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Global financial markets on May 1, 2025, are driven by optimism over potential US-China trade deals, pushing gold to a two-week low while boosting the US Dollar to a two-week high. Weak US economic data, including a surprise GDP contraction, reinforces Federal Reserve rate-cut expectations, capping USD gains and supporting safe-haven assets. The Australian Dollar holds steady despite mixed China PMI data, and the Euro weakens amid USD strength. Key US data releases, including the ISM Manufacturing PMI and Nonfarm Payrolls, are set to shape market direction amid ongoing trade and geopolitical uncertainties.
Current Level: Gold (XAU/USD) trades around $3,221, hitting a two-week low.
Market Dynamics: US-China trade deal optimism, fueled by Trump’s comments on potential agreements with China, India, South Korea, and Japan, reduces safe-haven demand. A USD rally to a two-week high (DXY near 99.75) adds pressure. However, a surprise US GDP contraction (-0.3% annualized Q1) and easing PCE inflation (2.3% YoY) bolster Fed rate-cut bets (100 bps by year-end), limiting gold losses. Geopolitical tensions, including Russian drone attacks in Ukraine, provide support.
Technical Outlook: Support at $3,228 (50% Fibonacci); resistance at $3,260. Bearish momentum grows, but a break below $3,228 could target $3,160. ISM Manufacturing PMI today is key.
Current Level: AUD/USD trades around 0.6410, supported by Australian data.
Key Drivers: Australia’s trade surplus surged to AUD 6.9 billion in March (vs. AUD 3.13 billion expected), and Q1 CPI rose 0.9% QoQ, reducing RBA rate-cut bets. China’s Manufacturing PMI at 49.0 signals contraction, capping AUD gains. USD strength, driven by trade optimism, pressures the pair, but weak US data (ADP employment at 62K vs. 108K expected) supports AUD/USD.
Technical Outlook: Resistance at 0.6449; support at 0.6388 (nine-day EMA). RSI above 50 maintains bullish bias, with US PMI data critical.
Current Level: EUR/USD trades near 1.1295, down 0.35%.
Market Dynamics: USD demand, spurred by Trump’s trade deal comments, weighs on EUR/USD. ECB’s dovish stance (2.25% rate) and US-China trade optimism pressure the Euro. Weak US GDP and PCE data support Fed rate-cut expectations, capping USD gains and limiting EUR losses. Eurozone PMI strength could provide support.
Technical Outlook: Support at 1.1270; resistance at 1.1425. RSI near 55.85 signals bullish momentum, but USD strength may dominate.
Current Level: USD/CHF trades around 0.8270, near nine-day EMA.
Influencing Factors: USD strength from trade optimism supports USD/CHF, but CHF’s safe-haven appeal persists amid geopolitical risks. Weak US data and Fed rate-cut bets limit USD upside. Switzerland’s trade surplus (CHF 6.35 billion in March) bolsters CHF.
Technical View: Support at 0.8251 (nine-day EMA); resistance at 0.8350. RSI above 30 suggests a corrective rebound, but bearish bias remains below 50.
Current Level: WTI crude oil trades at $57.89, down slightly.
Key Drivers: Weak global demand, US GDP contraction, and a 3.8 million barrel US inventory build pressure prices. OPEC+’s potential output hike on May 5 adds bearish sentiment. Trade optimism slightly offsets demand fears, but WTI faces a 15% monthly loss.
Technical Outlook: Support at $57.50; resistance at $59.50. Oversold RSI hints at a pause, but OPEC+ decisions loom large.
US Economic Data in Focus
Recent Data: US Q1 GDP contracted by 0.3% (vs. 0.4% expected), ADP employment rose by 62K (vs. 108K expected), and PCE Price Index eased to 2.3% YoY, reinforcing dovish Fed expectations. Consumer Confidence hit a five-year low at 86.0.
Today’s Releases: ISM Manufacturing PMI and Weekly Jobless Claims will provide insights into US economic health, with Nonfarm Payrolls on Friday critical for Fed policy outlook.
US-China Trade Developments
Current Status: Trump’s optimism about deals with China and others fuels risk-on sentiment, but his trade official notes no active China negotiations. China’s exemptions on some US goods contrast with its Foreign Ministry’s denial of talks, creating uncertainty. The trade war (US tariffs at 145%, China at 125%) continues to impact markets.
Outlook
On May 1, 2025, markets are buoyed by US-China trade deal hopes, pressuring gold and boosting the USD, while weak US data supports Fed rate-cut bets, limiting USD gains. AUD/USD holds firm, EUR/USD weakens, and WTI oil remains under pressure ahead of OPEC+’s May 5 meeting. Today’s ISM Manufacturing PMI and Friday’s Nonfarm Payrolls will drive volatility, with trade developments and geopolitical risks shaping sentiment. Investors stay cautious amid Trump’s shifting policies.
Stay tuned for further updates.
