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Hello everyone, today XM Foreign Exchange will bring you "[XM Foreign Exchange Market Review]: US oil tests the $60/barrel mark, global bond market is turbulent, gold price 3300 mark hovering, OPEC+ discusses increasing production in July". Hope it will be helpful to you! The original content is as follows:
On Friday (May 23, Beijing time), spot gold trading around 3300.80, gold prices turned from rising to falling on Thursday, as the dollar strengthened and investors took profit after hitting a two-week high at the beginning of the session. However, the current shadow of turbulence in the global bond market will become a potential factor for the bullish market in the gold market. U.S. crude oil fell and trading around 60.78 US dollars per barrel. Investors are paying attention to reports that OPEC+ is discussing production increase in July, which has triggered concerns that global supply growth may exceed demand growth.
U.S. stock market closed basically flat on Thursday, with intraday fluctuating, erasing the decline in the early trading. U.S. Treasury yields fell from recent highs after the U.S. House of Representatives passed U.S. President Trump's tax and spending bill.
Recent concerns about the U.S. deficit has pushed up U.S. Treasury yields and put pressure on stocks, but longer-term Treasury yields fell on Thursday, giving stocks a breather. The 10-year U.S. Treasury yield fell 5.4 basis points to 4.543%, the highest level since February.
Indicators S&P 500 and Dow Jones Industrial Index closed flat, while the Nasdaq rose slightly. On Wednesday, all three major stock indexes recorded their biggest single-day percentage drop in a month as concerns about U.S. debt burden drove U.S. bond yields soared.
The Republican-controlled House passed the bill with a narrow margin. The bill will deliver on many of Trump’s campaign promises, but the nonpartisan congressional budget office said it would increase the U.S. $36.2 trillion in debt by $3.8 trillion over the next decade.
George Young, partner and portfolio manager at Villere&Co in New Orleans, said, "The issue today is the tax bill, it seems to have passed, but we are considering bigger potential issues. The two main issues currently discussed in the market are tariffs and interest rates."
Young added: "The market hates uncertainty, and we are still facing two big open factors: tariffs and bond markets. The bond market is completely apolitical and completely international."
The Dow Jones Industrial Average fell only 1.35 points to 41,859.09; the S&P 500 fell only 2.60 points to 5,842.01; and the Nasdaq rose 53.09 points to 18,925.74.
Eight of the S&P 500 11 sectors closed down, with utilities, healthcare, energy and consumer essentials leading the decline. Consumer discretionary, communications services and technology stocks rose.
Extra-large growth stocks such as Nvidia, Amazon and Tesla rose. Alphabet rose 1.3%, hitting its nearly three-month high in the session. Apple closed down 0.36%.
Gold prices turned from rising to falling on Thursday as the dollar strengthened and investors took profits after hitting a two-week high at the beginning of the session. Spot gold fell 0.6% to $3295.21 per ounce. Gold prices earlier hit their highest since May 9 and then fell more than 1%. Gold prices rose in the previous three trading days. U.S. gold futures fell 0.6% to $3,294.90.
KitcoMetals senior analyst Jim Wycoff said: "We have seen some profit-taking pressure in the recent uptrend, and the strengthening of the dollar index is another bearish factor. The shadow of turmoil in the global bond market will become a potential factor for bullish gold, which will limit the downside of the gold market." Bond guards continue to focus on global bond markets, and the U.S. House of Representatives passed President Trump's "large and beautiful" tax cut bill with a narrow margin of one vote.
This will increase federal government debt by about $3.8 trillion over the next decade, according to the nonpartisan Congressional Budget Office. The current U.S. government debt is $36.2 trillion.
Data shows that corporate activity in the United States rebounded in May, but Trump's comprehensive tariffs have made imported goods more expensive for businesses and consumers.
Spot silver fell nearly 1% to $33.05 per ounce; platinum fell 0.1% to $1,075.02; palladium fell 2.1% to $1,016.02. Oil market
Oil prices closed lower on Thursday, as investors watched reports that OPEC+ was discussing production increases in July, raising concerns that global supply growth could outweigh demand growth.
ClothThe settlement price of Rent crude oil futures fell 0.72% to $64.44 per barrel. U.S. crude oil futures closed down 0.6% at $61.20 a barrel.
According to Bloomberg, the Organization of Petroleum Exporting Countries (OPEC) and its allies, OPEC+, is discussing whether to increase production significantly again at the June 1 meeting. According to reports, delegates at the meeting said that an increase in production by 411,000 barrels per day in July is one of the options under discussion, but no final agreement has been reached.
RBC Capital analyst Helima Croft said in a report on Wednesday that the meeting's "most likely result" is a 411,000 barrels per day increase from July, mainly from Saudi Arabia.
Data released by the U.S. Energy Information Administration (EIA) on Wednesday showed that U.S. crude and refined oil inventories unexpectedly increased last week, and oil prices fell intraday. The EIA said that U.S. crude oil inventories rose by 1.3 million barrels to 443.2 million barrels in the week ending May 16. Analysts surveyed by Reuters had previously expected a 1.3 million barrel drop in inventory.
Emril Jamil of the London Stock Exchange Group (LSEG) oil research firm said data released by the EIA showed unexpected increase in inventory, which would put downward pressure on oil prices, especially on U.S. crude prices, adding that this could further encourage U.S. exports to Europe and Asia.
The dollar rose Thursday after three consecutive days of declines, partly because the U.S. House of Representatives passed President Trump's massive tax and spending cuts. Meanwhile, data show that the euro zone's economic outlook is bleak and the euro falls.
Trump's drastic tax cut bill has always been the focus of market attention. The passage of the bill has relieved the market, but he is also cautious about it. The bill will cause the continued increase in the U.S.'s inflated debt. The market expects Republican-majority Senate to debate the bill for weeks.
This will increase federal government debt by about $3.8 trillion over the next decade, according to the nonpartisan Congressional Budget Office. The current U.S. government debt is $36.2 trillion.
In afternoon trading, the US dollar rose 0.1% against the yen to 143.75 yen, and earlier fell to its lowest since May 7, of 142.80 yen.
The euro fell 0.3% against the dollar to $1.1293, rising for the third consecutive trading day on Wednesday. The initial value of the comprehensive Purchasing Managers Index (PMI) released by HCOB on Thursday showed that corporate activity in the euro zone unexpectedly shrank in May. By contrast, U.S. corporate activity rebounded in May, partly due to a truce in the trade war between Washington and Beijing. S&P Global's U.S. comprehensive PMI, which tracks manufacturing and services, rose to 52.1 from 50.6 in April. Above 50 indicates that private sectors are expanding.
Erik Bregar, Director of Foreign Exchange and Precious Metals Risk Management, SilverGoldBullIt said the passing of the tax cut bill has boosted the dollar to some extent, but the dollar has already begun to rise when the U.S. House of Representatives gave the bill a green light.
He added: "Today feels a bit like the reversal of yesterday's de-dollarization trading. The stronger-than-expected U.S. PMI helped lift some of the de-dollarization trading."
The number of initial unemployment claims in the United States fell last week, and the labor market continued to remain stable, which also brought some boost to the dollar. The weekly report also shows that the number of unemployed people is close to the level at the end of 2021.
In the week ending May 17, the number of people who initially requested state unemployment benefits fell by 2,000, to 227,000 after seasonal adjustments. Economists surveyed by Reuters expect 230,000 people.
The 20-year U.S. bonds on Wednesday were not well-known, strengthening the argument of "selling the United States" and dragging down the dollar overnight. The weak bidding also put some pressure on Wall Street, and traders were already nervous after Moody's downgrade the U.S. 3A credit rating last week.
The pound was flat against the dollar at $1.3433, not far from the three-year high of $1.3468 hit on Wednesday, after data showing high inflation curbed the Bank of England's rate cut expectations.
The US dollar rose 0.5% to 0.8286 Swiss francs. The U.S. dollar index rose 0.3% to 99.905, hitting a two-week low of 99.333 on Wednesday.
According to reports, three people familiar with the matter revealed that U.S. President Trump raised at least $600 million in political donations for the midterm elections. According to people familiar with the matter, Trump's ultimate goal is to raise $1 billion or more and control the Senate and House of Representatives in November next year. Trump is eager to reverse the trend that Republican candidates are often surpassed by Democrats and hopes to maximize the presidential influence. The remaining funds after the term ends can help him maintain his immense influence on the Republican Party, cementing his position as the most influential decision-maker and potential patron in 2028 and beyond.
The Brazilian government uniformly 3.5% of the financial operation tax (IOF) tax rate for a series of foreign exchange transactions (including remittance to foreign countries and the use of international cards); foreign exchange transactions related to import and export, profits and dividends remitted to abroad are still exempted. The new policy will take effect from May 23. After the reform, tax revenue is expected to increase by 20.5 billion reais (US$3.61 billion) in 2025 and 41 billion reais in 2026.
A European official said Thursday that the United States "has not been convinced" to accept the proposal of lowering the Russian crude oil price ceiling proposed by the G7. EU proposes to lower the price cap to $50 a barrelreference level. The price cap was originally set in 2022 to ban the use of insurance services provided by Western countries when Russian crude oil sells for more than $60 a barrel, thereby weakening Russia's oil revenue. Ukraine is struggling to lower the price ceiling to US$30 per barrel. The European official, who spoke on condition of anonymity, said the U.S. Treasury team at the meeting believed oil prices were falling and were hurting Russia's interests. However, the European official said the United States is open to this and will continue to discuss it.
Super compromised with Republican lawmakers in the Blue State and suppressed conservative opposition at the last moment. Trump finally tried his best to get his "Big Beautiful Act" passed in the House of Representatives. But if the iconic tax cut is to pass the Senate smoothly, he must face a perhaps more difficult group of "voting" - namely U.S. Treasury investors. The 30-year U.S. Treasury yield broke through 5% again on Wednesday, a week after a third rating agency downgraded its U.S. sovereign credit rating, predicting U.S. debt will jump from about 100% of GDP to 134% in the next decade. This is far from the vision portrayed in Trump's March Congressional speech—who promised at the time to "realize budget balance in the near future." The bill passed by the House involves a series of tax cuts targeting key voter groups, targeting time workers, consumer earners, car buyers and the elderly. Meanwhile, signals from the Senate suggest that Republicans are likely to cut spending further to relieve financial pressure on other groups. "Everyone has had enough. Obviously, there is no 'adult' in Washington at all, and the accountability mechanism does not exist," said John Fath, a US asset management company in BTGPactual. "How can they take responsibility? The answer is market prices."
Roberto Pelley, an official in charge of monetary policy in the New York Fed, said Thursday that although the market liquidity is still abundant, the Fed is encouraging financial institutions to use the standing repurchase facilitation tool (SRF) more actively in the right situation. "I encourage counterparties to use SRF when economically reasonable. This tool exists to support the effective implementation of monetary policy and to promote the smooth operation of the market. If the SRF can work as intended, it will be in the best interest of all." In his speech, Paley reiterated that the New York Fed will adjust its operating arrangements in the near future, extending the current SRF operation only in the afternoon to the morning session, and completing the settlement on the same day. This is an important step to improve the effectiveness of the tool and marginally helps the Fed maintain a relatively smaller balance sheet size. Paley noted that there may be some way to go on the continued balance sheet shrinkage, although there are signs that money market liquidity is tightening. As the Fed narrows its balance sheet and lowers its reserves, upward pressure on money market interest rates may increase.
The Trump administration notified Harvard to prohibit it from recruiting international students. This decision posed a major blow to Harvard after it was frozen billions of dollars in federal funds. "Harvard's management allowed anti-American, pro-terrorism inciteers to harass and physically attack others, including a large number of Jewish students, to undermine the once respected academic environment of the school and create an unsafe campus atmosphere," the Department of Homeland Security issued a statement Thursday. The U.S. government has revoked Harvard's "Student and Exchange Visiting Scholars Program" (SEVP) certification, meaning Harvard will no longer be able to recruit international students. According to the notice, existing international students must transfer or lose their legal status.
A survey released on Friday showed that British consumers' confidence increased in May, which may reflect the impact of falling interest rates and easing global trade tensions. Driven by household optimism about financial conditions and overall economic outlook, the UK GfK consumer confidence index rose from -23 in April to -20 in May. Neil Bellamy, director of consumer insights at GfK, said the Bank of England's interest rate cut on May 8 and part of the easing of the trade war between U.S. by U.S. President Donald Trump may have given consumers a sigh of relief. "These dangers - especially inflation issues - have not disappeared, but the sentiment of British consumers seems to have improved." Despite this, the index is still far below the long-term average of the survey - 11.
The U.S. government once threatened to impose so-called "reciprocal tariffs" on wood in April. Although wood was eventually exempted and not included in the scope of new tariffs, it has never been laughed at for American industry insiders. On the one hand, the sharp fluctuations in wood prices have greatly increased uncertainty; on the other hand, the existing anti-subsidy and anti-dumping tariffs imposed by the United States on Canadian timber are more than doubled, which has also made industry insiders worried. In April 2025, cork prices rose by 23% year-on-year. Timber futures prices also rose sharply in the first quarter of 2025 due to concerns about increased tariffs and the closure of sawmills in many places in North America.
Zhu Hexin, deputy governor of the People's Bank of China and director of the State Administration of Foreign Exchange, said at a press conference of the State Information Office on May 22 that as of the end of March, the balance of loans for technology-based small and medium-sized enterprises reached 3.3 trillion yuan, an increase of 24% year-on-year, and the growth rate exceeded 20% for three consecutive years; the balance of loans for specialized and specialized enterprises nationwide was 6.3 trillion yuan, which far exceeded the average loan growth rate; the scale of equipment renewal loans signed by banks and enterprises reached 1.2 trillion yuan. The next step is to further improve the intensity and service capabilities of technology loans, which is in this regardNow in terms of the scale of loan issuance, the central bank should continue to make efforts in related re-lending; on the other hand, it should continue to make efforts in services, and banks should deepen the capacity building of technology credit services.
Guo Wuping, spokesperson of the State Administration for Financial Regulation and director of the Policy Research Department, said at a press conference of the State Information Office on the 22nd that the first batch of pilot pilots for long-term investment reform of insurance funds is 50 billion yuan, and the second batch of pilots is 112 billion yuan. Recently, it will be necessary to make the third batch of approvals for 60 billion yuan, with a total scale of 222 billion yuan.
The 7th China-Central and Eastern European Countries Customs Inspection and Quarantine Cooperation Dialogue was held today in Ningbo, Zhejiang. Data released by the General Administration of Customs shows that as of now, 126 agricultural and food products have been accessed in 14 Central and Eastern European countries, and a total of 3,430 overseas agricultural product enterprises have been registered. The continuous expansion of agricultural and food products imports has also promoted the stable development of foreign trade between my country and Central and Eastern European countries. In 2024, the total value of bilateral trade between China and Central and Eastern European countries was US$142.27 billion, an increase of 6.3% over the same period last year, 2.5 percentage points higher than China's overall import and export growth rate, showing a strong development momentum. In the first four months of this year, my country's import and export trade with Central and Eastern European countries reached 329.68 billion yuan, a year-on-year increase of 5.6%, and the import and export scale with Central and Eastern European countries hit a record high in the same period.
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