US, UK Make Headway on Trade Pact, British Official Says

Economic

China–U.S. Trade War

Summary:

Bessent told lawmakers earlier on Tuesday the Trump administration could announce trade agreements with some of the largest U.S. trading partners as early as this week.

The U.S. and Britain have made good progress in negotiating a trade deal that would likely include lower tariff quotas on steel and autos, a UK official said on Tuesday, but the timing of a deal remains in doubt amid conflicting signals from U.S. Treasury Secretary Scott Bessent and President Donald Trump.

Bessent told lawmakers earlier on Tuesday the Trump administration could announce trade agreements with some of the largest U.S. trading partners as early as this week. But later Trump told reporters before a meeting with Canadian Prime Minister Mark Carney that he and top administration officials will review potential trade deals over the next two weeks to decide which ones to accept.

Since Trump announced a 90-day hiatus from stiff "reciprocal" tariffs he had aimed at dozens of trading partners, he and his top officials have engaged in a flurry of meetings with trading partners to secure deals before the pause ends in early July.

U.S. and British officials engaged in "good discussions" remotely over the weekend and in person this week on a range of issues, but it was too soon to say when a deal could be finalized, a UK official said.

"There's a landing zone," the official said. "We've had good discussions this week."

The talks, led on the U.S. side by officials from the U.S. Trade Representative's office and the Commerce Department, were expected to result in lower-tariff quotas for steel and autos, with talks still continuing about the UK digital services tax.

A second source familiar with the talks said the situation was encouraging, but still fluid.

Britain was not expected to change its phytosanitary standards which have precluded the import of some U.S. meat products, but U.S. officials understood there was little demand for those products in Britain at this point. A second source familiar with the talks said the situation was still fluid.

A UK government spokesperson said talks on an economic deal between the U.S. and the UK were ongoing, but declined to set any timelines for agreement. "We will continue to take a calm and steady approach to talks and aim to find a resolution to help ease the pressure on UK businesses and consumers," they said.

Source: Reuters

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Patricia Franklin

Political

India early on Wednesday said its armed forces had conducted strikes against Pakistan and what it calls Pakistan-occupied Jammu and Kashmir, targeting "terrorist infrastructure."

"Our actions have been focused, measured and non-escalatory in nature. No Pakistani military facilities have been targeted," the country's Ministry of Defence said.

The operation follows a militant attack in Pahalgam, Jammu and Kashmir, in which 26 people were killed last month.

"We are living up to the commitment that those responsible for this attack will be held accountable," the statement said, while adding that India had shown "considerable restraint in selection of targets and method of execution."

The Defence Ministry said it will hold a detailed briefing on the strikes, labeled "Operation Sindoor," later in the day.

"Pakistan has every right to give a robust response to this act of war imposed by India, and a strong response is indeed being given," Pakistan's Prime Minister Shehbaz Sharif said, according to AP.

Source: CNBC

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Manuel

China–U.S. Trade War

Economic

Top U.S. officials are set to meet with a high-level Chinese delegation this weekend in Switzerland, the administration announced Tuesday, in the first major talks between the two nations since President Donald Trump sparked a trade war with stiff tariffs on imports.

Treasury Secretary Scott Bessent and trade representative Jamieson Greer will meet with their counterparts in Geneva in the most-senior known conversations between the two countries in months. It comes amid growing U.S. market worry over the impact of the tariffs on the prices and supply of consumer goods.

Trump had claimed previously that the U.S. and China were holding negotiations on lowering tariffs, which Beijing has denied, saying Trump must first lower his stiff tariffs. Bessent earlier Tuesday testified to a House committee that the U.S. and China “have not engaged in negotiations” but “as early as this week,” the U.S. will be announcing trade deals with some of the U.S.′ largest trading partners.

The Chinese Commerce Ministry on Tuesday confirmed the meeting between the vice premier and Bessent in Switzerland.

“The Chinese side carefully evaluated the information from the U.S. side and decided to agree to have contact with the U.S. side after fully considering global expectations, Chinese interests and calls from U.S. businesses and consumers,” said a ministry spokesperson.

Bessent and Greer also plan to meet with Swiss President Karin Keller-Sutter, according to readouts from their respective offices.

Both Greer and Bessent have had communications with their counterparts prior to the start of the trade war.

Greer told Fox News Channel last month that he spoke with his Chinese counterpart for over an hour before the trade war started. “I thought it was constructive,” he said, adding, “this is not a plan just to encircle China. It’s a plan to fix the American economy, to have a greater share of manufacturing as GDP, to have real wages go up, to be producing things instead of having an economy that’s financed by the government.”

And Bessent in February spoke with Chinese Vice Premier He Lifeng “to exchange views on the bilateral economic relationship,” according to a Treasury news release.

Source: AP

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Manuel

Cryptocurrency

Bitcoin (BTC) tightened its grip on the crypto market on Tuesday, with dominance surging to fresh four-year high as crypto traders rotated into the market’s anchor asset ahead of tomorrow's key Federal Reserve policy meeting.

BTC held steady around the $94,000-$95,000 area, up a modest 0.4% over the past 24 hours and extending a tight-range trading pattern that has persisted since the weekend.

Meanwhile, the broad-market CoinDesk 20 Index slipped 0.7% lower, with Ethereum's ether (ETH), and native tokens of Sui (SUI), Aptos (APT) and Polygon (POL) dragging the benchmark lower. Bitcoin Dominance Soars Ahead of FOMC as Volatility Burst Looms_1

Bitcoin Dominance Soars Ahead of FOMC as Volatility Burst Looms_1

A check on traditional markets showed stocks booking back-to-back losses, with the S&P 500 and the tech-heavy Nasdaq closing 0.7%-0.8% down, once again underperforming BTC.

Despite the lack of major price action, focus has increasingly turned to bitcoin’s growing share of the overall crypto market: The so-called Bitcoin Dominance metric surpassed 65%, its highest reading since 2021 January, according to TradingView data, signaling capital consolidating into the asset perceived as the most resilient in the face of macroeconomic uncertainty. Bitcoin Dominance Soars Ahead of FOMC as Volatility Burst Looms_2

Bitcoin Dominance Soars Ahead of FOMC as Volatility Burst Looms_2

Joel Kruger, market strategist at LMAX Group, described the current landscape as one of pause and anticipation. "The cryptocurrency market has remained largely stagnant since the weekly open, with prices settling into a holding pattern as investors await a pivotal catalyst," he noted. "This impetus may arise from traditional markets, driven by updates on tariff-related economic impacts or the Federal Reserve’s anticipated FOMC decision on May 7."

The Federal Reserve is widely expected to hold interest rates steady, according to the CME FedWatch Tool, but traders are on edge for any shift in Fed Chair Jerome Powell's tone that could impact risk appetite.

Bitcoin volatility burst on the horizon

With bitcoin's recent price action being extremely flat, the upcoming FOMC meeting "is rigged to cause significant volatility," said Vetle Lunde, head of research at K33. He noted in a Tuesday report that BTC's short term volatility is "abnormally compressed," with the 7-day average dropping to the lowest level last week in 563 days.

"Such low volatility regimes in BTC tend to be short-lived," Lunde said. "Violent volatility outbursts typically follow this form of stability once prices start to move, as leveraged trades are unwound and traders are reactivated into the market."

He said that a significant cascade lower is unlikely, as funding rates for perpetual swaps are consistently negative. Similar periods historically offered good buying opportunities for medium and long-term investors, Lunde added, favoring "aggressive spot exposure" ahead.

Source: Coindesk

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Manuel

Political

Commodity

Multiple loud explosions were heard in several places in Pakistan and Pakistani Kashmir on Wednesday as India said it had attacked "terrorist infrastructure" in nine sites and Pakistan vowed to respond to the attacks.

After the explosions, power was blacked out in Muzaffarabad, the capital of Pakistani Kashmir, witnesses said. It was not immediately clear what the explosions were.

"A little while ago, the Indian armed forces launched ‘OPERATION SINDOOR’, hitting terrorist infrastructure in Pakistan and Pakistan-occupied Jammu and Kashmir from where terrorist attacks against India have been planned and directed," the Indian government said in a statement.

"Our actions have been focused, measured and non-escalatory in nature. No Pakistani military facilities have been targeted. India has demonstrated considerable restraint in selection of targets and method of execution," it said.

A spokesman for Pakistan's military told broadcaster ARY that India had attacked Pakistan with missiles in three places and that Pakistan would respond.

The development comes amid heightened tensions between the nuclear-armed neighbours in the aftermath of an attack on Hindu tourists in Indian Kashmir last month.

India blamed Pakistan for the violence in which 26 men were killed and vowed to respond. Pakistan denied that it had anything to do with the killings and said that it had intelligence that India was planning to attack.

Source: Reuters

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Manuel

Political

Canadian Prime Minister Mark Carney visited the White House on Tuesday for his first talks with Donald Trump and bluntly told the U.S. president that Canada would never be for sale.

Carney won the April 28 election on a promise to stand up to Trump, who has imposed tariffs on some Canadian products and often muses about annexing the country.

Although Carney has repeatedly called these actions a betrayal, the two leaders showed little animosity during an opening session at the Oval Office where both men praised each other in front of reporters.

Trump said the two sides would not be discussing Canada becoming part of the United States, but said it would be "a wonderful marriage."

Carney put down the annexation idea firmly.

"It's not for sale, it won't be for sale - ever," he said.

"Never say never, never say never," Trump said.

Trump, whose tariff policy has rattled world markets, had said he and Carney would discuss "tough points," an allusion to the president's belief that the United States can do without Canadian products, a point that he made at length during the Oval Office conversation.

The meeting never appeared at risk of degenerating into the acrimonious exchanges that marked the Oval Office visit of Ukrainian President Volodymyr Zelenskiy in February. That encounter has served as a warning for other world leaders about the delicate dance they face in negotiating with Trump.

"This is not going to be like we had another little blowup with somebody else," Trump said.

"Regardless of anything, we're going to be friends with Canada. Canada is a very special place to me," he said, adding that the United States would always protect Canada.

Carney's Liberal Party promised voters it would create a new bilateral economic and security relationship with Washington and diversify an economy heavily dependent on exports to the U.S.

Ahead of the visit, Carney played down expectations of a breakthrough in the talks. Indeed, when Trump was asked if Carney could say anything to persuade him to lift tariffs, he replied, "No."

Greg MacEachern, principal at lobby group KAN Strategies and a former adviser to the Liberal government in the early 2000s, gave Carney high marks for his handling of Trump.

“I think Prime Minister Carney did what he needed to do, which was push back in a respectful Canadian way where he could without elevating the temperature and risking a rant that other world leaders have had to endure," he said.

A senior Canadian government official said Carney's private lunch with Trump after the Oval Office meeting was constructive. Carney told Trump the tariffs did not make sense, but not in a confrontational way, the official said.

TRADE DEAL IN FOCUS

Carney's comments about a new economic relationship had cast into doubt the future of the U.S.-Mexico-Canada Agreement, which Trump signed during his first White House term but has distanced himself from. It is due to be reviewed in 2026.

Carney steered clear of suggesting a major revamp, saying only that some things about the pact needed to be changed, while Trump described the agreement as fine and great for all countries.

Trump had famously bad relations with Justin Trudeau, Carney's predecessor, and during the meeting criticized him and former Foreign Minister Chrystia Freeland for how they negotiated the USMCA.

In a Truth Social Post just before the leaders met, Trump reiterated complaints about the trading relationship.

"We don't need their cars, we don't need their energy, we don't need their lumber, we don't need anything they have, other than their friendship," Trump wrote.

During the meeting, Trump reiterated complaints about what he called the huge U.S. deficit with Canada. Canada's merchandise trade surplus was C$102.3 billion ($74.25 billion) in 2024, due mostly to American imports of Canadian oil.

Carney, a 60-year-old ex-central banker with no previous political experience, was elected Liberal leader in March to replace Trudeau.

Canada is the U.S.' second-largest individual trading partner after Mexico, and the largest export market for U.S. goods. More than $760 billion in goods flowed between the two countries last year.

Ahead of the meeting, the U.S. Commerce Department reported on Tuesday Canada's goods trade surplus with the U.S. narrowed to a five-month low in March, the month when Trump's hefty tariffs on imported steel and aluminum took effect. Canadian exports to the U.S. plunged by $3.7 billion, the second-largest drop on record.

Trump in March imposed a 25% tariff on all steel and aluminum imports and then slapped another 25% tariff on cars and parts that did not comply with a North American free trade agreement.

On Sunday, Trump said he would put a 100% tariff on all movies produced outside the U.S., without giving details, in a potential blow to Canada's film industry.

Source: Reuters

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Thomas

Economic

Commodity

Responding to the query, Varga told Rigzone, “after Houthi rebels launched an attack on Israel’s Ben-Gurion airport, Israeli planes struck Houthi targets in Yemen leading to a jump in geopolitical risk premium, hence the rally”.

In a video posted on the Associated Press website on May 5, Yahya Saree, who the video describes as the “Houthi military spokesman”, states, “the Yemeni Armed Forces announce that they will work to impose a comprehensive aerial blockade on the Israeli enemy by repeatedly targeting airports, foremost among them Lod airport, named by Israel as Ben-Gurion airport”. The video included subtitles. Saree describes himself on his X page as the “spokesperson of the Yemeni Armed Forces”.

In a statement posted on its X page on May 6, Israel Defense Forces (IDF) said IDF fighter jets “struck and dismantled” Houthi infrastructure at the “main airport in Sana’a”. The IDF added in the statement that “several central power plants were struck in, and surrounding, the Sana’a area”.

A statement posted on the IDF’s X page on May 5 announced that IAF fighter jets struck Houthi targets along the Yemen coastline.

In her response to Rigzone’s question, Babin said, “crude is up today largely because the market was very short heading into the OPEC meeting - not just on flat price, but particularly through put spreads”.

“While the 400,000 barrel per day increase from OPEC was widely expected, some participants were positioning for a more aggressive signal - specifically, guidance toward a full unwind of the 2.2 million barrel per day cut by October, which didn’t materialize,” Babin added.

“The relatively muted outcome triggered a fair amount of short covering, especially as the market had been leaning into the idea that this meeting could push WTI below $55 and establish a new, lower range,” Babin went on to state.

Babin told Rigzone that, “also supporting prices today is speculation that China may announce additional stimulus on Wednesday, following the unusual move by the government to schedule a press conference - raising hopes for further policy support”.

Babin went on to add that “commentary from U.S. producers may also be helping”.

“Lower capex and commentary that U.S. shale may be peaking (FANG) [Diamondback Energy] - this obviously does not impact supply immediately but maybe providing more confidence there is a floor in crude as U.S. production slows,” Babin added.

Rigzone has contacted OPEC, the State Council of the People's Republic of China, the American Petroleum Institute (API), and Diamondback Energy for comment on Babin’s statement. At the time of writing, none of the above have responded to Rigzone.