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Japan finance minister Kato headline crossing:

• Not appropriate to lower consumption tax

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

Wages data from Japan for March 2025

• total earnings +2.1% y/y (expected +2.3%, prior +3.1%)
• overtime pay -1.1% y/y (prior +2.4%)
• inflation adjusted, ‘real’ wages -2.1% y/y

more to come

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

Japan March 2025 household spending

• +2.1% y/y (expected +0.2%, prior -0.5%)
• +0.4% m/m (expected -0.5%)

more to come

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

Via Reuters polling expectations

• China’s export growth likely slowed to 1.9% y/y in April, sharply down from 12.4% in March (the March export surge was partly due to exporters rushing shipments ahead of Trump’s tariff hikes), as Trump’s new tariffs took effect.

• The range of expectations varied from down 3.5% to a rise of 7.0%.

• Imports expected to fall 5.9% y/y, worsening from a 4.3% drop in March, signaling weak domestic demand.

The background to this is Trump has raised China tariffs to 145%, China retaliated with tariffs of up to 125% and curbs on some U.S. goods.

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Preliminary U.S.-China trade talks are set for this Saturday in Switzerland. Bessent is not too hopeful, saying he is looking for some de-escalation:

• “My sense is this will be about de-escalation”

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

Bloomberg (gated) report on China buying nearly US$1bn in agricultural product from Argentina instead of the US:

• China agreement with exporters in Argentina
• non-binding letter of intent signed
• Bloomberg cite two people familiar with the matter

China is already Argentina’s biggest buyer of unprocessed soybeans.

Some Friday muzak:

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

• Major US indices close higher for the second consecutive day
• VP Vance:US would walk away from Russia/Ukraine talks if Russia not engaging in good faith
• White House weighing plan to slash China tariffs to as low as 50% – report
• White House Navarro: To the EU, retaliation is a mistake
• Crude oil futures settle at $59.91
• Chicago-born Cardinal Robert Prevost elected as new Pope
• US treasury auctions off $25B of 30 year bonds at a high yield at 4.819%
• Bitcoin hits $100K. Some background emerges on Trump’s touting of XRP
• Trump says template for 10% tariffs is ‘probably the lowest’
• Trump asked if China tariffs could be lowered: Says they could be
• UK says steel and aluminum tariffs reduced to zero
• NY Fed 1-year inflation expectations tick higher
• Trump: Reached breakthrough deal with UK
• US March wholesale inventories +0.4% vs +0.5% expected
• US initial jobless claims 228K versus 230K estimate
• US Q1 unit labor costs prelim +5.7% vs +5.1% expected
• Russia and China intend to ramp up cooperation to decisively counter US containment
• ForexLive European FX news wrap: US-UK trade deal looms, BOE vote split raises eyebrows
• The BOE cuts by 25 basis points but it is a mixed decision. USDJPY higher. EURUSD lower.
• EU announces list of potential countermeasures against US tariffs if trade talks go south
• The EU is considering imposing tariffs on €95bn of US imports

It was UK day as the Bank of England cut rate by 25 basis points which was not a surprise, but the dissenters who wanted to cut by 50 basis points and dissenters who wanted to leave right unchanged. That put the BOE Chair Bailey in the hot seat as he maneuvered through Q&A questions.

Despite the rate cut, the BOE’s guidance remained unchanged, emphasizing a “gradual and careful” approach to easing—repeating the tone from March.

After that, the US and the UK announced the framework for a trade deal. According to US commerce Sec. Lutnick, the deal adds US$5 billion of opportunity for US exporters, and keeps a 10% tariff on all goods in place. He added that UK would buy $10 billion worth of Boeing planes. The US said that they would allow Rolls-Royce engines and plan parts to come over tariff free and exempted Rolls-Royce and Bentley automobiles from tariffs as well (thank goodness).

According to Trump, he and PM Starmer reached an agreement that will increase access for U.S. beef and ethanol, while also committing to reduce non-tariff barriers. As part of the deal, the UK will fast-track U.S. goods through customs, allowing for quicker movement in both directions.

Final details of the agreement are expected to be finalized in the coming weeks – a sentiement expressed by UK officials as well. Additionally, the U.S. will gain new market access for chemicals and machinery.

As Josh Brown on CNBC said sarcastically, “The US reached an agreement with its strongest ally for the last 200 plus years. Amazing news.”.

Later, Trump spoke of confidence for the forthcoming meetings with China over the weekend, and the NY Post, reported that the US may cut tariffs on China goods to 50% by as early as next week. Trump said the best a country can do is 10% tariffs.

Stocks were supported with gains now over the last 2 trading days after declines on the first 2 days of the week. For the day and the week (with one day to go):

• Dow rose 0.62%, and holding to a 0.12 gain for the week
• S&P rose 0.58%, but is still down -0.40% for the week
• Nasdaq rose 1.07% but is down -0.28% for the week.

The last day of the week will decide up or down for the week.

The USD move up vs the major currencies. A snapshot of the greenbacks gains vs the currencies showed the strongest gain vs the JPY (+1.45%) and the smallest gain vs the AUD (+0.34). The EUR fell -0.54% vs the USD and the GBP in volatile up and down trading on all the headline news, fell -0.37%. The CHF rose 1.01% vs the USD.

In the US debt market, yields moved higher helping to support the USD:

• 2 year yield 3.880%, +8.7 basis points
• 5 year yield 3.986%, +11.4 basis points
• 10 year yield 4.380%, +10.5 basis points
• 30 year yield 4.846%, +7.5 basis points

The US auctioned off $25B of 30 year bonds but was met with tepid demand (0.7 basis point tail and lower than average Bid to cover).

In other markets:

• Crude oil rose $2.17 or 3.74% to $60.24
• Gold fell $60 or -1.79% to $3304.98
• Bitcoin rose $5558 or 5.73% to $102,608

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

US Commerce Sec Lutnick was speaking in a Fox interview:

• We want a trade deal from a big country from Asia
• I am focused on big countries for the next trade deals
• The UK deal helps ease reliance on the China supply chain a bit

Earlier from the Com Sec:

• Lutnick says the best any country can do is a 10% US tariff

CSLutnick

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

US Commerce Secretary Lutnick:

• if a country opens its markets the best it can hope for is a 10% US tariff
• Deescalation with China is Bessent’s goal in talks
• says favours of raising the tax rate on high earners

WH Trade Adviser Navarro says:

• US is not getting rid of the tariffs on steel and aluminium

more to come

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

April trade data from China should begin to show tariff impacts.

Eyes will be on Switzerland this weekend for the first tentative steps towards a trade deal between the US and China. The latest:

• White House weighing plan to slash China tariffs to as low as 50% – report

• 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.

The major US stock indices are closing the day higher but well off their high levels of the day.

• Dow industrial average rose to 54.48 points or 0.62% at 41368.45. At session highs, the index was up 659.25 points
• S&P index rose 32.66 points or 0.58% at 5663.94. At session highs, the index is up 88.82 points
• NASDAQ index rose 189.98 points or 1.07% at 17928.14. At session highs, the index was up 357.84 points

The market got a boost from the UK/US trade deal framework and comments that the US might lower China tariffs to 50% as early as next week..

For China :

• At 145%, goods are not coming in. Inventories will dwindle away, and shelves will be empty.
• At 50%, a small amount of goods may come in. Inventories will dwindle away, and shelves will be less empty, but prices will be higher.

This article was written by Greg Michalowski 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.

A UK Official is commenting on the US/UK trade deal:

• Deal with the US is not a finished trade agreement, but it is substantive
• We have got more serious work to do.
• On sectorial up front, there are vital winds for UK on steel, autos, pharmaceuticals, and aerospace.
• Got some reassurance on movie tariffs.
• There is commitment to bring down or totally liberalize a large number of tariff lines.
• On beef, we have a win, our own quota for beef imports to the US for the first time

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