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UK Trade Minister Jonathan Reynolds will meet with U.S. Trade Representative Jamieson Greer on Tuesday to discuss how to implement a recent trade pact, as concerns mount over new U.S. steel tariffs. The meeting comes during Reynolds’ three-day trip to Paris and Brussels, where he will also review recent political trade understandings with both the U.S. and EU.

Although the deals struck last month aimed to lower tariffs on British car and steel exports to the U.S., they remain informal political agreements with key implementation details still unresolved. The situation has become more complicated after President Trump announced plans to double steel tariffs to 50% from Wednesday.

UK Steel has warned the move could severely hurt British producers. A UK government spokesperson said talks with Washington are ongoing to clarify how the new tariffs affect the deal. Reynolds stressed the importance of adapting relationships with the G7 and EU to support UK businesses and exporters.

Much ado about nothing back in May

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

New Zealand Q1 2025 terms of trade index +1.9% q/q

• expected +3.6%, prior +3.1%
• for the y/y +17%

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Export Prices +7.1%, led by dairy prices

• expected +3.7%, prior +3.2%

Import Prices +5.1%

• expected +1.3%, prior +0.1%

Stats NZ cites the Reserve Bank of New Zealand’s trade weighted NZD index

• fell 5.3% y/y in the quarter
• New Zealand dollar weakening against most major currencies

• “The weaker New Zealand dollar has contributed to the rise in import and export prices”

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Export Volumes +4.6%

• prior +1.3%
• Import volumes -2.4% q/q

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• Terms of trade refer to the ratio between the prices of a country’s exports and the prices of its imports. In other words, it’s the relative value of a country’s exports to its imports.
• When the terms of trade of a country are improving, it means that the prices of its exports are increasing faster than the prices of its imports. This can lead to an increase in the purchasing power of the country’s exports, which can boost economic growth.
• On the other hand, if a country’s terms of trade are deteriorating, it means that the prices of its imports are increasing faster than the prices of its exports. This can lead to a decrease in the purchasing power of the country’s exports, which can negatively impact economic growth.

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

Japanese media cite an unnamed source for the info:

• Japanese Prime Minister Shigeru Ishiba may dissolve the House of Representatives for a snap general election if the main opposition party submits a no-confidence motion
• Ishiba has told his aides that “a dissolution of the House of Representatives will come in sight if a no-confidence is submitted” from the Constitutional Democratic Party of Japan, the source said.

• LDP Secretary General Hiroshi Moriyama has already shared the idea with other LDP executives, the source said.

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

Trump yelling out policy on Iran via his own socila media app:

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

• Major US indices close higher to start the new week
• US extends tariff pause on some Chinese goods through to August 31
• Crude oil futures and settle at $62.52
• Trump Administration: We want countries “best offer” by Wednesday in tariff talks
• US deal with Iran allows them to enrich Uranium at low levels
• Ukraine Zelenskyy: Confirms Russia /Ukraine have agreed to exchange 1000 servicemen
• Fed’s Goolsbee: So fare we’ve had excellent inflation reports
• BOE Mann: Must consider interactions of QT and rate decisions
• Russia outlines in a memorandum the plans for cease-fire with Ukraine
• European indices close the day mixed
• Atlanta Fed GDPNow growth estimate for Q2 rises to 4.6% from 3.8%
• More Logan:With oil down, there is a risk of lower production, cap invest from energy cos.
• CNBC: Trump and XI to speak this week, but not today
• Fed’s Logan: Despite the uncertainty, the US economy is resilient
• US construction spending for April -0.4% versus 0.3% estimate.
• US ISM manufacturing index for May 48.5 versus 49.5 estimate
• US S&P global manufacturing PMI for May 52.0 versus 52.3 preliminary
• Canada S&P Global May manufacturing PMI 46.1 versus 45.3 in April
• Global Markets Brace for Impact: Central Bank Rate Cuts and Jobs Reports Await
• J.P. Morgan Dimon: US deficit, debt is a big deal
• Kickstart the new trading day, week, & month w/ technical look at EURUSD, USDJPY & GBPUSD
• ForexLive European FX news wrap: A brand new month but same old story for the dollar
• 17 out of 23 economists expect the BoC to cut at least twice more this year

The USD moved lower on the back of concerns about tariff wars, especially with China. Trump last week accused China of breaking the trade deal.

China firmly rejected the claim and countered that it was the United States that breached the deal. The Chinese Ministry of Commerce stated that the U.S. had implemented several “discriminatory restrictive” measures against China, including:

• Issuing guidance on AI chip export controls

• Halting sales of chip design software to China

• Revoking visas for Chinese students

China asserted that these actions seriously undermine the consensus reached at the Geneva economic and trade talks and damage China’s legitimate rights and interests.

Late Friday, President Trump announced that the United States will double tariffs on imported steel and aluminum from 25% to 50%, effective June 4, 2025. This increase applies broadly to imports from all countries, including China. The move aims to bolster the domestic metal industry and reduce reliance on foreign suppliers.

Later today, the White House said we want countries “best offer” by Wednesday in tariff talks.

And you wonder why the USD was hit?

The USD is trading down the most vs the NZD (-1.33%) and the AUD (-1.00%). The greenback did the best vs CAD at -0.21% after a new move to the lowest level since October 2022 failed. The dollar was down -0.62%vs the GBP adn teh -0.83% vs the EUR.

The US yields moved higher on the day with the 2 yhear up 2.0 bps at 3.938%. The 10 year yield moved up 2.6 bps at 4.443%.

The US stocks did erase early declines which was confusing unless you believe that all will pass over time. The Nasdaq led the way with a gain of 0.67%. The S&P was up 0.41% while the Dow rose 0.08%.

The ISM manufacturing index today stayed below 50 at 48.5 vs 49.5 last month. Construction spending also was weaker at -0.4% vs +0.3% estimate. The prior month was revised lower to -0.8% vs -0.5%. That data supports a lower dollar.

And to add more confusion in the “witches brew” that defines the markets (or doesn’t), the Atlanta Fed GDPNow forecast for Q2 growth continued the surged to 4.6% from 3.8% in its current guesstimate. Recall first quarter GDP was at -0.2%.

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

Reuters had this report on the response from the EU to Trump’s move to double tariffs.

In brief, the European Commission announced on Monday that it will push hard this week for the United States to scale back or scrap tariffs, despite Donald Trump’s pledge to double duties on steel and aluminium imports to 50%.

European Trade Commissioner Maros Sefcovic is set to meet U.S. Trade Representative Jamieson Greer at an OECD event in Paris on Wednesday, while Commission officials will also hold talks with their U.S. counterparts in Washington during the week.

Link here to the Reuters report for more detail.

Sefcovic

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

New York Times with the report that:

• Trump administration to eliminate federal protections banning drilling and mining in Alaska wilderness

more to come

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

The major US indices erased earlier declines and are closing higher on the day led by the NASDAQ index which is closing up 0.67%. At session lows, the index was down -128 points or -0.67%.

A snapshot of the closing levels shows:

• Dow industrial average rose 35.41 points or 0.08% at 42305.48
• S&P index rose 24.25 points or 0.41% at 5935.94
• NASDAQ index rose 128.85 points or 0.67% at 19242.61

The small-cap Russell 2000 rose 3.877 points or 0.19% at 2070.16.

Some of the big gainers today included:

• Chewy (CHWY): +4.88% to $47.46

• Micron (MU): +3.94% to $98.18

• Meta Platforms (META): +3.65% to $671.12

• AMD (AMD): +3.54% to $114.65

• ARK Genomic Revolution (ARKG): +3.44% to $21.64

• Roblox (RBLX): +3.41% to $89.95

• SoFi Technologies (SOFI): +2.93% to $13.69

• Super Micro Computer (SMCI): +2.91% to $41.19

• Robinhood Markets (HOOD): +2.77% to $67.98

• Broadcom (AVGO): +2.74% to $248.71

Some of the biggest losers included:

• First Solar (FSLR): -5.36% to $149.60

• Ford Motor (F): -3.95% to $9.97

• General Motors (GM): -3.87% to $47.69

• Stellantis NV (STLA): -3.55% to $9.78

• Rivian Automotive (RIVN): -2.89% to $14.11

• Adobe (ADBE): -2.83% to $403.35

• ProShares UltraPro Short QQQ (SQQQ): -2.32% to $23.18

• Alphabet A (GOOGL): -1.55% to $169.07

• Salesforce Inc (CRM): -1.49% to $261.41

• Paramount Global B (PARA): -1.24% to $11.95

• Tesla (TSLA): -1.09% to $342.69

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

more to come

Bank of England Member of the Monetary Policy Committee Catherine Mann takes part in the Fireside chat at the Federal Reserve Board of Governors IF 75th anniversary conference, Washington DC. Rising inflation numbers in the UK are weighing on marekt expectations of further Bank of England rate cuts. Ears open if Mann refers to this.

Later we’ll have meeting minutes from the most recent Reserve Bank of Australia meeting, back in May, when the Bank cut its cash rate again:

• RBA cut rates as expected, AUD falls on 50 bps debate

Later still is the private survey manufacturing PMI from China for May. On the weekend we got the official PMIs, manufacturing improved from April but remained in contraction:

• China May Manufacturing PMI rose to 49.5 (prior 49.0), Non-manufacturing 50.3 (prior 50.4)

Chinese and New Zealand markets reopen today after a holiday monday.

• This snapshot from the ForexLive economic data calendar, access it here.
• The times in the left-most column are GMT.
• The numbers in the right-most column are the ‘prior’ (previous month/quarter as the case may be) result. The number in the column next to that, where there is a number, is the consensus median expected.

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

Good morning, afternoon and evening all. Any charts, technical analysis, trade ideas, thoughts, views, ForexLive traders would like to share and discuss with fellow ForexLive traders, please do so:

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

US extends tariff pause on some Chinese goods through to August 31.

Bloomberg with the info.

more to come

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

The Trump Administration wants countries best offer by Wednesday in tariff talks. – Draft of Request.

Since the Saudi Arabia week where deals were aplenty and it started with the China/US reduction in tariffs, the promised deals have been 0 over the last 2-weeks despite promises for more deals from the likes of Hassett, Navarro and Trump himself.

I can hear him getting more frustrated as Japan, India are not closer. Steel tariffs of 50% are likely not to be helpful for Canada and Mexico. .

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