Potential US/China Trade U-Turn Coming?
The recovery in crude continues to grind higher mid-week as oil traders welcome a softer tone from Trump on both China and the Fed. The president told reporters that tariffs on Chinese goods, currently at a record 145%, would come down heavily, though wouldn’t return to zero. Those comments from Trump come on the back of earlier remarks from Treasury Secretary Scott Bessent who said that tariffs at those high levels were unsustainable and would likely come. While there is no signal on timing yet, markets are clearly cheering the potential U-Turn with crude prices rallying mid-week.
Trump Says Wont Fire Powell
In a further boost for risk sentiment, Trump also clarified that (despite previous threats) he wouldn’t be looking to fire Fed chair Powell. Trump has been a strong advocate for faster rate cuts from the Fed and has widely criticised Powell, recently calling him a ‘major loser. Trump’s harsh words had sparked fears of a potential assault on the independence of the Fed and projections that Trump might look to become the first US president to fire a Fed chairman with risk markets recoiling amidst rising uncertainty. However, Trump’s calmer tone this week has helped fuel a rebound in risk sentiment helping further underpin crude prices for now.
Technical Views
Crude
The rally off the 57.42 level has seen price breaking back above the bull channel lows with price now retesting the 63.83 level. Momentum studies are pushing higher here suggesting risks of a further move higher towards the 67.45 level next. If we fail at the current level, however, focus will turn back to 57.42 near-term.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.