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Greg posted this news, not be to be missed (in case you did):

• China: US undermines consensus reached in Geneva talks.

This was in response to the US Commerce Department saying use of Huawei’s Ascend AI chips violates the governments export controls.

Keeping a lid on tariffs is in the interest of both the US and China, so I imagine this’ll get sorted out. Could get ugly if not though.

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

India is discussing a US trade deal structured in three tranches

• Expects to reach an interim agreement before July

Info comes via Bloomberg

No further details as yet

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

China Merchants Bank with the cut.

There should be many more of these announcement on the wat today, as posted earlier:

• ICYMI – China’s state banks are expected to cut deposit rates today (Tuesday China time)

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

General Motors on Friday informed employees and dealers for its China export business that it would stop shipping vehicles to China from the United States, the company said.

Nothing further re details at this stage.

GM general motors CEO Mary Barra

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

• US stocks close marginally higher. S&P up for the sixth consecutive day
• US treasury does not anticipate any trade deal announcements at G7 meeting this week
• BOE Dhingra: Her vote for 50 bp cut was partly to make a statement on direction of economy
• Fed’s Bostic: Thinks rates in the US are mildly restrictive
• Crude oil futures settle at $62.69
• Kremlin: Trump/Putin did not discuss ceasefire timeframe
• Feds Kashkari: There is big uncertainty now in the economy
• Trump. Call with Putin went very well
• SNB Schlegal: SNB tolerates negative inflation rate in the short term
• Russian Press: The Putin/Trump phone call has concluded
• European indices end the day with mixed results
• Fed’s Williams: Uncertainty has led the Fed to keep interest rates steady so far
• The huge divergence between retail and fund managers continues
• White House: World has confidence in the US economy
• FOMC Gov. Jefferson: The impact of tariffs on the Fed’s mandates is top of mind
• China: US undermines consensus reached in Geneva talks.
• Feds Williams: Recent economic data has been very good
• WH Hassett: Would not be surprised if there are more trade deals this week
• More signs that the US-Japan trade agreement is on ice
• Forexlive European FX news wrap: Rough day for USD and US Treasuries
• Fed’s Bostic: Moody’s downgrade will cut across economics, financial markets

The late-Friday news of Moody’s downgrade of U.S. debt triggered broad market volatility to start the new trading week. Stocks opened lower, U.S. bond prices declined (sending yields higher), and the U.S. dollar weakened across the board.

At the open, the USD was sharply lower, with losses of:

• -0.90% vs EUR

• -0.81% vs GBP

• -0.45% vs JPY

By the end of the day, the dollar recovered modestly against most pairs:

• EUR: -0.70%

• GBP: -0.65%

• JPY: -0.55%

The dollar’s rebound was partial, with the decline extending further against the yen.

Bond markets saw a turnaround during the U.S. session. Earlier in the day, the 30-year yield spiked above the key 5% level, touching 5.007% at the open. However, a wave of buying brought it down to 4.904% by the close. Similarly, the 10-year yield fell from 4.536% to 4.493%, reflecting a flight to the US bonds as traders reevaluated the impact of the downgrade and realized that the US still remains a safe haven for money flows.

Equities also rebounded sharply. After falling as much as -273 points, the NASDAQ reversed course and closed marginally higher by 0.02%. The S&P 500 erased an intraday drop of -62.69 points to finish up 5.22 points, or +0.09%, marking its sixth consecutive daily gain.

The day’s news flow was driven by geopolitical developments and Federal Reserve commentary. On the geopolitical front, concerns intensified over the Israel-Gaza conflict, as Israeli Finance Minister Smotrich stated the country aims to push Gaza’s population southward and potentially out of the territory, according to Sky News Arabia. Prime Minister Netanyahu also vowed to take full control of Gaza. Israeli forces expanded their ground operations and airstrikes, reportedly killing over 100 people.

A high-profile phone call between former President Donald Trump and Russian President Vladimir Putin also captured market attention:

• From Trump’s perspective, the call was “very well” received. Trump said Russia and Ukraine would immediately begin ceasefire negotiations and highlighted Russia’s interest in expanding trade with the U.S. once the war ends. He noted that Germany, France, Italy, Finland, and the Vatican were informed of the talks, with the Vatican offering to host. Trump emphasized a diplomatic tone and the potential for mutual economic benefit post-conflict.

• From the Kremlin’s perspective, the call focused on normalizing U.S.-Russia relations, including discussions of a potential prisoner swap involving nine detainees from each country. Trump reportedly spoke emotionally about the desire to restore strong ties and identified Russia as a key future trade partner. While both leaders agreed to maintain dialogue and prepare for a personal meeting, the Kremlin clarified that no ceasefire timeframe was discussed. Moscow also noted Trump’s preference for diplomatic agreements over sanctions, and expressed support for U.S. efforts in the Middle East and Iran.

From the Fed today, the theme from monetary policy perspective was that of uncertainty:

• Atlanta Fed President Raphael Bostic this morning on CNBC warned that Moody’s downgrade could have wide-reaching effects across the economy and financial markets, particularly by raising the cost of capital and introducing greater uncertainty. He emphasized that it may take several months to fully understand the impact on U.S. debt demand and inflation from tariffs. Bostic noted the Fed is cautious on rate cuts, leaning toward just one this year due to the complex interplay of inflation, tariffs, and economic sentiment. While markets are functioning well, inflation remains above target and expectations are moving in a troubling way, although firms aren’t planning large layoffs. He highlighted a disconnect between economic sentiment and data and pointed to potential ripple effects from even reduced tariffs on China
• New York Fed President John Williams struck a cautiously optimistic tone in his remarks to the Mortgage Bankers Association, noting that recent economic data has been “very good” and the labor market is now “pretty much in balance.” He acknowledged that inflation continues to decline slowly and monetary policy remains “in a good place,” characterizing it as slightly restrictive. While first-quarter growth was affected by unusual trade dynamics, Williams emphasized that uncertainty—particularly around trade—is a defining feature of the current economic environment. He noted that many businesses and households are in a “wait-and-see” mode. Williams said the Fed still has work to do in reducing its balance sheet, though the process so far has not disrupted market pricing. He reassured that the U.S. dollar retains its status as the world’s reserve currency and that investor demand for Treasuries remains strong. Core fixed income markets, he added, are functioning well. On the consumer side, Williams observed that while households remain generally healthy, there are early signs of increasing caution. He expects the economy to slow this year and stressed that the Fed can take its time with future policy decisions. He also warned that tariffs could add upward pressure to inflation and increase unemployment risks.
• FOMC Governor Philip Jefferson emphasized that the potential impact of tariffs on the Fed’s dual mandate of price stability and full employment is a key concern. He noted that the risks to inflation and jobs will largely depend on policy decisions from the administration, many of which have not yet been finalized. Jefferson warned that tariffs could lead to a one-time rise in price levels and stressed the importance of preventing such increases from becoming embedded in inflation expectations. He reiterated the Fed’s commitment to maintaining current policy to ensure inflation remains anchored. While acknowledging the labor market’s resilience so far, he said it is still too early to assess how new trade policies might affect employment. Jefferson also confirmed that there are no active discussions about altering the Fed’s ample reserves framework. On the Moody’s downgrade of U.S. debt, he indicated the Fed will treat it like any other piece of incoming data—evaluating its implications for inflation and the labor market.

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

China’s major state banks expected to cut their deposit rates today

• will cut rates on some fixed-term deposits
• no indication of the scale of the rate cuts has been given

The cuts would be part of stimulus efforts from China. The People’s Bank of China cut its 7 day reverse repo benchmark rate by 10bp to 1.4% earlier this month. Governor Pan Gongsheng said a 10 basis point cut will lead to a reduction in the benchmark loan prime rate (LPR) of the same size.The monthly LPR fixing is due at 0100 GMT.

LPR cuts should help banks lower their funding costs. Chinese banks are under pressure to support economic growth amid a property crisis, weak loan demand and record low interest margins.

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.

According to a source briefed on US preparations for G7 finance meeting in Canada:

• US treasury does not anticipate any trade deal announcements at G7 finance meeting in Canada.

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

Crude oil futures are settling at $62.69, up $0.20 or 0.32% on the day.

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

The Kremlin is out with its accessment of the phone call between Putin and Trump:

• Putin and Trump both said they favoured normalisation of U.S.-Russia relations

• Putin and Trump discussed a possible Russia-U.S. prisoner swap

• Putin and Trump discussed exchanging nine Russian and nine U.S. prisoners

• Trump spoke quite emotionally about prospects for ties with Russia, wants them to be mutually beneficial

• Trump said there were impressive prospects for Russia-U.S. ties after Ukraine conflict is settled

• Trump said U.S. sees Russia as one of most important trade and economic partners

• Trump and Putin agreed to continue dialogue on all issues, intend to agree a personal meeting in the future

• A Putin-Trump meeting needs careful preparation, instructions have been given on both sides to do this

• No venue has been agreed for a Putin-Trump meeting

• Trump told Putin he could call him at any time

• Two leaders didn’t discuss ceasefire timeframe although Trump stressed his interest in reaching agreements quickly

• Trump said sanctions are being prepared in U.S. Senate but he himself favours agreements, not sanctions

• Putin welcomed results of Trump’s Middle East trip

• Putin welcomed progress in U.S. talks with Iran on nuclear program, Russia is willing to help

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

Trump on call with Russians Putin:

• Call went very well.
• Russia and Ukraine will immediately start negotiations toward a cease-fire
• Russia wants large trade with the US when war is over
• Can benefit from trade
• Negotiations will begin immediately.
• Vatican says it would be interested in hosting Russia Ukraine talks (HMMM)
• Germany, France, Italy, Finland have been informed.

US stocks are now trading higher on the day:

• Dow Industrial Average is up 175 points or 0.41%
• S&P index is up 7.66 points or 0.13%
• NASDAQ index is up 4.18 points or 0.02%

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

According to the Russian press, the phone call between Russian Pres. Putin and US President Trump is over.

• The call was very informative and helpful
• The call lasted 2+ hours.

Citing Putin:

• Russia favors a peaceful resolution of crisis
• Russia ready to work with Kiev on a memorandum on future peace talks
• Ceasefire is possible once agreements are reached.
• We are generally on the right track
• Russia and Ukraine must find compromises that suit both sides
• Root causes of the crisis should be eliminated.

Before the call, Pres. Trump did speak with Ukrains Zelenskyy

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