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What began as early trade optimism yesterday – triggered by the US Court of International Trade deeming Trump’s tariffs illegal – turned out to be too good to be true. Things quickly got messy when Trump appealed the decision, prompting the US Court of Appeals to pause the ruling in order to review arguments from both sides. Meanwhile, a separate federal court issued a similar but more limited decision on the tariffs. As a result, the initial ruling that had cancelled the tariffs is now effectively on hold. So it’s under this heavy cloud of uncertainty that the early risk-on rally yesterday fizzled out. Ongoing uncertainty around US fiscal and trade policy continues to weigh on the US dollar. Meanwhile, the economic impact of aggressive Trump policies – both on trade and government offices – is starting to show in the data. Figures released yesterday confirmed a contraction in US GDP in Q1, with spending growth more than halving and the trade deficit ballooning as firms rushed to import goods ahead of possible tariffs. Inventories rose. A key price gauge showed a sharp reversal in inflation pressures. Today’s PCE data – the Fed’s preferred inflation gauge – could surprise to the downside or meet expectations, but the full effects of the ‘tariff tsunami’ likely haven’t reached shore yet. The data will need to be taken with a pinch of salt. In energy, US crude wavers around the $60pb before OPEC confirms a third big output hike this weekend. Listen to find out more!

Nvidia below past earnings despite the Chinese hit and a US court deemed Trump’s tariffs illegal. The markets are up this morning, the US dollar gains, gold and franc retreat. US and European leaders are scheduled to speak today, but the court ruling may shift the tone of those talks. At this point, it’s unclear whether trade negotiations are even necessary anymore. European markets are closed today due to Ascension Day, so while futures are trading higher, the thin volumes could exaggerate market moves – and it looks like the good news will get the support. Listen to find out more!

Market mood is astonishingly great this week on the back of a global decline in yields, triggered by the Japanese government’s will to adjust the size of its bond issuance amid a selloff in long-maturity bonds sent 30- to 40-year JGB yields to all-time highs. The rally in Japanese bonds helped pull the US 30-year yield below the 5% mark. And optimism from falling sovereign yields was compounded by better-than-expected US durable goods orders in April and a surprise rebound in consumer confidence in May. The Conference Board’s gauge posted the biggest monthly gain in four years and exceeded all estimates. But that confidence gauge doesn’t capture the latest 50% tariff threats on American imports of European products, the uncertain and unilaterally shifting deadlines, or warnings from companies like Walmart that price hikes from tariffs will impact a broad range of goods. And trade risks and swelling government debt worries remain. So to me, the 2% rally in the S&P 500 seems exaggerated. Futures are slightly in the red today, PDD announced disappointing results, while Nvidia is due to reveal its own quarterly earnings after the bell! Listen to find out more!

The week started on a slow but hopeful note for European markets, with expectations that Trump’s latest 50% tariff threat on European imports would accelerate negotiations but that market optimism fascinates me. European markets are flirting with ATH levels, US futures were also up yesterday—but the reality is that with every piece of incoming information, the collective welfare deteriorates. Still, moving forward, fresh deals between the US and major trade partners could further boost market sentiment and send indices on both sides of the Atlantic to fresh ATH levels—but whether that optimism lasts is yet to be seen. The economic data—especially the inflation metrics—will be crucial. The US dollar is better bid this morning, but remains under pressure from trade tensions and the worsening perception of the US’s ballooning debt. The debt issues are also making the headlines in Japan. The 30- and 40-year JGB yields have recently spiked to the highest levels on record, and the 10-year yield hit the highest since 2009. Listen to find out more!

Trade headlines are accelerating again. Markets ended last week on a sour note after President Donald Trump threatened to impose a 50% tariff on European imports by June 1st, prompting a sharp selloff in major US and European indices. He also warned that Apple could face a 25% tariff unless it relocates its production to the US. Yet, sentiment has shifted sharply this morning. The Nikkei 225 rose more than 1.7%, buoyed by hopes that the US and Japan are progressing toward a trade deal. European and US futures rebounded on news that the 50% EU tariff threat will be postponed to June 9th... Selling pressure on the US dollar continues, driven by renewed trade frictions and swelling concerns over US debt. The dollar index is nearing its April lows, while the EURUSD has opened the week on strong footing—partly in relief over the delayed EU tariff deadline, though it's worth noting the euro was already rising on Friday when the tariff threat emerged. The euro appears to be acting as both a safe haven and a risk-on asset amid trade headlines. Cable surged past 1.35 for the first time in over three years, while the USDJPY looks poised to test the 142 level to the downside, gold continues to hold above $3,300 per ounce, supported by trade and debt uncertainties and Bitcoin is catching a bid amid capital outflows from the dollar and growing adoption by institutional players. The week will bring fresh inflation reports from major Eurozone economies and Japan, a likely rate cut from the Reserve Bank of New Zealand (RBNZ), the US GDP and PCE updates and Nvidia earnings! Listen to find out more!