacturing PMI rose to 50.7 in April, beating expectations of just 49 and indicating that the sector remains in expansion. Services on the other hand fell to 51.4 versus expectations of 52.5, also showing a sector in expansion despite the slowdown. The question of the Dollar is still a confusing one. The next Fed decision is now less than two weeks away and market participants appear increasingly unwilling to predict the outcome of the meeting.
Gold may also be debating its place in the rapidly evolving financial landscape. The precious metal is now a sizeable step away from Tuesday’s record high, awaiting the next geopolitical catalyst before deciding on its next move. It is much the same for markets at large, scheduled events have been pushed to the side for now and traders will have to maintain a wait-and-see approach.
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