US Jobless Claims Drop After Brief Spike During Spring Recess

Economic

Forex

Summary:

Applications for US unemployment benefits fell last week after a short-term spike coinciding with spring recess and the Easter holiday at the end of April.

Initial claims decreased by 13,000 to 228,000 in the week ended May 3. That was roughly in line with the median forecast in a Bloomberg survey of economists.

Continuing claims, a proxy for the number of people receiving benefits, also fell, to 1.88 million, in the previous week, according to Labor Department data released Thursday.

Jobless claims have remained largely subdued, indicating low levels of layoffs despite increased economic uncertainty amid tariffs and the ripple effects from the Trump administration’s actions to shrink the federal government.

Though tariffs could lead to higher unemployment and inflation, the labor market remains solid, Federal Reserve Chair Jerome Powell said Wednesday after central bankers held interest rates unchanged.

“People are feeling stress and concern. But unemployment hasn’t gone up, job creation is fine, wages are in good shape,” Powell said. “Initial claims for unemployment are not increasing in any kind of impressive way. So, the economy itself is still in solid shape.”

The four-week moving average of new applications, a metric that helps smooth out volatility, was little changed.

Before adjusting for seasonal factors, initial claims fell last week. A decline in New York filings accounted for most of the overall decrease. That state had seen a surge in the previous period around spring recess when some school workers, including bus drivers and janitors, can apply for benefits.

Source: Bloomberg Europe

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Michelle

Economic

Forex

If you want to know what the markets are going to do next, your best bet would be to look at the U.S. President’s Truth.Social account.

From fiery posts targeting Fed Chair Jerome Powell to bold declarations of a coming “GOLDEN AGE,” Trump’s words make everyone turn heads. And crypto remains in the middle of all the action.

Let’s unpack.

“The Golden Age Of America Is Coming”

Donald Trump’s post today might seem to fit in well with his overall optimism, but it ties well into a bigger push: his promise to bring down inflation, cut energy costs, and reset America’s financial direction.

By publicly slamming Powell, he signaled frustration with the Fed’s pace. Notably, this isn’t the first time Trump has lashed out - he previously hinted at a strong desire to “fire” the Fed chair as well.

“Too Late” Jerome Powell is a FOOL, who doesn’t have a clue. Other than that, I like him very much! Oil and Energy way down, almost all costs (groceries and “eggs”) down, virtually NO INFLATION, Tariff Money Pouring Into the U.S. — THE EXACT OPPOSITE OF “TOO LATE!” ENJOY!

The UK Trade Deal: Trump’s Economic Playbook In the Making

In a surprise move, Trump announced a “full and comprehensive” trade deal with the UK - the first since his aggressive tariff strategy rattled markets last month. His post emphasizes history and loyalty, but the timing is tactical. After markets reacted poorly to the blanket 10% tariff rollout, this deal offers reassurance that friendly nations aren’t being iced out entirely.

It’s the kind of pivot that shows Trump knows how to rattle markets and then reel them back in. Phew.

"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. Because of our long time history and allegiance together, it is a great honor to have the United Kingdom as our FIRST announcement. Many other deals, which are in serious stages of negotiation, to follow!," Trump wrote.

Crypto Under Trump: Thriving and Flourishing?!

Since his return to the White House, Trump has taken an unusually pro-crypto stance. He launched his own meme coin, pushed for a national crypto reserve, and signed an executive order to build a clearer regulatory framework.

SEC Chair Paul Atkins is on board too, with a dedicated task force to stop the “regulation by enforcement” chaos.

But it’s not all applause.

Controversy? Of Course. It’s Trump.

Democrats are sounding alarms about conflicts of interest, especially around the $TRUMP coin and its ties to the White House. A dinner contest for top token holders raised eyebrows - and the token’s price. With 80% of the supply linked to the Trump Organization, watchdogs are calling it a “pay-to-play” scheme.

Still, love him or hate him, Trump’s strategy is already reshaping trade, markets, and crypto.

Source: CryptoSlate

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Warren Takunda

Economic

Bank of England policymakers have cut interest rates by a quarter point to 4.25% to cushion the UK economy against the impact of Donald Trump’s trade war.

The widely expected move from the Bank’s monetary policy committee (MPC), its fourth cut since last August, also carried a warning that the UK economy would slow by a further 0.3% over the next two years in addition to dramatic cuts to its forecasts earlier this year.

In a blow to the chancellor, Rachel Reeves, the MPC said a combination of uncertainty surrounding the impact of US trade policy and clouds hanging over the UK economy meant economic growth would be almost stagnant for the rest of the year.

Economic growth “is judged to have slowed and is expected to remain subdued in the near term”, the Bank said.

In a split vote, with two of the nine-member MPC voting for a bigger 0.5 percentage point cut and two voting to keep rates held at 4.5%, the Bank signalled a high degree of caution about the number of interest rate cuts over the rest of the year.

Before the rates announcement, financial markets expected at least two further quarter-point cuts in borrowing costs this year.

However, concern that inflation will persist above a 2% target into 2026 led the National Institute of Economic and Social Research to say this week that the Bank would be limited to just one cut this year.

The Bank’s governor, Andrew Bailey, said: “Inflationary pressures have continued to ease so we have been able to cut rates again today. The past few weeks have shown how unpredictable the global economy can be.

“That’s why we need to stick to a gradual and careful approach to further rate cuts. Ensuring low and stable inflation is our top priority.”

The Bank said its latest quarterly forecasts were based on the current tariff situation and did not take account of a proposed deal between government ministers and the White House, expected to be announced on Thursday.

The UK is in negotiations with Washington about potentially winning an exemption from the 25% import charges that Trump has imposed on foreign cars and steel, in exchange for concessions.

But the chancellor has made clear that even if the UK secures a carve-out, the country would still be affected by the global slowdown expected to result from the trade war.

As well as monitoring the impact of trade policy, the Bank’s rate-setters said Reeves’s £25bn increase in employer national insurance contributions, which came into force last month, would affect employment, wages and prices, though it remained unclear to what extent.

MPC members were more concerned that a spike in inflation this year, largely due to higher council tax and utility bills, would provoke a disproportionate response from consumers already battered by a long period of rising prices.

Inflation is expected to peak in the third quarter at an average 3.5%, down from previous forecasts of 3.7%, largely in response to cheaper goods being redirected to the UK from China and other countries hit by US tariffs.

“World export prices are expected to be materially weaker, particularly in China,” the Bank said, adding: “The current overall impact of trade developments on the UK is therefore likely to be disinflationary than inflationary.”

Despite the lower peak in inflation, households could fear a more persistent rise in prices and focus their spending on essential items, limiting the amount of disposable income spent on big-ticket goods, depressing the economy further.

Inflation is not expected to ease to the MPC’s 2% target until spring 2027.

The Bank’s outlook follows a run of downbeat data on the UK economy, with surveys suggesting consumer and business confidence is weakening.

The Bank said the result would be “subdued” growth in business investment, which is likely to put a brake on hoped-for increases in the UK’s productivity.

Source: Theguardian

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Glendon

Political

Israel launched dozens of airstrikes in south Lebanon on Thursday, in one of its heaviest bombardments of the region since a ceasefire ended last year's war with the Iran-backed Hezbollah.

The Israeli military said it had hit a Hezbollah infrastructure site in the south. There was no immediate comment from Hezbollah, which has previously said that it withdrew all its forces from the south in line with the U.S.-brokered truce.

Lebanon's Health Ministry said at least one person was killed and another eight wounded in the strikes. Thick columns of smoke rose from the hilltops hit in the attacks in the Nabatieh region, some 12 km (8 miles) from the border.

Israel, which inflicted huge damage on Hezbollah during last year's war, has been carrying out airstrikes in south Lebanon on a regular basis since the ceasefire, and has also struck the Hezbollah-controlled southern suburbs of Beirut several times.

The ceasefire terms require that neither Hezbollah nor any other armed group have weapons in areas near the border south of the Litani river, which flows into the Mediterranean some 20 km (12 miles) north of the Israeli border. They require Israel to withdraw troops from the south and that the Lebanese army deploy into the border region.

Lebanon and Israel have accused each other of failing to fully implement the deal. Israel still has troops on five hilltop positions in the south. Rockets have been fired from Lebanon towards Israel twice, though Hezbollah denied any role.

Hezbollah leader Naim Qassem has said the group has no more weapons in south Lebanon, in line with the ceasefire terms.

Lebanese authorities have detained Palestinian militants, including Hamas members, accused of firing rockets towards Israel from Lebanon on two occasions since the ceasefire.

Both attacks prompted Israeli airstrikes on Beirut's southern suburbs.

Israel killed thousands of Hezbollah fighters in the war, destroyed much of its arsenal and eliminated top leaders, including Hassan Nasrallah.

The war spiraled after Hezbollah opened fire at the beginning of the Gaza war, declaring solidarity with its Palestinian ally Hamas.

Source: Reuters

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Gerik

Economic

China–U.S. Trade War

Export Paralysis as U.S.-China Tariffs Collapse Order Books

The latest escalation in the U.S.-China trade war is wreaking havoc on the global supply chain for consumer goods. U.S. President Donald Trump's sweeping tariffs have effectively shut the door on Chinese exports to America, paralyzing a key artery of the world’s trade system. Chinese exporters—from holiday decorations to metal goods—are now facing a tsunami of canceled contracts and unsold inventory. In turn, American firms are finding it nearly impossible to quickly source replacements for China’s deeply entrenched manufacturing capabilities.

Factories across Guangdong, Shenzhen, and Dongguan are reporting mass layoffs, halted production lines, and desperate fire sales. Some companies have resorted to livestreaming their liquidation efforts straight from the ports, slashing prices by up to 80% in an attempt to recover sunk costs. Others, faced with rejected shipments, have no choice but to abandon goods mid-journey or discard them altogether.

Supply Chain Breakdown: A Feedback Loop of Disruption

What’s unfolding is not just a short-term trade disruption but a structural shock to the global consumer goods economy. The tariffs have produced a domino effect across both ends of the Pacific. Chinese suppliers are cash-starved and overloaded with unsellable inventory, while American buyers are trapped between skyrocketing costs and dwindling options.

Importers like Robert Bohrer, previously reliant on Chinese machining services, are facing rising input costs and order fulfillment failures. Although alternatives like India and Taiwan are being explored, the scalability and price competitiveness of China’s mature industrial ecosystem remain unmatched. Products like holiday décor, fireworks, and custom components are either unavailable or prohibitively expensive elsewhere. This underlines a practical interdependence that policy alone cannot unravel quickly.

The situation reflects a clear sequential relationship between tariff hikes, order cancellations, supply shortages, and price inflation. The longer the trade impasse continues, the deeper these supply disruptions will embed into retail cycles, especially as the U.S. approaches its back-to-school and holiday shopping periods.

Economic Pain Beyond China’s Borders

The shock is not confined to China. U.S. retailers, including e-commerce giants like Amazon, are halting purchases altogether, unsure of the real landed cost of goods amid volatile tariffs. Companies like Mindscope Products and MGA Entertainment are freezing future production runs, anticipating both demand uncertainty and cost pressure. For SMEs, capital once locked in deposits or tooling has become a sunk cost.

Although larger firms may hedge or diversify, small and mid-sized exporters are less resilient. One such case is King Tree Handicraft, which reduced its workforce by 80% due to near-total evaporation of American orders. Clothing manufacturers like Dongguan Bolin are turning to short-form video platforms like Douyin to clear stock at cost, if not below.

Even where partial payments are being honored—as seen in George Balanchi’s continued support of his supplier Alan Chau—the underlying reality is grim. Chau’s revenue has plunged to 15% of the previous year, and his staff count has shrunk from 200 to just 20.

Implications for Global Trade and Inflation

Data from the International Trade Centre shows that up to 97% of fireworks and 87% of holiday décor imported into the U.S. comes from China, illustrating the extent of product-specific dependence. While reshoring and diversification are goals, their realization will be slow, and often costlier.

The substitution gap highlights a key point: the issue is not just about finding new suppliers, but about replicating complex, low-cost, large-scale supply chains—something that few other nations are currently positioned to offer. The resulting mismatch in supply and demand will likely manifest in retail shortages and higher consumer prices in the U.S., especially for discretionary seasonal goods.

As Trump's administration pushes forward with a protectionist agenda, the tariffs are not only disrupting trade volumes but also reshaping business decisions. The cost of political reordering, however, is falling disproportionately on private enterprises, workers, and consumers on both sides.

While the Trump administration frames this phase as a necessary “transition,” the evidence suggests a more complex fallout. Businesses in both nations are navigating a landscape defined by policy uncertainty, logistical constraints, and squeezed margins. Without a clear resolution or phased rollback, the risk of long-term structural damage to trade flows—and a loss of trust among global partners—remains high.

Source: WSJ

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Michelle

Cryptocurrency

Bitcoin Price Nears Record High Amid Explosive Weekly Rally

Bitcoin (BTC) is back in the spotlight, roaring past $99,800 and inching toward a new all-time high. The crypto market is heating up this week as Bitcoin’s price action defies expectations, fueled by a wave of bullish developments including global trade negotiations, pro-crypto regulation, and renewed institutional demand.

What's Driving Bitcoin's Surge?

🔹 US-China Trade Talks in Switzerland

Bitcoin’s momentum picked up after the U.S. and China announced renewed trade negotiations set to take place in Switzerland. Markets interpreted this as a sign of geopolitical easing, pushing risk-on assets like BTC higher. Investors are hopeful that a breakthrough deal could restore global market confidence—benefitting Bitcoin as a hedge and alternative store of value.

🔹 UK Trade Agreement Rumours

Speculation is also swirling around a possible high-profile trade agreement between the United States and the United Kingdom. Though unconfirmed, even the whispers of such a deal have added fuel to Bitcoin’s upward momentum, reinforcing its role as a global macro asset responsive to economic shifts.

Arizona Bill and State-Level Adoption Boost Investor Sentiment

The state of Arizona has introduced legislation allowing the creation of a crypto reserve fund—joining New Hampshire, which already passed similar laws earlier this year. This move is a major signal to investors that U.S. state-level governments are warming up to crypto, potentially laying the groundwork for broader adoption across the public sector.

Institutional Interest Soars: ETFs and Whale Accumulation

Bitcoin ETFs are once again seeing massive inflows, with over $1.3 billion in net investments recorded this month alone. Major institutions and funds are re-entering the market ahead of a potential breakout. On-chain data also confirms an increase in whale accumulation, with BTC being pulled off exchanges and held in cold storage—typically a bullish signal.

BTC Price Prediction: New BTC ATH Incoming?

BTC's current all-time high stands at $109K, recorded in January 2025. With today’s candle tapping $100,500 on some exchanges before a slight correction, bulls are clearly in control. Technical analysts are eyeing the psychological resistance of $100K, and if broken convincingly, BTC could enter price discovery with targets set at $110K–$120K in the near term.

BTC Price May 2025: Is $100K Just the Beginning?

Whether or not BTC officially breaks its all-time high today, one thing is certain—the sentiment has shifted dramatically. Bitcoin is once again the star of global finance, attracting institutional flows, mainstream media attention, and retail FOMO. As the perfect storm of macroeconomic drivers converges, BTC may not just be aiming for $100K—it could be preparing for much more.

Source: CryptoSlate

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Gerik

Economic

Political

EU Escalates Trade Strategy Amid Stalled U.S. Negotiations

In response to stalled negotiations and new U.S. tariffs ranging from 10% to 25% on nearly all EU goods, the European Commission is reportedly finalizing a tariff list targeting major U.S. exports. This includes industrial products, agricultural goods, and prominently, Boeing aircraft and American-made vehicles. The move is seen as both a countermeasure and a signal of strategic parity in the face of rising protectionism.

Boeing, the largest U.S. exporter by value, could see its aircraft slapped with additional tariffs. The EU argues this would "level the playing field" with Airbus, the European aerospace manufacturer currently subjected to U.S. import duties.

Boeing and U.S. Automakers Face EU Market Backlash

U.S. aerospace exports to Europe totaled over $35 billion in 2023, with many European carriers—such as Air France-KLM and Lufthansa—among Boeing’s key clients. Yet, in light of potential new EU tariffs, several airlines have threatened to cancel or delay Boeing orders. Ryanair, Boeing’s largest European customer, said it could walk away from a $33 billion deal if costs spike.

Automobiles are also at the heart of the EU’s potential retaliation. The U.S. imported $52.3 billion worth of new cars from the EU in 2023 but only exported $11.3 billion, mostly SUVs built in the U.S. by German automakers. A 25% tariff on U.S. vehicle exports would strike a critical blow, especially for high-value models shipped to Europe.

Negotiation Gridlock Raises Specter of Trade War

Talks between EU officials and the Trump administration have reportedly reached a deadlock. Trump’s blanket 20% tariff (currently paused at 10% until July) has already triggered discontent across Europe. According to EU estimates, the total value of its exports facing potential tariffs could reach €549 billion—about 97% of its exports to the U.S.

Airbus CEO Guillaume Faury recently endorsed retaliatory measures, stating: “If there’s no positive outcome, we expect equivalent tariffs to be imposed on U.S. aircraft.” Meanwhile, EU trade officials are preparing a new policy document to revive talks, emphasizing tariff and non-tariff reductions and increased investment access.

Strategic Inflection Point for Transatlantic Trade

This latest episode signals a critical juncture in transatlantic trade relations. The EU is walking a fine line between defending its economic interests and avoiding a full-blown trade war with Washington. As both sides dig in—Trump insisting “we don’t need deals, they do,” and the EU warning of “reciprocal measures”—a tit-for-tat escalation now seems increasingly likely.

If enacted, these tariffs could not only revive a Boeing-Airbus-style trade dispute from the Trump era but also disrupt global supply chains at a time of heightened geopolitical instability. The global trading system, already strained by U.S.-China tensions, may soon have to weather another major front: U.S.-EU decoupling.