OPEC has kept its forecast for global oil demand growth in 2025 and 2026 unchanged. A recent 90-day trade deal between the US and China could support the normalisation of trade flows.

Oil supply outside OPEC+ is projected to increase by 800,000 barrels per day this year, revised down from an earlier estimate of 900,000 barrels per day. There is an expected 5% decrease in investment in exploration and production outside the OPEC+ group in 2025.

Us Oil Supply Growth

The growth forecast for US oil supply in 2025 has been adjusted to 300,000 barrels per day, reduced from a previous figure of 400,000 barrels per day. In April 2025, OPEC+ crude oil output averaged 40.92 million barrels per day, a decline of 106,000 barrels per day from March.

The easing of trade tensions between the US and China is seen as beneficial for the crude oil market. There is potential for breaking out to new highs as the market consolidates at a key resistance zone.

What we’re looking at here is a broadly stable demand outlook on the part of OPEC, which has opted not to revise its projections for 2025 and 2026. That tells us there’s no shift expected from core consumption markets, and no major change anticipated in the rate at which oil is being used globally, at least from their side. So, no ramps or slowdowns from the demand front—just a continuation of earlier expectations.

Meanwhile, on the supply side, things are shifting a little more. The reduction in the forecast for oil output growth outside of OPEC+—trimmed now to 800,000 barrels per day for this year—is indicative of supply tightening slightly more than originally expected. This is reinforced by the updated figures for exploration and production spending, which are now set to fall by 5% in 2025 among producers outside the alliance. Reduced investment tends to show where producer sentiment is heading, and in this case, they don’t appear to be preparing for aggressive output expansion.

Opec Plus Production Fluctuations

The United States figures are even more specific. The projected supply increase for 2025 is being revised down, from 400,000 to 300,000 barrels per day. That adjustment isn’t enormous, but when aligned with falling investment and shrinking non-OPEC+ output growth, it adds another piece to the broader picture. It implies that internal supply growth is losing a bit of momentum.

OPEC+ themselves aren’t exempt from short-term fluctuations either. Their April production was down by over 100,000 barrels a day compared with March. Though not a dramatic fall, it serves as a reminder that even coordinated producers experience volatility in month-to-month output. This may stem from planned maintenance or strategic volume adjustments designed to keep prices within a comfortable range.

Now, the détente between Washington and Beijing—at least in trade terms—adds an element that recent months have lacked: a degree of stability around global trade flows. If that persists through the 90-day window, one of the world’s largest bilateral trading channels becomes less volatile, which tends to improve sentiment across commodity markets, particularly those like crude oil that are sensitive to transport activity and industrial production levels.

Technically, the price action we’re seeing confirms that the market has tested a resistance level and has so far managed to stay there. For those of us tracking derivatives, that’s often where breakouts are born—markets that have failed to push higher tend to retrace, but this one has extended its stay. That suggests the energy behind the move has not dissipated.

Traders would not be wrong to monitor implied volatilities around key expiry points. If resistance does finally give way, what follows may come with increased price range and more pronounced intra-day moves. It’s worth noting how the options structure adjusts with these developments—watch closely for changes in skew, because they can offer early hints of directional bias among large positioning players.

Moreover, front-month time spreads should be observed for any early signs of tightening. If backwardation does steepen while the broader structure holds above resistance, the stronger hands in the market may already be planning for higher spot prices. When spot drawers become more confident, you can often see them pull barrels faster and push front contracts higher relative to future ones.

As prices bump up against these levels, we find ourselves watching fewer fundamentals and paying more attention to positioning mechanics: open interest, roll dates, delta shifts. It’s in these moments that non-linear moves often start.

All told, right now, the data points aren’t creating high drama, but the adjustments—small and steady—are leaning bullish. It doesn’t take declarations to change direction; persistent undercurrents are enough.

Create your live VT Markets account and start trading now.

US Federal Reserve Vice Chair Philip Jefferson noted that recent inflation data show progress towards the 2% target. However, he warned about the uncertainty in the outlook, as new import tariffs could potentially raise prices.

Jefferson mentioned the current moderately restrictive policy rate is apt for responding to economic changes. While recent inflation data aligns with the 2% goal, he cautioned about the future uncertainty due to tariffs.

Impact of Tariffs

The possibility of tariffs leading to higher inflation remains uncertain in terms of its duration. Economic growth is expected to slow because of trade policy, but expansion is still anticipated over the year.

The first quarter GDP data exaggerated the slowdown in economic activity according to Jefferson. He affirmed that the labour market remains strong, but the impact of tariffs on persistent inflation depends on various factors.

What Jefferson is drawing attention to here, in fairly measured terms, is a gradually improving picture on inflation — but one that remains fragile, especially with new pressures in the background. While the Fed is seeing better alignment with its long-term price target, any optimism there is immediately checked by external pressures that tend to push cost levels up, such as tariffs. These are not small adjustments, and while their effect may not be long-lasting, they could throw off expectations, particularly around core readings.

Importantly, his view on the current policy rate — describing it as “moderately restrictive” — suggests we should not expect sweeping interventions on short notice. This reinforces the idea that the current stance is likely to be maintained unless something shifts dramatically in the data.

Implications for Derivatives Traders

When Jefferson refers to the first quarter GDP data overstating the slowdown, what he’s likely suggesting is that seasonal or temporary factors affected the official output numbers more than actual domestic momentum did. So while surface-level indicators pointed to a sharper deceleration, underlying demand may have held up more than those figures indicated.

For us, the key takeaway isn’t only about steady rates or tariffs themselves, but about the broader volatility in reaction functions. Derivatives traders ought to widen the lens beyond just front-month contracts or headline prints. There’s a chance that short-term rate volatility remains suppressed, but pricing risk further out may warrant closer attention. Especially where policy reaction asymmetry is likely — the Fed appears disinclined to ease into near-term strength, but prepared to extend tightness if pressures re-emerge.

The strong labour market points to resilience in domestic demand, which increases the likelihood that rate-sensitive instruments do not price in cuts too early. If you’re involved in macro positioning, it would be imprudent to rely too heavily on expected disinflation being straightforward or uninterrupted.

We should be preparing for positioning around rate hold scenarios that last longer than anticipated. Interest rate derivatives that lean too heavily into pricing in policy adjustments in the upcoming quarters may be misaligned, especially if real activity stays buoyant. The market, in our view, may continue underestimating policy patience when inflation moderates for short periods but doesn’t fully embed.

Eyeing vol structures may prove worthwhile. Given the potential tug-of-war between disinflation and trade-induced cost pressures, there could be sudden readjustments in the mid-term curve. As Jackson remains cautious, traders operating around policy expectations over a 3- to 6-month horizon would do well to build in wider tolerances for data surprises.

Create your live VT Markets account and start trading now.

Germany’s Chancellor states the commitment to preventing a long-term trade conflict with the United States. Germany aims to support the European Union in securing numerous trade agreements.

Efforts will be made to address one-sided dependencies on China under the banner of strategic de-risking. An agreement on the US-EU trade deal remains pending, and a 10% tariff on EU imports is becoming a possibility.

Complexity Of International Trade Relations

There is uncertainty about the EU’s capacity to withstand a prolonged trade war with the US. This situation underscores the complexity of international trade relations.

These remarks from the German Chancellor reflect a renewed effort to contain potential friction while maintaining influence in global supply chains. The references to strategic de-risking signal an intent to rebalance economic exposure—especially as Europe begins recalibrating its stance towards Beijing. While the position remains diplomatic on the surface, the clear acknowledgment of dependencies suggests that a shift in trade policy has already begun behind closed doors.

The pending arrangement between the United States and the European Union isn’t just a hypothetical point of conversation—it now carries exact implications for market participants, particularly after comments surrounding a possible 10% tariff on European products. Though not yet implemented, the pricing in of such a measure may require close monitoring over the next few weeks. Pricing models relying on past tariff environments could become unreliable if sentiment hardens further.

The Chancellor’s statements aim to temper reactions but they also highlight the limitations of thin optimism. Markets often react not to announcements but to energy behind the lobbies influencing them. In this case, we’re potentially heading towards more protective stances between partners who were seen as aligned not long ago. Energy, automotive, and luxury sectors—and the derivative instruments tied to them—could see increasing volume as hedging exposure becomes a direct response rather than a precaution.

Volatility In Trade Policy

Scholz is effectively walking a line between long-term realignment and short-term diplomatic containment. The problem for us lies in the delay: negotiations drag, but pricing pressures escalate quickly. Bonds, equity futures, and currency derivatives will move not because of outcomes, but because of the added delay itself. In the short term, volatility on euro-dollar derivatives should be expected, particularly near key option expiries aligned with expected trade policy announcements.

Viewing this through the lens of sentiment and positioning, liquidity may thin out on certain forward contracts due to hedging caution—less volume, wider spreads. We must also consider correlations: tech-linked contracts may behave differently than defensive sectors, influenced heavily by transatlantic exposure ratios.

Pressure might also mount from secondary effects. For example, if Asia begins to interpret this shift as a new front in trade restrictions, there could be additional flow into commodity-linked hedges. We shouldn’t dismiss the likelihood of hedging activity spilling into pairs like USD/JPY or EUR/CHF, which are instinctively treated as safe tensions rise.

Structural fragmentation is becoming part of the conversation. Any remaining expectation of a seamless supply system is being dismantled, sector by sector. The consequence? A long-needed reassessment of covariant risk in multi-country exposure. Let’s be ready for implied volatilities to deviate markedly from realised ones. Portfolio implications won’t just be mechanical—they’ll be dictated by the order and pace at which these strings of announcements are interpreted by capital flows.

We are, in effect, not responding to decisions but to the prolonged absence of them.

Create your live VT Markets account and start trading now.

The GBP/USD pair experienced a rise above key technical levels largely due to the general weakening of the US Dollar. This increase saw the pair gaining nearly 1% in a day, reaching a fresh weekly high around 1.3350 during the European trading session.

US inflation data contributed to the Dollar’s weakness, as the Consumer Price Index indicated annual inflation dropped to 2.3% in April from 2.4% in March. This influenced the GBP/USD to gain momentum during the American trading hours.

Elliott Wave Analysis

The primary Elliott Wave count on the GBP/USD hourly chart suggests the end of a corrective Wave (C) near 1.3140. This could mark a potential bottoming out, indicating the start of a new rally.

The bullish shift is supported by views expressed by Huw Pill, the Chief Economist at the Bank of England, who addressed inflationary issues in the UK. His comments coincided with the pair’s positive movement, underscoring ongoing market reactions to macroeconomic updates.

The information in this article is for informational purposes only, carrying risks and uncertainties in trading, which should always be carefully considered. The responsibility for any investment decisions remains with the reader.

With the GBP/USD pair pushing past technical resistance near 1.3350, attention was firmly drawn to the underlying momentum seen in the European session. The move upward was spurred not by sterling strength alone but largely traced back to softer data from the US. Specifically, the retreat in US Consumer Price Index figures to 2.3% adds to the view that inflationary pressure is beginning to cool more steadily than anticipated. For perspective, the March figure stood higher, and the monthly decline serves to scale back expectations for further aggressive tightening by the Fed.

Market Dynamics and Projections

This subtly shifts the environment that traders are navigating, as the justification for holding a stronger Dollar becomes thinner. When market participants react to inflation falling faster than projections, the Dollar tends to weaken—this is precisely what we observed during the US session.

From a technical analysis perspective, the completion of the Elliott Wave (C) near the 1.3140 level casts a more bullish shadow over the pair. This isn’t merely a corrective bounce. If the narrative is correct, the retracement has already run its course, and what’s developing now could be interpreted as the early stages of a broader impulse wave, not a simple upward blip. For those who analyse the chart structure closely, such transitions can provide a cleaner framework for positioning, particularly as upward momentum indicates more than a reactionary pop.

Meanwhile, when Pill weighed in on domestic inflationary pressures in the UK, his remarks earned attention for being relatively measured. Ongoing stickiness in UK price rises strengthens the case against swift rate cuts by the Bank of England. As we interpret it, this has buoyed the currency. His comments served more as a reminder than a forecast, but they were aligned well with how the pound traded throughout the session. It’s not just what is said—it’s when it’s said, and in this case, the timing lent added clarity to traders mapping future interest rate paths.

In the short term, price breaching the highs around 1.3350 sets a clear marker to watch. Long positions that built near the prior correction zone now ride with the trend, and profit-taking behaviour near resistance levels may provide added volume clues. We’ve often looked for these kinds of signals to confirm trend resilience or sniff out early signs of fatigue.

In upcoming sessions, volatility around Dollar inputs—particularly anything related to employment or forward guidance from Fed officials—will offer further shape to implied rate differentials. Similarly, with the UK not far from CPI updates of its own, traders may revisit current longs or shorts on GBP in light of any upside surprises. Reaction speed to these releases, not just direction, will matter for risk management.

Position sizing and stop placement remain central. Knowing when a move is overstretched compared to prior volatility bands keeps exposures appropriate, rather than emotional. When momentum strengthens rapidly, spreads widen and entries become less forgiving. We’ve found it useful to stay reactive with limits when underlying fundamentals and price action both reinforce a scenario—but not overstay entries past key retracement markers.

For the time being, expect the market to continue playing short-term Dollar softness against resilient UK inflation expectations. Relative central bank narratives are diverging more than converging. Until that trend shifts, we’ll be watching closely for momentum confirmations through volume and volatility expansions, particularly near round-number barriers where institutional interest tends to cluster.

Create your live VT Markets account and start trading now.

ECB supervisors have urged banks to evaluate their dollar funding needs, especially during potential market distress. This stems from concerns that if President Trump influences the Federal Reserve (Fed) to restrict access, banks might face challenges in securing dollar funding.

In times of financial stress, the Fed usually offers lending facilities to major partners to ease dollar shortages. However, unpredictable policy moves by Trump have raised fears that these funding channels might be suddenly cut off.

Fed Support Concerns

Thus far, two sources have mentioned the Fed has never indicated an unwillingness to uphold its support mechanisms. Despite recent market fluctuations showing a reduced interest in the dollar, the ECB finds some solace in positive developments related to the US-China trade conflict.

While current trade relations offer a temporary break, the future remains uncertain.

The European Central Bank (ECB) has urged lenders under its supervision to take a sobering look at their exposure to dollar funding, particularly under stress scenarios. The original concern, if we break it down, is not so much about current shortages or shrinking access, but the plausible scenario where political influence—especially from the executive office in Washington—could impact the Federal Reserve’s willingness or ability to maintain its usual backstop facilities during a crunch.

When strain erupts in markets, dollar funding becomes a pressure point. The Fed typically steps in with swap lines or emergency liquidity to partners it trusts. That safety net has historically cushioned the edges of financial stability. What we’re being asked to prepare for, however, is a world in which that support might be used selectively or politicised.

So far, we’ve heard from internal sources suggesting the Fed hasn’t hinted that they’d roll back these arrangements. But that doesn’t mean the risk is off the table. Market watchers have noticed softening interest for dollars in some recent trades—likely a reflection of temporary calm around international trade disputes rather than a change in structural dependencies.

Strategic Adjustments

Draghi’s camp took some comfort from easing China-US trade tensions, but that calm may offer only a shallow buffer. If future political decisions outpace economic logic, then banks without hardened strategies for dollar sourcing might find themselves vulnerably positioned.

From here on, there needs to be clear modelling for stressed conditions. Let’s assume that the backstop won’t be there. What happens next? What liquidity can be retained in-house, and where would rollovers fail? These questions are not hypothetical anymore. Liquidity mismatches are already appearing in smaller funding centres, so the implications could filter up.

We’ve chosen to take this not as panic, but as instruction. Our derivative pricing models are being revised to factor in not just volatility but also counterparty funding risk in a scenario where central liquidity may arrive late—or perhaps not at all. This must include revisions across short-term interest rate assumptions, especially where dollar-pegged assets are concerned.

Create your live VT Markets account and start trading now.

The Canadian Dollar is marginally higher against the US Dollar while underperforming other G10 currencies. Yield spreads pause has given the CAD room as markets await domestic data like building permits and housing starts.

The Bank of Canada’s schedule remains empty, with markets expecting a couple of 25 bps rate cuts by December. The approximate range for CAD/USD is between last week’s low of 1.3750 and this week’s peak over 1.4000, with the 200-day moving average at 1.4019 providing resistance.

European Currencies Show Variability

The RSI indicator is neutral, failing to rise above 50. In other markets, the EUR/USD pair is pulling back toward 1.1200 after reaching intraday highs of 1.1270, while the GBP/USD sees fluctuations around 1.3300 amidst a recovering US Dollar.

Gold consolidates below $3,200 per ounce after a recent drop, with shifts in investor focus away from this asset. The entire cryptocurrency market holds above $3.45 trillion, with major cryptos like Bitcoin and XRP showing positive performance.

The pause in trade war tensions between the US and China has invigorated markets, with optimism driving a return to risk assets. Trading foreign exchange on margin carries a high level of risk. Consider your investment objectives and seek independent advice if unsure.

At present, the Canadian Dollar remains relatively steady against the greenback but isn’t showing the same pace as other major currencies in the G10 basket. This lack of momentum, even amid a broader backdrop of reduced pressure in yield differentials, says more about what is missing than what is emerging. Essentially, the CAD is trading in a calm patch, driven more by waiting than by initiative. The Bank of Canada holds a blank calendar, and that absence creates a type of vacuum in rates guidance. Few expect any abrupt surprises before the end of the year.

In light of this, the CAD/USD pair is likely to drift within a logical technical corridor—marked on one side by 1.3750 and capped on the other by around 1.4000, with a noteworthy 200-day average traceable near 1.4020. So long as there’s no real shift in the broader interest rate expectations or headline data, it’s entirely plausible this pair sticks largely within that band. We’ve kept an eye on Relative Strength Index behaviour too, which isn’t lending much to the bull case at the moment. Sitting on the fence around 50 suggests momentum remains stuck in neutral.

Commodities And Digital Assets

Meanwhile, European currencies are behaving with a bit more texture. The Euro saw a flash of enthusiasm, but the peak near 1.1270 has lost stamina, and the retreat to the 1.1200 handle shows that buyers have taken some froth off for now. Sterling is no more certain, as 1.3300 seems to host a push-pull between short-term moves and a slightly firmer Dollar. Traders here would be wise to keep a close view on how US data filters into both consumer expectations and short-term rate bets—this will determine how flexible these currencies become in the days ahead.

In commodities, gold continues to struggle under a heavy ceiling near $3,200. After recent losses, although some are tempted to declare a bottom, consolidation at this level may simply reflect repositioning rather than conviction. Equity markets have seen a renewed appetite for risk following cooler US–China headlines, and that could mean less defensive interest in non-yielding assets like gold. Until real rate direction clarifies, we don’t expect a strong hand to take control of bullion.

Digital assets defy that uncertainty for now. Market capitalisations above $3.45 trillion speak to firm positioning, with Bitcoin and XRP showing relative firmness. It seems speculative appetite hasn’t cooled off entirely—even if broader macro uncertainty remains in play. That said, elevated levels require better discipline and tighter control on leveraged exposure as volatility remains a live factor.

Through our lens, nothing about the current environment suggests open-ended risk-taking. Short-term instruments and derivative trades should mirror the current backdrop: limited directional cues, cautious optimism, and constant reevaluation of exposure. Prices across FX, metals, and crypto are all circling key levels, unlikely to break out without a fresh push from macro data or central bank signals. Strategies that perform well in conditions like these tend to be the ones that leave room for recalibration, not those that assume conviction early.

Create your live VT Markets account and start trading now.

China and the European Union recently engaged in detailed discussions about global economic challenges. This dialogue took place during a financial working group meeting in Brussels as they mark 50 years of diplomatic relations.

The discussions focused on several key areas, including improving market access and enhancing cooperation in sustainable finance. Additional topics covered were cross-border data flows and the development of payment systems. Both parties continue to exchange pleasantries in the context of dealing with difficulties posed by the United States.

Diplomatic Balancing Act

The talks in Brussels underscored the steady diplomatic balancing act that both economies are navigating. The European Union—pushed by growing internal political pressures—highlighted its appetite for clearer data standards and greater transparency over capital flows, whereas Beijing pointed to its broader reform agenda as evidence of alignment with international objectives. Notably, the tone of the meeting sustained an intention to avoid direct confrontation, even while touchy structural issues around data regulation and access to digital infrastructure were broached.

From our point of view, this gathering was more than a ceremonial nod to 50 years of ties. It served as a carefully managed message to markets about continuity, particularly at a time when American policy circles seem to be recalibrating their own strategic interests. While the joint statements may not have revealed much that was unexpected, the very act of engagement provides clues about the rhythm of upcoming economic transitions—and what may be priced in or overlooked.

For traders involved in rate-sensitive or forward-looking implied volatility strategies, it’s worth narrowing attention to what was left unstated. The lack of any joint timeline for regulatory harmonisation in sustainable investment suggests delays in cross-border financial product alignment. Swap spreads in environmentally linked instruments might remain wider than typical seasonal patterns predict. That opens brief arbitrage windows where risk-weighted returns can be tilted favourably without adjusting core positioning.

Payment System Negotiations

Similarly, the payment system negotiations—which only received fleeting mentions—carried ample subtext. These exchanges were framed with enough technical ambiguity to allow both parties breathing room. Yet what matters most is the tacit acceptance of fragmentation risk. Onshore sentiment derivatives that feed off banking interface news may become increasingly relevant, especially when linked to transaction security protocols or reserve-backed tokens.

Meanwhile, the sub-discussion around cross-border data reflected a fault line that is quickly becoming measurable through option premiums in logistics-sensitive sectors. Structures that provide downside protection against regulatory drag—particularly where compliance bottlenecks might affect European-Asian flows—may see increased interest, at least until firmer guidelines emerge. Risk-hedging put spreads could be marginally adjusted along three- to six-month horizons.

What follows is a period where small signals—often buried inside trade disclosures or licensing tweaks—must be read with precision. We interpret the overall exchange not as a pivot, but as confirmation that neither bloc seeks to increase the velocity of structural divergence for now. That matters less for equity spot movement, which remains moored primarily to rate expectations, and more for tactical overlays in complex derivatives that feed on inter-bloc regulatory narratives. In this zone, subtle cues currently outweigh macro declarations.

Create your live VT Markets account and start trading now.

Canada’s building permits for March fell below expectations, registering a decrease of 4.1% instead of the anticipated 0.5% reduction. This decline indicates a downturn in construction-related activities within the given timeframe.

In the currency markets, the EUR/USD pair maintains its position around 1.1200 despite a previous high near 1.1270. Meanwhile, GBP/USD hovers around 1.3300 amid the US Dollar’s recovery, with initial gains prompted by comments from BoE officials.

Gold stabilises just below $3,200 per troy ounce, following its decline to recent lows. Market participants are moving away from gold as optimism grows over improvements in trade relations.

Cryptocurrency Market Movement

The cryptocurrency market is valued at over $3.45 trillion, with key cryptocurrencies experiencing positive movement. Market sentiment improves as the trade crisis tensions ease, fostering increased confidence among traders.

A trade pause between the US and China rejuvenates markets, driving a resurgence in risk assets. This change reflects a positive perception among market participants regarding ongoing trade discussions.

What we’re observing at the moment is a shift in sentiment that could produce short-term volatility across rates, commodities, and foreign exchange, all reflected in the recent macro prints and price movements.

The unexpected drop in Canadian building permits is not just a figure to gloss over. It illustrates dropped demand in one of the more interest-rate-sensitive sectors—construction. This may, over coming months, be interpreted as a hint at broader economic fatigue, especially in areas tied to real estate, housing starts, and permit lead times. If similar slippage is seen in upcoming monthly reads, then sentiment around the Canadian dollar may weaken, particularly if neighbouring regions continue holding relatively stable macro data.

In currency spaces, the EUR/USD holding steady near 1.1200, following its retreat from 1.1270, implies we might have seen a near-term top for now. The euro remains moderately firm, which tells us that any pullbacks may continue to be bought in anticipation of a more patient US Fed as markets weigh in on the global growth outlook. For traders with exposure to currency legs, short-duration pullback setups may emerge if U.S. yields creep higher or if European economic data begin surprising to the downside.

Sterling’s placement around 1.3300 against the dollar suggests that recent upside has already priced in the verbal support expressed by certain monetary policymakers. The fact that it hasn’t extended higher could point to a demand ceiling unless fresh fiscal or employment data shifts expectations around domestic tightening. Look for confirmation in short-end yield differentials, especially as we approach next week’s data cycle. Positioning bias may lean towards a fade if bond market adjustments begin pulling forward expectations for a U.S. policy shift post-summer.

Gold Market Stability

Gold’s stabilisation just under $3,200 per troy ounce follows a sharp decline. The metal’s behaviour mirrors the unwinding of typical safe-haven trades as optimism returns on trade fronts. However, stabilisation at these levels still suggests underlying demand hasn’t collapsed. We see no aggressive rotation out of bullion yet. This could mean uncertainty is still priced in, even though it’s less immediate. Consider keeping an eye on the CFTC non-commercial positioning reports—if outflows moderate, it could mark accumulation zones, particularly if tensions resume or growth data overshoots downward.

The broader crypto market pushing through $3.45 trillion in total valuation is not strictly a technical or speculative bounce. There are clear sentiment ties to receding risks on the geopolitical front. Enthusiasm reflecting improved trade dialogue has emboldened longer-term holders, and this renewed confidence appears to be bringing sidelined capital back into play. Be wary of leverage metrics, especially on major exchanges, as they are likely to stretch if price continuation accelerates through technical resistance.

As trade negotiations between the U.S. and China appear to pause hostilities, the financial markets have responded with renewed appetite for risk. For short-term strategies, this requires sensitivity to volatility compression and the growing likelihood of rally gaps above modest resistance as risk premiums continue to unwind. Positioning should reflect a nimbleness towards reversals especially in sectors sensitive to cross-border flows and equity-linked derivatives.

We are approaching a period where geopolitical calm may give macro data more influence after months of being overshadowed. Understanding where momentum is truly building, versus where it has simply paused, will remain essential.

Create your live VT Markets account and start trading now.

Mortgage applications in the US saw a rise of 1.1% for the week ending May 9, 2025. This increase follows a prior week’s 11.0% increase, as outlined by the Mortgage Bankers Association.

Key figures show the market index rose to 251.2 from 248.4. The purchase index increased to 166.5 from 162.8, while the refinance index decreased slightly to 718.1 from 721.0. Additionally, the 30-year mortgage rate went up to 6.86% from 6.84%.

Influence Of Rising Rates

The growth in applications was mainly due to a rise in purchase activity, even though refinancing experienced a small decline. How rising rates will affect future applications remains uncertain, as it might lead to more distinct trends in the mortgage market.

The prior data paints a fairly plain picture: demand for home purchases edged up again, adding to the jump we saw earlier. A smaller contribution came from refinancing, which slipped a little this time around. Despite the 30-year mortgage rate ticking slightly higher—6.86%, up from 6.84%—buyers appeared unfazed. At least for now.

The overall market index moved up modestly, holding onto the momentum of the previous week’s double-digit climb. That said, the nature of these consecutive rises may be less about a general increase in lending optimism and more about timing—especially if borrowers are attempting to get ahead of any further increases in rates. We’ve seen before how short spikes in applications can result from a sudden sense of urgency rather than a fundamental shift.

Kan, as cited, pointed toward the comparative strength in purchase activity, which rose solidly for the second week running. This is telling. While refinancing continues to fall out of favour, likely due to the relatively higher rate environment, new borrowing still has some legs. If markets begin to price in prolonged tightness in rate policy, we might see borrowers hurrying to lock in terms sooner rather than later. That would not be a long-lasting effect, but it may drive percentage gains in the short term.

Mortgage Market Sentiment

So what can be understood here? Mortgage activity offers us a window into consumer sentiment around longer-term borrowing. A roughly flat move in refinancing, paired with a moderate push in home purchases, tells us fewer people are reacting to changes in yield once they’ve already held debt for some time. But new entrants—home buyers—are still prepared to act in what they see as acceptable conditions. The persistence of those views is what we’ll be watching.

It’s also worth noting that the increase in the average 30-year fixed mortgage rate, though small, is not meaningless. The cost of borrowing is not dropping—and that’s a critical data point. When paired with steady inflation numbers and hawkish central bank language, the tone of forward-looking rate stability appears limited. This tempers any reason to expect a sharp comeback in refinancing any time soon.

In the coming weeks, if similar week-on-week moves occur, our balance of focus stays pinned to directionality across indices rather than magnitude alone. Index moves like the ones from 248.4 to 251.2 might not sound like much, but they illustrate short-term behaviour—not longer-term lending sentiment. Rise and fall patterns in the purchase and refinance components matter more.

There’s also the matter of base effect. The large 11% lift previously means that even a small gain now may simply reflect timing distortions—seasonal borrowing habits or delayed filings. We don’t act on numbers without digging deeper into why they’ve moved.

Some participants will inevitably follow the headline percentages alone, overlooking the slower grind in long-term sentiment. But trends aren’t hidden—they’re just slightly behind the veil of week-on-week excitement. That veil, for a while at least, likely stays in place.

Create your live VT Markets account and start trading now.

Gold prices saw a dip to $3,235 as the pressure eased slightly due to a softer US Dollar. Recent US inflation data, which was lower than expected, encouraged a shift towards riskier assets, affecting gold prices amid talks of further Federal Reserve rate cuts.

On Wednesday, without major economic reports, attention shifted to President Trump’s visit to Saudi Arabia, securing $600 billion in trade deals. Additionally, Ukrainian President Zelenskyy is poised for possible peace talks with Russian President Putin in Istanbul, influencing global sentiment and market reactions.

India Trade Deficit Decreases

India’s trade deficit showed a decrease to $18.9 billion in April, partially due to reduced gold imports as high prices dampened demand. Additionally, a decline in crude oil prices is anticipated to lower oil import volumes, balancing typical seasonal trends.

Gold’s technical outlook reveals a consolidation phase between $3,207 and $3,300. The daily Pivot Point at $3,243 is identified as a target for any recovery, while strong resistance levels remain near $3,293. On the downside, support levels are positioned at $3,222 and $3,194, with the key technical support at $3,167.

We’ve seen gold wobble a bit this week, softening to $3,235 as the US Dollar lost some of its recent traction. The US inflation figures released earlier came in a touch lighter than expected, which was enough to nudge some traders back toward equities and other growth-oriented assets. That steady pullback from defensive holdings placed some downward pressure on bullion, though much of the move remains contained within established ranges.

With Wednesday bringing little in the way of scheduled economic indicators from major economies, the market’s attention meandered instead towards political developments. One key story was Trump’s meeting in Saudi Arabia, which reportedly locked in an extensive $600 billion in trade arrangements – an eye-catching number if it holds up under scrutiny. These types of large figures can calm certain funding concerns and often improve risk-on sentiment temporarily, depending on how feasible implementation appears across sectors.

Gold Price Action and Technical Analysis

At the same time, efforts at diplomacy took a tentative step forward as Zelenskyy signalled openness to negotiations, possibly in Istanbul, with Putin. Movements toward a ceasefire or even preliminary progress in ending hostilities typically favour broader risk appetite. That can undercut demand for safe-haven assets such as gold, particularly in times when inflation appears to be retreating and the major central banks grow more comfortable about easing their stance.

India’s April trade report added another piece to the mix. Their monthly deficit narrowed to $18.9 billion. Now, part of that came from a sharp decrease in gold buying, as domestic demand saw pressure from elevated prices. When people stop buying physical gold in large quantities because it’s simply getting too expensive, that shift matters over the medium term – especially when layered onto signs of reduced crude price pressures on imports.

Looking at technical structures, the current price action suggests firmness above lower supports yet hesitancy to challenge overhead resistance. The range between $3,207 and $3,300 has developed into a zone of calm after recent swings. Volume has started tapering a bit, which during a consolidation phase feels about right. Still, whenever price reacts around the $3,243 Pivot, we watch those levels closely, particularly on short-term timeframes.

Stronger barriers overhead sit just below $3,293, a zone that price has flirted with, though not convincingly breached. Below, we’ve mapped out support points around $3,222 and again further down near $3,194. Should price slip beneath those, the next practical level to focus on becomes $3,167 – a place buyers may start stepping in again depending on macro flows.

What matters over the next few weeks is how traders adjust to a combination of real rate expectations and demand signals. As positioning continues to reset following the inflation data, we remain attentive to volatility at boundary levels and whether the US Federal Reserve begins to signal a timeline for rate reductions more confidently. Trades should be structured knowing that the ranges may compress or break depending on external developments – mostly macroeconomic – and political stability indicators. The market appears to be temporarily pausing, but these pauses rarely hold indefinitely.

Create your live VT Markets account and start trading now.