Fast-Track Trade Talks

Daily Updates:

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• Minutes for the FOMC’s May 7th meeting are expected to be released at 2pm ET today. The minutes should shed light on the committee's decision to continue the pause to interest rate cuts for the third consecutive time. In the press conference after that meeting, Chair Powell stated in various ways the Fed’s willingness to wait and see:

“Policy rate is in a good place to stay”

“We don’t feel like we need to be in a hurry”

“Right thing to do is to await further clarity”

“The appropriate thing is for us to wait and see” 

“We can afford to be patient as things unfold, there’s no cost”

• Powell’s comments on the uncertainty faced by the Fed in making their decision have certainly been vindicated in the weeks since that meeting. President Trump has reversed course on tariffs several times, introduced his “Big, Beautiful Tax Bill”, and longer-dated (30Y) treasury yields have visited above 5%.

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• In a bid to avoid President Trump's reciprocal tariffs which, currently delayed until July 9, 2025, negotiation continues between US and India who have reportedly offered major tariff reductions for the US, excluding specific agricultural commodities.
• The European Union has similarly agreed to fast-track trade talks with the US.

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• With trade deal agreements looking closer, US equities responded positively with the S&P 500 closing 2% higher, Nasdaq 100 up 2.4% and Dow Jones Industrial Average recording a 1.8% gain. Single stocks saw Nvidia rally 3%, and a pause on the Apple Inc. sell-off.
• “I had a little problem with Tim Cook yesterday,” Trump said last week, stating “I don’t want you building in India.’” The Apple CEO had previously claimed that “tariffs could add $900 million to Apple’s costs this quarter”.

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• Eurozone government bond yields moved modestly higher today, as investors have their focus on the upcoming sovereign actions in Germany and Spain, alongside the impact of a notably weak Japanese government bond auction.
• Germany plans to offer €2B in 15-year bonds, while Spain prepares a 10-year banking syndicate.

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• It has been announced that Trump Media and Technology Group' (DJT.O), has officially signed deals with institutional investors to raise $2.5B in debt to buy Bitcoin. Responding to earlier claims of a $3B crypto raise, the company dismissed the report, commenting “apparently the Financial Times has dumb writers listening to even dumber sources”.

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• Circle, the issuer of USDC stablecoin, has applied to go public on the New York Stock Exchange under the ticker symbol “CRCL,” targeting a valuation of approximately $5.65B, correlating to a share price projection of approximately $24 to $26.
• The IPO will consist of 24M shares of Class A common stock, with Circle issuing 9.6M shares and existing shareholders selling 14.4M. 

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• Nasdaq has officially filed the 19b-4 form to list the 21Shares Spot Sui ETF ($SUI), initiating the SEC’s review process for its approval.

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• Over 150K Ethereum validators (approximately 15% of the network) have signalled support to raise block gas limit from 36M to 60M, which translates to a higher transaction throughput on Ethereum's Layer 1. If over 50% of validators signal support, Ethereum’s can automatically adjust the block gas limit without requiring a hard fork.

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• A largely rangebound price action has reversed a rally in short-tenor options implied volatility for both majors BTC and ETH. Having risen to touch the level of the six-month tenor above 50%, BTC’s 7-day constant tenor at-the-money volatility now sits below 40% once again.
• The rally had been more extreme in ETH’s term structure, which had extended an inversion that began on May 19, 2025. ETH’s term structure now trades flat, not yet returning to its “normal” steep shape.
• The sideways price action in BTC has not ended the bullish skew of its volatility smiles across the term structure, but it has decisively ended the inverted shape of its futures curve.

This Week’s Calendar:

Charts of the Day: