North America News
Market Recap: S&P Slips Again, Solana Shrugs Off Institutional Buying
For the second straight session, the S&P 500 closed lower, breaking a strong nine-day winning streak. Tuesday’s drop saw the S&P fall 0.77%, the Dow drop 0.95%, and the Nasdaq decline 0.87%. The small-cap Russell 2000 underperformed, losing 1.05%.
Earnings Snapshot: Lucid, Super Micro, and EA Post Mixed Results
Lucid (LCID) beat earnings expectations with a Q1 EPS of -$0.20 vs. -$0.23 expected (13% beat), but missed revenue estimates, posting $235M vs. $246M projected (5% miss). Still, year-over-year performance improved sharply:
- EPS up 33% YoY
- Revenue up 36% YoY
Super Micro Computer (SMCI) reported a mixed quarter. EPS came in strong at $0.31, beating estimates by 55%, but revenue missed, hitting $4.6B vs. $5.05B expected (9% miss). The company saw a sharp YoY EPS drop of 53% and QoQ revenue decline of 19%, despite a 19% YoY revenue gain.
Electronic Arts (EA) delivered a solid beat on both lines. EPS of $0.98 topped the $0.91 estimate (8% beat), and revenue came in at $1.799B vs. $1.55B expected (16% beat).
- EPS rose 46% YoY
- Revenue climbed 8% YoY
- However, quarter-over-quarter figures were weaker, with EPS down 12% and revenue down 19%.
Post-Close Earnings: AMD and Rivian Surprise to the Upside
AMD (AMD) exceeded expectations with EPS of $0.96 (vs. $0.93 expected) and revenue of $7.4B (vs. $7.12B). It also guided for $7.4B in revenue next quarter. A standout was its Data Center segment, which posted $3.7B in Q1 revenue, a 57% YoY increase—highlighting strong AI and cloud momentum.
Rivian (RIVN) posted a better-than-expected quarter with EPS at -$0.48, beating the -$0.92 consensus. Revenue hit $1.2B, ahead of the $1.02B estimate. The results suggest Rivian is gaining traction despite macro headwinds in the EV space.
Strong Demand at $42B US 10-Year Treasury Auction
The US auctioned $42 billion in 10-year notes at a high yield of 4.342%, slightly below the 4.354% when-issued level. The bid-to-cover ratio hit 2.60x, slightly above average. Direct and indirect bidders took more than usual, leaving dealers with just 8.93%—well below the six-month average of 13.2%. The auction had strong demand.
US Growth Estimate Doubles to 2.2% – Atlanta Fed
The Atlanta Fed’s GDPNow model has revised US Q2 GDP growth up to 2.2%, from a prior estimate of 1.1%, reflecting stronger-than-expected economic momentum.
The GDPNow growth estimate for the Q2 rose to 2.2% from 1.1% prior. In their own words:
The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2025 is 2.2 percent on May 6, up from 1.1 percent on May 1. After recent releases from the US Bureau of Labor Statistics, the US Census Bureau, and the US Bureau of Economic Analysis, the nowcasts of second-quarter real personal consumption expenditures growth and real private fixed investment growth increased from 1.9 percent and 1.3 percent, respectively, to 3.3 percent and 3.6 percent.
U.S. Trade Deficit Hits Historic High in March
The U.S. international trade gap widened sharply in March, reaching a record $140.5 billion—far above the $137.0 billion economists projected. That’s up from February’s already substantial $122.7 billion deficit.
The goods trade portion saw a jump to -$163.17 billion, compared to -$147.85 billion the previous month. Services partly offset this, but the underlying imbalance remains significant.
Imports surged by 4.4% while exports barely budged, rising just 0.2%. The jump in imports was primarily due to front-loaded purchases ahead of new tariffs, a temporary spike that analysts believe could fade by April or May.
Key categories behind the import surge:
- Pharmaceuticals: +$20.9B
- Computer accessories: +$2.0B
- Passenger vehicles: +$2.1B
At the same time, industrial inputs dropped:
- Finished metal products: -$10.3B (a 45% monthly plunge)
- Gold (nonmonetary): -$1.8B
- Crude oil: -$1.2B
The sharp drop in metal imports reflects a rush to import ahead of March 12 tariff enforcement, followed by a pullback.
US and UK close to trade agreement – report
- The FT reports that the US and UK are close to a trade agreement that would lower UK quotas on cars and steel.
- The agreement would include lower-tariff quotas for UK steel and car exports to the US
- The UK is hoping to secure reductions in the sector specific 25% tariffs that Trump has levied on steel and autos
- The UK’s concessions include changes to digital services tax, cuts on US auto export tariffs, and reduced tariffs on US agricultural products
- The UK refuses to accept US food production standards like chlorine-washed chicken
- UK industries, especially luxury car brands like Bentley and Jaguar Land Rover, are facing “severe” impacts from the current tariffs
Trump and Carney Exchange Jabs, Signal USMCA Shakeup
President Trump suggested the U.S. is subsidizing Canada and hinted that USMCA might be up for renegotiation. He questioned Canada’s relevance to U.S. economic needs, particularly in autos, energy, and lumber.
Carney, newly arrived in Washington, pushed back firmly:
- “Canada is not for sale.”
- Emphasized the strategic alliance and institutional cooperation.
- Acknowledged USMCA might evolve but warned it would take time.
The meeting ended with mixed signals but reaffirmed an ongoing dialogue.
UBS Projects S&P 500 to Reach 5,800 by Year-End
UBS sees a stronger outlook for U.S. equities, forecasting the S&P 500 to hit 5,800 by December. The bank cites easing trade tensions, expected Fed rate cuts, and structural growth trends as catalysts. Despite near-term volatility, UBS believes the fundamentals will support continued gains through 2025.
‘Recession’ Talk Hits Earnings Calls Hard
Mentions of “recession” on S&P 500 earnings calls have surged to their highest level since 2023, according to transcript analysis. Despite solid corporate performance and consumer data, executives are increasingly voicing concern over inflation, high interest rates, and trade instability. New U.S. tariffs are raising fears of supply chain disruptions and eroded profit margins.
Retail Investors Flood Equities with $40B in April
Retail investors pumped a record-breaking $40 billion into the stock market in April, JP Morgan reports. The buying spree, focused on tech and momentum stocks, highlights retail enthusiasm amid institutional caution. Analysts note the resilience of individual traders, but question whether retail momentum alone can sustain a broader bull market.
Trump Cuts Red Tape for Domestic Pharma Manufacturing
A new executive order signed by Donald Trump aims to speed up domestic pharmaceutical production. The directive instructs the FDA to accelerate approvals for U.S.-based drug manufacturing facilities and enforce stricter sourcing disclosures from foreign producers. Non-compliant sites may be publicly listed.
Fed Faces No-Win Situation Ahead of Key Policy Meeting
The Federal Reserve is bracing for tough policy decisions amid trade disruptions caused by erratic tariff measures from the Trump administration. According to WSJ’s Nick Timiraos, officials are caught between risking a recession or stoking stagflation. Fed Chair Jerome Powell is expected to maintain a cautious stance, avoiding premature rate cuts while monitoring inflation and labor data closely.
The article is much longer and in depth, if you can access it the link is here.
Canada’s Trade Deficit Narrows Unexpectedly
Canada reported a smaller-than-expected trade deficit of C$0.51 billion for March, beating forecasts of C$1.56 billion and improving from February’s C$1.52 billion shortfall.
Exports dipped slightly to C$69.90 billion from C$70.04B, while imports fell to C$70.40 billion from C$71.44B. The performance was helped by declining imports and slightly steadier exports.
However, Canadian shipments to the U.S. fell 6.6%—the second monthly drop after a January peak. Imports from the U.S. were also down, falling 2.9%, shrinking Canada’s trade surplus with the U.S. from C$10.8B to C$8.4B.
Highlights from the March export report:
- Total exports: -0.2%
- Exports to U.S.: -6.6%
- Exports to other countries: +24.8%
- Real export volume: +1.8%
Year-over-year, exports are still up 10.2%. However, six of eleven categories showed monthly declines, influenced in part by weaker prices.
Sector-specific export changes:
- Consumer goods: -4.2%
- Meat (esp. pork to Asia): -10.8%
- Pharmaceuticals: -7.0%
- Energy: -2.2%
- Nuclear energy: -54.5%
- Natural gas: -13.7%
- Motor vehicles: +7.7%
- Passenger vehicles: +11.8%
- Farm & food: +3.1%
- Forestry/building: +3.5%
- Metals/minerals: +6.5%
On the import side, volumes slipped 1.5%, ending a five-month rising streak. Real import volumes were essentially flat (-0.1%).
Largest import declines:
- Metals/minerals: -15.8%
- Energy products: -18.8%
Note: CBSA data used for March includes estimations due to CARM rollout delays. Expect revisions.
Canadian Manufacturing Weakens in April
The April Ivey Purchasing Managers Index (PMI) dropped to 47.9, down from March’s 51.3. The non-seasonally adjusted figure also declined to 52.3 from 55.6.
This marks a clear sign of strain in Canada’s manufacturing sector, likely weighed down by the ongoing tariff environment.
Commodities News
Gold Jumps $80 to $3,112 as Risk Sentiment Deteriorates
Gold continues its sharp rally, climbing $80 to $3,112 on Tuesday—its second-best close ever. The rise is driven by global risk aversion: Middle East tensions, Trump’s trade moves, and policy uncertainty ahead of the Fed’s meeting. Traders are seeking safe-haven assets amid rising geopolitical risks, stalled trade negotiations, and weak dollar performance. The Fed is expected to hold rates steady, but any dovish signals could further fuel gold’s momentum. Market attention is now on Chair Powell’s guidance.
Crude Oil Settles at $59.09 After Rally
Oil futures closed at $59.09, up $1.96 (+3.43%). The price briefly hit $59.79, just shy of technical resistance at $60.08 (the 50% retracement of the April 23–May 4 drop). A break above $60.08 would strengthen the bullish setup. On the downside, $58.96 remains key support, with the 100-hour moving average at $58.06 the next bearish target.
Silver Surges to $33 on Trump’s Pharma Tariff Threat
Silver spiked near $33 amid rising safe-haven demand, after former President Trump threatened new tariffs on pharmaceutical imports. Trade tensions with China also remain high, with both sides imposing steep tariffs—145% by the US and 125% by China. Beijing insists it won’t resume talks until the US cuts levies. A weaker dollar and no expected change in Fed policy are further boosting silver, though Fed rate stability typically weighs on non-yielding assets like silver.
US Oil Activity Set to Slow as Prices Weaken – ING
With WTI crude in the mid-$50s—well below the $65/bbl average breakeven for drilling—US oil producers are pulling back. ING highlights a drop in rig count to 479 and a slowdown in well completions. Even if drilling continues, producers may delay completions, raising the DUC (drilled but uncompleted) well count. The slowdown also threatens associated natural gas supply, just as US LNG export demand is rising.
OPEC+ Shocks Market with Another Big Output Hike – ING
OPEC+ has approved another aggressive supply increase for June, continuing its shift away from gradual output normalization. After a surprise 411k b/d hike for May, the group has now brought back nearly 1 million b/d in just three months—far ahead of the original 2.2 million b/d plan spread through September 2026. ING notes this policy shift adds fresh supply uncertainty to a market already dealing with demand risks. Saudi Arabia is pushing the hikes to discipline overproducing members, but with oil trading well below its $90/bbl fiscal breakeven, Riyadh may need to slash spending or raise debt.
Diamondback Warns U.S. Oil Growth May Be Over
Oil prices bounced back to $59.13 despite OPEC+ production increases, helped by short-covering and a major shift in U.S. shale strategy.
Diamondback Energy announced a 10% cut to its capex budget and hinted U.S. onshore output may have peaked. CEO Travis Stice compared the move to easing off the gas at a red light, signaling they’ll resume spending only if prices recover meaningfully.
He cited:
- Rising costs due to steel tariffs
- A 15% drop in frac crews
- Shrinking Tier 1 drilling inventory
- Geological limits outweighing tech improvements
Stice’s comments push back on federal optimism for continued U.S. oil expansion.
Vitesse Energy Slashes Capital Spending by Nearly a Third
U.S.-based Vitesse Energy Inc., a non-operating oil and gas firm with holdings in the Williston Basin and the Central Rockies, announced a sharp reduction in planned capital expenditures. The company said it will cut spending by 32%, calling it a significant pullback aimed at adjusting to current market dynamics.
Goldman Sachs Predicts Gold Could Hit $4,000 or More
Goldman Sachs reaffirmed its bullish view on gold, with a base case projection of $3,700 per ounce by the end of 2025 and $4,000 by mid-2026. If a recession occurs, they believe ETF inflows could push prices to $3,880. In a scenario where confidence in the Fed erodes or U.S. reserve policy shifts dramatically, Goldman says gold could climb as high as $4,500 by year-end.
Europe News
Eurozone Services PMI Revised Up to 50.1, Signaling Stagnation
Eurozone April final services PMI was revised to 50.1 from the preliminary 49.7. The composite PMI came in at 50.4. While a touch of growth remains, the broader picture points to stagnation, with demand still weak. Easing price pressures provided some relief.
HCOB notes that:
“Eurozone economic growth slowed at the start of the second quarter, following a pick-up in the first three months of the year. The services sector, which is a major player, practically stagnated in April. Even though manufacturing output saw a surprising uptick, it wasn’t enough to prevent the overall slowdown in growth.
“In the services sector, cost pressures are still relatively high, though they have eased a bit over the past couple of months. Inflation is down for sales prices and continued to trend lower. Many members of the European Central Bank (ECB) have been hinting at another interest rate cut in June, and these latest figures seem to support their stance.
“Euro area employment has seen a slight stabilization. The drop in headcounts among manufacturers has been more-thancounterbalanced by an increase in jobs within the service sector. Overall, there’s still a noticeable hesitation to hire new staff, which isn’t too surprising given the current uncertainties.
“Spain is leading the pack in terms of growth, followed by Italy, then Germany with marginal growth, and France trailing behind. This is reflected in the Composite PMI data for the first four months of 2025 and aligns with Eurostat’s GDP data for the first quarter. We expect Germany to soon outpace Italy thanks to a generous fiscal package, while France is likely to remain at the bottom for now due to its uncertain political climate.”
Eurozone Producer Prices Fall 1.6% in March on Energy Decline
Eurozone March PPI dropped 1.6% month-on-month, driven mainly by a 5.8% fall in energy prices. Year-on-year, prices rose 1.9%, below the expected 2.5%. Excluding energy, PPI rose 0.1% month-on-month, with modest gains across most goods categories.
Germany Services PMI Revised to 49.0, Lowest in Over a Year
Germany’s final services PMI for April was revised slightly higher to 49.0 from 48.8 but still marks a 14-month low. The composite PMI was adjusted to 50.1. Business confidence weakened, and output slowed, adding to concerns about the outlook.
Commenting on the PMI data, Dr. Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank, said:
“The German service sector has hit the brakes. Business activity dipped a bit in April, ending a four-month streak of growth. The composite PMI didn’t slip into recession territory, thanks to manufacturing companies ramping up production, just like they did in March after a slump that lasted nearly two years.
“Service providers probably felt the squeeze on profit margins in April. Costs went up more than last month, but they had to dial back on price hikes. With this in mind, confidence about future business took a hit, with the index dropping further below its long-term average.
“At first glance, the future doesn’t look too bright. New business has shrunk for the eighth month in a row, order book backlogs have been sliding downhill for most of the past two years, and there’s no sign of a solid recovery in exports. But, companies are still hiring, and job growth has even picked up for the second month straight. Clearly, businesses aren’t ready to throw in the towel just yet. And for good reason, as the new government, expected to start this week, could well give the economy a boost with its fiscal stimulus program in infrastructure and defence, plus more social spending. All of this should also spread to the services sector.”
Spain Services PMI Slips Below Forecast at 53.4
Spain’s April services PMI eased to 53.4 from 54.7 in March, missing the 54.0 forecast. The composite PMI also fell to 52.5 from 54.0. Slower new business growth and declining confidence—now at its weakest since November—suggest momentum is softening.
HCOB notes that:
“In April, business activity growth in Spain’s private sector slightly slowed according to the HCOB Composite PMI. While growth in the services sector weakened, production in the manufacturing sector declined. This trend is also reflected in the order situation: service providers recorded slower order growth, while orders in the manufacturing sector decreased.
“Service providers report a more challenging work environment. This is not surprising, given the increasing tensions in international markets – keywords: trade frictions – which led to postponed or cancelled consumption and investment decisions. Despite the slight slowdown, business activity and order levels remain in the growth zone.
“Operating costs for Spanish service providers remain high, despite the current slight slowdown. Anecdotal evidence suggests that trade tariffs have already had initial impacts on supply chains, leading to input price increases. Additionally, wage increases continue to be a significant driver of prices. As a result of rising input costs, companies are passing these costs on to their customers.
“Spanish service providers remain optimistic about the future, even though the corresponding index recorded a decline this month, falling to the lowest level of the year. This is mainly due to the uncertainty arising from US tariffs and their effects on the international trade network. However, this has no immediate impact on Spanish workers. Given the continued growth in orders and increasing backlogs, service providers added to their workforces.”
Italy Services PMI Beats Expectations at 52.9
Italy’s services PMI rose to 52.9 in April, above expectations of 51.5 and March’s 52.0. The composite PMI improved to 52.1 from 50.5. Output and new orders accelerated, cost pressures eased to 2025 lows, but business sentiment dropped to a 4.5-year low.
Commenting on the PMI data, Dr. Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank, said:
“The growth trend appears to be consolidating. The Italian private sector has grown for three months in a row, led by the service sector, while manufacturing output has practically stopped shrinking after a year. According to the Bank of Italy, tourism and hospitality have supported growth in the service sector during the first months of the year, which suggests a certain degree of sustainability. In the manufacturing sector, the question remains as to whether this sector could soon be hit harder by US tariffs and EU countermeasures. For the year as a whole, we expect economic growth of around half a percent.
“The service sector is showing relatively robust growth, which has accelerated slightly compared with the previous month. Accordingly, service providers have once again hired more people, especially as they were also able to expand new business more strongly than in March. It’s encouraging that most people were hired on a permanent basis, as panellists said.
“Tariff uncertainty could also indirectly weigh on the service sector, with the challenging economic and geopolitical climate mentioned by panellists as having weighed on expectations regarding future activity, with the index already well below its long-term average. However, especially in these times, the service sector is likely to maintain its role as a stabiliser of the Italian economy, which it has held for around two years.
“There is some slight relief on the cost side for service companies. Operating costs have not risen quite as sharply as in previous months. However, companies were also unable to increase sales prices at the same pace as before and had to settle for significantly lower increases, meaning that profit margins were unlikely to benefit.”
France Services PMI Revised Higher but Still Signals Weakness
France’s April final services PMI was revised to 47.3 from the preliminary 46.8, but remains in contraction territory for an eighth straight month. The composite PMI stood at 47.8. Weak demand and a subdued economic outlook continue to weigh on activity.
HCOB notes that:
“April marked another month of declining activity in the French private sector. The HCOB Composite PMI signals a continued downturn in economic activity in France, driven by weakness in the services sector. However, the manufacturing sector has managed to increase production for the first time in nearly three years.
“The French services sector remains on a downward trajectory. Business activity declined again in April, attributed to lower customer demand and generally poorer market conditions. The rapid decline in new orders is particularly concerning this month. Surveyed companies report that weak market conditions make it very difficult to attract new business, and existing customers are also hesitant to engage in new transactions. High trade policy uncertainty seems to be causing postponements to investment and consumption decisions.
“Current developments – weak demand amid high uncertainty – do not bode well for the profit margins of French service providers. Additionally, our survey results indicate that operating costs, appear to be rising faster than end prices, which have virtually stagnated due to competitive pressures.
“Future business expectations remain in the growth zone, but significantly below the historical average. Employees find themselves in a concerning situation, as they are increasingly at risk of job loss as workloads decrease due to the order slump and simultaneous reduction of backlogs.”
Switzerland Unemployment Rate Holds Steady at 2.8% in April
Switzerland’s seasonally adjusted unemployment rate remained unchanged at 2.8% in April, matching expectations. The number of registered unemployed dropped slightly to 130,101, down from 132,569 in March, according to the Federal Statistics Office.
UK Services Sector Contracts, Business Sentiment Hits 2.5-Year Low
UK April final services PMI came in at 49.0, slightly above the 48.9 preliminary reading but below March’s 52.5. The composite PMI was revised up to 48.5 from 48.2. New business fell again, export sales dropped at their fastest rate since February 2021, and business confidence hit its lowest level in over two years.
Tim Moore, Economics Director at S&P Global Market Intelligence, said:
“UK service sector output slipped into contraction for the first time in one-and-a-half years as heightened business uncertainty weighed on order books during April. Export conditions were particularly weak, with new business from abroad falling to the greatest extent since February 2021.
“Survey respondents often commented on the impact of global financial market turbulence in the wake of US tariff announcements. Businesses in the technology and financial service sectors noted rising risk aversion and delayed spending decisions among clients, especially in relation to major investment plans. Consumer service providers meanwhile cited subdued domestic economic conditions and challenges with passing on rising payroll costs, especially those in the hospitality and leisure sectors.
“Input prices increased at the steepest pace since the summer of 2023 as higher National Living Wage rates and National Insurance contributions added to payroll costs in April. Prices charged inflation was also the strongest for nearly two years as service providers sought to pass on additional costs to clients despite fragile demand.
“Business expectations for the year ahead fell sharply as service sector firms braced for an extended period of global economic turbulence and heightened recession risks. Some 22% of the survey panel predict an outright decline in business activity during the next 12 months, up from 14% in March and well above the post-election low of 6% in July 2024.”
Merz Wins Second Vote to Secure German Chancellorship
Friedrich Merz was confirmed as Chancellor after a second parliamentary vote, following an initial protest within his coalition despite their 12-seat majority. The episode was politically embarrassing but doesn’t change the coalition’s functional power.
EU Threatens $100 Billion Tariff Hit on U.S. Goods
The EU is prepared to impose tariffs on up to $100 billion worth of American goods if current trade talks fail, according to Bloomberg sources. While the headline jolted markets, the underlying threat isn’t new—Brussels has long hinted at retaliation if no deal is reached. Market reactions may reverse once that context settles in.
Click here for the full article
Merz Fails to Secure Chancellor Role in Initial Vote
Friedrich Merz fell short of the 316 votes required to become Germany’s chancellor, receiving only 310 in the Bundestag’s first round of voting. Despite his CDU/CSU/SPD coalition holding 328 seats, secret ballot dynamics introduced uncertainty. A second vote could happen within 14 days, but failure would trigger a third round where only a relative majority is needed.
Europe Offers €500 Million to Attract Scientists Amid U.S. Cuts
The EU and France jointly announced a €500 million fund to attract scientists disillusioned by funding cuts in the U.S. French President Emmanuel Macron extended an open call to global researchers, encouraging them to pursue academic freedom in Europe. The package will support relocation and operational costs for foreign talent. European Commission President Ursula von der Leyen urged member nations to increase R&D spending to 3% of GDP by 2030.
EU’s Sefcovic: EU doesn’t feel weak or under pressure to accept unfair deal with the US
- Further remarks by the EU Trade Commissioner
- EU doesn’t feel weak or under pressure to accept unfair deal with the US.
- The US tariffs are unfair.
- Everyone wants to accelerate free trade agreements with EU.
- We also need to look at what we can do better inside the single market.
EU Trade Commissioner Sefcovic: Proposed 0 for 0 tariffs on industrial goods
- Remarks by the EU’s Trade Commissioner, Maros Sefcovic
- Proposed 0 for 0 tariffs on industrial goods.
- Accelerating trade talks with India among others.
- Another €170B US-exports may be impacted by tariffs.
- Ready to use all available tools in trade defence.
SNB’s Schlegel: We haven’t ruled out negative interest rates
- Remarks by SNB chairman, Martin Schlegel
- The Swiss franc has really appreciated a lot
- We have said we are ready to intervene in the FX market as necessary
- No one likes negative rates
- But if we have to, we are prepared to do it again
- We expected Swiss inflation to come down
Financial Times reports EU set to make it easier for UK professionals to work in the bloc
- Chipping away at Brexit further
Financial Times has more.
Asia-Pacific & World News
China’s Services Growth Slows Sharply in April
The Caixin Services PMI in China fell to 50.7 in April 2025, missing expectations of 51.7 and marking the weakest reading since September 2024. The composite index came in at 51.1, down from 51.8. New orders increased at the slowest rate since late 2022, while job cuts drove backlog higher. Despite rising input costs from wages and materials, service providers dropped prices for a third straight month due to weak demand. Business confidence fell sharply, with U.S. tariff concerns dampening future expectations.
China Logs 314 Million Domestic Trips Over May Holiday
China reported 314 million domestic trips over the recent May holiday, a 6.4% increase compared to the same period last year. Spending was also robust, up 8% year-over-year based on credit card transaction data. The figures were published by China Daily and state broadcaster CCTV, suggesting a strong showing for local tourism despite broader economic uncertainty.
China to Reveal Financial Stimulus Measures Wednesday
Chinese financial authorities, including the PBoC and securities regulators, will hold a press conference on Wednesday. The event is expected to unveil a new policy package aimed at stabilizing financial markets and investor sentiment, as part of Beijing’s ongoing response to economic challenges.
China Open to EU Talks as Diplomatic Ties Hit 50-Year Mark
Marking five decades of China-EU diplomatic relations, Beijing has invited European leaders for a new round of talks. Chinese officials expressed readiness to host Ursula von der Leyen or Antonio Costa, emphasizing shared opposition to U.S. tariffs. China also lifted all restrictions on bilateral exchanges with the EU to facilitate discussions.
China’s Xi: China and EU should oppose unilateral bullying
- Xinhua reporting President Xi’s remarks
- China and EU should oppose unilateral bullying.
- Ready to work with EU leaders to expand mutual openness, properly handle frictions and differences.
- Calls for China, EU to safeguard fairness and justice.
- Stands ready to work with European Council, European commission to deepen strategic communication, enhance understanding and mutual trust.
HKMA Intervenes to Curb Hong Kong Dollar Strength
The Hong Kong Monetary Authority (HKMA) intervened in currency markets, injecting HK$60.543 billion to counter the Hong Kong dollar reaching the stronger end of its permitted range. The move underscores the central bank’s active role in defending its currency peg amid volatile capital flows.
U.S. Bill Aims to Track Nvidia AI Chips and Prevent China Smuggling
Congressman Bill Foster, an Illinois Democrat and former particle physicist, is preparing new legislation targeting the unauthorized export of advanced AI chips. The upcoming bill seeks to ensure that chips—such as those produced by Nvidia—can be traced post-sale, a response to ongoing reports that these components are being smuggled into China in violation of U.S. export restrictions.
Nearly Half of Hong Kong’s U.S.-Bound Containers Cancelled
Hong Kong’s shipping industry is taking a hit, with 41% of container shipments to North America’s west coast cancelled for the week of May 12. The ongoing U.S.-China tariff war is battering trade routes. Freightos and Sea-Intelligence data confirm a wave of cancellations. Tariffs of 145% from the U.S. and 125% in Chinese countermeasures are slashing shipping profitability. With tariffs above 35% considered a tipping point, analysts warn many export lanes are now economically unsustainable.
PBOC sets USD/ CNY reference rate for today at 7.2008 (vs. estimate at 7.2518)
- China is back from holidays today
People’s Bank of China injects 405bn yuan via 7-day reverse repos at 1.5% in Open Market Operations (OMOs)
- 1087 bn yuan mature today (post-holiday impact)
- net drain of 682bn yuan
Taiwan central bank says will visit FX custodian banks to carry out inspections
- The central bank tries to assuage fears after the sudden surge in the currency yesterday
- We feel the market has returned to a more stable situation today
- Expectations of the Taiwanese dollar appreciating have mostly gone
Taiwan Dollar Eases After Central Bank Steps In
The Taiwan dollar gave up some of its recent gains after a sharp rally on Friday and Monday. Central Bank Governor Yang Chin-Long intervened verbally and financially to cool the market. He cautioned against overhyped commentary and advised manufacturers to stay level-headed amid wild exchange rate projections. DBS’s Philip Wee noted that the dip in the currency reflects central bank efforts to temper speculative fervor, including direct market intervention.
Australian Building Permits Slide in March
Australian building approvals fell sharply in March 2025, down 8.8% month-on-month—well below the forecast of a 0.6% decline. Year-over-year figures were still positive at +13.4%, though down from February’s +25.7%. Separately, household spending for March slipped 0.3% m/m, the weakest monthly figure in six months. Annual household spending rose 3.5%, below the 3.9% expectation.
Westpac CEO: Stress Easing for Households and Businesses
Westpac’s CEO believes the economic tide may be turning, stating that financial pressure on consumers and businesses appears to be easing. He also noted that interest in financing for mergers and acquisitions is rising faster than anticipated, suggesting improved market sentiment.
NAB Sees Aussie Dollar at 0.70 by Year-End
National Australia Bank has raised its forecast for the AUD/USD exchange rate to 0.70 by the end of 2025. The bank anticipates a series of interest rate cuts from the Reserve Bank of Australia—starting with 50 basis points in May, followed by 25 basis point cuts in July, August, November, and February. A weakening U.S. dollar and better risk appetite are expected to support the Aussie in the second half of the year.
New Zealand Commodity Prices Flat in April
The ANZ World Commodity Price Index held steady in April 2025, unchanged month-over-month. In New Zealand dollar terms, the index fell 1%. The index tracks 17 key export commodities, including dairy, meat, wool, forestry, and seafood. Shipping costs dipped slightly overall, with exporters expecting further declines amid softening global demand. The China Containerized Freight Index was the only measure to show a small rise.
Crypto Market Pulse
Bitcoin Faces Selling Pressure as Dormant Wallets Reactivate
Bitcoin traded near $94,000 Tuesday, struggling to push through the $97,700 resistance level. On-chain data from Santiment shows long-inactive wallets are moving coins—typically a bearish signal.
The Network Realized Profit/Loss (NPL) metric spiked, indicating profit-taking by holders. The Age Consumed index also saw a notable jump, historically a precursor to price dips.
Still, corporate demand remains robust:
- Semler Scientific: +167 BTC
- Strategy (formerly MicroStrategy): +1,895 BTC
- Total investment: $196.5M
Strategy now holds over 555,000 BTC. Meanwhile, Riot Platforms sold 475 BTC in April to fund operations, avoiding equity dilution.
Bitcoin ETFs also saw a $425.45 million inflow on Monday, continuing a four-day streak.
XRP Faces Resistance as Ripple Ends Quarterly Reports
XRP trades at $2.11, struggling to gain traction above key technical levels. The token is down from earlier highs, with traders increasingly cautious as support at $2.00 becomes critical.
Ripple will discontinue its quarterly report starting Q2, citing misuse of the disclosures during past SEC litigation. The company says it will continue providing updates via its official channels.
Key developments:
- Franklin Templeton filed for a spot XRP ETF
- CME added XRP futures
- Ripple acquired brokerage Hidden Road for $1.25B
- XRP products saw $214M in 2024 inflows, nearly surpassing Ethereum-based funds
Despite strong institutional interest, technical indicators show persistent bearishness, with overleveraged longs facing liquidation.
BNB Eyes Breakout on AI Integration Launch
BNB is hovering near $600, testing a key resistance point. Binance Chain announced “plug-and-play” AI integration via the Model Context Protocol (MCP), part of a broader “AI-first” push.
MCP allows AI apps to securely communicate with external systems in a standardized way. This could boost DeFi security, create traceable trading strategies, and serve other blockchain sectors.
BNB’s RSI is climbing, signaling building bullish momentum ahead of a potential breakout above its 50-day EMA.
Turbo Coin Surges While Doge, Shiba Slip
Meme coins are under pressure ahead of the Fed’s interest rate decision. Dogecoin and Shiba Inu are both facing resistance and have slipped in recent sessions.
Meanwhile, Turbo coin surged over 250% in the last 30 days, reclaiming key technical levels. It’s now approaching $0.01 with investor sentiment turning sharply positive.
Coinbase Criticizes Fed in Bold Bitcoin Ad
Coinbase took aim at the U.S. Federal Reserve in a new television campaign promoting Bitcoin. The ad claims the Fed creates $465 million in new money daily—equivalent to 26,000 shipping containers—diluting the value of the U.S. dollar. The message: Bitcoin offers an alternative to what Coinbase calls “money printed out of thin air.”
The Day’s Takeaway
Day’s Takeaway: Key Market Trends & Developments
United States
- AI Chip Export Oversight: Congressman Bill Foster is drafting legislation to track advanced AI chips post-sale, particularly Nvidia’s, amid concerns about illegal exports to China.
- Fed in a Bind: The Fed faces a policy dilemma as it prepares for its next meeting—caught between risking a recession or triggering stagflation due to Trump-era tariffs.
- GDP Outlook Improves: The Atlanta Fed revised its Q2 growth forecast to 2.2%, doubling the previous 1.1% estimate, reflecting unexpected economic strength.
- Recession Worries on Earnings Calls: Mentions of “recession” surged in S&P 500 earnings calls, despite steady performance and retail enthusiasm.
- UBS Bullish on Equities: UBS forecasts the S&P 500 will reach 5,800 by year-end, citing easing trade tensions and expected Fed rate cuts.
- Retail Investor Boom: Retail traders poured $40 billion into equities in April, especially into tech and momentum stocks, according to JPMorgan.
- Goldman Sachs Eyes $4,000 Gold: Citing inflation hedging and geopolitical instability, Goldman predicts gold could hit $4,000 by mid-2026, or even $4,500 if confidence in U.S. policy erodes.
- Trump’s Pharma Push: A new executive order cuts regulatory red tape for domestic drug manufacturing, speeding FDA approvals and requiring stricter foreign sourcing disclosures.
Canada
- Trade Deficit Narrows Sharply: Canada’s March trade deficit shrank to C$0.51 billion, beating expectations of C$1.56 billion. Imports dropped more than exports, which stabilized slightly. However, exports to the U.S. declined 6.6%, while exports to other countries surged 24.8%.
- Sector Trends Mixed: Notable export gains came from motor vehicles (+7.7%), metals/minerals (+6.5%), and forestry (+3.5%). Meanwhile, nuclear energy (-54.5%), natural gas (-13.7%), and pharmaceuticals (-7.0%) saw steep drops.
- Manufacturing Deteriorates: The Ivey PMI fell to 47.9 in April, signaling contraction in the sector amid tariff-related headwinds and weakening demand.
Commodities
- Gold Surges: Gold jumped $80 to $3,112, its second-highest close ever, driven by risk aversion, trade tensions, and a soft dollar.
- Oil Climbs: Crude oil rose to $59.09, gaining 3.43%. A test of the $60 resistance is key to confirming a bullish trend.
- Silver Spikes: Silver rose to $33 on safe-haven demand following Trump’s pharma tariff threats and high U.S.-China tensions.
- NZ Commodity Index Flat: ANZ’s April commodity price index was unchanged month-on-month, with a 1% drop in local currency terms. Exporters see weak global demand.
- Shipping Costs Mixed: Slight declines in global shipping costs were reported, with China’s freight index the only one to tick up.
Europe
- €500 Million to Lure Scientists: The EU and France launched a €500 million fund to attract global researchers amid U.S. R&D funding cuts.
- Tariff Threats Escalate: The EU is ready to impose $100 billion in tariffs on U.S. goods if trade talks collapse—though the threat is more strategic than imminent.
- Germany’s Merz Falls Short: Friedrich Merz failed to secure a parliamentary majority to become Germany’s chancellor; a second vote looms.
- China-EU Diplomacy at 50: China is inviting EU leaders for talks and lifted all restrictions on bilateral exchanges, signaling interest in strengthening ties.
Asia
- China’s Services Slow: The Caixin Services PMI fell to 50.7 in April, the weakest since September 2024, as demand weakened and job cuts rose.
- Holiday Travel Boom: China recorded 314 million domestic trips over the May holiday, up 6.4% YoY, with spending rising 8%—a rare bright spot.
- Stimulus Incoming: China plans to unveil new financial support measures on Wednesday to stabilize markets amid weak sentiment.
- Hong Kong Shipping Hit: Nearly 41% of container shipments to North America were canceled for the week of May 12, mainly due to high tariffs and unprofitable routes.
- Taiwan Dollar Dips: The Taiwan dollar slipped after intervention by the central bank aimed at calming speculative activity.
- HKMA Intervenes: Hong Kong’s monetary authority injected HK$60.5 billion to curb currency strength, defending the peg amid volatile capital flows.
Rest of the World
- Australia’s Mixed Signals:
- Building Permits Down: March approvals fell 8.8% MoM, much worse than forecast.
- Household Spending Slips: Spending fell 0.3% MoM—the weakest in six months.
- RBA Rate Cuts Forecast: NAB now sees the Aussie dollar at 0.70 by year-end, expecting 125 bps in RBA rate cuts over the next year.
- New Zealand: Export commodity prices remained flat overall, with soft global demand continuing to weigh on prices and expectations.
Crypto
- Coinbase Attacks Fed in Ad: A bold new Coinbase campaign slams the Fed for printing $465 million daily, positioning Bitcoin as a hedge against inflation and fiat dilution.
