American Eagle Outfitters, Inc. will announce its results for the first quarter of fiscal 2025 on May 29. The company expects revenue to be $1.1 billion, a 4.6% decrease from last year. Analysts predict a loss of 25 cents per share, a significant drop from last year’s earnings of 34 cents per share. In the last quarter, American Eagle’s earnings were 8% higher than expected. However, this quarter is not projected to follow suit. Ongoing inflation and high debt levels are influencing consumer spending, especially affecting American Eagle’s core customers who are cutting back on non-essential purchases like clothing. In a recent update, the company noted disappointing preliminary results for the first quarter. Problems with their merchandising approach led to higher promotions and inventory issues. As a result, they took an inventory write-down of nearly $75 million on spring and summer products. Revenue is still expected at $1.1 billion, with comparable sales projected to drop by almost 3%. Despite these challenges, American Eagle is committed to its long-term growth strategy called Powering Profitable Growth. The company’s shares are currently trading at a low price-to-earnings ratio of 9.4X. Over the past six months, their stock has fallen by 42.4%, while the industry average drop is only 10.7%. The financial situation is concerning. A 4.6% decrease in revenue compared to last year, along with a shift from profit to predicted losses, raises alarms. The company’s preliminary results indicated weaknesses in merchandising, which led to unexpected discounts and a significant inventory write-down. Predicted comparable sales will likely decline 3%. While this might not alarm many retailers, it indicates less interest from shoppers both in stores and online. Broader economic challenges, like persistent inflation and higher household debt, are putting additional pressure on the company, especially as younger customers face tighter budgets. From an analysis perspective, last quarter’s slight success does not provide much reassurance now. Although there was an 8% increase in earnings, the market does not expect this to happen again due to weakening apparel demand and markdowns that hurt profit margins. The company’s valuation suggests that expectations are low. The forward price-to-earnings ratio of 9.4X reflects slower growth, lower pricing power, and execution risks. In the past six months, the stock has dropped significantly—about four times more than the sector average. This indicates that the market views American Eagle not just as part of a retail slump, but as a company facing unique challenges. Looking ahead, the Powering Profitable Growth strategy is optimistic, but current signals urge caution. Issues with spring and summer products suggest there are problems with planning and response times. Seasonal changes are opportunities for full-price sales, and when those fail, margins suffer. Questions to consider include whether operational changes are already happening and how quickly they are being executed. Management has shown awareness of these issues through early disclosures, which is positive. However, until there is clear evidence of balanced inventory and reduced margin pressure, the short-term outlook remains uncertain. As we approach earnings season, market dynamics may shift. With rising volatility and competitors managing their inventories better, the upcoming weeks are a chance to reassess positions. If the company’s guidance worsens or if there are ongoing logistical issues during earnings calls, the stock may face further declines. Conversely, if results are better than expected or early success from the new strategy is evident, the current low valuation could prompt a strong market reaction. Option premiums indicate uncertainty, with spread differences widening a bit more on near-term puts than on calls, suggesting some long position holders are hedging. The direction of bets around the May 29 report will depend on the clarity and tone of the results. While revenue misses may already be factored in, discussions on margins and future guidance could significantly shift market sentiment.

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GBP/USD is trading around 1.3570, staying above 1.3550 and getting closer to its previous high of 1.3593, which is the highest in 39 months. This rise is due to the US Dollar weakening as concerns grow about the US’s debt situation. Tensions between the US and the EU have eased, boosting market confidence. The US President has postponed tariff impositions on the EU until July 9. Earlier, there were threats of high tariffs on European imports, but the recent news has helped stabilize the USD.

Market Movements Observation

The improved risk appetite has helped support the US Dollar Index near 99.00 after reaching a four-week low. Meanwhile, GBP/USD pulled back slightly due to thin trading volumes during a US holiday. Market reactions are focused on upcoming US data and the Senate’s tax legislation debate, which will affect GBP/USD trading. Both GBP and USD are set to respond to changes in trade relations and economic data. The pound is performing well around 1.3570, close to the peak of 1.3593. The dollar has weakened, mainly due to concerns about the US’s borrowing capabilities, leading to shifts in market positions as some traders predict more significant impacts on yield frameworks and short-term spreads.

Domestic and Global Influences

Washington’s attitude towards Europe has changed, at least for now. The decision to delay new tariffs until early July has calmed the markets. The previous proposal for steep tariffs on European goods had created anxiety, but with that risk set aside, the demand for moderate exposure has increased. The dollar index showed some strength as it rebounded off the 99.00 mark, but this recovery lacked excitement, especially with low trading activity during a US holiday. In these quieter times, price movements tend to be limited, but they also provide insights. The pullback in GBP/USD wasn’t significant, but it served as a reminder that higher levels can quickly reverse when liquidity is low. The direction of the market may depend on upcoming US economic data, particularly on inflation and employment, which could shift expectations for policy changes. Additionally, Senate discussions about potential tax code changes introduce a domestic risk, causing caution among macro traders. As a result, there’s been a shift in forward-rate pricing and demand for dollar hedges, especially for one to three-month periods. Shorter-term volatility is slightly higher, suggesting there may be sharp movements once the busy calendar clears. For those monitoring options flows, next week looks to be more active. With GBP/USD just below multi-year highs, traders with positions above 1.35 will be looking for signals from US fiscal developments and the Bank of England’s broader strategies. For now, currency traders see the pound’s strength as dependent on data rather than sustainable. Movements against other currencies, especially the euro, will also affect trading decisions as traders look for differing monetary guidance for the third quarter. As risk tolerance remains solid, the pair may rise further, but responses will be sensitive to updates from policymakers and upcoming economic events. Traders should prepare for sudden changes if the data surprises or sentiment shifts. The current situation offers both opportunities and the need for focused execution. Create your live VT Markets account and start trading now.

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The EUR/USD exchange rate increased to about 1.1395 during the Asian session on Tuesday. This rise came after President Trump announced a delay on the 50% tariffs on European Union shipments. As a result, the Euro reached its highest value since late April. Trump postponed the tariffs to July 9 following discussions with the President of the European Commission. This decision helped calm market fears, which in turn supported the Euro against the US Dollar.

Impact on Euro Value

The delay provides context for US trade policy, as July 9 marks the end of the 90-day pause on Trump’s tariffs against the EU, introduced on April 2. Possible trade tensions could influence the Euro’s value compared to the US Dollar. Trading activity and economic data play key roles in determining the Euro’s worth. As the second most traded currency, it is affected by important economic indicators like inflation rates and trade balances. The European Central Bank (ECB) is crucial for the Euro’s performance by managing monetary policy and interest rates. High interest rates or rising inflation could force the ECB to adjust rates, thereby strengthening the Euro. The recent rise in the Euro, predominantly driven by political factors, has broader implications for short-term pricing in options and futures markets. The delay of US tariffs gave traders some temporary relief, lessening immediate pressure on the Euro. Delays like this often do not indicate long-term changes in policy, meaning any assumption of permanence could lead to incorrect market decisions.

Market Strategy Insights

Traders should look deeper than just tariff news. The delay to July 9 aligns with a structured pause that started in early April—a complete 90 days. Those in the market should have integrated this timeline into their medium-term trading strategies. A careful approach is needed, considering the possibility of price instability returning once the pause ends. Furthermore, while the Euro’s recent strength may seem technical, viewing it that way would be short-sighted. Important Eurozone economic data, including Consumer Price Index (CPI) and consumer sentiment, will be released in the coming weeks. These results can lead to price adjustments in swaps and forwards, especially when market expectations differ significantly from published data. From a strategic viewpoint, short-term rallies fueled by political news, while tempting, usually lack momentum unless supported by solid fundamentals. Current derivative pricing reflects rising speculation. In the EUR/USD weeklies leading into mid-July, spreads are modestly widening, indicating that traders are preparing for potential reversals or accelerations depending on future trade discussions. Attention must also focus on policy signals from Frankfurt. The ECB’s upcoming meeting and related events could alter expectations for interest rates, especially if inflation data significantly diverges from their targets. Lagarde’s previous emphasis on responding to data remains relevant, signaling that surprises are unlikely unless economic indicators shift substantially. Instead of relying on trades based solely on today’s strengths, it may be better to consider straddle or strangle strategies with expiration dates beyond July 9. This allows traders to capitalize on expected volatility without betting on a specific trend. Moreover, if managing risk is important, the current low levels of short-dated options compared to other G10 currencies suggest that Euro options are relatively inexpensive. We observe that dollar sentiment has not fully changed despite today’s soft tone. Powell’s stance remains unpredictable—if economic data from the US continues to be mixed, markets may start questioning the direction of the Federal Reserve’s policy tightening or potential pivot. This uncertainty increases the attractiveness of option-based strategies. Lastly, it’s important to monitor changes in the term structure closely. If the back end starts to steepen before early July, it may indicate expectations for longer-lasting policy differences. In such cases, carry trades could shift quickly, and costs for hedging uncovered positions may rise. Minor changes in implied rates often signal these behaviors, particularly during periods of low realized volatility. Successful capital management in this environment relies on traders being agile, not just in trading but also in testing assumptions. Create your live VT Markets account and start trading now.

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Gold prices in Malaysia were stable on Tuesday. The price was 452.27 Malaysian Ringgits (MYR) per gram and MYR 5,275.23 per tola. Prices change daily based on international rates, adjusted for local currency and units. These rates are for reference only and may differ slightly from local market prices.

Gold as a Hedge Against Inflation

Gold is considered a safe investment and a way to protect against inflation and currency loss. In 2022, central banks purchased 1,136 tonnes of gold, the largest annual amount ever recorded. Gold prices often move in the opposite direction of the US Dollar and US Treasuries. Factors like global instability, fears of a recession, and changes in interest rates can influence gold’s price. This information is for reference only and not a suggestion to buy or sell. Market conditions are unpredictable, and anyone interested should do their own research before investing. Gold remains stable in Malaysia at MYR 452.27 per gram. This aligns with trends observed globally. At MYR 5,275.23 per tola, these prices reflect international gold rates when converted to the local currency. While the prices are mainly a guideline, they may differ slightly from what you see in stores, which is common due to minor pricing differences in local markets. Gold is still viewed as a way to protect wealth, especially when currencies are unstable or purchasing power decreases. The amount of gold added to central bank reserves in 2022—1,136 metric tonnes—is significant and shows serious interest from large institutions.

Understanding Market Dynamics

This data not only reflects gold’s value but also the trends affecting monetary reserves. When central banks buy large amounts of assets, it indicates long-term views on inflation and confidence in financial instruments, like government debt. Traders pay close attention to these transactions to understand the market’s direction. This increase in gold purchases was not just a reaction— it was a strategic move in response to multiple economic risks. Gold’s tendency to move in the opposite direction of the US Dollar and Treasury yields is still strong. When the US Dollar gains strength or real yields rise, gold prices often drop. This happens because gold doesn’t earn interest, making other investments more attractive when yields rise. Yet, during times of market uncertainty, gold demand tends to increase. Geopolitical issues and economic concerns usually boost demand for gold-related products. For example, conflicts in Eastern Europe or uncertainties in Asia can make investors reconsider their risks. Similarly, comments from central banks about interest rate changes can cause fluctuations in commodity-related trading. In the future, those following derivatives should carefully watch broader economic signals. Changes in interest rates from the US Federal Reserve are a major influence on gold prices. An unexpected change in their approach—especially concerning inflation—could lead to a rise in demand for gold. It’s important to consider more than just rates or the US Dollar. Actions from institutions, like reserve updates and ETF flows, can provide valuable confirmation. If multiple signs point towards rising gold demand—such as lower Treasury interest, relaxed inflation expectations, or increased investments in gold—this trend will likely continue. Medium-term fluctuations in gold prices may not always indicate major changes. We need to distinguish between short-term noise and real signals. Look for consistent signs—like a narrowing yield curve, stagnant risky assets, or renewed interest in gold-backed investments. These often impact the derivatives market faster than spot prices. During uncertain periods, gold typically attracts defensive investments. However, sharp price changes could occur if there are supply disruptions or currency shocks. Therefore, risk assessments for shorter contracts should factor in potential triggers as well as price targets. Above all, we must rely on data. Economics should guide our decisions, not speculation. Create your live VT Markets account and start trading now.

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Japan’s Finance Minister Shunichi Kato has mentioned that interest rates are affected by many factors. However, rising rates often highlight worries about government finances. They are closely watching the bond market, especially the super long sector, and are in constant talks with bond investors and market players. Currently, the USD/JPY pair is down 0.36%, trading at 142.30. Kato emphasized the need for stable currency movements that reflect economic realities. He noted that a stronger yen could lower import costs and prices.

Factors Influencing The Japanese Yen

The value of the Japanese Yen is influenced by several elements, including Japan’s economy, the Bank of Japan’s (BOJ) policies, and the interest rate gap between Japanese and US bonds. The BOJ’s actions and monetary strategies significantly impact the Yen. A recent policy change in 2024 has begun to support the Yen, moving away from an ultra-loose monetary stance. A wider gap between Japanese and US bond yields typically favors the US Dollar over the Yen. However, recent adjustments in policies are reducing this gap. In times of market stress, the Yen is regarded as a safe-haven currency, attracting more investments due to its stability. Kato’s comments point out that rising yields in Japan’s long-term bond market are drawing more attention from policymakers. Historically, increases in yields, especially those beyond 10 years, can shake investor confidence in the sustainability of public debt. When long-term yields rise without an increase in short-term inflation expectations, it often signals deeper issues, such as unsustainable fiscal policies or concerns about future funding that could push capital away from Japanese Government Bonds (JGBs). This is why Japanese authorities are proactively monitoring and engaging with the market to prevent instability. In the current market, the Yen’s slight strengthening to around 142.30 against the US dollar might not indicate drastic changes in investor sentiment, but it does suggest some adjustments. Kato also highlighted that exchange rates play a crucial role in import-driven inflation. A stronger currency can reduce the cost of imported goods, potentially easing financial pressures on local businesses, but only up to a certain extent and if it aligns with actual economic performance.

Interactions of Monetary Policies

For traders, the important aspect is how monetary policies are interacting. The difference between Japanese and US yields is well-known—it’s traditionally a benchmark in foreign exchange strategies. However, what’s notable now is not just the size of the difference but the speed at which it’s narrowing. Recent changes by the Bank of Japan, including slight adjustments to its ultra-loose stance, have given the Yen more room to breathe. This has prompted a reassessment of long-standing assumptions about interest rates in short-dated options. However, any cross-border foreign exchange or interest rate trade must also consider how quickly risk sentiment can shift. During turbulent market conditions, capital flows can overshadow yield strategies. The tendency for funds to flow into the Yen during times of tight liquidity or rising uncertainty remains. This is why risk-neutral strategies cannot overlook macro hedges in Yen pairs, even in calmer periods. We are noticing lower volatility premiums than average, but these may not persist, especially if bond market conditions or central bank communications become less predictable. Considering these changes, models should place greater importance on how central bank statements affect rate expectations, particularly at the longer end of the yield curve. Strategies that overly depend on interest rate differences, without considering policy risks or geopolitical tensions, may face significant exposure. Create your live VT Markets account and start trading now.

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West Texas Intermediate (WTI), a key US crude oil benchmark, is currently trading at about $61.25 during Asian market hours. The price is stable as traders await OPEC+ decisions on July oil production levels, expected on May 31. OPEC+ may increase production by another 411,000 barrels per day, continuing a trend for the third month. Russian Prime Minister Alexander Novak mentioned that discussions on further output increases haven’t happened yet.

US-Iran Nuclear Talks Impact

US-Iran nuclear talks are also affecting the oil market, with some potential progress following proposals from Oman. While there are challenges, these discussions could impact WTI prices and may limit price increases in the near term. Additionally, the US has postponed a 50% tariff deadline on the EU until July 9 after talks with EU Commission President Ursula von der Leyen. This news could provide slight upward pressure on oil prices. WTI oil is considered high quality because of its low gravity and sulfur content. It plays an important role in the global oil market, reflecting changes in supply and demand, geopolitical issues, and OPEC’s production choices. The value of WTI is also influenced by the US Dollar, as oil is primarily traded in dollars.

Trade Policy and Price Sensitivity

Currently, WTI is steady at around $61.25, reflecting anticipation rather than a lack of interest. This price point indicates a market waiting for clarity from OPEC+ before their May 31 announcement. OPEC+ may choose to increase output by 411,000 barrels per day again, although there’s still room for discussions among members before a final decision. For those trading futures, this moment feels uncertain—waiting for confirmation from decision-makers about supply. Entering trades early without clear signals could lead to unnecessary volatility. Additionally, communication from Russian officials suggests a lack of agreement among them. The ongoing US-Iran negotiations add another layer of uncertainty. There are indications that discussions are becoming more positive, but translating that into real oil supply is complicated. Although the news may curb sharp price increases, its actual impact remains unclear—especially for short-term contracts. Thus, it’s wise to stay flexible. Regarding trade policy, the US has delayed the EU tariff deadline to July 9, easing potential market shocks. This decision likely creates mild upward pressure on oil prices due to reduced tensions between the US and EU. Those holding refined product spreads might experience slight benefits, as the chance of demand reductions due to friction has lessened. In a week heavy with political moves, don’t forget the fundamentals. WTI’s low sulfur and tight density make it desirable, keeping it sensitive to changes in refinery demand and transport patterns. However, short-term actions are more linked to perceived policy changes than to actual inventories. During this time, it may be better to reduce exposure rather than take big risks. Also, watch the US Dollar. Since most crude is traded in dollars, even small changes can affect overall prices. A stronger dollar can make it more expensive for international buyers, evident in recent global demand reactions. Market watchers should pay attention to macroeconomic data that might affect US interest rate expectations, which will directly impact WTI prices. We’ve seen this before: expectations often lead reality. The next steps depend not just on production targets but also on how market players manage risk before clear signals emerge. Being early doesn’t guarantee being right, especially when factors like geopolitics, diplomacy, and fiscal policy come into play. Staying adaptable is more valuable than sticking to a firm belief. Create your live VT Markets account and start trading now.

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Gold prices dropped over 0.50% on Monday, trading at $3,336. This decline followed reduced demand for safe-haven assets after US President Donald Trump postponed tariffs on goods from the European Union. Trading volumes were low due to market closures in the UK and US for holidays. Trump’s announcement to delay tariffs until July 9 boosted market confidence, which put pressure on gold prices despite a 4.86% increase last week—the largest gain since early April. On Friday, gold prices rose as Trump pressured Apple to manufacture iPhones in the US, threatening significant tariffs.

Gold Price Trends Amid Changing Demand

Gold prices are likely to keep rising, especially after data revealed that China’s gold imports from Hong Kong doubled in April compared to March. Geopolitical tensions are also high, with Russia’s ongoing military actions against Ukraine eliciting responses from Trump. Upcoming US economic reports include Durable Goods Orders, FOMC meeting minutes, GDP estimates, and the Core PCE Price Index. There are worries about the US fiscal deficit after Moody’s downgraded its debt rating, which also supports a positive outlook for gold. Technical analysis suggests that if gold stays above $3,300, it may test or surpass previous highs. On the other hand, if it falls below $3,300, prices could decline further toward recent lows. The sharp decline in gold prices on Monday, settling around $3,336, reflects a temporary change in sentiment due to recent news. Relief from tariff delays on EU goods reduced the demand for safe-haven assets. Even though the decline was noticeable, it should be seen in the context of last week’s 4.86% gain—gold’s strongest performance in over a month. Thus, Monday’s movement appears more like a pause than a reversal. Thin trading contributed to erratic price movements, as both UK and US markets were closed. In such environments, any headline can cause significant price shifts, which we observed. Traders must account for low-volume distortions when evaluating these price levels.

Influence of US Trade Policy and Geopolitical Tensions

The shift in sentiment away from safe-haven assets was primarily due to a policy change from Washington. By moving the tariff deadline to July, Trump introduced short-term optimism for global trade, which applied downward pressure on gold. This shift isn’t based on changing fundamentals but rather a repositioning in response to new information. Underneath it all, there remains strong support for gold. April saw a significant increase in Chinese demand, shown by the doubling of imports through Hong Kong. This type of demand signifies strong end-user interest and cannot be easily ignored. When a major importer increases consumption significantly, it creates a foundation for medium-term support, even if speculative buying fluctuates in the short term. The broader geopolitical context also plays a crucial role. Ongoing military actions by Russia have heightened market tensions, and Trump’s responses have added more uncertainty. This scenario supports a long-term demand for gold, especially alongside concerns about fiscal stability. For example, Moody’s recent debt rating downgrade indicates underlying stress in the US financial outlook. Concerns over widening deficits are among the key factors that typically support gold prices in the upcoming months. Looking ahead, we focus on the US economic calendar. Important data to watch includes durable goods orders, preliminary GDP estimates, the Core PCE Price Index (the Fed’s preferred measure of inflation), and the latest minutes from the FOMC meeting. Each of these could alter rate expectations, influence the strength of the dollar, and impact metal prices. We will review these as they are released. From a technical standpoint, the $3,300 support level remains crucial. If prices hold above this area, we expect another attempt to rise toward April’s highs. Conversely, if prices drop below this support, recent lows around $3,260 may draw market attention in the coming sessions. The balance of the market will depend on how traders adjust around this key level. Traders should remain flexible in their strategies. The market’s reaction is very sensitive to any changes in rate expectations or geopolitical developments. Headline risks are increasing and fragmenting, making it essential to align technical analysis with a clear understanding of macroeconomic drivers. We are closely monitoring market flows and sentiment changes in both options and futures markets. Early signs indicate that traders are focusing more on protective strategies rather than directional bets, suggesting that market participants are cautious and unconvinced about significant trends at this moment. Create your live VT Markets account and start trading now.

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The US Dollar Index (DXY) dropped to five-week lows, dipping below 99.00. This decline is linked to unpredictable US trade policies. On Tuesday, the focus will shift to key US economic indicators: the Consumer Confidence from the US Conference Board, Durable Goods Orders, House Price Index, and the Dallas Fed Manufacturing Index. Additionally, Fed’s Kashkari will be speaking. EUR/USD rose to multi-week highs above 1.1400, fueled by optimism in trade. Key upcoming releases include Germany’s GfK Consumer Confidence, Economic Sentiment for the Euro Area, the final Consumer Confidence report, and the Consumer Inflation Expectations survey.

Exchange Rate Movements

GBP/USD approached 1.3600, benefiting from USD weakness. The only relevant UK release is the CBI Distributive Trades survey. USD/JPY gained some strength after touching monthly lows around 142.20. Japan’s Foreign Bond Investment data and Consumer Confidence figures are due on May 29. AUD/USD rose above 0.6500 but fell back slightly, with traders awaiting the RBA’s CPI Indicator and Construction Work Done data on May 28. WTI oil prices slid towards $61.00 per barrel, and Gold dropped to about $3,320 per ounce, reacting to Trump’s prolonged EU trade discussions. Silver faced selling pressure near $33.00 per ounce as the week started. The US Dollar Index’s recent fall below 99.00 is mainly due to inconsistent trade policy coming from Washington. This situation has led to adjustments in many USD pairs. As the week progresses, we expect several important economic events from the US—especially consumer sentiment and durable goods orders—to create short-term movements in trading. Kashkari’s comments may shed light on the Federal Reserve’s discussions about inflation and future policy directions. The euro’s rise above 1.1400 indicates improved sentiment due to lowered trade tensions and a better economic outlook in parts of the eurozone. With Germany’s consumer confidence data and eurozone sentiment indicators set to be released soon, any positive surprises could strengthen the euro further. However, changes in sentiment often have little impact on large institutional trading strategies unless they indicate a significant shift in spending or investment.

Commodity Price Fluctuations

Sterling’s rise toward 1.3600 was mainly due to dollar weakness, rather than strong domestic data. With only a minor UK retail survey expected, trading strategies involving sterling may need to focus more on technical analysis than on news. This suggests that traders should pay close attention to short-term trigger levels and manage their stops carefully, as macroeconomic influences appear limited for now. In Tokyo, the yen briefly recovered against the dollar after reaching monthly lows. Upcoming Japanese data, particularly on foreign investment, may reveal essential trends that could affect JPY trading. However, consumer figures might not provide much clarity unless there’s a surprising change from previous results. The Australian dollar held steady above 0.6500 before sliding a bit, likely due to cautious positioning ahead of the Reserve Bank’s CPI indicator and quarterly construction data. These reports are crucial for shaping interest rate expectations, which may lead to significant market reactions. We should be ready for volatile movements if the data deviates from expectations. In the commodities market, oil prices experienced a decline, nearing $61.00 due to ongoing trade negotiations between the US and EU. Unresolved tariffs and trade deals are impacting energy demand expectations. Precious metals saw similar weakness. Gold fell to around $3,320 per ounce, while silver faced renewed selling around $33.00. These drops indicate a shift towards riskier assets and less demand for safe havens. We’re monitoring movements driven by volatility in asset pricing and relationships between different commodities. Those involved in derivatives should be aware of changes in implied volatility and shifts in positions that may come from broader trends rather than individual asset performance. Not all economic data is equally relevant, but some reports may significantly impact future expectations. Create your live VT Markets account and start trading now.

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Dow Jones futures rose over 1% on Memorial Day after U.S. President Donald Trump delayed EU tariffs until July 9. The NASDAQ 100 futures increased by 1.52%, as this postponement lowered immediate tariff worries. This decision came after talks with European Commission President Ursula von der Leyen and affects the trade agreement timeline between the U.S. and the EU. Recently, the Dow fell by 2.5% due to fears of potential 50% tariffs on the EU. Earlier, Trump had set a 20% tariff on the EU in April, then lowered it to 10% during negotiations. Actions like these create market uncertainty.

Investment Advice on 30-Year U.S. Treasuries

Bank of America recommends investing in 30-year U.S. Treasuries, even as their yield reached 5.04%. This suggestion comes as the Federal Reserve prepares to release the FOMC Meeting Minutes, which will reveal their concerns about inflation and employment. This week, tech giants Salesforce and Nvidia will announce their earnings. Nvidia expects to report $43.17 billion in revenue with an adjusted earnings per share (EPS) of $0.73. Despite a 2% decline this year, Nvidia’s annual growth remains strong. Similarly, Salesforce anticipates $9.75 billion in revenue, a 6.8% year-over-year increase, and an adjusted EPS of $2.55. The rise in Dow Jones and NASDAQ 100 futures during Memorial Day was expected after the announcement of the tariff delay until July 9. With Washington delaying harsher measures, the anxiety over increased trade tensions eased, at least temporarily. This change followed discussions between Trump and von der Leyen, influencing the postponement. This immediate relief is reflected in futures pricing. Markets dislike sudden changes, and with the earlier threat of tariffs approaching 50%, traders faced increasing unpredictability. Just a week earlier, stocks had sharply declined, especially in export-sensitive sectors, in response to renewed trade policy risks. The prior changes—first raising tariffs to 20% and then reducing them to 10%—show how unpredictable these negotiations can be. It reminds us that political outcomes can shift unexpectedly. There’s little certainty that current agreements will last. The situation may change again, and the timeline until July is now crucial to monitor closely.

FOMC Meeting Minutes and Market Implications

In terms of market positioning, bond traders are shifting towards longer-duration Treasuries. Bank of America’s recommendation for 30-year bonds, despite yields near 5.04%, is not about comfort but about hedging against inflation expectations and signs of a slowing economy. The market anticipates a potentially less aggressive approach from the Federal Reserve, although this hasn’t been confirmed. All eyes are now on the upcoming FOMC Meeting Minutes. The key question is whether the Fed will signal a change in direction or if inflation concerns will delay such a move. Employment numbers remain steady, but they haven’t shown the softness typically seen before the Fed takes action. Until the minutes are released and provide more clarity, traders have limited room for directional trades in rates. This week also brings quarterly updates from Salesforce and Nvidia. These reports will provide vital insights, not just for their own sectors but also for assessing overall demand in consumer and enterprise markets. Nvidia’s forecast of over $43 billion in revenue, along with modest earnings per share, suggests steady demand. However, the slight year-to-date drop in share price hints that the market expected more aggressive growth. Nonetheless, Nvidia’s long-term performance remains strong, attracting attention from asset managers focused on AI and semiconductors. Salesforce is also projecting nearly 7% growth year-over-year. What’s essential now is not just whether the company meets or exceeds revenue and earnings targets, but what management says about future bookings and demand. If those indicators fall below expectations, it will support a critical theme we’re observing—whether software investment is stabilizing or still expanding after the pandemic. For derivatives trading, this means adapting to short-term moves shaped by macro data while preparing for increased volatility around earnings. With tariffs delayed for now, implied volatility may decrease in trading, but open interest in major indices will likely remain focused on tech-related developments. Position sizing should factor in these short-term sensitivities to data. And with the Fed’s commentary on the horizon, maintaining agility with duration and risk exposure is more important than ever. Create your live VT Markets account and start trading now.

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BoJ’s Historical Approach

The Bank of Japan (BoJ) has a history of using very loose monetary policy to increase domestic demand. In contrast, the US Federal Reserve has kept interest rates high to fight inflation. These different strategies are being reconsidered as worries about fiscal issues and credit ratings affect the strength of the US Dollar. Markets are adjusting expectations for possible interest rate cuts by the Fed this year. The Japanese Yen is making a comeback as a safe-haven currency due to concerns about fiscal responsibility in the US. If Ueda hints at tightening policies, the Yen could gain strength by narrowing the interest rate gap and increasing confidence in the currency. Currently, the USD/JPY is facing renewed downward pressure, influenced by last week’s changes in US Treasury yields and a global move towards safer assets. The drop below 143.00 is more than just a technical indicator; it reflects a change in market sentiment and a shift away from recent trends. As risk aversion increases, short-term trades are highly sensitive to news about inflation and interest rates in both the US and Japan.

Federal Reserve Stance

Ueda’s upcoming speech is attracting more attention than expected. Although he usually avoids making bold policy announcements, any hints—especially regarding the labor market or domestic spending—will be closely analyzed for signs that Japan may further ease its yield curve control. Long-term Japanese bonds have been steadily changing, and a clear stance from the BoJ could draw investment back to the Yen, creating pressure on the currency pair from Japan. The Federal Reserve’s position is still unclear. While inflation has decreased from its highs, core levels remain resistant in some areas of the economy. Powell’s team has not given strong indications about reducing interest rates, and ongoing budget concerns increase the demand for safe-haven assets. This trend is becoming visible in the bond markets, with long-term yields slightly rising as investors reconsider public spending risks. This situation could indirectly support the Yen, especially if Japanese authorities reduce their intervention efforts. We anticipate that the gap between US and Japanese yields will remain narrow in the short term, particularly if the Fed stays cautious about easing policies. This makes carry trades less appealing and may lead to a reduction of USD/JPY long positions that were built with the expectation of continuous strong US economic performance. Create your live VT Markets account and start trading now.

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