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US Treasury Secretary Bessent is speaking in an interview with Fox ‘News’:

• No trade deal is done until Trump announces it
• Trump needs to sign off on 18 key trade deals, he is involved in talks
• There is a plan for changes to auto tariffs
• The tax deal will make auto loans for US-made cars deductible

Bessent saying the big T needs to ‘sign off’ on 18 deals makes it sounds like the deals have been done. They have not.

This article was written by Eamonn Sheridan at www.forexlive.com.

• “If there Is no progress, US will step back as mediators in this process”

I pray this war ends but Russia is in an interesting spot here. They can stall and it sounds like Trump would possibly turn to secondary sanctions if it falls apart but at the same time, he would drop military support for Ukraine, or at least limit it. If that’s the case, Russia could calculate it could win the war outright in time.

That second scenario would be bullish for oil prices, particularly if the US went hard on Russia secondary sanctions.

This article was written by Adam Button at www.forexlive.com.

• If auto makers can’t get parts we don’t want to penalize them
• There is great support for a tax deal
• Not at all worried about the auto industry
• India coming along great, think we have a deal on tariffs
• He will visit Africa
• He will speak to Australians

More signs point to the first tariff deal being with India, as I speculated.

This article was written by Adam Button at www.forexlive.com.

A notable detail from Howard Lutnick’s interview on CNBC today was that the US has a trade deal with one country ready to go — pending ratification from a country’s parliament and leadership.

That was followed up by Fox Business’ Charlie Gasparino who wrote that “word on Wall Street” was that it was India or South Korea.

Two things point to India:

1) A hint from earlier today

Earlier today Treasury Secretary Scott Bessent said they were one of the easiest countries to negotiate with because they have so many tariffs. That meant the US could ask for them to be taken down and the ask was relatively clear. With non-tariff barriers, it can get more difficult and complicated.

2) The structure of parliament

Because the Union cabinet in India can implement a tariff-cutting deal by executive notification that only has to be tabled in Parliament, not approved by a full vote, the ruling National Democratic Alliance can bring a U-S-India tariff package into force in a few weeks to a couple of months after signature. Because of the structure of government, opposition parties would have to actively defeat it, rather than passing it and the NDA have enough seats to block that path.

South Korea’s parliament is controlled by the opposition and it’s very contentious at the moment. Even with some cooperation, it would take 6-12 months to approve because of hearings, studies and public consultations. A previous US deal that wasn’t contentious took 5 months to approve, though you could argue the US could waive tariffs before approval if it was on track.

All told: Bet on India if you have to pick a spot.

This article was written by Adam Button at www.forexlive.com.

This isn’t a big surprise given the politics and reality in Europe, along with its clout. The US seems to be trying to use the UK as a wedge but all trade negotiations in the EU are tough.

The deadline that matters for Europe is the 90 days after Liberation Day. If the US ramps up tariffs back to 20%, it could quickly turn into a China-like situation.

This article was written by Adam Button at www.forexlive.com.

• All of the deals will be incredibly smart and incredibly thoughtful
• If we cut our trade deficit in half, that’s 2 percentage points of GDP
• Americans are going to work in factories as technicians
• You’re going to see the greatest domestic resurgence in auto manufacturing in the next two years, and I’ll wear it

The GDP math is such a tiresome argument. If you gain on the trade deficit by charging people people $2000 for an iPhone built domestically, then they won’t have that money to spend on other domestic goods/services.

This article was written by Adam Button at www.forexlive.com.

Synopsis:
Goldman Sachs has revised its USDCAD forecasts lower, citing stronger-than-expected Canadian data, a supportive fiscal policy stance, and diminished expectations for Bank of Canada (BoC) rate cuts. While Canada’s close ties to the U.S. may limit broader gains on the crosses, Goldman expects the Canadian dollar to outperform the U.S. dollar through the remainder of 2025.

Key Drivers Behind the Revision

• Emerging Trade War Effects
  Canada’s recent payrolls report may be the first sign that the U.S.-led trade war is beginning to weigh on hard economic data beyond the U.S.

• BoC Defers to Fiscal Support
  The BoC is emphasizing fiscal policy—not monetary easing—as the primary buffer against trade-related growth risks. This stance reduces the likelihood of aggressive rate cuts.

• CAD Supportive Backdrop
  A combination of less dovish BoC policy expectations and proactive government stimulus is strengthening the outlook for the Canadian dollar, especially versus the USD.

• USDCAD Forecast Revisions
  Goldman Sachs’ updated projections are:
  • 3-month: 1.36 (previous: 1.40)
  • 6-month: 1.35 (previous: 1.39)
  • 12-month: 1.34 (previous: 1.38)

Conclusion

Goldman Sachs is growing more confident in the CAD’s relative strength against the U.S. dollar, supported by macroeconomic stability and policy alignment. However, due to Canada’s close economic ties with the U.S., broader CAD gains on cross-currency pairs may remain limited.

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This article was written by Greg Michalowski at www.forexlive.com.

Major European indices ended the session with mixed results. Italy’s FTSE MIB led the way, rising 1.09%, supported by strength in auto and banking stocks. Reports suggesting auto tariffs may be less severe than expected helped lift sentiment, with notable gains from Stellantis (+4.0%) and Iveco (+2.3%). Banks also performed strongly, including UniCredit (+1.3%), Intesa Sanpaolo (+1.4%), Mediobanca (+3.6%), Monte dei Paschi (+2.7%), and Banca Generali (+2.2%).

Elsewhere:

• German DAX: +0.80%

• UK FTSE 100: +0.55%

• France’s CAC 40: -0.24%

• Spain’s Ibex 35: -0.66%

As European traders wrap up for the day, U.S. markets are modestly higher. The Dow Jones leads with a 0.5% gain, while the S&P 500 is up 0.14% and the Nasdaq is slightly firmer by 0.06%.

U.S. Treasury yields are moving lower across the curve:

• 2-year: 3.666% (-1.9 bps)

• 5-year: 3.783% (-3.1 bps)

• 10-year: 4.181% (-3.5 bps)

• 30-year: 4.661% (-3.1 bps)

Commodities and crypto:

• Crude oil: $60.86, down $1.19 (-1.92%)

• Gold: $3,307, down $36.70 (-1.10%)

• Bitcoin: $94,937, down $100

This article was written by Greg Michalowski at www.forexlive.com.

Lutnick will also appear on CNBC at 2 pm ET

• Adjustments to auto tariffs are aimed at allowing domestic automakers time to growth US plants and employment
• Executive orders growth out of detailed conversations with domestic car makers
• Manufacturers of domestic autos will get a 15% offset for the value of those vehicles against parts imports

Automakers aren’t exactly cheering the news today with share prices near flat.

This whole things sounds over-complex and ripe for abuse. Ronald Reagan warned that tariffs end in corruption.

This article was written by Adam Button at www.forexlive.com.

The US GDP report is due out tomorrow and the consensus is -0.3% but I suspect the market shifted to a worse number in light of the poor trade balance data released today.

“After this morning’s Advance Economic Indicators release from the US
Census Bureau, the standard and alternative model nowcasts of the
contribution of net exports to first-quarter real GDP growth declined
from -4.90 percentage points and -2.85 percentage points, respectively,
to -5.26 percentage points and -4.05 percentage points,” the Atlanta Fed writes.

For tomorrow’s GDP report, the market is more likely to focus on final
sales to domestic purchasers in the GDP report as it will look through some of the trade turmoil.

This article was written by Adam Button at www.forexlive.com.

• Spain April Flash CPI Y/Y 2.2% vs 2.0% expected
• Prior 2.3%
• Core CPI Y/Y 2.4% vs 2.0% prior

Higher than expected figures although they haven’t influenced much interest rates expectations for the ECB, which is expected to cut by another 25 bps in June.

This article was written by Giuseppe Dellamotta at www.forexlive.com.

• Prior was -11.3
• Revenue index vs +1.3 prior

This article was written by Adam Button at www.forexlive.com.