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Summary
Commodity markets saw oil prices rebound by over 1%, recovering from a multi-session selloff as traders weighed renewed trade optimism against oversupply concerns. In economic data releases, the U.S. services sector returned to growth, with the ISM services PMI rising to 51.6% in April. Japan’s services PMI also climbed back into expansion territory after a month of stagnation. Looking ahead, market focus turns to the outcome of the Fed’s May meeting and the ice-breaker trade talks scheduled in Geneva.
Global Equity Markets
- U.S. futures rally: S&P 500 futures gained 0.9% on hopes that U.S. and Chinese officials will de-escalate trade tensions at talks in Switzerland.
- Asia outperforms: Hong Kong’s Hang Seng climbed 1.7% on the same optimism, while mainland China’s blue-chip CSI 300 index rose 0.5% following a surprise rate cut by the People’s Bank of China.
- European markets: European stocks broadly followed Asian cues, maintaining positive momentum into the late European session.
Currencies
- Dollar index: The DXY dollar index showed only minor changes after having posted consecutive losses, as traders positioned for the Fed’s policy decision.
- Euro and yen: The euro dipped slightly, trading near $1.13, while the yen hovered around recent ranges as markets awaited fresh rate signals from major central banks.
- Asian currencies calm: After recent swings, the Taiwan dollar has surged over 10% since early April’s tariff announcements, and other Asian currencies like the Korean won have seen reduced volatility.
Commodities
- Oil rebound: Brent crude traded at $61.15 a barrel and U.S. West Texas Intermediate at $58.02, up more than 1% as traders took advantage of technical buy signals following a steep multi-session decline.
- Gold retreats: Gold prices fell roughly 1.4% as investors shifted funds from safe-haven assets into riskier equities on improved trade outlook.
Key Economic Data
- U.S. services PMI: The Institute for Supply Management’s services PMI jumped to 51.6% in April from 50.8% in March, driven by stronger new orders even as employment remained in contraction.
- Japan services PMI: Japan’s service sector activity returned to growth in April after stagnating in March, reflecting improved orders and domestic demand.
What to Watch Next
- Fed meeting outcome: Investors will focus on the Federal Reserve’s May policy decision, where interest rates are widely expected to be held steady, but forward guidance will be scrutinized for clues on the timing of future cuts.
- U.S.–China trade talks: Ice-breaker discussions between senior U.S. and Chinese trade officials in Geneva on Saturday could pave the way for tariff roll-backs or product-specific exemptions, influencing risk sentiment across assets.
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