Moneta Markets Daily Market Update: May 12, 2025

Daily Market Update - Moneta Markets. Global financial markets on May 12, 2025, are buoyed by optimism surrounding a US-China trade deal, though uncertainties over tariff reductions temper gains. Gold drops to a one-week low near $3,253, while EUR/USD holds above 1.1200, awaiting trade deal details. AUD/USD rises on trade optimism, and USD/JPY remains firm as JPY weakens. WTI crude nears $61.00, supported by eased demand concerns but capped by OPEC+ output plans. US inflation data and Fed Chair Powell’s Thursday appearance are key catalysts this week.

Gold Drops to One-Week Low

Current Level: Gold (XAU/USD) trades near $3,253, down to a one-week low.

Market Dynamics: US-China trade deal optimism (Switzerland talks) and easing US recession fears reduce safe-haven demand, pressuring gold. A firm USD (DXY at 100.60) post-Fed’s hawkish pause (rates at 4.25%-4.50%) adds headwinds. Geopolitical risks (Russia-Ukraine talks, Middle East tensions, India-Pakistan clashes) limit losses, with traders awaiting the US-China joint statement. US inflation data and Powell’s speech (Thursday) are critical.

Technical Outlook: Support at $3,252; resistance at $3,317. Bearish oscillators suggest downside, with a break below $3,200 targeting monthly lows.

EUR/USD Holds Above 1.1200

Current Level: EUR/USD trades near 1.1210, above a one-month low.

Key Drivers: Modest USD strength and US-China trade optimism weigh on EUR, but ECB’s June rate-cut bets (25 bps) and Eurozone PMI stability provide support. Geopolitical risks and trade deal uncertainties limit losses. Technical breakdown below 100-period SMA signals bearish bias, with US inflation data (Tuesday) and Powell’s comments key.

Technical Outlook: Support at 1.1200 (200-period SMA); resistance at 1.1250. Bearish oscillators favor downside, with 1.1100 in sight if 1.1200 breaks.

AUD/USD Advances to 0.6420

Current Level: AUD/USD trades near 0.6420, building momentum.

Market Dynamics: US-China trade deal progress boosts AUD, given Australia’s trade ties with China. Weaker USD (DXY at 100.60) supports gains, despite China’s CPI decline (-0.1% YoY) and PPI contraction (-2.7% YoY). RBA rate-cut bets for May and upcoming Westpac Consumer Confidence (Tuesday) influence sentiment.

Technical Outlook: Resistance at 0.6515; support at 0.6420 (nine-day EMA). RSI above 50 signals bullish bias, with trade statement as a catalyst.USD/JPY Firm Near 146.00

Current Level: USD/JPY trades near 145.80, steady above 145.55.

Influencing Factors: JPY weakens as US-China trade optimism (joint statement awaited) reduces safe-haven demand. USD strength from Fed’s hawkish stance and Japan’s mixed data (Household Spending +2.1% YoY, real wages -2.1%) support USD/JPY. BoJ rate-hike bets for 2025 limit JPY losses, with US inflation data key.

Technical View: Resistance at 146.80; support at 145.55 (50% Fibonacci). Bullish oscillators favor upside, with 147.00 as the next target.

WTI Nears Two-Week High at $61.00

Current Level: WTI crude trades near $60.90, just below $61.00.

Key Drivers: US-China trade deal optimism eases demand concerns, boosting prices after a 2.032 million barrel US inventory drawdown. OPEC+ output hike plans and USD strength cap gains. Geopolitical risks (Middle East, India-Pakistan) and US sanctions on Chinese refiners support prices. US inflation data (Tuesday) will influence USD and oil.

Technical Outlook: Resistance at $61.00; support at $59.80. RSI neutral, with trade deal details critical.

Economic Data and Fed Focus

Today’s Data: US-China joint trade statement (Geneva) is the focal point, with details on tariff reductions (US 145%, China 125%) driving risk sentiment. Australian Westpac Consumer Confidence and NAB Business Conditions (Tuesday) will impact AUD.

US Inflation and Powell: US CPI (Tuesday), Retail Sales, and PPI (Thursday) will shape Fed rate-cut expectations (July favored). Powell’s Thursday appearance will clarify tariff impacts and policy stance.

China Data: Weak CPI (-0.1% YoY) and PPI (-2.7% YoY) signal deflationary pressures, while a $96.18 billion trade surplus (April) reflects slower export growth (8.1% YoY), pressuring AUD and NZD.

US-China Trade Deal and Geopolitical Risks

Trade Status: US-China talks achieved “substantial progress” (Bessent, He Lifeng), with a joint statement due today. No tariff cuts (US 145%, China 125%) were confirmed, tempering optimism. US-UK deal (10% tariffs) and potential 50% China tariff cuts next week lift sentiment. Commerce Secretary Lutnick signals more deals soon.

Geopolitical Tensions: Russia-Ukraine talks (May 15), Hamas hostage release plans, and India-Pakistan border clashes maintain safe-haven demand for gold and JPY, despite trade optimism.

Outlook

On May 12, 2025, markets are driven by US-China trade deal optimism, lifting AUD/USD (0.6420) and WTI ($60.90), while gold ($3,253) and EUR/USD (1.1210) face pressure from a firm USD (DXY at 100.60). USD/JPY holds near 146.00 as JPY weakens. The US-China joint statement, US inflation data, and Powell’s speech will shape volatility, with geopolitical risks and trade uncertainties keeping investors cautious.

Stay tuned for further updates.