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Equity markets seem to have shaken off the risk, Jamie Dimon with a caution, ICYMI.

Dimon says a U.S. recession is still a live risk. The JPMorgan Chase CEO told Bloomberg that surging federal deficits, persistent inflation and the prospect of higher long-term interest rates could yet tip the economy into contraction. “I wouldn’t take it off the table at this point,” he said, adding that he relies on his bank’s economists for precise forecasts and cannot predict “how big it will be or how long it will last” if a downturn materialises.

JPMorgan’s research team this week trimmed its recession probability to “below 50 percent,” having previously expected a slump soon after the Trump administration’s early-April tariff blitz. Chief U.S. economist Michael Feroli acknowledged that risks remain “elevated,” but Dimon cautioned that even the current uncertainty is enough to make businesses hesitate before committing to new investment.

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

Good morning, afternoon and evening all, welcome to Friday! 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.

The WSJ is reporting that Meta has delayed the release of its flagship large language model, Llama 4 “Behemoth,” citing internal concerns about its performance and whether it offers meaningful improvements over previous versions.

• Delayed Release: Behemoth, originally targeted for an April release, has now been pushed to fall or later.

• Performance Issues: Engineers say Behemoth shows minimal gains over prior models, sparking debate about whether it’s ready for public release.

• Internal Frustration: Meta executives are frustrated with the Llama 4 team’s progress and may restructure the AI product group.

• Mismatch with Public Claims: Behemoth has been publicly touted as outperforming rivals, but insiders say training issues are limiting its real-world performance.

• Earlier Releases Questioned: Two Llama models released in April performed well on AI leaderboards, but Meta later admitted it had optimized those submissions specifically for the tests.

• Research Team Turnover: 11 of the 14 researchers behind the original Llama model have since left the company.

• Industry Trend: Meta’s delays reflect broader challenges in the AI space—OpenAI’s GPT-5 and Anthropic’s Claude 3.5 Opus have also missed initial release expectations.

• Meta’s AI Spending: The company plans up to $72 billion in capital expenditures this year, much of it devoted to AI development.

Shares of Meta are trading down -$14.12 or -2.16% 15 $645.15, after trading as high as +$3.89 on the day.

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

The price of crude oil move down $1.53 or 2.42% settling at $61.62. Contributing to the downward bias includes:

• Potential U.S.–Iran nuclear deal: May lead to lifting of sanctions on Iranian oil exports, increasing global supply.

• OPEC+ production increases: Scheduled to add 411,000 bpd as part of the continued rollback of earlier cuts.

• IEA demand outlook: Sees global demand growth slowing from 0.99M bpd in Q1 to 0.65M bpd for the rest of 2025.

• IEA supply outlook: Revised 2025 global supply growth upward to 1.6M bpd, from 1.2M bpd previously.

• Macroeconomic headwinds: Ongoing tariff tensions and slowing global growth are weighing on oil demand.

Technically, the price of oil moved down to test the 200-hour MA today at session lows. The price did extend below that MA but could not sustain momentum. The price is back below the 100 and 200-hour MAs. The higher 100 hour MA is at $62.12. The 200-hour MA is at $60.41. THose MAs will be barometers for more bullish or more bearish bias on a break higher or lower. .

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

Gold is up $40 today to $3219 in an impressive $110 intraday turnaround after falling as low as $3120 in Asia-Pacific trade.

There is a growing conversation about US fiscal sustainability and its erratic trade war. Trade tensions have fallen and gold has fallen at the same time but we’re still not clear on where the end goal is or how to get there.

The only trade deal so far is between the US and UK. It was a win for the US but trade between the military allies is surprisingly small and limited, with the major categories of trade getting exemptions. Will other countries offer anything in order to get 10% tariff rates in the US? That’s hard to believe until we see it.

With that, the fear (and what’s boosting gold) is the possibility that we’re just in an ebb in trade negotiations.

Maybe the bigger question is how all these events are seen abroad. Certainly, this is at least a nudge towards some level of de-dollarization or de-integration. Trust in US trade and military treaties is certainly stretched.

At the same time, we’re watching the US fiscal package unfold and it looks like there won’t be much austerity, with +6% deficits-to-GDP ratios forever.

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

George Saravelos is Global Head of FX Research at
Deutsche Bank is out with a striking note today, highlighting the problems with the US dollar, deficits and government policy. The note certainly resonates with US 30-year yields touching off 5% today.

He highlights the emerging consensus around the fiscal budget bill that’s working its way though Congress and the growing likelihood of higher deficits. That’s working against the White House’s stated aim of lowering the trade deficit because it gooses consumer demand.

They see the current account deficit continuing to rise.

“The significance of
this conclusion cannot be over-estimated. We have been arguing over the last
few months that the market is reducing its willingness to fund US twin deficits,” Saravelos writes. “We worry this is
brewing a major problem for the dollar and potentially the US bond market too.”

Adding to the vulnerability is a backdrop of larger foreign ownership of US assets and “extreme” valuation of dollar-denominated assets.

It’s tough to call a tipping point in this relationship but at some point the US will face a reckoning.

“For foreigners to
continue financing US debt one thing needs to happen: the non-dollar price of
US Treasuries needs to decline, either via currency depreciation or a drop in
the price of the bonds. The problem for the latter is that it makes US debt
dynamics even worse so is not sustainable. We are ultimately left with the only
solution to this problem being dollar weakness.”

Saravelos believes this is already unfolding as inflows to the US are slowing and that there is an emerging breakdown in the dynamic between USD/JPY and yields.

To sum it all up, as Secretary Bessent alluded to
himself, the US cannot be asking of the rest of the world to reduce its
imbalance with America if the US is not willing to reduce its own. The risk is
the rest of the world forces the correction upon the US in a disorderly way.

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

The Qatar wealth fund plans to invest $500B in US over the next 10 years. This is according to Bloomberg.

Earlier in the week, during talks in Riyadh, Saudi Arabia pledged a historic $600 billion in future investments across U.S. energy, technology, defense, and infrastructure sectors, a commitment announced jointly by the White House and Saudi leadership.

Complementing that headline figure, Saudi Aramco also signed 34 preliminary agreements with American companies valued at up to $90 billion, underscoring the kingdom’s push to deepen commercial ties with the United States.

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

Freddie Mac 30 year mortgage rate for the current week rises to 6.81% from 6.76%

U.S. housing data continue to paint a mixed picture. New‑home sales rose solidly in March, climbing to a seasonally‑adjusted annual rate (SAAR) of 724 000 units, a 7.4 % jump from February and 6 % above year‑earlier levels. Builders are attracting buyers with incentives: the median price of a newly built home slipped to $403 600, down 7.5 % from a year earlier, while inventory edged up to 503 000 units (an 8.3‑month supply). These figures suggest that new construction remains the brightest spot in residential real estate as builders fill the gap left by a thin resale market.

Meanwhile, the existing‑home market remains subdued. March resale transactions fell 5.9 % on the month to an annual pace of 4.02 million—2.4 % below the same period last year—confirming that high borrowing costs and limited listings continue to dampen turnover. Yet tight supply is supporting prices: the median existing‑home price reached $403 700, up 2.7 % year on year and the highest ever recorded for March.

Financing conditions are steady but still historically expensive. Freddie Mac’s latest Primary Mortgage Market Survey shows the 30‑year fixed rate at 6.81 % (week ended 15 May), up modestly from 6.76 % the prior week. Rates have hovered in a 6.7 – 6.9 % corridor for nearly four months and sit roughly 30 basis points below the level of a year ago. That range has been tight enough to limit refinancing but stable enough to coax some buyers off the sidelines—purchase‑application volume is running about 18 % above last year’s depressed levels.

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

The major European indices are closing the session with gains.

• The German DAX is closing at a new record high level of 23680.03.
• Spain’s Ibex April 2008.
• Italy’s FTSE MIB closed at its highest level going back to 2007

A snapshot of the closing levels shows:

• German DAX (Germany): +0.65%

• UK’s FTSE 100 (UK): +0.57%

• France CAC 40 (France): +0.21%

• Euro Stoxx 50 (Eurozone): +0.12%

• Spain’s IBEX 35 (Spain): +0.65%

• Italy FTSE MIB (Italy): +0.15%

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

The major US stock indices are recovering from Lowe’s. The S&P index is now down around -5 points or -0.08% at 5888. The low price reached 5865.16 down -27.42 point at session lows.

The NASDAQ index is still down -92 points are -0.49% at 19053. But reached a low of 18967.78 down -179 point at session lows.

The Dow industrial average as down nine points or -0.02% at 42042.06. At session lows the index was down -267.02 points.

Although indices are still down, the levels are sharply off the intraday lows.

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

CIBC is out with a note on today’s US retail sales report and they’re not impressed.

They note the soft ‘control group’ reading and possible pull-forward spending as a mirage. Later in the year, slower population growth could lead to weakness.

“The road ahead for the consumer is going to be rough,” CIBC writes.

They note that liberation day has been somewhat walked back but rates are still much higher at around 15% compared to 3% tariffs before.

“Many businesses have been managing these first few months through inventories and
absorbing some of the tariffs, but that is starting to change. Major retailers are starting to report price hikes for May
and the summer,” they write.

That echos what Walmart said today, as it plans to raise prices in May, as tariff-affected merchandise arrives.

“The magnitude and speed at which these prices are coming to us is somewhat unprecedented in history,” said CFO John David Rainey.

CIBC sees some paths to a boost in consumer sentiment but they’re narrow.

“The mood is more cautious, sentiment is low and markets are on edge with an administration seeking
to make drastic changes to international trade and finance even if more methodically now. Fiscal policy could turn
more supportive and lift spirits, but the rates market might cut into some of that benefit if it does come. All in all, we
expect tariffs and the sentiment shock to bring consumption growth to slow to around 1-1.5% in the second half of this
year.”

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

The toughest negotiation of all for the US administration is with the EU.

I just don’t see any world where the EU can accept a 10% floor on tariffs. But there is also a significant trade surplus with the US so I don’t see how Trump’s team can back down.

But if the EU gets sub-10% tariffs then what about other trade partners?

In a perfect world maybe all tariffs end up back at zero and the US gets some trade concessions that open up some markets. There’s a decent chance of that but that sort of ‘win’ is hardly worth the political cost the US has already paid.

Time will tell.

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