Investor sentiment improved at the start of the week following reports of “substantial progress” in trade negotiations between the United States and China. The positive tone in global markets comes despite a lack of high-impact economic data on the calendar, with market participants instead turning their attention to further developments in US-China relations and comments from key central bank officials.
Talks held over the weekend in Switzerland marked the first formal discussions in months between the two economic powers. US Treasury Secretary Scott Bessent described the meetings as “productive and constructive,” while China’s Vice Premier He Lifeng called them “in-depth and candid.” Bessent is expected to deliver more details during remarks scheduled for 07:00 GMT on Monday.
Reflecting the upbeat sentiment, US equity futures climbed between 1% and 2% in early trading. Meanwhile, the US Dollar Index (DXY) maintained its upward momentum, holding above the 100.50 mark after posting modest weekly gains for three consecutive weeks.
Gold prices remained under pressure amid rising risk appetite and a stronger US dollar, slipping to a new weekly low below $3,300 per ounce.
In currency markets:
- EUR/USD continues to trade weakly, staying below the 1.1250 threshold as the European session gets underway.
- USD/JPY extended its gains, hitting a one-month high near 146.00 after starting the week with a modest bullish gap.
- GBP/USD remained subdued, trading in a tight range around 1.3300. UK employment data for April is due Tuesday.
- AUD/USD showed resilience, holding modest gains above 0.6400 despite broader dollar strength.
- USD/CAD entered consolidation above 1.3900, following a near 1% rise last week. Data on Friday revealed Canada’s unemployment rate increased to 6.9% in April from 6.7% in March.
Looking ahead, attention will turn to the US Consumer Price Index (CPI) data scheduled for release on Tuesday. The inflation report is expected to provide further clues on the Federal Reserve’s interest rate path and could add volatility to both currency and commodity markets.
