Articles

• Oil -1 at 486
• Natural gas +2 at 102
• Total rigs +1 at 593

The price of crude oil is trading up $0.32 and $68.39. For the week, the price is up about 1.8%.

This article was written by Greg Michalowski at www.forexlive.com.

European major indices are closing the day mostly lower with the exception being Spain’s Ibex.

A snapshot of the closing levels shows:

• German DAX, -0.47%
• France’s CAC -0.63%
• UK’s FTSE 100 -0.63%
• Spain’s Ibex, +0.33%
• Italy’s FTSE MIB -0.39%.

For the trading week, the indices were mixed:

• German DAX, -0.41%
• France’s CAC, +0.18%
• UK’s FTSE 100 +0.17%
• Spain’s Ibex +2.65%
• Italy’s FTSE MIB, +0.98%

This article was written by Greg Michalowski at www.forexlive.com.

The tariff dance continues with Trump talking about tariffs. There were various mixed messages but at least he’s not drawing a hard line in the sand.

Asked about possible exemptions to the April 2 tariffs, Trump said: “There will be flexibility.”

Asked if China can do anything to head off trade war: “We can talk.” He added that he will be talking to Xi (there is a rumored mid-June summit).

The S&P 500 has trimmed the decline to 18 points and the Nasdaq is down just 0.1%.

In FX, we’re seeing small signs of a reversal in the weakness in the commodity currencies and strength in the US dollar.

This article was written by Adam Button at www.forexlive.com.

London Heathrow will resume flights tomorrow but losing a day will likely be felt for a few days travel plans get rebooked

This article was written by Greg Michalowski at www.forexlive.com.

• Repeats that April 2 will be ‘liberation day’
• Some of that money will come back to us as tariffs
• Musk is at Pentagon to address costs
• I want car companies to build here
• Says he will be speaking with China’s Xi

The US dollar has made a move higher in the past few minutes in part due to a report saying that France has floated harsh retaliations against the US. Most of this is the usual rhetoric but I take some comfort in him opening up the door to at least negotiating with China.

• There will be flexibility on tariffs
• Basically it’s reciprocal
• We can’t be expected to carry Canada

The comments about Canada are non-sense, as usual. The only reason the US has a surplus with Canada is because Canada sells the US discounted oil.

This article was written by Adam Button at www.forexlive.com.

The euro has dipped on this headline, which suggests more escalation in the trade war.

This article was written by Adam Button at www.forexlive.com.

• Prior was -13.6

This reading matches the lowest in a year.

This article was written by Adam Button at www.forexlive.com.

• Prior was -13.6

This reading matches the lowest in a year.

This article was written by Adam Button at www.forexlive.com.

Shares of FedEx are down 9.2% and traded today at the lowest since May 2023. That comes on a lower earnings guide and concerns about the macro economy. There were some revealing details in the conference call.

CEO Raj Subramaniam noted some of thing things that have been weighing on the economy.

“Weakness in the industrial economy continued to pressure our higher-margin B2B volumes,” he said. “The current environment, however, is adding uncertainty to demand.”

Perhaps most-interesting was a comment from Brie Carere, FedEx’s Chief Customer Officer who said this:

“From an outlook perspective, we think that we have given you a very prudent forecast for the fourth quarter and that this incorporates the feedback that we’ve had from our customers around the world. I would say that from a feedback perspective, I think first, the #1 thing that we keep getting asked is has there been a pull forward. We did not see any significant pull forward in Q3 [their FY ends May 31]. We did see a little volatility in APAC kind of at the end of February, early March. But for the most part, a pull forward is really hard, so we have not seen that, actually. In all the sales calls that I’ve done over the last 90 days, I’ve actually only met one customer who attempted it and they regretted it because they ended up storing some excess inventory.”

That goes against some of the assumptions that are built into Q1 economic views. Most observers expect businesses to build up inventories and undoubtedly there is some of that going on but her comment reveals that we’re still in a just-in-time economy where turns dominate rather than flexibility.

Looking ahead, CFO John Dietrich said there is no help coming.

“I think it’s reasonable to assume that the macro environment is not going to significantly improve at least for the first half of FY ’26…” With their odd fiscal year that would basically mean softness through calendar 2025.

The company now projects FY ’25 adjusted earnings per share to be in the range of $18 to $18.60 compared to our $19 to $20 prior range.

Finally, the indications from Carere are that companies will pass on tariff costs.

“As far as kind of how customers are planning, we’re having a lot of conversations about being able to move the network as they require… I would say, to the point on inflation, that we are talking to a lot of customers who are anticipating that they will increase prices or already have.”

In short, there are some real problems in the economy.

This article was written by Adam Button at www.forexlive.com.

The UK Sun is out with a bit of a bizarre one.

They claim that Kier Starmer hand-delivered a letter from King Charles to Trump with an offer to visit the King, which Trump immediately accepted. That’s nothing new as Trump visiting Queen Elizabeth in his last tenure and is a fan of the royal family. Then the story takes a twist:

Plans are allegedly in the works to make the USA the next “associate member” of the Commonwealth, the report says. The offer would be presented to Trump on the visit with the plan being discussed “at the highest levels”.

“Canada, of which the King is head of state, is part of the Commonwealth of Nations and including America may dampen the current conflict.”

None of this makes any sense to me, but that’s the UK press.

This article was written by Adam Button at www.forexlive.com.

Waller offered a rare dissent from a Fed governor this week but it was related to the pace of the balance sheet runoff.

• Slowing or stopping runoff will be appropriate as we get closer to ample reserves
• In my view we’re not there yet because reserve balances stand at over $3 trillion and this level is abundant
• No evidence that banking system is getting close to ample level of reserves

This article was written by Adam Button at www.forexlive.com.

• Prior was -0.1%

USD/CAD has been tracking higher today and is up 33 pips to 1.4356.

This article was written by Adam Button at www.forexlive.com.