The US and UK signed a trade agreement. China’s trade balance data pleased investors

US stocks continued to rise on Thursday as expectations of tariff cuts from major trading partners triggered a rally in US capital markets. The Dow Jones Index (US30) was up 0.62%. The S&P 500 Index (US500) gained 0.58%. The Nasdaq Technology Index (US100) closed higher by 0.98%. President Trump unveiled a trade deal with the UK that keeps existing tariffs in place but signals fewer future US export restrictions. Stocks only gained momentum after the President acknowledged the possibility of lower tariffs against China after talks that begin this weekend.

Technology stocks surged, with Tesla (TSLA) jumping more than 4% and Palantir (PLTR) soaring 7.5%, reversing yesterday’s decline. Shares of Apple (AAPL) and Alphabet (GOOG) also rose, partially recovering from last session’s decline.

The Mexican peso (USD/MXN) strengthened to 19.50 per US dollar, again nearing a six-month-high, as Consumer Price Index data supported a cautious stance on rate cuts and optimism that trade tensions are easing. Core annual inflation accelerated to 3.93% in April, slightly above expectations, while the monthly figure rose by 0.49% month-on-month, suggesting the Bank of Mexico may need to slow interest rate cuts.

Bitcoin (BTC/USD) rose about 9% this week, breaking the key psychological threshold of $100,000 for the first time since early February. Two US states passed legislation authorizing strategic bitcoin reserves. Meanwhile, the federal government confirmed that US banks can “responsibly” trade digital assets on behalf of customers and can outsource trading of digital currency and custody services to trusted third parties. These developments have reinforced the view of Bitcoin as a mature asset class.

Equity markets in Europe were mostly down on Thursday. Germany’s DAX (DE40) rose by 1.02%, France’s CAC 40 (FR40) closed higher by 0.89%, Spain’s IBEX35 (ES35) gained 0.06%, and the UK’s FTSE 100 (UK100) fell by 0.32%. On Thursday, European stocks held on to early gains and closed with solid gains. Most sectors rose as markets assessed recent developments in European trade and monetary policy. Sweden’s Riksbank kept its discount rate at 2.25% for May 2025, in line with expectations, citing increased global uncertainty, especially following the US trade policy shift, which has led to volatility in markets and weakened growth prospects in both the US and Europe. Norges Bank left its key rate unchanged at 4.5% at its May 2025 meeting, keeping it at a 15-year high for more than one year, in line with market expectations and Central Bank signals. Like other monetary authorities that monitor G10 currencies, Norges Bank emphasized that trade barriers imposed by the United States and other major economies are increasing uncertainty in the global macroeconomic backdrop.

WTI crude oil prices rose nearly 3.2% to reach $59.9 per barrel on Thursday, driven by renewed hopes of progress in upcoming trade talks between the US and China, key players in the global oil market. Lingering trade tensions between the US and China have raised concerns about a decline in global oil consumption, but signs of diplomatic engagement have helped ease market fears. At the same time, the announcement of a trade agreement between the US and the UK boosted positive sentiment.

Asian markets were predominantly rising yesterday. Japan’s Nikkei 225 (JP225) rose by 0.41%, China’s FTSE China A50 (CHA50) gained 0.63%, and Hong Kong’s Hang Seng (HK50) climbed 0.37%, while Australia’s ASX 200 (AU200) gained 0.16%.

China’s trade surplus in April 2025 rose to US$96.18 billion from US$72.04 billion in the same period a year earlier and exceeded market expectations of US$89 billion. The sharp increase was mainly due to an 8.1% year-on-year rise in exports, well above market projections that expected a 1.9% rise, despite growth weakening from 12.4% in March as shipments to the US were weakened by Trump’s tariffs.

The New Zealand dollar fell as low as 0.588 US dollars on Friday, extending losses for a third straight session and hitting its lowest level in more than three weeks. The kiwi came under pressure as the US dollar strengthened following President Donald Trump’s announcement of a trade deal with Britain, which he called “the first of many.” It also raised hopes for progress in talks between the US and China in Switzerland over the weekend.