■ TL;DR
- Trump’s China tour disappointed — 200 Boeing planes, no progress on AI chips, rare earths, or the Iran conflict.
- US PPI jumped 6% YoY; Goldman Sachs pushed back rate-cut expectations. FOMC minutes Wednesday are the week’s key event.
- UK political pressure and Eurozone weakness dominate Europe — a data-heavy week ahead for GBP and EUR pairs.
- Oil holding the $100 range; overnight positions should stay small and watch for fade/reversal behavior.
- NVIDIA earnings Wednesday is the AI industry’s pulse check — wait for post-release directional confirmation before entering.
■ Table of Contents
Anyone expecting dramatic market surges following Trump’s China tour was surely disappointed, as Trump’s biggest achievement seems to have been a Chinese commitment to purchase 200 Boeing aircraft — less than hoped for. No progress was reported on advanced AI chip trade, rare earths, or the Iran conflict.
US
Meanwhile, US inflation numbers hit a 3-year high — the PPI jumping by 6% YoY — raising speculation that the FED may need to resume tightening, especially after Goldman Sachs postponed their cut expectations from September and December to December and March.
■ Prop Focus
Wednesday afternoon, prop traders should stay tuned for the FOMC meeting minutes — if not for a specific decision, certainly to gauge sentiment. Assets under scrutiny should include USD pairs, gold, bond yields and US indices. Open smaller-sized positions and look out for the whipsaws.
Europe
With challenges to Starmer’s premiership now loudly vocal, the UK government soap opera is pressuring the pound and inflating the bond market. Across the channel, Eurozone GDP increased by a paltry 0.8% YoY. According to Bloomberg, ECB Board Member Stournaras has expressed hopes for a central bank rate hike to ease inflationary pressures.
■ Data Calendar for EUR & GBP Traders
Prop traders may want to open Euro-pair and GBP-pair positions, keeping an eye on: Monday — French bond auctions; Tuesday — UK labour market data; Wednesday — UK inflation data & EU CPIs; Thursday — Euro/UK/German PMIs; Friday — France Q1 GDP, US nonfarm payrolls, French consumer spending and inflation data.
Asia
Investors should expect rough waters for Indian markets in the weeks ahead, following last week’s report of a 40% surge in the country’s trade deficit — mainly on energy imports, 40% of which pass through Hormuz. Meanwhile, BRICs foreign ministers meeting in Delhi last week failed to issue a joint statement, due primarily to tensions between Iranian and UAE representatives.
Is the US consumer finally cracking? That’s the question driving every trade this week.
■ ■ ■
Commodities
There was no relief for oil markets this week, following non-committal remarks from China — which transports most of its Iranian oil through other means — on the desire to keep the Straits of Hormuz open, alongside veiled warnings over Taiwan. Consequently, oil maintained the middle ground of its month-long range around the $100 mark, following a dip on the hopes and a recovery over the weekend.
■ Assets to Watch
Other than oil, consider airline shares and CAD pairs. Any prop traders maintaining overnight positions should keep exposure limited and look out for fade/reversal behavior.
Equities
The week ends with investors on the edge of their seats, as the DJIA perches precariously on a month-long danger zone currently acting as support for a 10-day range — mostly thanks to surges in bond markets. Despite recent index rises and an incredible 27.7% increase in EPS across the board, Reuters reports that only about a fifth of S&P companies had outperformed the index in the past month.
With nearly all companies having already reported quarterly earnings, this week sees some retail giants reporting — Home Depot on Tuesday, Marks & Spencer (annual) and Target on Wednesday, and Walmart on Thursday, alongside easyJet. Pessimism is running high following last week’s elevated consumer and wholesale prices — April’s PPI at a 4-year high — and its effect on consumer spending.
■ NVIDIA & the AI Trade
Eyes will be on NVIDIA Wednesday for a pulse reading of the AI industry. Its shares are up 36% MoM against the SOX’s 60%. Prop traders should watch for guidance, margins, and demand commentary as the release approaches, and wait for post-release directional confirmation. If not trading NVIDIA directly, look for movements on the SOX and NASDAQ-100 indices and other AI-linked names such as AMD. The Chicago Mercantile Exchange’s decision to float AI-driven computing power futures is also worth watching — especially if markets begin to price these faster than fundamentals can justify.
About the Author
Barry Sadovsky is a leading Analyst covering the Financial Markets for the last 20 years. Find more about Barry on his LinkedIn Page →
