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The FT reports that the US and UK are close to a trade agreement that would lower UK quotas on cars and steel.

• The agreement would include lower-tariff quotas for UK steel and car exports to the US
• The UK is hoping to secure reductions in the sector specific 25% tariffs that Trump has levied on steel and autos
• The UK’s concessions include changes to digital services tax, cuts on US auto export tariffs, and reduced tariffs on US agricultural products
• The UK refuses to accept US food production standards like chlorine-washed chicken
• UK industries, especially luxury car brands like Bentley and Jaguar Land Rover, are facing “severe” impacts from the current tariffs

This report is short on the critical question: What tariffs will the US continue to charge the UK? The UK overall is facing a 10% rate but also 25% of autos and steel. This appears to deal with only the latter two but it’s short on details.

It looked last week like a deal with India was coming but now it looks like the UK could be first out of the gate.

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

The gold buyers are back in a big way following the holiday in China and other parts of Asia.

Gold surged yesterday and traced out an outside bullish reversal. That pattern extended today in a powerful signal for gold buyers. If we close here it will be the second-best closing level ever and just $10 from the closing record on April 21.

The big level though is $3500, which is where gold stalled on April 22. That was followed by a heavy round of profit taking that coincided with optimism about US trade deals.

Lately though, progress appears to have stalled. Treasury Secretary Scott Bessent today confirmed that the US and China aren’t talking. He continued to tease other trade deals but the market is at the point where it wants to see less talk and more signed papers.

Trump today said he’s tired of questions about when deals would be struck and “we’re going to put down the price the people are going to have to pay to shop in the United States.”

“We’re going to put very fair numbers down, and we’re going to say, here’s – what this country, what we want. And congratulations, we have a deal. And they’ll either say ‘great,’ and they’ll start shopping, or they’ll say, not good,'” Trump said alongside Canadian Prime Minister Mark Carney.

“It’s going to be a very fair number, it’ll be a low number. We’re not looking to hurt countries,” he said.

This all sounds like improvisation and Trump has likely been emboldened by the bounce back in stock markets.

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

• High yield 4.342%
• WI yield before the auction 4.354%
• Tail -1.2 basis points vs six-month average of 0.7 basis points
• Bid to cover 2.60x versus the six-month average of 2.59X
• Direct 19.88% vs the six-month average of 16.8%
• Indirects 71.2% vs six-month average of 70.0%
• Dealers 8.93% versus the six-month average of 13.2%

AUCTION GRADE: A

Domestic buyers were higher than the average. International buyers are also higher than the average. The dealers therefore were saddled with less than average.

The US 10 year yield is now trading near loss for the day at 4.321% down 2.1 basis points

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

• Canada chose a talented person
• Oval office improved with the help of gold ; )
• Houthis don’t want to fight anymore
• We will stop bombing
• We will discuss Ukraine
• We will have a very big announcement before middle east trip
• Announcement will be made Thursday, Friday or Monday before we leave

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

USD/CAD has been in a 150-pip range since April 15 but it’s near the low end of that range at the moment.

I expect the loonie to move on the tone and comments from today’s Trump-Carney meeting but at the end of the day, it’s just one meeting in what will be a long relationship between two newly-elected leaders.

It’s not clear when they will address reporters but that’s the usual protocol.

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

This isn’t a promising start but it’s the same thing he’s said forever.

• We don’t need Canada’s cars, energy or lumber
• I look forward to meeting Carney

Carney is due to arrive at the White House any minute.

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

The German political drama of the day is over as Merz was confirmed as Chancellor in the second anonymous vote. His coalition held a 12-seat majority in the first vote but a dozen parliamentarians decided to cast protest votes before falling in line.

The euro touched the highs of the day but it was fleeting as this was expected.

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

Beyonce is on tour but no one seems to care. The tickets are going for $25 and there are plenty of empty seats.

At some point, people don’t want to see the same old song and dance anymore.

That’s increasingly the case with Trump’s trade team talking up trade deals that never seem to materialize. Hassett said on Thursday that a deal was coming later that day and we’re still waiting.

Now Bessent is playing the classics again:

• Many trading partners have approached us with very good offers
• US negotiating with 17 trading partners
• Have not engaged with China yet

The market rallied for 9 days in a row on the hope/expectation that Trump would start to announce trade deals but the clock keeps ticking and yesterday we learned that the US isn’t going to offer zero tariffs, at least to Japan.

The US dollar is sagging today and gold is up $51 in a troubling potential return of the early-April paradigm.

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

• Prior was 51.3
• Non-seasonally adjusted 52.3 vs 55.6 prior

This is a poor economic indicator but there is no doubt that the Canadian economy is feeling the tariff war, among other things.

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

Oil has closed the opening gap for the week and is now up $2.01 to $59.13. It’s an unlikely rebound after OPEC+ added barrels once again on the weekend and a leak said they will continue to do so until Kazakhstan and Iraq meet their pledges to pay back overproduction.

I think there is an element of short-covering at the moment but yesterday’s report from shale driller Diamondback Energy highlights the likelihood of US output falling this year (and continuing to fall sub-$60).

The company cut its capex budget for the year by 10% and CEO Travis Stice penned a letter:

“We are taking our foot off the accelerator as we approach a red light.
If the light turns green before we get to the stoplight, we will hit the
gas again, but we are also prepared to brake if needed,” Stice wrote, highlighting that it needs to see $65 oil, particularly with steel tariffs spiking the price of casing.

He estimates the US frac crew count is down 15% this year and expected to decline further.

“It is likely that US onshore production has peaked,” he said in a sharp rebuke to ‘drill, baby, drill’ talk of the White House.

The big kicker is that US Tier 1 inventory is drying up.

“Today, geologic headwinds outweigh the tailwinds provided by improvements in technology and operational efficiency,” Stice wrote.

At oil below $70, those headwinds won’t go away.

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

When Trump was elected, one of the most-predictable outcomes was a resumption of steel and aluminum tariffs. This chart shows imports of ‘finished metal shapes’, which is the official way of saying ‘things made out of metal’.

That points to a $78 billion excess build-up in US metals imports that will slowly be exhausted. How slowly? At the pre-2025 pace of imports of pre-tariffs of $3.48 billion, it will take 22 months to exhaust.

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

The US continues to tease a big trade deal and it’s likely with India, but after saying on Thursday that it was coming later that day, the deal still hasn’t been struck.

Meanwhile, the UK just appears to have concluded negotiations with India at the same time. India Prime Minister Modi said they have successfully concluded a mutually beneficial trade agreement.

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