Stock-index futures and Asian shares jumped on Thursday after Trump said he would reveal a 'major' trade deal, raising hopes of progress in talks. The Pound also gained.
S&P 500 and European stock futures rose 0.8% following Trump’s announcement on Truth Social, though he didn’t name the country involved. Sources suggest the deal will likely be with the UK.
Another big development yesterday that boosted US equities came from the Trump administration plans to change a Biden-era rule that restricted the export of advanced AI chips, according to a spokeswoman for the U.S. Department of Commerce.
President Trump did dent the enthusiasm slightly with comments on the upcoming US-China trade talks scheduled for this weekend. The president stated that he was unwilling to decrease tariffs on China in order to open up more substantial trade conversations with Beijing.
On the FX front, the British pound rose by up to 0.5% before settling with a 0.2% gain at 1.3315 at the time of writing, despite expectations of a quarter-point rate cut by the Bank of England later in the day.
The Australian dollar jumped 0.6% against the U.S. dollar, while the New Zealand dollar gained 0.5%, with both trimming their gains to around 0.3%.
Currency Strength Chart, Strongest - Weakest: USD, GBP, EUR, AUD, NZD, CAD, JPY, CHF
Source: FinancialJuice
Oil prices remained stable on Thursday. Brent crude rose by 43 cents (0.7%) to 61.55 a barrel, while U.S. West Texas Intermediate crude increased by 49 cents (0.8%) to 58.56 a barrel at the time of writing.
Gold prices slipped back toward the 3300 handle before finding some support. The precious metal is trading around 3340 at the time of writing as risk-on sentiment returns.
Fed meeting takeaways
The key point from the FOMC meeting was that the Fed recognized the risks of higher inflation and unemployment happening at the same time. These risks could show up in the Fed's next economic projections in June. After falling last night, U.S. interest rates are rising this morning, possibly due to improved market sentiment.
Economic data releases
From a data standpoint, it is a quiet day on the data front until the Bank of England (BoE) meeting later in the day.
The Bank of England meeting today is expected to impact the market. A 0.25% rate cut to 4.25% is widely anticipated. The main focus will be on how the BoE handles the statement about taking a "gradual and careful" approach to easing monetary policy. Market participants expecting deeper rate cuts are hoping this phrase will be changed or removed to suggest faster action.
The market predicts four 0.25% rate cuts this year, while we expect three in May, August, and November. If the BoE sticks to its "gradual and careful" approach, the pound might strengthen.
For all market-moving economic releases and events, see the MarketPulse Economic Calendar. (click to enlarge)
Chart of the day - DAX
From a technical standpoint, the DAX has closed above a key support area around 23212.
The DAX is now eyeing a break and fresh all-time highs with improving sentiment.
Fresh all-time highs leaves us with very little historic price action to analyse.
I will be keeping an eye on key psychological levels at 23750, 24000 and 24250 respectively.
DAX Daily Chart, May 8, 2025
Source: TradingView.com (click to enlarge)
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