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Kuwait Times
12-05-2025
- Business
- Kuwait Times
Fed holds rates steady and adopts ‘wait-and-see' stance on trade war
US-UK trade deal eases auto/agricultural tariffs, signaling cautious de-escalation KUWAIT: The US services sector expanded in April with the ISM PMI coming in at 51.6, lifted by new orders and inventories, though employment contracted, and tariff-driven price pressures hit a 27-month high. The Federal Reserve held rates steady at 4.25 percent-4.50 percent, citing trade uncertainty as aggressive tariffs risk stagflationary pressures, while unemployment claims dipped to 228,000. A preliminary US and UK trade deal eased auto/agricultural tariffs, signaling cautious de-escalation, though existing China tariffs remain. The Bank of England cut rates to 4.25 percent to counter slow growth, while China's services sector came in at 50.7 amid weak exports and rising costs. Japan's services PMI rose to 52.4 on stronger demand, but input costs surged and optimism declined. Globally, central banks tread carefully as trade tensions inflame inflation risks while suppressing growth, leaving markets balancing fragile optimism against looming stagflation threats. The ISM Services PMI in the US rose to 51.6 in April 2025, up from 50.8 in March and beating expectations of 50.2, signaling a stronger expansion in the services sector. Growth was driven by faster increases in new orders and inventories, while business activity remained positive despite a slight slowdown. Employment continued to shrink, though at a slower rate, and supplier delivery times lengthened. Price pressures surged to their highest level since February 2023. Concerns over tariff-related price impacts and federal budget cuts persist, but overall conditions are improving, according to ISM's Steve Miller. Federal funds rate In its latest policy meeting last Wednesday, the Federal Reserve opted to keep interest rates unchanged at 4.25 percent to 4.50 percent, emphasizing a cautious 'wait-and-see' approach as trade tensions cloud the economic outlook. Chair Jerome Powell highlighted that while the economy and labor market remain broadly solid, the Fed will refrain from adjusting rates until it gathers more clarity on the evolving impact of recent tariff policies. The decision comes amid a surge in imports aimed at beating new tariffs, a trend that may have distorted Q1 GDP figures. Powell pointed to the Trump administration's aggressive trade measures as a major source of economic uncertainty, warning that rising tariffs risks pushing inflation higher while simultaneously slowing growth, an unfavorable scenario that could leave the Fed's dual mandate out of reach. Meanwhile, President Donald Trump hinted that there will be a deal with a 'big' country announced on Thursday, adding that he would not lower tariffs on China as a condition to begin negotiations. Markets reacted positively on Wednesday with the Dow Jones, S&P 500, and Nasdaq indices ending the trading day with positive gains. Unemployment claims US jobless claims decreased by 13,000 to a seasonally adjusted 228,000 for the week ending May 3rd, following a prior week surge partly due to a 15,089 jump in unadjusted claims in New York. This previous increase was linked to layoffs across transportation, warehousing, hospitality, public administration, and education sectors. President Trump's tariffs include a significant hike to 145 percent on some Chinese imports. Federal Reserve Chair Jerome Powell noted that these 'significantly larger than anticipated' tariff increases could lead to a rise in inflation, a slowdown in economic growth, and an increase in unemployment, with the current Fed benchmark interest rate remaining in the 4.25 percent-4.50 percent range. Trump speaks President Trump announced a trade agreement framework with the UK, seen as a potential model for easing US tariffs. While details are still being finalized, the deal includes reduced tariffs on UK cars and agricultural products, and a joint tariff on steel and aluminum, with pharmaceutical exemptions. However, it's more of a 'letter' of understanding than a comprehensive deal, and existing universal tariffs remain. The announcement, which surprised some UK officials, was met with positive market reactions, though analysts note the limited scope and potential for only small economic gains for the UK. Trump emphasized that this is the first of many upcoming trade deals. Simultaneously, the US is engaging with China, with upcoming meetings aimed at de-escalating trade tensions, despite Trump's refusal to lower existing tariffs beforehand. These developments are viewed as potential signs of de-escalation in Trump's broader trade policies, which have drawn criticism from economists and global institutions concerned about their negative impact on the global economy and potential for a US recession. The greenback was last seen trading at 100.339. UK official bank rate Amidst a sluggish economy and concerns over President Trump's trade policies, the Bank of England (BoE) lowered its main interest rate from 4.5 percent to 4.25 percent on Thursday. This decision, anticipated due to easing inflation (down to 2.6 percent in March), aims to ease financial pressures for borrowers, businesses, and consumers. While five of the nine policymakers supported the 0.25 percent cut, some favored a larger reduction, and others preferred no change. The BoE highlighted the increasing uncertainty in global trade due to tariffs, noting a weakened outlook for global growth, though expecting a smaller impact on the UK. This rate cut is expected to stimulate investment, spending, and housing activity, benefiting those with loans but potentially disadvantaged savers. The GBP/USD currency pair was last seen trading at 1.3304 China services PMI China's Caixin Services PMI fell to 50.7 in April 2025 from 51.9 in March, missing expectations and marking the weakest growth since September. New orders rose at the slowest pace in over two years, hindered by US tariffs affecting goods trade. Export growth was minimal, while employment fell for the second month amid rising cost pressures. Input costs rose sharply due to higher wages and materials, but output prices declined for the third straight month as firms tried to stay competitive. Business confidence dropped to its second-lowest level since records began in 2005, reflecting concerns over trade policy shifts. The USD/CNY currency pair was last seen trading at 7.2364 Japan services PMI The au Jibun Bank Japan Services PMI for April 2025 was revised up to 52.4 from 52.2, indicating continued expansion for the sixth straight month and improving from March's neutral 50.0. New orders rose at the fastest rate in nearly a year, supported by ongoing, though slower, overseas demand. Hiring accelerated to its quickest pace since January, while backlogs increased modestly. Input costs surged at the fastest rate since February 2023, and output prices rose as firms passed on some costs. Despite this growth, business optimism dropped to its lowest since January 2021 due to concerns over global trade, labor shortages, and inflation. The USD/JPY currency pair was last seen trading at 145.34 Kuwait Kuwaiti dinar USD/KWD closed last week at 0.30645
Business Standard
06-05-2025
- Business
- Business Standard
Dollar index steadies under 100 mark; Fed policy in focus
The dollar index continues to steady in a narrow range under 100 mark on Tuesday amid uncertainty regarding tariff deals between US and China and resurfacing concerns in Middle East. Meanwhile, ISM survey showed on Monday that the growth in the US services sector picked up in April. ISM Services PMI rose to 51.6 compared to 50.8 in March and 50.6 estimated. This comes on top of Friday's upbeat US jobs data and eases fears of a US recession. Investors now look forward to the highly-anticipated two-day FOMC meeting starting this Tuesday for cues on rate path. Currently, the dollar index that measures the greenback against a basket of currencies is quoting at 99.46, down 0.18% on the day. Powered by Capital Market - Live News
Yahoo
05-05-2025
- Business
- Yahoo
Services PMI reaches highest level since January 2023: ISM
The Institute for Supply Management's services PMI (Purchasing Managers Index) moves a notch higher to a reading of 51.6, its highest level seen since January 2023. Catalysts host Madison Mills examines the latest PMI data alongside employment figures and how US stocks (^DJI, ^IXIC, ^GSPC) and the bond market (^TYX, ^TNX, ^FVX) are moving Monday morning. To watch more expert insights and analysis on the latest market action, check out more Catalysts here. The US ISM Services Price Index rising to the highest level since January of 2023. The ISM Services PMI rising at 51.6. That is from 50.8 and is also above the estimate here of 50.2. I also take a look at new employment. The survey data coming in at 47.1, actually a bit of a beat there coming in at 49. So potentially a sign that unemployment is not uh under pressure at least for that particular area here as we continue to take a look here at this data coming in. Again that ISM Services Price Index rising to the highest level since January of 2023. And new orders here the survey coming in at 50.3, the actual number coming in at 52.3. Taking a look at the markets here, you've got them continuing to be under pressure. This has been happening since the market opened this morning. Taking a look at the 10-year yield down just a clip here, but still holding above that 43 level, continuing to see a touch of a steeper or a little bit further out on the curve here in the bond market as we do uh digest that economic data coming in this morning.
Business Insider
04-05-2025
- Business
- Business Insider
3 Economic Events That Could Affect Your Portfolio This Week, May 5-9, 2025
Stocks rose for a second straight week, with the S&P 500 (SPX) gaining 2.92%, the Dow Jones Industrial Average (DJIA) ending the week with a gain of 3%, up 3%, and the tech-heavy Nasdaq-100 (NDX) surging 3.45%. The S&P 500 notched its longest daily rally in over two decades, driven by robust tech earnings, progress in tariff negotiations, and continued strength in the job market. Protect Your Portfolio Against Market Uncertainty The two main forces that had pressured stocks – tariff uncertainty and concerns about the sustainability of the AI-led rally – began to ease, at least for now. The Q1 earnings season has been by-and-large positive, with over 75% of reporting S&P 500 companies beating EPS estimates. Microsoft and Meta Platforms reignited investor optimism last week, beating expectations and, more importantly, issuing bullish guidance while maintaining aggressive AI-related capex plans. That momentum lifted a broad range of AI hardware and infrastructure stocks, as well as adjacent plays like power producers and electronics suppliers. This optimism from pure-play tech giants overshadowed signs of trouble in the outlooks of more consumer-facing companies such as Apple and Amazon, both already feeling the impact of the trade spat with China and bracing for an impending consumer pullback amid an economic slowdown. They join a growing list of retailers and consumer goods firms slashing or withdrawing guidance, citing rising costs from tariffs and weakening demand. Although the worst of the tariff uncertainty seems to be behind us, with the markets apparently making peace with a new tariff regime, the impacts of the Trump administration's trade policies on the U.S. economy are just beginning to trickle in. Although the unexpected Q1 2025 GDP contraction shook sentiment, it was the result of companies front-loading orders ahead of anticipated tariffs and is expected to be reversed in the second quarter. Meanwhile, the economy's underlying metrics remained sound, as confirmed by the stronger-than-expected April jobs report, with job gains at their strongest since May 2023. While stock markets are increasingly optimistic about de-escalating trade tensions, consumers seem less convinced. Consumer sentiment fell in April for the fourth month in a row, reaching levels not seen since the pandemic era, as households brace for tariff-induced price increases. However, elevated consumer inflation expectations, coupled with the job market's strength, may keep the Fed on hold longer from acting as it weighs the impact of tariffs on growth and inflation. Here are three key economic events that could affect your portfolio this week. For a full listing of additional economic reports, check out the TipRanks Economic Calendar. » April's ISM Services PMI – Monday, 05/05 – This report reflects business conditions in the U.S. services sector, which accounts for over 70% of GDP. The ISM Services PMI is a key leading indicator, helping analysts anticipate shifts in economic momentum, as changes in its components often precede broader economic trends. » April's S&P Global Services PMI – Monday, 05/05 – This report offers an alternative perspective on the U.S. services sector. Unlike ISM, S&P Global's survey includes a wider spectrum of private-sector firms, including small and mid-sized enterprises. It places greater emphasis on output and business expectations, whereas ISM focuses more on actual spending and activity. Together, the two reports provide a more comprehensive view of the sector's health. » March's Consumer Credit Change – Wednesday, 05/07 – This report measures the monthly change in total outstanding consumer credit, excluding mortgage debt. It provides insight into how much consumers are borrowing to finance spending on goods and services. Rising consumer credit can signal strong consumer confidence and robust household spending, while declines may indicate caution or financial strain.
Economic Times
03-05-2025
- Business
- Economic Times
Gold price forecast: Can gold break above $3,268 and surge toward $3,300 amid Fed rate decision and 177K jobs boost? Can it finally push past $3,500? Here's what you need to know
Why is gold struggling despite rising global uncertainty? What key data is expected to shake up gold prices next week? Live Events May 6: ISM Services PMI (Forecast: 50.2, Previous: 50.8) May 7: Fed Funds Rate decision (Expected: 4.50%, no change) May 7: FOMC statement and Fed Chair Jerome Powell's press conference May 8: Weekly unemployment claims (Forecast: 232,000, Prior: 241,000) May 9: Speech from FOMC member Christopher Waller Could a breakout above $3,268 trigger a gold rally? What's the trade setup for gold this week? Entry Point: Confirmed breakout and close above $3,268 Targets: First at $3,275, then $3,295 Stop Loss: Just below $3,231 Will gold finally push past the $3,500 ceiling? FAQs: (You can now subscribe to our (You can now subscribe to our Economic Times WhatsApp channel Gold prices ended the week around $3,241, but all eyes are now locked on the critical $3,268 breakout level, as investors brace for a heavy week of U.S. economic data and the Federal Reserve's rate decision. While gold has been under pressure lately due to stronger-than-expected job numbers and improved U.S.-China trade sentiment, the coming days could bring new volatility—and potentially open the door for another gold week, gold slipped slightly as a solid U.S. jobs report and signs of easing trade tensions took the shine off the precious metal. According to the latest Nonfarm Payrolls (NFP) data, the U.S. added 177,000 jobs in April, beating forecasts of 130,000. That surprise gain pushed Treasury yields higher and dampened hopes for a near-term interest rate gold doesn't offer any yield, rising bond yields often make it less attractive. This time was no different. Traders immediately scaled back bets on a June rate cut, and that shift pressured gold prices even strategist Daniel Pavilonis highlighted that optimism around U.S.-China trade talks is also weighing on gold. On Friday, China's Commerce Ministry signaled willingness to negotiate on tariffs—a move that boosted risk-on sentiment and capped gold below the $3,500 week is packed with market-moving U.S. macro data, and gold traders are on high alert. Here's the full lineup:While no rate hike or cut is expected, Powell's tone during the press conference will be key. If he signals any hint of dovishness—or even acknowledges economic softening—gold could get a fresh lift. Otherwise, hawkish signals may keep gold bulls on the speaking, gold (XAU/USD) is caught in a tight zone, trading just under the $3,268 resistance. That level marks a descending trendline as well as the 50-period EMA—both key indicators for short-term price gold can break and hold above $3,268, analysts suggest it could unlock further upside targets around $3,275 and $3,295. But caution is warranted—traders should wait for confirmation before jumping in, especially with volatility likely to rise after upcoming economic the downside, support sits at $3,231, followed by $3,204. While the MACD indicator remains bearish, there are signs it's beginning to stabilize, hinting that momentum could shift a simplified breakdown of the gold trade strategy many are watching:If the Fed or ISM data surprise to the downside, gold could benefit as rate cut hopes revive. On the flip side, strong data could push Treasury yields even higher and pressure gold traders should resist the temptation to chase early breakouts. With so many events lined up, waiting for pullbacks after volatility spikes might offer safer now, $3,500 remains a ceiling for gold, and that's largely due to the rebound in market risk appetite. The shift comes as geopolitical risks ease and economic indicators surprise to the we see major dovish signals from the Fed, or weaker-than-expected economic data, gold may struggle to break that upper level in the short term. But if macro conditions shift—even slightly—the $3,268 breakout could be the trigger for a fresh gold then, gold remains at a crossroads—caught between strong U.S. fundamentals, cooling inflation, and cautious central bank messaging.A1: Gold needs to break and hold abovefor a potential rally.A2: A dovish Fed tone could boostby reviving rate cut hopes.
