Trump Announces US-UK Trade Deal Amid Tariff Threats

Economic

Summary:

US President Donald Trump announced what he called a "breakthrough" trade deal with the United Kingdom on Thursday.

"The agreement with the United Kingdom is a full and comprehensive one that will cement the relationship between the United States and the United Kingdom for many years to come," Trump said on his Truth social media platform.

"Because of our long time history and allegiance together, it is a great honor to have the United Kingdom as our FIRST announcement."

Starmer vows to defend UK workers and businesses

UK Prime Minister Kier Starmer also hinted at a forthcoming announcement earlier on Thursday.

"Talks with the US have been ongoing and you'll hear more from me about that later today," Starmer told a press conference in London. "But make no mistake, I will always act in our national interest, for workers, businesses and families, to deliver security and renewal for our country."

A British official suggested that the UK was considering lowering its own tariffs on US cars as well as cutting digital sales tax affecting US tech companies, Reuters reported.

Trump's tariff negotiations put to the test

Since taking office early this year, the Trump administration has been actively expanding the US tariff policies.

In April, Trump announced broad tariffs on US trading partners, however, most of the tariffs announced were later reversed or paused to allow for trade negotiations. However, the 145% levy on Chinese imports still stands.

The US president has repeatedly said that multiple countries are eager to finalize deals with the US.

Investors will be watching to see if Trump can deescalate the trade war he triggered and which in turn sparked chaos in stock markets around the world.

Officials from the US and China are meeting in Switzerland on Saturday to find a resolution to the trade war between the world's two largest economies.

UK eager for trade deals post-Brexit

Meanwhile, since leaving the European Union, the UK has sought to expand global trade ties. But Brexit also brought some light relief, with Trump's announced tariffs on the UK only reaching 10%, half of the 20% announced against the EU.

Nevertheless, a trade deal with the US is seen as key by Starmer's government.

"The United States is an indispensable ally for both our economic and national security," a Downing Street spokesperson said. "Talks on a deal between our countries have been continuing at pace and the Prime Minister will update later today."

Britain earlier this week struck a free trade agreement with India — the biggest trade deal since Brexit.

On Tuesday, a UK official announced good progress amid talks with Washington on lowering tariffs on steel and autos. Discussions are also ongoing regarding Trump's recent announcement of 100% tariff on all movies produced outside the US.

Source: DW

To stay updated on all economic events of today, please check out our Economic calendar

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Adam

Commodity

Crude Oil Holds Gains as Trade Hopes Offset Supply and Rate Pressures

Daily Light Crude Oil Futures

Light crude oil futures are edging higher Thursday, recovering from earlier losses in the week. After a strong midweek rally to $60.26 stalled at resistance levels of $59.68 and $60.09, traders are now watching key technical levels for direction. Minor support at $57.78 remains pivotal; holding above this zone could trigger renewed buying and another attempt to break above the weekly high.

At 09:10 GMT, Light Crude Oil Futures are trading $58.76, up $0.69 or +1.19%.

US-China Trade Talks Offer Near-Term Support

Crude oil prices are finding modest support from optimism surrounding upcoming U.S.-China trade talks. Scheduled for May 10 in Switzerland, the talks between U.S. Treasury Secretary Scott Bessent and China’s top economic official are raising hopes of easing tensions between the world’s two largest oil consumers. This positive sentiment has helped Brent crude stabilize above $61 per barrel, despite broader macroeconomic concerns.

Rising Supply from OPEC+ Adds Pressure

However, the upside remains limited as OPEC+ has announced plans to increase output for a second straight month. The coalition will add 411,000 barrels per day to global supply in June, a decision made despite falling prices and softening demand projections. The move is likely to cap any short-term rallies, especially if broader consumption concerns tied to global economic uncertainty persist.

Fed Policy, Strong Dollar Weigh on Commodities

The U.S. Federal Reserve’s decision to hold rates steady has added further pressure on commodity markets. While rates remain unchanged, the Fed flagged potential inflation and employment concerns, boosting the U.S. dollar. A stronger dollar typically weighs on oil prices by making crude more expensive for holders of other currencies, adding a headwind for bullish traders.

Mixed Oil Prices Forecast as Supply Risks Dominate

Analysts are divided on oil prices projections. Citi Research has cut its three-month Brent forecast to $55 per barrel, citing the potential for a U.S.-Iran nuclear deal that could lift sanctions and increase supply. The bank estimates a 60% chance of a deal and warns that prices could dip to $50 if it materializes. Conversely, no deal or escalatory action could lift prices back toward $70. Meanwhile, ANZ maintains its near-term outlook at $55, cautioning that risks remain skewed to the downside.

Market Outlook: Neutral to Bearish Near-Term

Despite short-term support from geopolitical optimism, the crude oil market remains under pressure from increasing supply and macroeconomic headwinds. Unless prices can hold key technical support and overcome overhead resistance, traders should brace for a potential retest of the $55.30–$54.48 value zone. The near-term outlook is neutral to bearish, with supply-driven pressures likely to dominate.

Source: fxempire

Risk Warnings and Disclaimers

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Warren Takunda

Cryptocurrency

Key takeaways:

Ether breaks multimonth downtrend as traders target $3,000 ETH price.

Ethereum TVL surges 41% to $52.8 billion in 30 days, with a 22% rise in daily transactions to 1.34 million, signaling strong network recovery.

Technicals show ETH price faces major resistance at $2,100-$2,800.

Ether is setting up for a recovery toward the $3,000 psychological level, backed by recovering network activity, increasing TVL, and strong technicals.

Ether price seeks a return to $3K

Ether looks to end its downtrend that has been in play since mid-December after it turned away from its 10-month high of $4,100.

Crypto technical analyst Mikybull Crypto shared a chart showing the ETH price breaking above a six-month descending trendline, with $2,000 and $2,250 being key resistance levels to watch, saying:

“ETH breaking out.”

Ether’s price broke above the downtrend line at $1,600 on April 22 when cooling macroeconomic tensions sparked a marketwide recovery.

The 50-day simple moving average (SMA) at $1,775 is now acting as immediate support for Ether’s price.

The relative strength index has risen sharply, jumping from 56 to 66 over the last 24 hours, suggesting bullish momentum is picking up. Ethereum Price Finally ‘Breaking Out,’ Data Suggests — Is $3K ETH Next?_1

Ethereum Price Finally ‘Breaking Out,’ Data Suggests — Is $3K ETH Next?_1

ETH/USD daily chart. Source: Cointelegraph/TradingView

Key levels to watch on the upside are the 100-day SMA at $2,100 and the supplier congestion zone between $2,500 and $2,800, where the 200-day SMA lies. Overcoming these barriers will likely push ETH prices higher, with $3,000 representing the short-term target for the bulls.

Crypto analyst Crypto Claws said the ETH/USD pair was “primed for a bullish reversal,” setting the upside target between $2,500 and $3,500.

Meanwhile, Crypto Salamanca told his X followers that with the latest Pectra upgrade-fueled momentum, “ETH could target $2,150–$2,700 in the coming weeks.”

Ethereum onchain metrics show strength

Ethereum remains the largest layer-1 blockchain based on the total value locked (TVL) and ranks second in DEX volumes.

Ethereum’s TVL has risen from $44.5 billion on April 9 to $52.8 billion on May 8. Ethereum Price Finally ‘Breaking Out,’ Data Suggests — Is $3K ETH Next?_2

ETH TVL and transaction count. Source: DefiLlama

Additional positive signs include a 50% increase in deposits on BlackRock BUIDL, a digital liquidity fund application, a 33% increase in Spark and 25% growth in Ether.fi.

Ethereum’s daily transaction count has increased by 22% over the last month to 1.34 million transactions.

However, the 95% drop in Ethereum fees year-to-date suggests that Ethereum’s rise to $3,000 might take longer than traders may wish. Ethereum Price Finally ‘Breaking Out,’ Data Suggests — Is $3K ETH Next?_3

Ethereum Price Finally ‘Breaking Out,’ Data Suggests — Is $3K ETH Next?_3

Ethereum network’s daily fees. Source: DefiLlama

Low transaction activity on Ethereum reduces ETH burning, making it inflationary as new coins issued for staking rewards outpace the network’s burn mechanism.

In addition, US-listed spot Ether ETFs saw $39.7 million in net outflows between May 5 and May 7, while similar BTC instruments experienced net inflows of $482 million over the same period, adding to recovery concerns.

Source: Cointelegraph

Risk Warnings and Disclaimers

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Michelle

Political

Pakistan and India accused each other of launching drone attacks on Thursday, and Islamabad’s Defence Minister said further retaliation was “increasingly certain”, on the second day of major clashes between the nuclear-armed neighbours.

Pakistan said it shot down 25 drones from India, while India said it air defences had stopped Pakistani drone and missile attacks on military targets, dashing hopes they would soon bow to pressure to end their worst confrontation in more than two decades.

World powers from the U.S. to Russia and China have called for calm in one of the world's most dangerous, and most populated, nuclear flashpoint regions. The U.S. Consulate General in Pakistan's Lahore ordered staff to shelter in place.

Thursday's reported exchanges came a day after India said it hit nine "terrorist infrastructure" sites in Pakistan in retaliation for what it says was a deadly Islamabad-backed attack in Indian Kashmir on April 22.

Pakistan says it was not involved and denied that any the sites hit by India were militant bases. It said it shot down five Indian aircraft on Wednesday, a report the Indian embassy in Beijing dismissed as "misinformation".

Pakistani retaliation "is increasingly becoming certain now," Pakistan's Defence Minister, Khawaja Muhammad Asif, told Reuters. "I will still refrain from saying it is 100%. But the situation has become very difficult. We have to respond."

The relationship between India and Pakistan has been fraught with tension since they gained independence from colonial Britain in 1947. The countries have fought three wars, two of them over Kashmir, and clashed many times.

The countries that both claim Kashmir in full and rule over parts of it separately acquired nuclear weapons in the 1990s.

TRADING HALTED

Trading was halted on Pakistan's benchmark share index (.KSE), opens new tab after the index slumped 6.3% on news of the drone attacks. Pakistan's international bonds extended their losses with the 2036 bond down 2.4 cents to bid at 72.4 cents.

Indian equities, rupee and bonds fell sharply in late afternoon trading after the Indian defence ministry statement, with the stock market benchmark Nifty 50 (.NSEI), opens new tab settling 0.58% lower in the most volatile trading session in a month.

Pakistan shot down 25 Israeli-made drones from India at multiple locations, including the two largest cities of Karachi and Lahore, and their debris is being collected, Pakistan military spokesperson Ahmed Sharif Chaudhry said.

One drone was also shot down over the garrison city of Rawalpindi, home to the Pakistan army's heavily fortified headquarters, he added.

One drone hit a military target near Lahore and four personnel of the Pakistan army were injured in this attack, Chaudhry said.

"Indian drones continue to be sent into Pakistan airspace...(India) will continue to pay dearly for this naked aggression," he said.

The Indian defence ministry said Pakistan attempted to engage a number of military targets in northern and western India from Wednesday night into Thursday morning and they were "neutralised" by Indian air defence systems.

In response, Indian forces targeted air defence radars and systems at a number of locations in Pakistan on Thursday, the ministry said. The "Indian response has been in the same domain with the same intensity as Pakistan," it added.

The Indian ministry accused Pakistan of increasing the intensity of its firing across the ceasefire line, the de facto border, in Kashmir. Sixteen people, including five children and three women, were killed on the Indian side, the statement said.

Graphic: Graphics showing the military power of India and Pakistan

Pakistan says at least 31 of its civilians were killed and about 50 wounded in Wednesday's strikes and in cross-border shelling across the frontier in Kashmir that followed, while India says 13 of its civilians died and 59 were wounded.

On Thursday, Indian government ministers told a meeting of political parties in New Delhi that the strikes on Pakistan had killed more than 100 militants and that the count was still ongoing, government sources said.

Pakistan's Information Minister Attaullah Tarar told parliament that Pakistani forces had killed 40-50 Indian soldiers on the de-facto border in Kashmir and "blown" Indian military installations.

Reuters could not independently verify claims of both countries.

Blackout drills were conducted in India's border regions on Wednesday night.

Local media reported panic buying in some cities in the Indian state of Punjab which shares a border with Pakistan, as people hoarded essentials fearing a Pakistani retaliation to the Indian strikes.

Indian Foreign Minister Subrahmanyam Jaishankar said New Delhi did not intend to escalate the situation. "However, if there are military attacks on us, there should be no doubt that it will be met with a very, very firm response," he said at a India-Iran Joint Commission Meeting.

His Pakistani counterpart, Ishaq Dar, told Reuters that there have been contacts between the offices of the national security advisers of the two countries and the hotline between their heads of military operations was also working. He did not give more details.

Source: Reuters

Risk Warnings and Disclaimers

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Adam

Economic

Central Bank

Time and again, the chair came back to the idea that the Fed has an ability, and an obligation, to wait and see how developments evolve on tariff policy and any economic distortions that follow.

The first distortion, as the Fed noted in its policy statement, came from export data that dragged down first quarter GDP. Powell also noted survey data reflects considerable uncertainty among businesses and households. And ongoing trade negotiations make the outlook hard to peg too.

"For the time being, we're well-positioned to wait for greater clarity before considering any adjustments to our policy stance," Powell said in prepared remarks Wednesday. And as the Fed chair's Q&A evolved, the theme recurred.

But what began as an insistence toward patience eventually announced itself as the outlines of a plan, in the end, not to be preemptive but reactive. Specifically, the central bank will wait and see if things get worse in the US economy. And only then will it be compelled to move.

Back in 2019, Powell noted the economy showed some signs of weakening and, with inflation running below the Fed's 2% target, the central bank cut rates three times to stave off a further slowdown. Before the pandemic rocked the global economy, the Fed and markets enjoyed what some called one of the "easiest years ever for investors."

In 2025, the central bank is in no such situation.

Today, inflation is running above the Fed's 2% target. The prospect of tariffs likely lifts inflation — even if temporarily — further away from that goal. Powell also acknowledged that some are making forecasts for a weakening economy, even a recession.

"My gut tells me that uncertainty about the path of the economy is extremely elevated, and that the downside risks have increased," Powell said during his press conference.

In its policy statement, the central bank noted that since March, "Uncertainty about the economic outlook has increased further." It added, "The Committee is attentive to the risks to both sides of its dual mandate and judges that the risks of higher unemployment and higher inflation have risen."

Still, attentiveness does not create an ability to anticipate.

"In any case, [the current economy is] not a situation where we can be preemptive because we actually don't know what the right response to the data will be until we see more data," Powell said.

Just moments before the Fed's announcement on Wednesday, President Trump said he had no plans to pare back 145% tariffs on China.

And as economic developments effectively speed up, Powell argued the Fed's approach must be to slow down. Markets still expect the Fed to cut rates three times this year, but the prospects of a rate cut next month dimmed further on Wednesday.

"We'll know more with each week and month that goes by about where tariffs are going to land," Powell said. "And we'll know what the effects will be when we start to see those things. So we think we'll be learning. I can't tell you how long it will take, but for now it does seem like it's a fairly clear decision for us to wait and see and watch."

Source: finance.yahoo

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

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Adam

Commodity

Gold prices are holding near-term support above $3,350 per ounce following the release of better-than-expected labor market data after the number of Americans filing new claims for unemployment benefits came in below economists’ forecasts.

Initial claims for state unemployment benefits came in at seasonally adjusted 228,000 for the week ending May 3, the Labor Department announced on Thursday. The number was slightly better than expectations, as consensus estimates forecasted a reading of 230,000 claims. The previous week’s figure was unrevised at 241,000.

Spot gold sold off overnight, hitting a session low of $3,320.38 just before 3 a.m. EDT, but has been climbing steadily since. Spot gold last traded at $3,350.80 per ounce for a loss of 0.40% on the session.

Spot gold trades at $3,350/oz after U.S. weekly jobless claims fall to 228k_1

Meanwhile, the four-week moving average for new claims – often viewed as a more reliable measure of the labor market since it flattens week-to-week volatility – came in at 227,000 against expectations for a 230,000 reading, and following the previous week's unrevised average of 226,000.

Continuing jobless claims, which represent the number of people already receiving benefits, were at 1.879 million during the week ending April 26, lower than the expected 1.890 million reading and also below the previous week’s downwardly revised 1.908 million level.

Source: kitco

Risk Warnings and Disclaimers

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Warren Takunda

Economic

China–U.S. Trade War

A new series of US products has been targeted for potential EU tariffs including aerospace champion Boeing, in case negotiations with the US administration end in deadlock, the European Commission announced on Thursday.

“We believe there are good deals to be made for the benefit of consumers and businesses on both sides of the Atlantic,” Commission’s president Ursula von der Leyen said in a statement adding, however: “At the same time, we continue preparing for all possibilities.”

Since mid-March the US has imposed 25% tariffs on EU aluminium and steel, 25% on cars and a 10% blanket tariff on all EU imports.

US products that could be hit by the EU include agri-food products such as processed fruits, nuts, vegetables, as well as fish, industrial products such as automotives, electrical equipment, engines and machinery. The list also targets Boeing and Bourbon Whiskey.

The new retaliatory measures, if used by the EU, will add to the list of US products already hit by EU tariffs which were suspended after US President Donald Trump announced a 90-day pause in the war waged against his trading partners around the world after threatening them with so-called "reciprocal" tariffs on 2 April, which would have hit EU imports with 20% tariffs.

US tariffs now cover 70% of EU exports to the US and could rise to 97% if further US investigations into pharmaceuticals, semiconductors and other products result in more tariffs.

The list of US products targeted by the EU will now be open to consultation by EU industries until 10 June, before approval by EU member states, as well as possible restrictions on certain EU exports of steel scrap and chemical products to the US worth €4.4 billion.

The level of EU tariffs that could hit the new list of US products will be decided at a later date.

On Thursday, the Commission also announced it will challenge the 10% blanket tariffs and tariffs on cars before the WTO.

US services are not threatened by Thursday’s proposed EU countermeasures, but an EU official said that all “options were on the table” if negotiations with the US fails.

EU top officials were in Washington on Tuesday and Wednesday, led by Sabine Weyand, chief of DG trade at the Commission, to meet their US counterparts. The discussion appear to have been fruitless, as no deal has been announced.

The EU official said that the EU was not presenting a “retaliation” package but was looking for a “rebalancing” of the trade relation with the US, if no deal was reached.