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Hello everyone, today XM Foreign Exchange will bring you "[XM Foreign Exchange Market Review]: Increased supply limits oil price increases, Trump imposes movie tariffs, and risk aversion sentiment pushes gold prices back to around 3330." Hope it will be helpful to you! The original content is as follows:
On Tuesday (May 6, Beijing time), spot gold trading was around 3332.10, gold prices rose more than 2% on Monday. Driven by weakening the US dollar and safe-haven demand, the market is waiting for the Federal Reserve's policy decision later this week; U.S. crude oil trading was around 57.10 US dollars per barrel, and oil prices closed at a multi-year low on Monday, as OPEC+ decided to accelerate production growth, which aroused concerns about increased global supply amid uncertain demand outlook.
Trump announced on Sunday that he imposed 100% tariffs on films made outside the United States, but did not give details on how to implement them. Stocks have been volatile since Trump announced the first round of tariffs on April 2, with the S&P 500 falling nearly 15% at one point, but then stabilizing, closing higher in the past nine trading days ending last Friday, marking the longest round of gains since 2004.
U.S. Treasury Secretary Bescent said on Monday that President Trump's tariffs, tax cuts and regulatory agenda will jointly promote long-term investment in the U.S. economy, saying that the U.S. financial markets are "anti-vulnerable" and will withstand the test of any short-term turmoil."The S&P 500 has been ongoing for nine days and it's hard to maintain, and we've begun to take into account the possibility of a final announcement of an agreement, but there's not much time because every past week and we haven't started finalizing the agreement, there will be economic losses."
The Dow Jones Industrial Average fell 0.24% to 41,218.83 points, the S&P 500 fell 0.64% to 5,650.38 points, and the Nasdaq fell 0.74% to 17,844.24 points. The Dow also ended its nine consecutive trading days of gains, the longest gain since December 2023. After Trump announced the news of film tariffs, several major film and television production companies plummeted, but the decline subsequently narrowed.
Netflix fell 1.9%, ending its 11-day rally, with Amazon falling 1.9% and Paramount falling 1.6%. The energy sector fell 2%, the worst performance among S&P's 11 major sectors, after OPEC+ decided to speed up production growth and demand remained uncertain, which has raised concerns about increased supply. Berkshire Hathaway's Class B shares fell 5.1% after Buffett said he would resign as CEO. Economically, the Institute for Supply Management (ISM) data showed that U.S. service industry growth rebounded in April, while indicators measuring the prices of materials and services paid by businesses soared to their highest levels in more than two years, indicating that inflationary pressures caused by tariffs are increasing.
Investors will closely monitor the Fed’s policy statement on Wednesday, and the market generally expects interest rates to remain unchanged. Chairman Powell's statement will be closely watched and investors will look for signs of when to adjust their monetary policy.
Gold prices rose more than 2% on Monday, driven by weaker dollar and safe-haven demand, and the market is awaiting the Fed's policy decision later this week. Spot gold rose 2.3% to $3315.09 an ounce. US gold futures closed up 2.4% at $3,322.3.
U.S. President Trump's announcement of 100% tariffs on films produced overseas has once again raised concerns about the potential consequences of the global trade war.
Jim Wyckoff, senior analyst at KitcoMetals, said: "We are seeing a continuous inflow of safe-haven demand, keeping gold prices firms, at least in the short term, gold prices will trade above $3,000. I don't think there will be any changes in interest rates at this meeting, but we will look at it and see if the Fed has any particular tendency."
Traders are waiting for comments by Fed Chairman Powell on Wednesday to get clues about the interest rate path. The Federal Reserve has maintained its policy interest rate in the range of 4.25%-4.50% since December.
The Fed is expected to keep interest rates unchanged at this meeting, but this may be the last time it turns out to beIt is clear, because Trump's tariff policy casts a shadow of uncertainty on the economic outlook.
Gold is considered a tool to hedge uncertainty and often shines in low-interest rate environments, with record highs so far this year, with an increase of more than 26%.
Goldman Sachs expects gold's performance to continue to outperform silver, but also points out that given the strong correlation of capital flows, the recovery of gold demand in 2025 may also boost silver prices. Spot silver rose 1% to $32.31 an ounce.
At the same time, platinum fell 0.4% to $956.05; palladium fell 1.5% to $939.55. Oil market
Oil prices fell more than $1 on Monday, closing at multi-year lows as OPEC+ decided to accelerate production growth, raising concerns about increased global supply amid uncertain demand outlook.
Brent crude oil futures closed at $60.23 per barrel, down 1.7%. U.S. crude oil futures closed at $57.13 a barrel, down 2%. Oil prices in both indicators hit new lows since 2021.
Last week, Brent crude fell 8.3% and U.S. crude fell 7.5%, after Saudi Arabia said it could cope with a long-term low oil price environment. Saxo Bank analyst Ole Hansen said this offsets the demand side's optimistic expectations for possible tariff negotiations between China and the United States.
Last Saturday, OPEC+ agreed to further accelerate oil production for the second consecutive month, with production increasing by 411,000 barrels per day in June.
The increase in production in June by OPEC+ of eight member states will bring the total increase in production in April, May and June to 960,000 barrels per day. According to Reuters' calculations, this means that a total of 2.2 million bpd of production cuts reached by multiple agreements since 2022 have been lifted by 44%.
ThirdBridge analyst Peter McNally said: For non-OPEC+ oil producers, which currently account for nearly 60% of the global oil supply, if these new output flows into the market, causing oil prices to fall, their market share growth may end.
OpEC+ sources told Reuters that if member states cannot better comply with their production quotas, the organization may completely lift voluntary production cuts by the end of October.
OPEC+ sources said Saudi Arabia is pushing OPEC+ to speed up the lifting of previous production cuts to punish Iraq and Kazakhstan, who are also members of OPEC+, to comply with their poor production quotas.
Hansen of Saxo Bank said: "Under Saudi instigation, increasing production is to challenge the U.S. shale oil supply, and to punish member states that benefit from rising prices but ignore production restrictions."
Dutch International Group (ING) and Barclays Bank also lowered their forecasts for Brent crude after OPEC+ made the above decision.
BaClay Bank lowered its average Brent crude oil price forecast for 2025 to $66 per barrel and lowered its 2026 forecast by $2 to $60 per barrel, while Dutch International Group expects its average Brent crude oil price this year to be $65, compared with the previous forecast of $70.
The dollar weakened against major currencies such as the yen and the euro on Monday, with the market weighing the ongoing uncertainty of President Trump's tariff policy and its impact on the economy.
Other Asia-Pacific currencies, including the Australian dollar, rose against the US dollar. The Australian dollar hit a high of $0.64,935, the highest since December.
BannockburnGlobalForex chief market strategist Marc Chandler said the dollar weakened against Asian currencies in part because some investors cleared a large number of unheld positions after news that the U.S. would impose more tariffs.
Trump doubled down on tariff-driven policies in an interview Sunday, reiterating that imposing tariffs on imported goods will ultimately make Americans rich. He announced on Sunday that he imposed 100% tariffs on films made outside the United States.
Treasury Secretary Becent defended Trump's tariff measures on Monday, stressing that his broader agenda, including tax cuts, will ultimately lead to long-term economic growth.
MonexUSA's trading director in Washington Juan Perez said Trump did not abandon the important position of tariffs, which had an impact on the market.
The US dollar fell 0.73% against the yen to 143.885 yen. The US dollar fell 0.50% against the Swiss franc to 0.82255 Swiss francs. Trump said he would not remove Fed Chairman Powell before the end of his term, but he again called for lower interest rates and called Powell a "rigid man". The Fed will end its two-day meeting on Wednesday, with the market generally expecting the Fed to keep interest rates unchanged, and its March jobs report released last Friday was solid.
Perez said that market chaos has caused the most damage to the dollar, and I think we are back today to this very low sentiment and downward trend, and people are beginning to realize that overall, we can’t rely on the US market as we used to. This phenomenon has also been shown in the U.S. Treasury market. ”
Currently, the market suggests that the possibility of the Federal Reserve's interest rate cut in June is only 37%, down from 64% a month ago. Both Goldman Sachs and Barclays postponed interest rate cuts from June to July.
The Institute of Supply Management (ISM) April report showed that the U.S. service industry, which accounts for two-thirds of the U.S. economy, grew higher than expected, and the dollar narrowed its decline against the yen after the data was released.
In Europe, the euro was $1.131,600, up 0.15%; the pound was $1.32,950, up 0.21%. The Bank of England will hold a meeting on Thursday, and the market is generally expected to cut further interest rates by 25 basis points to 4.25%. The central banks of Norway and Sweden will also hold this weekThe meeting is expected to keep interest rates unchanged.
U.S. California has warned that the sharp drop in international tourism will hit tourism revenue. International visits are expected to fall by more than 9% this year due to global negative sentiment towards Trump’s policy, according to a report released by the California Tourism Bureau on Monday. California Governor Newsom said that California's tourism industry had a sharp year-on-year decline in March. The report shows that in 2024, tourists spent $157.3 billion in corporate spending in California, a year-on-year increase of 3%, bringing $12.6 billion in tax revenue to California and local governments and creating 24,000 new jobs. Canadians spent $3.72 billion on travel to California last year, but Canadian tourists fell 12% year-on-year in the first full month after Trump took office, in February.
U.S. President Trump announced today that Washington will host the 2027 National Football League (NFL) Draft, saying that this will promote Washington's development. Trump said the three-day event was scheduled to be held at the National Mall and could attract 1 million fans. "These announcements are not only good for the NFL, but also advance the mission of safety, tidy and beautiful in Washington, D.C.," Trump said. Trump has used the NFL as part of his larger effort to increase his approval rating among young white men. In the first few months of his second term, he attended the Super Bowl, Daytona 500, UFC and NCAA Wrestling Championships.
U.S. President Trump said that oil prices have fallen, adding: "We are in a good position to reach an agreement with Russia." Russian President Putin announced a three-day ceasefire, "It sounds nothing, but if you know where we started, you will understand that it means a lot.
U.S. Treasury Secretary Becent said on Monday that President Trump's tariffs, tax cuts and deregulation agenda will jointly drive long-term investment in the U.S. economy, adding that the U.S. financial markets have "anti-frailty" "Sex, will withstand any short-term turmoil. Becente made a pre-prepared speech at the Milken Institute global conference in Los Angeles, defending Trump's tariff policy in a comprehensive defense, stressing that the Republican tax bill that Congress is considering will perpetuate many parts of the president's first term tax cuts, including tax cuts for small businesses. "The main components of Trump's economic agenda—trade, tax cuts and deregulation—is not an isolated policy. They are interconnected parts, together forming an engine that drives long-term investment in the U.S. economy. "
On May 5, local time, the White House said that no "final" decision has been made on the movie tariffs. White House spokesman Kush Desai said that although no final decision has been made, the government is exploring all options to fulfill Trump's instructions.
On Monday, people familiar with the matter revealed that the United States rejected Japan's comprehensive exemption of 10% reciprocal tariffs and tariffs targeting specific countries in recent negotiations. Sources said that U.S. officials, including U.S. Treasury Secretary Becent Becent, said in a meeting with Japan's chief negotiator Ryo Akazawa last week in Washington, D.C., that the Trump administration intends to cut only 14% of specific country tariffs, which is suspended until early July. The United States stressed in the second round of negotiations that, based on the progress of the negotiations, it will only consider extending the 90-day moratorium or reducing the tariffs by 14%. Tokyo has been In search of the United States to completely cancel reciprocal tariffs, 25% auto tariffs and 25% steel and aluminum tariffs. Washington once said that it will not negotiate 10% of the world's basic tariffs or tariffs on automobiles and steel products.
The May Day movie market in 2025 rebounded. According to the data of the Lighthouse Professional Edition, as of 16:30 on May 5, the total box office (including pre-sales) during the May Day holiday exceeded 720 million yuan, and "Dunting Queen" led the box office list with 185 million yuan. This year, the May Day movies have a rich variety of films, meeting the diverse needs of different audience groups. Behind the May Day movies, Maoyan Entertainment, Chinese films and other companies were listed. Behind the May Day movies, Maoyan Entertainment, Chinese films and other companies were listed. The company participated in it. Judging from the first quarter report of 2025 disclosed by listed film companies, the performance of film and television listed companies is showing a differentiated trend. Industry insiders said that the current industry still lacks high-quality supply. In the future, movies must not only be well-made, but also seek breakthroughs in content, aesthetic breakthroughs, type breakthroughs, and theme breakthroughs.
The National Immigration Administration learned that with the continuous optimization of entry policies, strong demand for vacation tourism, and increased international flight capacity, this year's May Day holiday, the number of foreigners entering the country at large international airport ports such as Beijing Daxing, Shanghai Pudong, and Guangzhou Baiyun continued to grow, and the popularity of "cross-border travel" was high. Data shows that from May 1 to May 3The number of foreigners entering the Beijing port reached 27,000, an increase of 80.8% year-on-year. From May 1 to May 5, the total inbound and outbound passenger flow at Shanghai Port is expected to reach 594,000, with an average daily average of 119,000, an increase of about 30.7% year-on-year. Three days before the May Day holiday, 32,000 foreigners entered the Guangzhou Port, an increase of 43% year-on-year.
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