Articles

Japan finance minister Kato

• will discuss FX with Bessent in line with points agreed in prior talks
• FX should be determined by market
• excessive FX moves damage economy

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

BNZ – BusinessNZ Performance of Manufacturing Index (PMI).

April comes in at 53.9

• up from 53.2 in March
• fourth month in a row showing expansion
• above the average of 52.5

BusinessNZ’s Director, Advocacy Catherine Beard:

• “All of the sub-index values were in expansion during April.”

BNZ’s Senior Economist Doug Steel:

• “activity is not surging, but a manufacturing recovery seems to be underway with the PMI having improved substantially from its low of 41.4 last June. That said, there remain questions around how sustainable it is given uncertainty stemming from offshore”.

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

The Financial Times is gated, but in brief:

• Trump administration plans to put a number of Chinese chipmaking companies on an export blacklist (the “entity list”)
• timing of the move has been complicated by the trade deal agreed by China and the US in Geneva at the weekend
• some Trump administration officials have argued that putting export controls on critical Chinese groups now could jeopardise the trade negotiations

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

A piece in today’s Australian Financial Review on Australia not joining in on Trump’s trade attack on China.

Trade Minister Don Farrell spoke in an interview with the AFR (gated):

reluctant to be part of a US campaign
against China on trade, given that Australian exports to China are worth almost 10 times that to the US

• “China is our
  largest trading partner. Chinese trade is almost 10 times more
  valuable to Australia”
• We don’t want to do less business
  with China, we want to do more business with China.

• We’ll make
  decisions about how we continue to engage with China based on our
  national interests and not on what the Americans may or may not
  want.”

The AFR is gated, here is the link if you can access it for much more.

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

U.S. Deputy Treasury Secretary Faulkender spoke in an interview with Bloomberg TV:

• not concerned about persistent increases in prices
• expects inflation will return to target level
• US economy building foundation to accelerate in H2 this year
• confident that August timeline is earliest we have to worry about X date

more to come

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

Japan, US to resume tariff talks after G7 summit as Akazawa plans Washington visit

Japan and the United States are preparing for a third round of negotiations over trade tariffs, aiming to resume talks later this month.

The discussions are part of ongoing efforts to ease tensions following recent U.S. tariff hikes under the Trump administration. Japan’s chief negotiator, Ryosei Akazawa, is expected to travel to the U.S. for the talks shortly after attending the upcoming Group of Seven (G7) meeting of finance ministers and central bank governors. That summit, set to be held next week, is likely to feature prominently in setting the tone for bilateral discussions, with both sides under pressure to find common ground on trade imbalances and tariff rollbacks.

That’s Akazawa in the hat!

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

• US April retail sales +0.1% vs 0.0% expected
• US April PPI +2.4% vs +2.5% expected
• US initial jobless claims 229K versus 229K estimate
• Philadelphia Fed Business index for May -4.0 vs -11.0 expected
• US May NAHB housing market index 34 vs 40 expected
• US April industrial production 0.0% vs +0.2% expected
• Empire manufacturing index for May -9.2 vs -10.0 estimate
• Atlanta Fed GDPNow Q2 rises to 2.5% from 2.3% prior
• EU’s Sefcovic agreed with US Commerce Secretary Lutnick to accelerate trade talks
• US business inventories for March 0.1% vs 0.2% estimate
• Bank of Mexico cuts benchmark interest rate to 8.5% from 9.0%
• Fed’s Barr says economy is on a solid footing, trade clouds the outlook
• Fed’s Powell discusses mon pol framework, doesn’t comment on the outlook for rates
• Canada March wholesale trade 0.2% vs -0.3% expected
• Walmart offers a major warning on prices

Markets:

• WTI crude oil down $1.42 to $61.77
• US 10-year yields down 9 bps to 4.43%
• Gold up $60 to $3234
• CHF leads, NZD lags
• S&P 500 up 0.4%

We got a full slate of data today and most of the numbers were close to estimates but PPI stood out as a softer indication and that led to Fed rate cut odds ticking higher, especially further out the curve. It also lent some relief in bonds as yields fell 7-11 bps across the curve.

The US dollar continues to differ in its reaction function to yield moves, suggesting that fiscal policy is increasingly seen as off-base. Despite falling yields, the US dollar rose and it’s been the opposite on days when yields have risen. That’s something Deutsche Bank raised the alarm on today and a critical dynamic to watch as the US budget drama plays out.

The US retail sales data was somewhat comforting as it showed strong spending in bars and restaurants, which is typically one of the first things to go. Walmart did offer a stark warning about price rises though so that should keep the Fed in watch-and-wait mode.

The Canadian dollar was something of an outperformer in North American as oil and commodity prices rebounded from the earlier lows. Part of that was a bounce in oil prices after Iran said it hadn’t received an deal offers from the United States. The risk picture also lent some support, though that wasn’t seen in the other commodity currencies.

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

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.