Market Talks covering the impact of U.S. Politics and White House policies on companies and markets. Published exclusively on Dow Jones Newswires throughout the day.
0511 ET - The yuan strengthens modestly against the dollar after news of the U.S.-China trade ceasefire and could appreciate further near term, ING's Lynn Song says in a note. The USD/CNY pair is now trading at a lower level than before "Liberation Day," despite monetary easing by the People's Bank of China and the back-and-forth tariff developments, the economist says in a note. Positive news could encourage capital inflows and support further CNY strengthening in the short term, though how this will balance out with what may also be conditions for a USD recovery is hard to gauge at this point, Song says. ING keeps its forecast band of 7.00-7.40 unchanged. USD/CNY last at 7.21, USD/CNH last at 7.20. (fabiana.negrinochoa@wsj.com)
0509 ET - Continued U.S. trade progress is needed for the dollar to sustain its recovery after the U.S. and China agreed to lower tariffs considerably for 90 days, Ballinger Group forex analyst Kyle Chapman says in a note. The U.S.-China progress is "substantially better news than most were expecting" but it's not the end of the story by any means. There is an expiry date attached to lower tariffs and disagreements may grow down the line, Chapman says. The market needs convincing that trade optimism will persist for the longer-term to allow the dollar to recover to levels before April 2 reciprocal tariffs were announced, he says. The DXY dollar index rises to a one-month high of 101.792. (renae.dyer@wsj.com)
0453 ET - Agricultural commodities are mixed, with wheat declining 0.6% to $5.19 a bushel but soybeans rising 1.4% to $10.66 a bushel. The U.S. and China have agreed to suspend most mutual tariffs pending further talks, driving soybeans' gains. China had imported the lowest amount of soybeans in April for ten years, Commerzbank analysts say in a note. According to data from the customs authority, April's soybean imports amounted to just over 6 million metric tons, an on-year decline of 29%. This was likely a result of the U.S.-China trade war, as soybeans from the U.S. became prohibitively expensive due to China's 140% counter-tariffs following U.S. levies, Commerzbank writes. The agreement to lower tariffs on U.S. goods to 10% for 90 days pending further negotiations has since raised hopes of increased soybean demand. (joseph.hoppe@wsj.com)
0452 ET - Gold futures slide after the U.S. and China said they will temporarily lower tariffs on each other's products. Futures are down 3.2% at $3,236.90 a troy ounce. The precious metal's safe-haven demand has been dented by the easing trade tensions, while a ceasefire between India and Pakistan further buoyed market risk-on sentiment and weighed on gold prices, ING analysts say in a note. That said, questions remain for markets as to what the end game for a U.S.-China trade deal will be, ING says. President Trump's unpredictable trade policy has been a key driver for gold so far in 2025, with the yellow metal up more than 20% year-to-date. Uncertainty is still high and volatility is likely to remain elevated across commodities markets, supporting gold prices, ING adds.(joseph.hoppe@wsj.com)
0430 ET - European natural-gas prices rise as the European Union threatens new sanctions against Russia. The benchmark Dutch TTF contract rises 3.5% to 35.83 euros a megawatt hour. Ukraine's European allies have threatened fresh sanctions, including a permanent block on the Nord Stream 2 gas pipeline that connects Russia to Germany, if Russia doesn't agree to a 30-day ceasefire proposed by President Trump. The EU has already increased pressure on Russia by detailing plans to cut most energy imports from Russia by the end of 2027. At the same time, gas has also been boosted by a general risk-on market sentiment, as the U.S. and China agreed to substantially cut tariffs pending further talks. (joseph.hoppe@wsj.com)
0428 ET - The selloff in U.S. Treasurys and eurozone government bonds accelerates, pushing yields up further, after the U.S. and China reached a deal to slash tariffs. The U.S. said the reductions would last for 90 days while the two sides begin further talks. Ten-year eurozone government bond yields extend their rise, with the 10-year Bund yield last up 7 basis points to 7.625%, according to Tradeweb. The 10-year Treasury yield increases 7 basis points to 4.446%. (emese.bartha@wsj.com)
0427 ET - The coordinated tariff reductions between the U.S. and China signal a change in tone or at the very least a political willingness to pause, Pepperstone research strategist Ahmad Assiri writes in a note. The measures, though temporary, were met with an immediate and strong reaction in markets, Assiri says. The shift creates room to reassess global trade flows and input costs, and may support corporate earnings in the next quarter, the analyst adds. Markets read this as a sign that progress in U.S. and China trade negotiations is possible, the analyst says. It feels like a reverse version of "Liberation Day"--not a full removal of barriers, but a softening. Investors are likely to keep a close eye on upcoming bilateral meetings which will shape the path beyond the 90-day pause, Assiri adds.(jiahui.huang@wsj.com; @ivy_jiahuihuang)
0427 ET - The euro is likely to remain under pressure on optimism over a de-escalation in the global trade war after the U.S. and China agreed to significantly lower tariffs, Convera strategist George Vessey says in a note. Encouraging signals from U.S.-China trade talks have reinforced the pattern of inverse moves between risky assets and the euro, he says. "Recent market dynamics have positioned the euro as a hedge against U.S. policy uncertainty, benefiting from safe-haven flows when equities decline."However, risk appetite is improving on signs of easing trade tensions. Any further trade progress could accelerate the euro's losses, he says. The euro falls to a one-month low of $1.1083, according to FactSet.(renae.dyer@wsj.com)
0424 ET - New highs for markets, especially tech stocks, are on the table in 2025 after the U.S. and China agreed to cut tariffs substantially, Wedbush analysts say in a research note. The base-case scenario for the trade talks over the weekend was some de-escalation and agreement for more discussions, they say. The massive cuts to U.S.-China reciprocal tariffs is the "best-case scenario" from the talks, they note. "This is very bullish news for the tech trade, as the supply-chain concerns will now be significantly reduced," the analysts say. With the U.S. and China on an accelerated path for a broader deal, investors will likely focus on the next steps in these trade negotiations, which will happen over the coming months, they add. (sherry.qin@wsj.com)
0420 ET - Futures linked to the tech-heavy Nasdaq-100 rise sharply after the U.S. and China agreed to suspend most tariffs on each other's goods pending further negotiations. The E-mini Nasdaq 100 futures contract is up 3.3% on Monday. Tech stocks had been under strain since U.S. President Trump in April levied tariffs on dozens of nations, including China, prompting Beijing to retaliate. Tariffs rattled tech investors who feared a trade war could destabilize supply chains and raise costs for both manufacturers and consumers. Nvidia shares are up 2.7% premarket at $119.74, while Apple stock is up 4.6% at $207.38. (mauro.orru@wsj.com)
0412 ET - Shares in European automakers jump after the U.S. and China agreed to slash tariffs for the next 90 days, pending further talks. The major de-escalation in the trade war between the two countries boosted European equity markets and sent shares in Stellantis up 7% in early trade with Porsche and Mercedes-Benz both gaining over 5%. Shares in BMW rise 4.4% while Volkswagen rises 3.5%. (dominic.chopping@wsj.com)
0411 ET - Base metal prices rise as the U.S. and China agree to substantially cut tariffs pending further talks, with LME three-month copper up 0.8% at $9,515.50 a metric ton and LME three-month aluminum up 2% at $2,465.9 a ton. According to a joint statement, President Trump's "reciprocal" tariffs on China will fall to 10% from 125%, and China will likewise cut tariffs on U.S. goods to 10% from 125% for 90 days. Base metals have ridden the resultant wave of positive market sentiment, as the tariff reductions lift the global economic outlook and raise demand expectations. Previously, forecasters had lowered China's growth outlook, given the effects of punitively high U.S. tariffs on Chinese goods. (joseph.hoppe@wsj.com)
(END) Dow Jones Newswires
May 12, 2025 05:11 ET (09:11 GMT)
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