Spring Bank Holiday in the UK/Memorial Day in the US will keep action limited

It is Spring Bank Holiday in the UK and Memorial Day holiday in the US. Peace to those that died in the fight for freedom and to their families.

Today, the USD moved lower but has since retraced the declines to start the NA session.. The US banks, stock and bond markets are closed but Canada is open. The forex market never sleeps (it may rest though). The price action is likely to be somewhat limited in the forex.

A snapshot of the USD to start the session now shows a mixed picture. The greenback is lower vs:

• EUR -0.11%
• GBP -0.17%
• CAD -0.16%
• AUD -0.20%
• NZD -0.37%

and is higher vs:

Pres. Trump over the weekend eased fiscal policy (at least temporarily) vs Friday by extending a reprieve to the EU for tariffs to 50% tariffs to July 9, 2025. On Friday, he said he “recommended” a greater tightening of fiscal policy by adding a 50% tariffs starting June 1. Meanwhile, the Fed remains on hold as tariff policy and budget policy is being enacted around them and they wait for the dust to settle on inflation and growth.

Fed’s Neel Kashkari (a 2026 FOMC voter) on Sunday emphasized that uncertainty is a major concern for both the Federal Reserve and U.S. businesses. When asked whether the Fed could adjust rates by September, he said “anything is possible,” indicating a cautious stance. He noted that the central bank is currently in “wait and see” mode and described the economic impact of new tariffs as stagflationary—combining stagnant growth with inflation

Regarding the EU, the Trump reaction on Friday was due to limited progress on trade negotiations. IN addition,

Trump today said that countries “all over the world” wanted to make trade deals with the US. There were no trade deals made last week despite comments from the week before that there would be more deals coming.

Recall on May 14, the US and China agreed to ease the “embargo” where tariffs were imposed on trade up to 145%..

President Trump visited Saudi Arabia from May 13 to May 14, 2025, as part of his four-day Middle East tour that also included Qatar and the United Arab Emirates. While there, there were some stimulative economic measures announced::

• Saudi Arabia pledged to invest $600 billion in the United States, focusing on sectors like energy, defense, technology, and infrastructure. This commitment was formalized during the U.S.–Saudi Investment Forum in Riyadh.
• The U.S. agreed to sell Saudi Arabia an arms package worth nearly $142 billion, encompassing tanks, combat ships, missile defense systems, and cybersecurity technology. This deal is considered the largest defense cooperation agreement between the two nations.
• President Trump and Crown Prince Mohammed bin Salman signed an agreement to enhance cooperation in key sectors, including energy, mining, and defense, signifying a deepening of economic and strategic ties

In addition, Saudi Arabia launched “Humain,” a state-backed AI company, partnering with U.S. tech firms:

• Nvidia: Agreed to supply at least 18,000 GPUs to Humain.

• AMD: Committed to a $10 billion investment in joint AI infrastructure projects.

• Amazon Web Services: Plans to establish a $5 billion AI Zone in Saudi Arabia.

President Trump formally accepted a luxury Boeing 747-8 aircraft from the Qatari government during his May 2025 visit to the Middle East. Valued at approximately $400 million, the jet is intended to serve as a temporary replacement for Air Force One. The Pentagon confirmed that the aircraft was accepted in accordance with federal regulations and will undergo modifications to meet presidential transport standards.

Last week, the “One Big Beautiful Bill Act,” passed the House last week. The Congressional Budget Office estimates that the bill would add approximately $3.8 trillion to the federal deficit over the next decade.Others disagree, sayingthe bill’s tax provisions, will stimulate investment and job creation.

The bill increased the SALT (State and local tax (SALT) deduction) to $40,000 from $10,000. Raising the SALT deduction cap from $10,000 to $40,000 allows eligible taxpayers to reduce their taxable income by an additional $30,000—saving between $6,600 and $11,100 in federal taxes depending on their tax bracket. This change heavily benefits wealthier individuals in high-tax states.

Increasing the small business tax deduction from 20% to 23% and restoring 100% immediate expensing are designed to support small business growth and investment.

What next? The bill now moves to the Senate, where it faces scrutiny and potential amendments. Some Republican senators have expressed concerns about the bill’s impact on the deficit and social programs, indicating that revisions may be necessary for passage.

In other geopolitical news, Pres. Trump called Russia’s Putin “Crazy” in a Truth Social post:

• Trump claims he had a good relationship with Putin but says “something has happened to him” and calls him “absolutely CRAZY.”

• Criticizes Putin for indiscriminate attacks on Ukrainian cities using missiles and drones.

• Says Putin wants “ALL of Ukraine,” which could lead to Russia’s downfall.

• Criticizes Ukrainian President Zelenskyy for escalating tensions with his rhetoric.

• Blames the war on Zelenskyy, Putin, and President Biden

• Claims the war would never have started if he were president.

• States he is only trying to stop the destruction caused by “Gross Incompetence and Hatred.”