Morning wrap (05.05.2025)

A strong Non-Farm Payroll (NFP) report and declarations of readiness for trade negotiations between China and the U.S. led to euphoric gains on Wall Street on Friday. The biggest winner was the Russell 2000 (+2.3%), followed by the Nasdaq (+1.5%), S&P 500 (+1.5%), and DJIA (+1.4%).

Donald Trump announced plans to impose a 100% tariff on films produced outside the U.S., claiming that “Hollywood is dying.”

Additionally, the U.S. President denied speculation that he would try to remove Jerome Powell from his position as Federal Reserve Chair or seek a third presidential term.

Trading in the Asia-Pacific region is limited today due to Children’s Day in Japan and South Korea, and Labour Day in China. On open markets, moderate optimism prevails amid hopes for progress in U.S.-China talks (MSCI Asia Pacific ex Japan: +1%), with Indian stocks leading gains (Nifty 50: +0.5%).

Australia’s Labor Party, led by current Prime Minister Anthony Albanese, won Saturday’s parliamentary elections and will form a majority government. Albanese defeated the conservatives, whose support collapsed due to the so-called “Trump effect.” The victory appeared priced in by the market, as the S&P/ASX 200 is down 0.9% today.

Australia’s final services PMI reading came in slightly worse than expected (51, forecast: 51.4, previous: 51.6).

Brent and WTI crude oil prices are falling by about 3% after OPEC+ announced it will increase oil production for a second month in a row in June, to 411,000 barrels per day. The production hike and anticipated impact of Trump’s tariff policy are pushing oil prices below $60 per barrel.

On the forex market, the U.S. dollar index (USDIDX) is down another 0.4%, as markets await the first trade deals between the U.S. and partners—possibly this week. The Antipodean currencies are gaining the most (AUDUSD: +0.75%, NZDUSD: +0.7%), along with the Japanese yen (USDJPY: -0.67%). EURUSD continues to rise, up another 0.4% to 1.1346.

Precious metals are gaining at the start of the week, despite easing volatility and progress in trade talks. Gold is up 0.6% to $3,261/oz, while silver rises 0.9% to $32.30/oz.

The cryptocurrency market is seeing losses. Bitcoin is down 1.25% to $94,535, and Ethereum is down 1.62% to $1,806.

Markets in the United Kingdom will be closed today due to a public holiday.