MARKET WRAPS
Watch For:
Bank of England rate decision, Germany trade, industrial production; trading updates for Maersk, Infineon, Puma, IHG, Siemens Energy, Heidelberg Materials, AB Inbev, Nexi, Airtel, Next, Henkel, IMI, Leonardo, Solvay, Enel, Zurich Insurance.
Opening Call:
European stock futures were higher after Asia stocks were mixed. U.S. Treasurys and the dollar was flat, while gold and oil rose.
Equities:
European equity futures pointed to a higher open, as U.S. President Trump is expected to announce a framework of a trade deal with the U.K. on Thursday.
This would mark the first in what the White House hopes is a series of trade agreements since it imposed tariffs against allies and adversaries, according to people familiar with the negotiations.
The announcement, which Trump teased late Wednesday on Truth Social as being with a “big, and highly respected country,” is expected to be a framework of an agreement with tariff adjustments.
Investors also awaited the Bank of England’s rate decision, after the Federal Reserve held rates steady overnight.
“Elevated uncertainty and subsequent weakness in survey data suggest another quarter-point rate cut is a no-brainer” for the BOE this month, said ING analyst James Smith. “The path of least resistance is for the bank to keep cutting rates once per quarter,” and the reductions could “continue for longer than markets are now pricing.”
Forex:
Sterling could weaken if the Bank of England’s policy decision hints at ramping up interest rate cuts, TD Securities analysts said. The BOE is likely to vote 8-1 to cut rates by 25 basis points, but with policymaker Swati Dhingra voting in favor of a 50 basis point cut, they said.
The BOE is also likely to downgrade its economic growth forecasts and drop the word “gradual” from its guidance for further rate cuts amid heightened trade uncertainty.
“Inflation has come in below market expectations and monetary policy report projections, giving members confidence in continuing on a cutting path,” TD analysts said.
Bonds:
Longer-dated Treasurys are worth buying after their falls last month which took yields sharply higher, said Morgan Stanley Investment Management’s Jim Caron in a note.
The rise in yields was “mainly technical in nature.” It came as investors scrambled to cover positions and unwound basis trades–a leveraged way to hold Treasurys–following a sudden fall in equities after the announcement of widespread U.S. tariffs.
Treasurys are still a safe-haven investment, Caron said. “If the U.S. economy is slowing due to tariffs, and recession risks are rising, we then believe longer duration U.S. Treasurys have both outright and hedging value to investors,” he added.
Energy:
Oil consolidated after data released overnight by the EIA showed commercial crude oil stocks, excluding Strategic Petroleum Reserve, dropped by 2 million barrels in the week ended May 2.
An analyst survey by The Wall Street Journal had predicted a 1.3 million barrel decline in crude stockpiles.
Crude oil prices have been volatile as traders are still worried over OPEC+’s production policy, Pepperstone’s Quasar Elizundia said. OPEC+ is set to quicken production increases, heightening oversupply risks, the research strategist added.
Metals:
Gold rose after the Fed warned of uncertainty to the economy coming from tariffs.
The precious metal tends to perform well during periods of economic uncertainty.
However, price gains may be capped by expectations of a meeting between U.S. and Chinese officials in Switzerland on Thursday.
BofA Global Research’s supply/demand model suggested that gold can trade comfortably above $3,000/oz, but not above $3,500/oz for now, particularly if trade disputes ease, its Global Commodity Research team wrote.
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Copper rose as strong orders from the State Grid Corp of China appear to be driving increased purchasing activity among wire and cable manufactures that supply the major power company, said ANZ research.
Data also showed purchases of home appliances in China up nearly 16% during the five-day holiday at the start of May, they added. Still, near-term prices are likely to be volatile, as multiple factors, including macroeconomics and geopolitical tensions, are affecting the base metal.
TODAY’S TOP HEADLINES
Trump to Announce Trade Agreement With Britain
WASHINGTON-President Trump is expected to announce a framework of a trade deal with the United Kingdom on Thursday, the first in what the White House hopes is a series of trade agreements since it imposed tariffs against allies and adversaries, according to people familiar with the negotiations.
The announcement, which Trump teased late Wednesday on Truth Social as being with a “big, and highly respected country,” is expected to be a framework of an agreement with tariff adjustments.
Bank of England Set to Cut Interest Rates Again. Why the Fed Is Lagging Further Behind the U.K.
The Bank of England will take a further step ahead of the Federal Reserve when it comes to interest-rate cuts on Thursday, as the U.K. central bank is set to step in to bolster a flagging economy.
The U.S. is in a different position than the U.K., coming off stronger growth last year even though gross domestic product fell in the first quarter. Fed Chair Jerome Powell warned Wednesday that inflation might pick up even if growth slows, which will make it harder to lower borrowing costs.
Trump’s Threats Push Greenlanders Closer to Denmark
NUUK, Greenland-Kaj Sandgreen waited patiently in a sleek concert hall here last week, as hundreds of others lined the snow-blanketed street outside and cheered as King Frederik X of Denmark arrived.
“Unlike Trump, the king respects us,” the 63-year-old Sandgreen said minutes before shaking hands with the king, who was clad in olive cargo pants and a puffer jacket emblazoned with the red-white Greenlandic and Danish flags. “It’s so good for him to come here and show that he cares about Greenlanders at this chaotic time when we fear an invasion from the United States.”
Trump Says He Hasn’t Decided If Iran Can Enrich Uranium in a New Deal
President Trump said Wednesday that he hasn’t decided whether Iran should be allowed to enrich uranium under a new nuclear deal, signaling that the White House might be flexible on a central issue in the talks.
Asked if Iran can have a civilian enrichment program if it didn’t produce weapons-grade material that could be used in a bomb, Trump said: “We haven’t made that decision yet.”
Why Nvidia investors are cheering Trump’s likely dismantling of Biden’s AI chip rules
Shares of Nvidia Corp. climbed toward the end of trading Wednesday after a report that the Trump administration is not planning to implement artificial-intelligence rules controlling chips shipments that was introduced by the Biden administration.
The AI diffusion rules, which had been slated to go into effect May 15, are likely to be rescinded as President Donald Trump develops his own semiconductor restrictions, though he’s yet to make a final decision, Bloomberg News reported.
Uber Swings to Profit on Bookings Growth but Misses Revenue Estimates
Uber Technologies swung to a first-quarter profit as riders ordered more trips on the digital taxi service, but the company missed Wall Street revenue estimates.
Shares fell 2.5% to $83.65 on Wednesday
AI Is Hitting Search Traffic, Testimony Suggests. Google Stock Falls.
Alphabet stock fell sharply after Bloomberg reported that an Apple executive’s testimony pointed to artificial intelligence taking market share from traditional search.
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Expected Major Events for Thursday
06:00/GER: Mar Foreign Trade
06:00/UK: Apr Halifax House Price Index
06:00/ROM: Mar Retail trade
06:00/NOR: Mar Industrial Production Index
06:00/DEN: Mar Industrial production & new orders
06:00/GER: Mar Industrial Production Index
06:00/NOR: 1Q Labour force survey
06:30/HUN: Mar Preliminary Industrial Production
07:00/AUT: Feb Foreign Trade
07:00/SPN: Mar Industrial Production
07:30/SWE: Swedish repo rate announcement
07:30/NED: Mar Consumer Spending
08:00/NOR: Norges Bank monetary policy decision
08:00/ICE: Apr External trade, preliminary figures
08:30/UK: Apr Narrow money (Notes & Coin) and reserve balances
09:00/CYP: Apr CPI
09:00/GRE: Mar External Trade (provisional data)
09:00/LUX: Mar Industrial Production
10:00/IRL: Apr CPI
11:02/UK: Bank of England Monetary Policy Report – 2 min delay for VE Day
11:02/UK: UK interest rate decision – 2m delay for VE Day
23:01/UK: Apr BRC-Sensormatic IQ Footfall Monitor
All times in GMT. Powered by Onclusive and Dow Jones.
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This article is a text version of a Wall Street Journal newsletter published earlier today.
(END) Dow Jones Newswires
05-08-25 0015ET
