Trump demands the EU to cut tariffs, analysis of short-term trends of spot gold, silver, crude oil and foreign exchange on May 23

Global Market Review

1. European and American market conditions

The three major U.S. stock index futures fell. Dow futures fell 0.23%, S&P 500 futures fell 0.23%, and Nasdaq futures fell 0.30%. The German DAX index fell 0.06%, the UK FTSE 100 index fell 0.04%, the French CAC40 index fell 0.63%, and the European Stoke 50 index rose 0.43%.

2. Market news interpretation

Trump demands that the EU cut tariffs, otherwise it will face additional tariffs

⑴ According to the Financial Times, U.S. President Trump's trade negotiator is pushing the EU to unilaterally reduce tariffs on US goods, otherwise the EU will not be able to make progress in negotiations to avoid an additional 20% "reciprocal" tariffs. ⑵ U.S. Trade Representative Greer plans to inform EU Trade xmserving.commissioner Sefcovic on Friday that the "explanatory documents" of negotiations shared by Brussels failed to meet U.S. expectations. ⑶ European xmserving.commission trade spokesman Gill said that the EU's priority is to reach a fair and balanced agreement with the United States to match the huge trade and investment relations between the two sides. ⑷ The EU has been actively promoting negotiations with the United States, and Sefcovic will meet with Greer on Friday. ⑸ The EU had previously proposed that both sides xmserving.completely cancel tariffs on industrial products to deal with the United States' 25% tariff on EU automobiles, steel and aluminum in March and the 20% tariff on other xmserving.commodities in April.

Trump tariff threat triggers adjustments to ECB policy expectations

⑴TrumpIt is proposed to impose a 50% tariff on EU goods from June 1, triggering the market to reprice the European Central Bank policy. ⑵The next European Central Bank policy meeting will be held on June 5. ⑶ The market expects the ECB rate cut to be raised from 54 basis points to 65 basis points by the end of the year, reflecting the increased expectations for loose policies. ⑷The market generally expects that interest rate cuts in June are no longer suspense, but the threat of tariffs may force the ECB to cut interest rates again in July. ⑸ The current market expects a 38% chance of interest rate cuts in July.

Greece plans to auction six-month government bonds on May 28

⑴ Greece plans to auction six-month government bonds worth 500 million euros (about 567 million US dollars) on May 28, the Greek Debt Authority (PDMA) said on Friday. ⑵The last time the institution auctioned six-month treasury bonds was in April, with a yield of 1.90%. ⑶The delivery date of the new treasury bonds for this auction is May 30. ⑷ Only junior traders can participate in the auction and no xmserving.commission is charged, PDMA said. ⑸ During the auction period, junior traders can submit non-competitive bids, up to an additional 20% of the auction amount.

The cost of Japanese government bond default insurance has risen

⑴ As concerns about rising Japanese government bond yields intensify, and stronger-than-expected inflation data raise the possibility of rising interest rates in Japan, the cost of providing protection for Japanese government debt defaults has risen. ⑵ Rostro chief market analyst Joshua Mahony pointed out that Japan's overnight inflation data has sparked concerns about a new round of rising bond yields, with both 30-year and 40-year Treasury bond yields hitting record highs this week. ⑶ S&P Global Market Finance Data shows that the 5-year Japanese credit default swap rose by 1 basis point to 23 basis points, the highest level in six weeks.

The cost of default insurance for euro-denominated credit bonds has decreased

⑴ The cost of providing default insurance for euro-denominated credit bonds has decreased, mainly due to the improvement in recent macroeconomic data. ⑵ The U.S. Purchasing Managers Index (PMI) released on Thursday and the UK retail sales and Germany GDP data released on Friday were both better than expected, driving market sentiment. ⑶ S&P Global Market Finance Data shows that the iTraxxEurope Crossover index, which tracks euro junk bond credit default swaps, fell by 1 basis point to 302 basis points.

Turkey's overnight interest rate fell to 46%, paving the way for restarting easing

⑴Turkey's overnight interest rate fell to 46% on Friday, after 49% in the previous weeks, a adjustment marked a key liquidity operation by the Turkish central bank before restarting the monetary easing cycle. ⑵ Previously, the Turkish central bank took a series of tightening measures in March and April, including raising the overnight loan interest rate cap to 49% in response to the market shock caused by the arrest of the mayor of Istanbul. ⑶ On Thursday, the Turkish central bank said in its quarterly inflation report that future policy adjustments will be based on data, but did not provide a specific timetable. ⑷ The central bank maintains inflation expectations at the end of the year24% remained unchanged, noting that previous austerity measures were implemented in a wider cycle of interest rate cuts, so their impact was more significant. ⑸ Bankers said that reducing overnight market interest rates is a necessary step for the Turkish central bank to restart its easing cycle, which began in December but was suspended for two months due to investors' concerns about Türkiye's political development. ⑹ Traders said they will closely monitor whether overnight loan rates will continue to remain around 46% in the xmserving.coming days for further policy signals. ⑺The next two interest rate decisions of the Turkish central bank were on June 19 and July 24 respectively. ⑻In April, the Turkish central bank unexpectedly raised key interest rates to 46%, a move that reversed the previous easing cycle and stabilized Turkey's asset prices after the arrest of the mayor of Istanbul. ⑼ As part of the policy adjustment, the Turkish central bank also sold about US$57 billion in foreign exchange reserves to alleviate outflows in areas such as the bond market. ⑽Recently, the Turkish central bank has begun reverse operations, purchasing about US$10 billion in foreign exchange in the past two weeks. Central Bank Governor Fatih Karahan said on Thursday that measures since March have effectively curbed a serious deterioration in inflation expectations.

The benchmark price of Middle East crude oil fell, and the market expected OPEC+ to increase production

⑴ The benchmark price of Middle East crude oil, Oman, Dubai and Murban crude oil prices fell for the second consecutive trading day on Friday, as the market expected OPEC+ to increase production again in July. ⑵ Expectations of increased supply also put pressure on oil prices, with Brent and WTI crude prices falling for the fourth consecutive day on Friday, expected to see their first weekly decline in three weeks. ⑶ Caspian Pipeline Alliance (CPC) said that the Cropokinskaya pump station, which was damaged in February, has resumed operations. ⑷ As the UAE increases production after accelerating OPEC+ and xmserving.competes with US shale oil, the spot premium of Murban crude oil has dropped to a six-month low. ⑸ The operating license of Chevron in Venezuela will expire as planned on May 27, and US Secretary of State Rubio said on his personal X account. ⑹ Kazakhstan’s energy minister Erlan Akkenov said that due to the expansion of the Tengzi oil field led by Chevron, Kazakhstan’s crude oil production in 2025 may exceed the original planned 96.2 million tons, despite pressure from OPEC+.

The outlook for UK retail sales data may be unstable

⑴ Kathleen Brooks, head of research at XTB, said that UK retail sales data may be uneven in the xmserving.coming months. ⑵In April, retail sales in the UK increased by 1.2% month-on-month, exceeding the 0.3% expected by economists in the Wall Street Journal survey. ⑶Brooks believes that the strong performance of retail sales may be that British consumers buy goods in advance to avoid future tariffs and price increases. ⑷ She pointed out that this sales level may not be maintained in the future, although this may bring some boost to the UK economy in the second quarter.

The unemployment rate in the euro zone is low but wage growth slows down, and the European Central Bank's room for interest rate cuts has increased

⑴2The eurozone unemployment rate remained at a historical low in the first quarter of 2025, but wage growth slowed significantly. ⑵ Data released by the European Central Bank on Friday showed that wages rose 2.38% year-on-year in the first quarter, lower than the 4.12% increase in the fourth quarter of last year, and the slowdown exceeded expectations. ⑶ The ECB cut key interest rates for the seventh time since June 2024 last month. ⑷ Investors expect the ECB to reduce borrowing costs again at its meeting earlier next month, and the slowdown in wage growth provides more room for interest rate cuts.

The UK revoked the official certification of some producer price data

⑴ On May 23, 2025, the UK statistical agency revoked the official certification of producer price data released since November 2020, because of the discovery of calculation errors. ⑵ The Office for National Statistics (ONS) suspended the release of new producer price data in March because it found that there was an error in the encoding of the "chain link" method in its data production system. ⑶The Office of Statistics and Supervision agrees to ONS's request to remove the "certified official status" of relevant data, and awaits possible revisions. ⑷ This adjustment involves the producer price index, including the export price index, the import price index and the service producer price index, but the consumer price inflation data was not affected.

Bond Guardians Swap Spread Bets that endanger hedge funds' love

Long-term bond yields soar, again likely to impact a transaction that hedge funds have flocked in, that is, betting that U.S. Treasuries will outperform interest rate swaps. The deal is now at risk of collapse as U.S. borrowing costs soar, weakening returns on U.S. bonds against interest rate swaps. This is a problem for hedge funds and other investors who have deployed such deals in recent weeks and has also challenged the advice of a number of Wall Street strategists.

3. Trends of major currency pairs in the New York Stock Exchange before the market

Euro/USD: As of 20:21 Beijing time, the euro/USD rose, now at 1.1310, an increase of 0.27%. Before the New York Stock Exchange, the price of (Euro-USD) rose in recent intraday trading, supported by positive signals on (RSI), and was subject to continued positive pressure due to its trading above the EAM50, which occurred in the trading of the pair, while having a slight bullish tendency on a short-term basis.

GBP/USD: As of 20:21 Beijing time, GBP/USD has risen, now at 1.3486, an increase of 0.52%. Before the New York Stock Exchange, the (GBPUSD) price rose on the last trading day, ready to attack the stubborn key resistance level of 1.3440, with a major bullish trend dominating in the short term and trading along a slash line. After reaching the oversold level, positive pressure continues due to its trading above the EMA50, in addition to the positive signal on the (RSI).

Spot gold: As of 20:21 Beijing time, spot gold rose, now at 3350.83, up 1.72%. Before the New York market, the (gold) price rose in the recent intraday trading, which had previously stabilized above $3,300. After reaching the oversold level, with the emergence of positive signals on (RSI), the gold price traded along a small bullish trend line on a short-term basis.

Spot silver: As of 20:21 Beijing time, spot silver rose, now at 33.048, up 0.08%. Before the New York Stock Exchange, the price of (silver) rose steadily in recent intraday trading. It was affected by its EMA50 support, which provided positive motivation to help it rise. After reaching the oversold level, supported by (RSI) positive signals, bullish trends dominate in the short-term trend.

Crude Oil Market: As of 20:21 Beijing time, U.S. oil fell and is now at 60.670, a drop of 0.87%. Before the New York Stock Exchange, the price of (crude oil) fluctuated in narrow side trading, and the price managed to get rid of the (RSI) oversold condition affected by its short-term exit from the bullish channel range. Negative pressure continued to exist as its trading is below EMA50.

4. Institutional View

ANZ: The RBI may cut interest rates three more times in 2025

The RBI research team said in a report that the RBI may cut interest rates three more times by the end of 2025. They wrote that given that inflation is not a problem at present, the current sluggish economic growth may mean that the RBI will need to continue to relax monetary policy. They added that the RBI may not be allowed if the GDP data for January-March is lower than expected. Not to lower the current fiscal year's growth forecast of 6.5%.

Citi: A higher maturity premium is needed to stabilize U.S. Treasury bonds

Citi said in a global asset allocation report that to stabilize U.S. Treasury bonds, the market may need a higher maturity premium. The so-called maturity premium refers to the additional benefits required by investors to hold long-term bonds relative to holding short-term bonds. "Even if the fiscal situation under the new U.S. budget is not as severe as more pessimistic observers think, the yield curve may remain steep. "In view of the possible rise in year-on-year U.S. inflation, Citi maintains its low-level stance on U.S. Treasury bonds. However, the bank said it is difficult to predict when U.S. Treasury bonds may be sold. The yield curve is steeper, i.e., short-term and long-termThe widening of bond yield differences is also a global phenomenon, not just driven by trends in the U.S. Treasury market.

The above content is all about "[XM Foreign Exchange]: Trump asks the EU to cut tariffs, and the short-term trend analysis of spot gold, silver, crude oil and foreign exchange on May 23" is carefully xmserving.compiled and edited by the editor of XM Foreign Exchange. I hope it will be helpful to your trading! Thanks for the support!

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