Home › Market News › Rates, Tariffs & Bitcoin: What’s Happening This Week?
The Economic Calendar:
MONDAY: Dallas Fed Manufacturing Index (9:30a CT), Treasury Refunding Financing Estimates (2:00p CT)
TUESDAY: Goods Trade Balance (7:30a CT), Retail Inventories (7:30a CT), Wholesale Inventories (7:30a CT), Redbook (7:55a CT), House Price Index (8:00a CT), S&P/Case-Shiller Home Prices Index (8:00a CT), Consumer Confidence (9:00a CT), JOLTs (9:00a CT), Dallas Fed Services Index (9:30a CT)
WEDNESDAY: MBA Mortgage Applications (6:00a CT), ADP Employment Change (7:15a CT), Employment Cost Index (7:30a CT), GDP (7:30a CT), Real Consumer Spending (7:30a CT), Treasury Refunding Announcement (7:30a CT), Chicago PMI (8:45a CT), Core PCE (9:00a CT), Pending Home Sales (9:00a CT), EIA Petroleum Status Report (9:30a CT)
THURSDAY: Challenger Job Cuts (6:30a CT), Jobless Claims (7:30a CT), S&P Global Manufacturing PMI (8:45a CT), Construction Spending (9:00a CT), ISM Manufacturing Index (9:00a CT), EIA Natural Gas Report (9:30a CT), Fed Balance Sheet (3:30p CT)
FRIDAY: March Jobs Report (7:30a CT), Factory Orders (9:00a CT), Total Vehicle Sales (9:00a CT), Baker Hughes Rig Count (12:00p CT)
Key Events:
We see payrolls up +130k in April, down from +228k in March, with the unemployment rate (4.2%) and hourly earnings growth rate (+0.3%) unchanged.
Misinformation and jawboning at its best. Trump says China trade talks are going well, and China denies any discussions between the two countries on tariffs.
Despite all the posturing, we assign a high probability (90%) to the scenario where China and the U.S. engage in talks within the coming weeks.
President Trump expressed his hope for Federal Reserve interest rate cuts, citing declining inflation. Despite previous tensions, President Trump recently stated he has no intention of firing Chairman Powell.
The Federal Reserve’s apparent reluctance to ease monetary policy has drawn scrutiny. Critics suggest the Fed’s stance may be politically motivated or reflect a misunderstanding of the non-inflationary nature of tariffs.
The current Fed, led by Chairman Jerome Powell, previously faced criticism for its delayed response to the significant inflation fueled by the Biden administration’s fiscal spending. The market recalls the Fed’s initial characterization of inflation as “transitory” before ultimately acknowledging its error and committing to aggressive measures, even at the expense of Main Street, to prioritize Wall Street stability.
Source: TradingView
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Over the past week, the front-month S&P 500 E-mini futures contract has returned +4.55%. However, looking at longer timeframes, the performance has been negative. Over the last month, the contract has declined by -3.27%, and the losses have deepened over the past three months, registering a decrease of -9.73%.
In a notable divergence from historical patterns, individual investors have emerged as a consistent source of buying pressure during the recent weeks of market volatility, while professional money managers, including hedge funds, have significantly reduced their equity exposure.
Retail traders are navigating with a buy-the-dip mentality, while professional investors have opted for significant deleveraging.
According to data from JPMorgan, hedge funds have net sold over $1 trillion in shares year-to-date. This substantial de-risking by institutional players stands in stark contrast to the behavior of retail traders, who have reportedly made net stock purchases averaging $50 billion per month with little interruption.
Crude oil prices are bucking the broader market’s enthusiasm, breaking below a significant multi-year technical pattern and establishing $65 a barrel as a new resistance point, closing at $63.17 on Friday.
Conflicting Signals Keep Oil Prices Range-Bound
The oil market is currently navigating a period of uncertainty, trapped within a defined trading range due to conflicting signals. Concerns are rising that crude prices exceeding $65 per barrel could negatively impact broader economic growth, potentially acting as a ceiling for the market. Furthermore, speculation regarding a potential increase in OPEC production is reinforcing this upper limit, suggesting resistance in the $65-$70 range.
Potential Downside Price Floor
Conversely, the Trump administration’s “Drill, Baby, Drill” policy is being tested by current low prices. While a sustained oil price of $50 per barrel is currently unprofitable for many U.S. producers, industry stakeholders believe that future regulatory streamlining and technological advancements will eventually make such levels economically viable. In support of increased domestic production, the administration has already expedited the approval process for new oil and gas projects, reducing the timeline to a maximum of 28 days through emergency procedures.
Source: TradingView
The bullish momentum for Bitcoin is returning, as short- and medium-term trend followers have re-established long positions. Currently trading 15% below its all-time high of around $109,500 reached in January, Bitcoin continues to be supported by a confluence of positive market sentiment.
Bitcoin has successfully formed a technical bottom and has seen a significant liquidation of 38% of its futures open interest. The current technical outlook for Bitcoin is encouraging.
Source: TradingView
We assign a high probability (90%) to the scenario where China and the U.S. engage in talks within the coming weeks, potentially facilitated by an intermediary to avoid direct contact between leaders. This engagement would likely result in China also implementing “10% reciprocal tariffs” for 90 days, mirroring the policy applied to other nations.
A less likely but still significant scenario (10%) involves China refusing to negotiate with the U.S. for at least six months, opting to wait until U.S. inventories of crucial components, such as rare earths and pharmaceuticals, are depleted.
The analysis suggests that President Trump misjudged the current leverage in the U.S.-China trade dynamic. While the U.S. may possess a long-term strategic advantage, China holds significant short-term leverage. The U.S. relies heavily on Chinese manufacturing, making China a key driver of goods inflation and U.S. consumer stability. Furthermore, China has substantial U.S. assets. The U.S. cannot rapidly build domestic alternatives, while China can readily support its industries and strategically offload products to other markets, mitigating significant economic damage.
The U.S. corn planting season is off to a robust start, with 12% of the crop now in the ground, outpacing the 10% average for this time of year.
However, analysts anticipate a potential slowdown in the planting pace next week due to variable weather conditions. Corn futures have eased slightly from recent highs, down approximately 15 cents, but expectations remain for a near-term rebound.
Optimism surrounding U.S. trade negotiations is growing, with reports suggesting several deals are nearing completion and China potentially closer to an agreement than previously anticipated. Strong demand for old-crop corn persists, leading to expectations that the USDA will further revise export forecasts upward in upcoming reports. Market participants are advised to monitor price action, with a target of $4.75 for December futures before considering new-crop sales. Current levels in old-crop corn may present a “buy the dip” opportunity.
Soybean futures have demonstrated greater resilience than corn, supported by significant fund inflows that have shifted the market from a net short to a net long position. Expectations are for funds to further increase their long exposure in the coming months.
A more conciliatory tone from President Trump regarding trade talks with China, coupled with China’s recent appointment of a seasoned negotiator, has fueled optimism for a potential trade agreement. Such an agreement is anticipated to trigger a significant rally in soybean prices.
NYMEX natural gas futures settled lower last week, at $2.93 per million British thermal units (MMbtu), a decline of $0.24/MMbtu, reflecting a bearish fundamental outlook.
While tariffs and broader economic uncertainty are exerting some influence on the natural gas market, the primary drivers of the recent price weakness are subdued seasonal demand coupled with robust production levels. Weather patterns across key consumption regions are reported to be largely in line with seasonal norms for this time of year, which is expected to limit heating and cooling demand.
Natural gas production in the United States remains strong, averaging 104.0 billion cubic feet (Bcf) per day year-to-date. This represents a notable increase compared to the 101.9 Bcf per day recorded during the same period last year.
Demand dynamics present a mixed picture. Electric power generation demand for natural gas has increased year-to-date, averaging 32.2 billion cubic feet (Bcf) per day, compared to 30.0 Bcf per day last year. Similarly, residential and commercial demand has seen a significant increase, averaging 36.8 Bcf per day year-to-date, up from 27.2 Bcf per day in the corresponding period of 2024. Liquefied natural gas (LNG) exports also continue to rise, averaging 15.4 Bcf per day year-to-date, versus 12.9 Bcf per day last year.
Despite these increases in power generation, residential and commercial use, and LNG exports, the overall demand picture is not strong enough to offset the elevated production levels, contributing to downward pressure on prices.
Looking ahead, the natural gas futures strip for the years 2026 through 2030 indicates a gradual decline in prices, trading at $4.00, $3.74, $3.59, $3.47, and $3.37 per MMbtu, respectively, suggesting the market anticipates continued ample supply in the coming years.
