HFMarkets (hfm.com): New market analysis services.

[HFM]

Date: 08th May 2025.


Markets Rally as Fed Holds Rates, Trump Teases Major Trade Deal With UK.



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US stocks surged midweek as investors reacted to a flurry of market-moving developments—from Federal Reserve policy decisions and trade deal speculation to AI regulations and geopolitical tensions.


Federal Reserve Holds Rates Amid Political Pressure


Despite mounting pressure from former President Donald Trump to lower interest rates ahead of a potential economic slowdown, the Federal Open Market Committee (FOMC) unanimously voted to maintain the benchmark interest rate in the 4.25% to 4.5% range. This decision follows a full percentage point cut made in late 2024.


‘Uncertainty’ remains the name of the game for the FOMC as well as the markets. Though the word was used only once in the statement, Chair Powell used it, or variations of it, many times in his presser, ultimately saying his gut tells him ‘uncertainty’ over the economy's path is extremely elevated.


Powell warned of ongoing risks from global trade tensions and tariffs, stating, ‘If sustained, large increases in tariffs could lead to higher inflation, slower growth, and increased unemployment.’ He acknowledged that the Fed remains vigilant, especially as uncertainties around international trade persist.


The major takeaway is that the Fed is firmly on the sidelines monitoring the many tariff-related unknowns regarding their ‘scale, scope, timing, and persistence’ and their impacts on the economy. The Fed is in no hurry and awaits clear evidence to dictate the appropriate policy response.


Federal Reserve Chair Jerome Powell reaffirmed the central bank’s independence on Wednesday, dismissing political influence from the White House. Addressing reporters, Powell emphasised, ‘President Trump doesn’t affect our doing our job at all,’ and reiterated that he has never—and will never—request a meeting with any US president.





Trump Sparks Market Rally With UK Trade Deal Tease


Equity markets jumped late Wednesday after Donald Trump posted on Truth Social that the US had secured a ‘MAJOR TRADE DEAL WITH A BIG, AND HIGHLY RESPECTED, COUNTRY.’ Sources familiar with the matter indicated the United Kingdom is expected to be named as the trade partner during a scheduled White House press conference Thursday morning.


US stock futures surged on the news:


* Dow Jones Industrial Average futures rose 0.6%
* S&P 500 futures gained 0.7%
* Nasdaq 100 futures climbed 1%
* Gold is down 0.7%, sliding to $3,336 — edging closer to the crucial 100-hour moving average at $3,330.


Expectations for a broader US-UK economic agreement added to investor optimism, alongside plans for high-level trade talks between the US and China in Switzerland. However, Trump’s statement that tariffs on Chinese imports would remain in place ahead of the negotiations tempered some enthusiasm.


Asian Markets and Geopolitical Concerns


The US Dollar Index (DXY) slipped below the 100 mark, closing at 99.809 after touching a high of 100.030 and a low of 99.464. The dollar weakened against most G10 currencies and lost ground to several Asian counterparts as rate differentials failed to offer support.


Nevertheless, stronger US economic data—including accelerated activity among US service providers—helped the dollar edge higher during the session, easing a rapid appreciation in Asian currencies spurred by optimism over potential trade agreements.


Asia Forex Volatility Increases Amid Trade Hopes


Asian stock markets followed the US momentum on Thursday:


* Japan’s Nikkei 225 rose 0.2%
* Australia’s ASX 200 increased 0.2%
* South Korea’s Kospi added 0.3%
* Hong Kong’s Hang Seng surged 0.8%
* Shanghai Composite advanced 0.8%


However, ongoing geopolitical tensions, particularly the escalating conflict between India and Pakistan, introduced fresh risks. Pakistan has vowed retaliation for missile strikes it says were carried out by India, resulting in over 30 civilian deaths in Pakistan-administered Kashmir and Punjab. The situation has drawn international concern over the potential for wider instability in the region.


Nvidia, AMD Surge as AI Export Rules Get Revamped


Tech stocks, particularly in the semiconductor sector, also benefited from a regulatory shift. Nvidia (NVDA) closed up 3% following reports that the Trump administration will repeal AI chip export restrictions imposed by the Biden administration.


The US Commerce Department confirmed the policy reversal, describing the previous rules as ‘overly bureaucratic’ and vowing to implement a streamlined framework that ‘unleashes American innovation.’


Advanced Micro Devices (AMD) also climbed nearly 1.8% on the news, though both chipmakers saw their shares ease slightly in after-hours trading.


The Walt Disney Co. led the earnings-driven rally, soaring 10.8% after beating profit forecasts, raising guidance, and reporting over one million new streaming subscribers.


BoE Expected to Cut Today


The BoE is widely expected to lower the Bank Rate by another 25 bp to 4.25% on May 8. U.K. inflation is still expected to pick up again before retreating, but lower oil prices and a stronger pound will likely prompt the BoE to lower inflation forecasts with the updated Monetary Policy Report, which will pave the way for lower rates. And with growth risks intensifying thanks to US tariff jitters and the impact of the autumn budget, the chances of back-to-back cuts are rising, especially as U.K. rates remain relatively high.


Stagflation risks continue to linger, but BoE head Bailey warned last week that a trade war would hurt the U.K. economy, despite the fact that it is facing lower ‘reciprocal’ tariffs than others. Bailey stressed that ‘it is not just the relationship between the US and the UK, it is the relationship between the US, the U.K. and the rest of the world that matters, because the UK is such an open economy.’ ‘We have to take very seriously the risk to growth’, Bailey warned, adding that ‘fragmenting the world economy will be bad for growth.’


Outlook: Economic Growth Meets Policy Uncertainty


Despite global uncertainties, the Fed noted that the US economy continues to grow at a ‘solid pace.’ However, Powell cautioned that persistent tariff threats and rising inflation could put the central bank in a precarious position,risking a scenario of stagflation, where economic stagnation coincides with rising prices.


With trade negotiations looming, rate cuts paused, and geopolitical risks rising, investors will be closely monitoring headlines for clues on the next moves in markets and monetary policy.


Always trade with strict risk management. Your capital is the single most important aspect of your trading business.


Please note that times displayed based on local time zone and are from time of writing this report.


Click HERE to access the full HFM Economic calendar.


Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work. Click HERE to register for FREE!


Click HERE to READ more Market news.


Andria Pichidi
HFMarkets


Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

[HFM]

Date: 30th May 2025.


ECB Rate Cut Expectations: Will June Deliver Another 25 bp Cut?



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The European Central Bank (ECB) is widely expected to announce another 25 basis point (bp) interest rate cut at its upcoming June policy meeting. Despite dovish expectations, recent statements from hawkish members and rising geopolitical uncertainties suggest that the path toward additional monetary policy easing may not be as straightforward as before.


Mixed Signals: Schnabel’s Call for Caution vs Dovish Momentum


While Executive Board member Isabel Schnabel voiced support for keeping rates unchanged, noting that now is the time for a ‘steady hand,’ the overall tone within the ECB Governing Council has recently leaned dovish. Preliminary Eurozone inflation data and updated projections could strengthen the case made by members like François Villeroy de Galhau for another cut.


June Outlook: Pause vs 25 bp Cut


At the last meeting, the ECB delivered a widely anticipated 25 bp cut. However, the April meeting minutes revealed a split into three camps:


* One group initially preferred to pause but agreed to front-load a June cut due to rising trade tensions from Trump’s ‘Liberation Day’ tariff threats.
* Another faction argued for a larger 50 bp cut, indicating deeper concern over growth risks.
* A third group favoured more cautious, data-dependent easing.


Heading into the June ECB decision, the debate has narrowed to two options:


* A pause to assess incoming data
* A 25 bp rate cut to sustain momentum


Schnabel and Austrian central bank chief Robert Holzmann have spoken in favour of pausing, arguing that further cuts may be ineffective or even risky for the Eurozone economy.


Data & Tariff Tensions: A New Source of Risk


Since Schnabel’s remarks, Trump has escalated threats of a 50 bp tariff on EU imports. Though temporarily suspended for talks, the uncertainty weighs on sentiment. Unlike the market volatility after the ‘Liberation Day’ headlines, current reactions have been more subdued, making a preemptive rate cut less justifiable.


Even ECB Chief Economist Philip Lane, typically dovish, warned against both over-tightening and over-easing. He emphasized the need for data-driven decisions, saying that further cuts are possible if inflation softens, but ‘no one is talking about dramatic rate cuts.’


Preliminary May inflation data, especially in services, is expected to show deceleration—but this may reflect seasonal adjustments. Meanwhile, import prices continue to fall, though disinflation from a stronger euro (EUR) may have peaked.


Trump’s recent trade threats dampen hopes for a negotiated deal. EU retaliation, if pursued, could raise imported goods prices and offset currency-related disinflation, adding complexity to the ECB’s policy decisions.


The ECB’s inflation expectations survey showed a rise in 1-year inflation expectations, though long-term views remain stable. Business confidence data has been mixed, with front-loaded exports earlier this year potentially leading to weaker activity in Q2.


Germany’s new Chancellor's investment push in infrastructure and defence—what Holzmann called a ‘fiscal shock’—could provide economic support in the medium term. While such measures take time to impact GDP, they add another layer to the ECB’s policy calculus.


Is the ECB Running Out of Room to Cut?


With rising internal opposition and geopolitical headwinds, the ECB's path to additional interest rate cuts appears increasingly narrow. If a cut is delivered next week, the central bank may pause in July unless further economic shocks emerge. Alternatively, a June pause could leave the door open for easing in July. As Lane stated, the ECB must remain flexible, but the hurdles to further rate cuts are clearly rising.


Always trade with strict risk management. Your capital is the single most important aspect of your trading business.


Please note that times displayed based on local time zone and are from time of writing this report.


Click HERE to access the full HFM Economic calendar.


Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work. Click HERE to register for FREE!


Click HERE to READ more Market news.


Andria Pichidi
HFMarkets


Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

[HFM]

Date: 13th June 2025.


Israel Attacks Iran in An Overnight Strike: Oil Rises 13%!



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Israel launched attacks on Iran's nuclear facilities, military leadership and key Iranian scientists according to reports. The attack took place overnight and involved more than 200 Israeli fighter jets which bombed more than 100 targets. The US has made a statement publicly advising the country was not involved. In addition to this, other key partners such as the UK and France are pushing for de-escalation. How is the market reacting so far?


Crude Oil Prices Jump 13%


The asset which is seeing the most volatility is understandably Crude Oil as Iran is the 7th highest producer of Crude Oil after Iraq. Currently, the price of Crude Oil is trading 5.00% higher, but earlier in the day it was 13% higher. Crude Oil rose to a high of $77.64 per barrel and to its highest price since January.


Due to extremely high volatility in a short period, it is understandable that the asset became oversold triggering a decline in the past 3 hours. Currently, the bearish momentum continues to remain the driving force in the short term. The 200-period SMA continues to act as a trend-line meaning the price may continue to decline to $70.50 before finding support. However, this would also depend on the upcoming developments.


According to reports, the Israeli army not only attacked nuclear facilities, military leadership and key Iranian scientists, but also the country’s ability to instantly retaliate. As a result, Iran was limited to using drones to retaliate. According to army experts, drones can travel long distances and cause significant damage, but they travel extremely slowly. The Israeli government is advising they are currently shooting down drones over Jordan and Syria.



Crude Oil Daily Chart


If the conflict was to escalate, the price of Oil could regain bullish momentum as it would trigger a fear of supply chain disruptions and lower production levels.


SNP500 - Developments Trigger Low Risk Appetite!


The SNP500 fell as much as 1.98% before retracing higher. Currently, the SNP500 is trading 1.20% lower and the NASDAQ 1.33%. The downward price movement is being triggered by 2 factors. The first is the conflict between Israel and Iran prompting a lower risk appetite. The second is the significantly higher oil prices which can apply upward pressure on inflation.


The future price movements of the SNP500 and stock market in general will depend on how the current situation escalates. If the two countries escalate, the price of Oil may continue to rise while the stock market potentially could take a larger hit. If downward pressure increases, a key support level for the index could be seen at $5,791.24. This level may act as a target for individuals looking to speculate downward momentum in the medium-term.


Traders should note that even though the index is yet to witness significant lasting volatility, most risk indicators point to a ‘risk off’ sentiment. For example, the VIX Index currently trades 9% higher.


Gold - Safe Haven Asset Witness Increased Demand!


The price of Gold has not only risen due to the Israeli strikes on Iran, but has been increasing in value for 3 consecutive days. Originally, lower inflation data drove the upward price movement, prompting a weaker US Dollar. Gold is inversely correlated with the US Dollar. However, now the commodity’s safe haven status is coming into play as institutions look to lower the risk of their portfolios.


Key Takeaway Points:


* Oil prices spiked 13% due to the Israeli strikes, reaching $77.64, with potential decline to $70.50 if bearish momentum continues.
* The SNP500 fell 1.98% as the conflict escalated, and rising oil prices raised inflation concerns.
* Gold has been increasing for the last three days, driven by the weaker US Dollar and its safe-haven appeal amid the crisis.


Always trade with strict risk management. Your capital is the single most important aspect of your trading business.


Please note that times displayed based on local time zone and are from time of writing this report.


Click HERE to access the full HFM Economic calendar.


Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work. Click HERE to register for FREE!


Click HERE to READ more Market news.


Michalis Efthymiou
HFMarkets


Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.