100 Days in: Chaos, Confusion and Counting

The week kicked off on a slightly positive note for European equities on continued expectations that the disinflationary impact of Trump’s trade policies would allow the European Central Bank (ECB) to give ample support to the underlying economies. But sentiment was much less bullish for US equities, which saw an initial drop on rising inflation expectations for the US economy and worries that any Federal Reserve (Fed) support would be limited due to a heat-up in inflation dynamics. And indeed, we see all over the news and posts how the Chinese are reflecting almost all of their import costs onto their clients. Some think that the tariff impact will be temporary; some — including the Fed members — are starting to think that the impact could last longer than just a one-off jump in prices; while many continue to hope that Trump will have no choice but to dial back his tariffs — and the threats — as the rest of the world has shown much greater resilience to Trump’s attacks, with China in particular appearing ready to fight to the last dime.

The good news of the day is that it’s been a few days since we last heard fresh attacks by Trump. It feels like he’s been obliged to slow down the pace and intensity of his attacks. The bad news is, there is no clarity regarding the tariff situation, and the best outcome would be that the US keeps the 10% tariffs for everyone even if negotiations go well and lead to a favourable outcome. Anyway, for investor mood, three things matter:

  1. No news from Trump is good news — it means that he and his government are softening their tone. Scott Bessent says that they are leaving China aside and concentrating on other negotiations for now, but there is a clear reluctance to further escalate the war on the Chinese front.
  2. A dovish shift in Fed expectations would be more than welcome, even though the Fed can’t do much if inflation picks up momentum.
  3. Earnings must live up to expectations and forecasts shouldn’t sound too gloomy.

Unfortunately, on that front, the news is not brilliant. Bloomberg’s Economics team warns that a 22% tariff model would lead to a 7% contraction of S&P 500 companies’ net income in 2025 versus the current estimate of 12% growth. Some say that a softer US dollar should support US company earnings, but tit-for-tat tariffs from the rest of the world could well eat into that margin. Nvidia, for example, fell 2% yesterday in a relatively calm session on news that China’s Huawei Technologies will test a new chip to replace its Nvidia chips.

100 days of chaos.

Today is Trump’s 100th day in office, and he will go down in history as the President who triggered the most unnecessary trade war in history. US consumer sentiment fell to one of the lowest reads on record, and long-term inflation expectations spiked to the highest since 1991. The US economy has certainly taken an unnecessary hit from tariff uncertainty, as GDP is expected to have dropped from 2.4% to 0.4% in just three months… The stock markets print their worst 100 days of a President since 1974 while the US dollar is losing its safe haven and reserve demand. Oh well…

Buy more Gold?

The dollar’s misery makes gold shine stronger than ever. The price of an ounce posted lower highs in the past three sessions, but not necessarily lower lows. Price dips could still be interesting opportunities to buy gold as risks persist, and central banks keep buying. But for those who missed the gold rally, silver — which lags behind by historical means — could be an interesting option, on expectation that the mint ratio would decline toward the 80/90 range without a significant downside correction in gold prices. Another interesting play for those who missed the gold rally is gold miners. The latter are seen as a “leveraged bet” on gold, as higher gold prices boost revenues, profits, and investor enthusiasm, leading to higher miner share prices — often by a larger multiple.

Gold, for example, rose around 42% between August last year and April this year, while Fresnillo rose more than 100% during the same period.

And for gold, the bulls remain strongly bullish based on the fact that the factors that pushed gold prices higher — the trade and geopolitical tensions, central bank and retail buying — remain intact. Some point that the latest gold rally — of just 40% — is far from 1979’s 120% rally.

Source link

Visited 1 times, 1 visit(s) today

Related Article

AUD/USD Forex Signal Today 04/06: Tight Range (Chart)

AUD/USD Forex Signal Today 04/06: Tight Range (Chart)

Bullish view Buy the AUD/USD pair and set a take-profit at 0.6600. Add a stop-loss at 0.6350. Timeline: 1-2 days. Bearish view Sell the AUD/USD pair and set a take-profit at 0.6350. Add a stop-loss at 0.6600. The AUD/USD exchange rate remained at 2.8% as investors focused on th latest macroeconomic data from the United

Equities Up Regardless of Trade Worries, Mixed Data

Market performance was surprisingly strong yesterday, especially considering the day began in the US with a sharp downgrade in global growth projections from the OECD. The organization cited ‘substantial increases in trade barriers, tighter financial conditions, and weakened business and consumer confidence’ as key concerns. That neatly sums up why many expect a global economic

EUR/USD Analysis Today 04/06: Trading Under Pressure (chart)

EUR/USD Analysis Today 04/06: Trading Under Pressure (chart)

EUR/USD Analysis Summary Today Overall Trend: Upward. Today’s Euro-Dollar Support Levels: 1.1330 – 1.1270 – 1.1190. Today’s Euro-Dollar Resistance Levels: 1.1460 – 1.1500 – 1.1580. EUR/USD Trading Signals: Buy Euro-Dollar from the 1.1290 support level with a target of 1.1420 and a stop-loss of 1.1200. Sell Euro-Dollar from the 1.1500 resistance level with a target

GOLD: Bullish Bias Above Broken Triangle’s Upper Boundary

Gold price moves within a tight range on Wednesday but remains bullishly aligned following limited corrective dip on Tuesday. Broken Fibo level at $3355 (61.8% of $3200/$3120 pullback) reverted to solid support which keeps the downside protected so far and guards lower trigger at $3328 (broken triangle’s upper boundary, reinforced by 10DMA). Technical picture on

Muted Trading Persists as Trump Pressures Fed after ADP Miss

Trading remains subdued as markets drift into the US session, with little conviction across asset classes. US futures dipped slightly after a dismal ADP employment report showing only 37k job additions in May, sharply below expectations. Still, the reaction was contained, with no clear evidence of a broad risk-off move. US President Donald Trump added

USD/CAD technical forecast

USD/CAD Forecast: Loonie Gains Ahead of Expected BoC

The USD/CAD forecast points south as the loonie strengthens ahead of a likely BoC pause. Market participants are waiting to see developments in trade negotiations. The US is set to release the nonfarm payrolls report on Friday. The USD/CAD forecast points south as the loonie strengthens ahead of a likely BoC pause. At the same

BME Presents Foreign Exchange Settlement System FXS

BME Presents Foreign Exchange Settlement System FXS

The main advantages of the new system compared to bilateral settlement are improved efficiency and reduced risks in foreign exchange transactions The global foreign exchange market trades more than 7.5 trillion dollars a day BME has presented, at an event held at the Madrid Stock Exchange Palace, its new foreign exchange transaction settlement system in

image

Will Prices Rise Again? (Chart)

Today’s Gold Analysis Overview: General trend for gold: Upward. Today’s gold support points: $3267 – $3200 – $3150 per ounce. Today’s gold resistance points: $3366 – $3400 – $3480 per ounce. Today’s gold trading signals update: Sell gold from the resistance level of $3370, with a target of $3280 and a stop loss of $3400.

How to Trade AUDCAD effectively – Exploiting the Range

While AUDCAD isn’t among the highest-volume pairs in Forex, it’s often in the lesser-traded instruments that sharp traders find unique opportunities. Commodities heavily influence the Australian and Canadian dollars, as both nations are major exporters. The AUD tends to react more to moves in industrial metals—especially copper—while the CAD is tied to oil price fluctuations.

Taurex launches Social Trading in Asia via Brokeree Solutions

Taurex launches Social Trading in Asia via Brokeree Solutions

Multi-regulated global broker Taurex has announced that it has partnered with leading fintech provider Brokeree Solutions to introduce Social Trading for clients across Asia. This integration brings a seamless copy trading solution to the widely used MT4 platform, supporting a more collaborative and flexible trading experience. Through Social Trading, Taurex clients can follow and automatically

Dollar Struggles, Gold Rally Stalls, Trade Uncertainty Caps Conviction

Global markets remain mixed, reflecting a cautious investor mood amid heightened trade uncertainty and a lack of clear directional drivers. US stocks closed modestly higher overnight, reversing losses from earlier in the session. Asian equities broadly followed the rebound, seemingly brushing off disappointing Chinese manufacturing data. The overall tone, however, remains indecisive, with no strong

June Starts With Mixed Feelings

The month of June started on a bearish note, as renewed trade tensions and mixed economic data dominated the headlines. First, tensions between the US and China notched up another level, with both countries accusing each other of violating agreements and implementing discriminatory measures. It’s now uncertain whether Trump and Xi will meet to talk.

Gold Today 03/06: Trend May Break Above $3400 Again (Chart)

Trend May Break Above $3400 Again (Chart)

Today’s Gold Analysis Overview: The overall trend of Gold: Strongly bullish. Today’s Gold Support Levels: $3338 – $3300 – $3250 per ounce. Today’s Gold Resistance Levels: $3390 – $3440 – $3500 per ounce. Today’s gold trading signals update: Sell Gold from the $3440 resistance level with a target of $3280 and a stop-loss of $3480.

image

cTrader vs MT5 Trading Platforms Comparisons, Updated [year]

Today’s financial market data flows in milliseconds, as algorithms handle over 80% of the deal flow. Therefore, traders require an efficient, stable, and reliable trading platform supportive of algorithmic trading solutions. cTrader and MT5 are industry-leading trading platforms with unique advantages, but which is the best choice for your trading requirements? MT5 is the successor

USD/JPY technical price analysis

USD/JPY Price Analysis: BoJ Commentary Lifts Yen

The USD/JPY price analysis shows strength in the yen after Ueda’s comments. The BoJ will hike rates if the economy re-accelerates. Data revealed soft business activity in the US manufacturing sector.   The USD/JPY price analysis shows strength in the yen after BoJ’s Ueda said the central bank would hike rates if growth re-accelerates. At the

EUR/USD technical outlook

EUR/USD Outlook: Traders Reposition Ahead of ECB Meeting

The EUR/USD outlook shows a bearish shift in sentiment. The euro pulled back from a six-week high as focus shifted to the likely ECB rate cut. The US ISM manufacturing PMI revealed weaker-than-expected business activity. The EUR/USD outlook shows a bearish shift in sentiment as traders focus on the upcoming European Central Bank meeting. However,

India Foreign Exchange Market Valuation to Reach USD 65.8

India Foreign Exchange Market Valuation to Reach USD 65.8

India Foreign Exchange Market 2025-2033 According to IMARC Group’s report titled “India Foreign Exchange Market Size, Share, Trends and Forecast by Counterparty, Type, and Region, 2025-2033”, The report offers a comprehensive analysis of the industry, including market share, growth, trends, and regional insights. How Big is the India Foreign Exchange Industry ? The India foreign

0
Would love your thoughts, please comment.x
()
x