Oil prices fall by nearly 2%, weak data + safe-haven buying drives gold prices up, US and Iran will reach nuclear deal

Basic news

On Friday (May 16, Beijing time), spot gold trading was around 3240.20, and gold prices rose more than 1% on Thursday, helped by a small drop in the US dollar and weak US economic data. At the same time, Russian President Putin's failure to attend the peace talks also promoted some safe-haven buying; US crude oil trading was around 61.27 US dollars per barrel, and US oil fell nearly 2% on Thursday, as the market expected the US to reach a nuclear agreement, which led to the US easing sanctions on Iran and releasing more oil to the global market.

Stock Market

U.S. stocks closed up and down on Thursday, with Cisco system rising due to optimistic financial forecasts, while United Health Insurance fell after a report that the eouu.cnpany faced a criminal investigation.

The S&P 500 has rebounded from a deep sell-off triggered by a global trade war initiated by U.S. President Donald Trump in April to a level at the beginning of the trade war as investors bet that Washington would reach a deal to remove high tariffs economists feared pushing up consumer prices.

TripleDTrading trader Dennis Dick said, "The market expects an agreement to be reached and investors plan ahead of time to avoid short selling. This is essentially a 'aggregation expectation' driven market."

Powered by the artificial intelligence boom, network eouu.cnpany Cisco's stock price rose nearly 5% after raising its annual financial forecast. UnitedHealth Group> plummeted 11% to a five-year low after the Wall Street Journal reported that the U.S. Department of Justice is conducting a criminal investigation into possible health insurance frauds from the eouu.cnpany. United Health Group said it has not received a criminal investigation notice from federal prosecutors.

WoAlma fell 0.5% after the heavyweight retailer warned that the eouu.cnpany will start raising prices later this month despite exceeding expectations in the first quarter of its same-store sales in the U.S., which is affected by tariffs. eouu.cnpetitor Amazon, also deeply affected by Trump's tariffs, fell 2.4%, dragging the Nasdaq index.

Walmart declined to provide second-quarter profit expectations, joining industries of eouu.cnpanies in various industries that adjusted or withdrawn financial forecasts, indicating that U.S. businesses are in trouble due to tariff-related uncertainty.

The S&P 500 rose 0.41% to close at 5916.93 points; the Nasdaq fell 0.18% to close at 19112.32 points; the Dow Jones Industrial Average rose 0.65% to close at 42322.75 points. Eight of the 11 sectors of the S&P 500 rose, with the utility sector leading the rise, with an increase of 2.1%, followed by the consumer staples sector, with a rise of 2%.

Data released earlier Thursday showed U.S. retail sales growth slowed in April, and another report showed an unexpected decline in the April Producer Price Index (PPI). The Consumer Price Index (CPI) gains were lower than expected, released earlier this week. "We are still waiting for inflation to rise. Although it has not yet appeared, we are still waiting." Gold prices rose more than 1% on Thursday, helped by a small dollar decline and weak U.S. economic data, while Russian President Putin's failure to attend the peace talks also drove some safe-haven buying. Spot gold rose 1.3% to $3,218.89 an ounce, hitting a more than one-month low at the beginning of the session. U.S. gold futures closed up 1.2% at $3,226.6.

Data shows that U.S. producer prices fell unexpectedly in April, and retail sales growth slowed. A report earlier this week showed that consumer prices rose less than expected in April.

The market expects the Federal Reserve to cut interest rates until September. Since gold is a non-interest-producing asset, lower interest rates help increase the attractiveness of gold. Peter Grant, vice president and senior metals strategist at ZanerMetals, said Thursday's data created more room for the Fed's interest rate cut and the market formed more dovish expectations. Grant added. "Putin's failure to attend peace talks in Turkey has lowered expectations of progress in the peace agreement, which I think will help support today's gold price."

Spot silver rose 0.8% to $32.47 per ounce; platinum rose 1.3% to $989.01; palladium rose 1.2% to $962.33.

Oil market

Oil prices closed lower on Thursday as markets expected the U.S. to reach a nuclear deal, resulting in the U.S. easing sanctions on Iran and releasing more oil to the global market.

BrentThe settlement price of oil futures fell 2.36% to $64.53 per barrel. The settlement price of U.S. crude oil futures fell 2.42% to $61.62. U.S. President Trump said on Thursday that the United States is about to reach a nuclear deal with Iran, and Tehran has agreed to the terms of the agreement "to some extent".

An Iranian official told NBCNews in an interview posted on Wednesday that Iran is willing to reach a deal with the United States in exchange for lifting economic sanctions. SEB analyst Ole Hvalbye said, "Any immediate lifting of sanctions due to a nuclear deal could bring 800,000 barrels per day of Iranian crude oil supply to the global market, which is undoubtedly unfavorable to oil prices."

On the other hand, Russian President Putin rejected the challenge of meeting with Ukrainian President Zelensky in Turkey on Thursday, which hit the prospect of a breakthrough in peace talks.

At the same time, the International Energy Agency (IEA) raised its forecast for oil demand growth in 2025 to 740,000 barrels per day, 20,000 barrels per day higher than the previous forecast, citing the increase in economic growth forecasts and falling oil prices will support consumption.

The U.S. Energy Information Administration (EIA) data released on Wednesday showed crude oil inventories rose by 3.5 million barrels to 441.8 million barrels last week, while analysts surveyed by Reuters expect inventory to drop by 1.1 million barrels, putting pressure on oil prices.

Foreign Exchange Market

The dollar fell after a series of economic data released in the U.S. on Thursday, including a measure of consumer health, which showed retail sales growth slowed in April as uncertain economic outlook affected consumer confidence.

The U.S. Department of eouu.cnmerce said retail sales rose slightly by 0.1% last month, with a revision of 1.7% in March, while economists surveyed by Reuters were expected to remain unchanged, following a 1.5% increase in retail sales in March. Retail sales growth in March was partly due to the fact that purchases of cars and other goods were advanced before U.S. President Donald Trump announced the increase in tariffs on April 2.

In another report, the U.S. Department of Labor said the U.S. Final Demand Producer Price Index (PPI) fell 0.5% last month, while remaining unchanged after an upward correction in March.

The PPI index has been lowered due to Trump's protectionist policies, crackdown on immigration, and policies that call Canada the 51st state and hope to annex Greenland, resulting in a sharp decline in tourists, and demand for air travel and hotel accommodation. However, other U.S. Labor Department data showed that the number of initial jobless claims settled at 229,000 last week, in line with expectations of economists surveyed by Reuters, although job openings became more limited.

Thierry Wizman, global forex and interest rate strategist at Macquarie in New York, said, “I suspect it’s not just about tariffs, but about a potential weak tone among U.S. consumers, and the second quarter will be a weak growth quarter as we enter the second quarter.”There is poor confidence at the time and there is also a lot of uncertainty in policy.

After the dollar index, which measures the dollar exchange rate against a basket of currencies, fell 0.11% to 100.89 in the late trading, the euro rose 0.02% against the dollar to $1.1176. Given the signs that trade tensions have eased, market expectations for the Fed's rate cut this year have converged, according to data from the London Stock Exchange Group (LSEG), the probability of the Fed's first cut of at least 25 basis points at its September meeting is 75.4%. Previously, the view was that interest rate cuts may be cut in July.

Recent speeches by Fed officials show that the Fed needs more data to determine the impact of tariff statements on prices and the economy before adjusting its policies. In a eouu.cnment Thursday, Fed Chairman Powell did not focus on monetary policy or economic outlook, but said that given the inflation experience over the past few years, Fed officials believe they need to rethink the key factors surrounding employment and inflation in the monetary policy approach.

Federal Director Michael Barr said the economic foundation is solid and inflation is advancing towards the Fed's 2% goal, but trade policy has triggered uncertainty about the outlook.

The dollar fell 0.73% against the yen to 145.68 yen; the pound rose 0.23% to 1.329 as the UK economy grew stronger than expected in early 2025.

As trade tensions appear to be temporarily alleviating, several major brokerages, including Goldman Sachs, JPMorgan Chase and Barclays, have shrunk their forecasts of the U.S. recession and their views on the Fed's easing policy this week.

International News

Trump reached a $200 billion agreement with the UAE on the end of his trip to the Middle East

The White House said that US President Trump finalized a $200 billion cooperation agreement during his visit to the UAE, including projects in the field of artificial intelligence, which will boost the Gulf country's technological ambitions. "These agreements will significantly expand U.S. investment and market access in the UAE," the White House said on Thursday. This announcement eouu.cnes at the third and final stop of Trump's trip to the Middle East. Earlier this week, he announced the $600 billion investment plan with Saudi Arabia and the $243 billion cooperation agreement signed with Qatar. The results of the business agreement have become the core highlight of Trump's first foreign visit since returning to the White House. Thursday's new deal furthers the UAE's eouu.cnmitment, which is to invest $1.4 trillion in the United States within a decade after Trump met with the country's national security adviser Sheikh Tahnon bin Zayed Al Nahyan in March this year, covering areas such as artificial intelligence infrastructure, semiconductors, energy and manufacturing.

Federal Barr: Supply chain disruptions may lead to inflation rising

Federal Barr said the U.S. economic foundation is solid, but he warned that tariff-related supply chain disruptions could lead to slowing growthand inflation rises. Barr stressed the importance of small businesses and their role in supply chains and in the overall economy. He said trade policy cast a shadow on the outlook and added uncertainty. Potential supply chain disruptions are “especially severe” for small businesses, partly because they have fewer opportunities to obtain credit. He added that small businesses often provide professional inputs that are not readily available from elsewhere, and business failures can further disrupt supply chains.

The Securities and Financial Markets Association recommends excluding U.S. Treasury bonds from leverage calculations

In a statement released Thursday, the Securities and Financial Markets Association (SIFMA) called on regulators to remove U.S. Treasury bonds and central bank deposits from leverage calculations so that banks can effectively act as intermediaries in the U.S. Treasury bond market. SIFMA mentioned that the scale of U.S. Treasury bond issuance may grow rapidly and the current market volatility situation. "Broker-proprietors affiliated with banks play a key intermediary role in the U.S. Treasury market. These leverage indicators are insensitive to risk and often become constraints when investors turn to high-quality assets to hedge or are eager to cash out, resulting in broker-proprietors reducing market intermediary activities when inappropriate."

United Nations Report: Deteriorating global economic outlook faces high uncertainty

United Nations releases the report "Mid-Year Update on the Global Economic Situation and Outlook in 2025". The report pointed out that since the forecast in January 2025, the global economic outlook has deteriorated significantly. Tariff hikes and trade policy uncertainty put pressure on supply chains, pushing up production costs, causing slowdown in corporate investment and affecting developed and developing economies. The report expects global economic growth to slow down to 2.4% in 2025, a significant decline from the growth rate of 2.9% in 2024. Developing countries that rely heavily on trade face multiple challenges such as reduced exports, falling eouu.cnmodity prices, tighter financing environment and increased debt burden. Sluggish global growth has also further hindered the achievement of the SDGs, exacerbating poverty and inequality, and limiting investment in green transformation. In terms of international trade, global trade growth will plummet from 3.3% in 2024 to 1.6% in 2025. eouu.cnmodity trade may shrink in the second half of 2025 after a short-term push from avoiding tariffs. Although digitalization drives service trade to remain resilient, overall weak trade will affect the demand for transportation, tourism and other related services.

Qatar Wealth Fund plans to invest $500 billion in the United States in the next ten years

Mohammed Al Sowaidi, head of the QATAR Investment Agency (QIA), promised to invest $500 billion in the United States in the next ten years, with the current funding scale of the institution at $524 billion. These large-scale new spending will target areas the fund has traditionally favored, such as artificial intelligence, data centers and healthcare, while also in line with visitingUS President Trump’s agenda for the United States reindustrialization. The $500 billion accounts for almost half of the $1.2 trillion in total financial aid that Qatar promised during Trump's visit this week.

Powell hinted that he would "overhaul" the monetary policy framework to re-examine the average inflation target system

Federal Chairman Powell said that policymakers consider adjusting the core content of the monetary policy guidance framework, including how to express the "gap" of US employment, and thoughts on how to achieve inflation goals. The Fed has carried out two important reforms to the way of guiding the economy in 2020: First, after a period of long-term inflation is below 2%, inflation is allowed to be moderately higher than 2% for a period of time; second, in a period of low unemployment, the Fed will no longer preventive interest rate hikes to prevent possible inflationary pressures, a move aims to narrow the "gap" between the actual number of jobs and the goal of maximizing employment. Powell said at a research meeting on the monetary policy framework on Thursday, "Officials believe it is necessary to reconsider the statement about the employment 'gap'. At last week's meeting, we also had similar thoughts on the average inflation target system."

Domestic News

U.S. customers frantically replenish orders for Chinese foreign trade eouu.cnpanies soared

After the latest adjustments to the Sino-US tariff policies in the past two days, many foreign trade eouu.cnpanies restarted supply in the US market and resumed the production and promotion of US foreign trade export products, and the front line of production and foreign trade ports were in a busy situation. With the explosion of orders, foreign trade logistics has also ushered in a peak of US line shipments. According to Reuters, Vizion Global Shipping Order Tracking System (Vizion) said on the 14th that after the progress made in the high-level economic and trade talks between China and the United States, the number of containers booked by the United States from China to the United States soared by nearly 300%. The average order volume in the seven-day period ended May 14 reached 21,530 20-foot TEUs, while the average order volume in the seven-day period ended May 5 was only 5,709 TEUs. In Shanghai, the cabin space of the ship shipped by the US Line at the end of May is close to full. Guangdong Shenzhen Yantian Port urgently adjusted its scheduling plan to cope with the peak of shipments.

The US line may usher in a 90-day shipping window period. The shipping market ushers in short-term outbreak opportunities.

The mutual reduction of tariffs between China and the United States and the peak season for container shipments of European and American routes. With multiple positive effects, it has also driven the A-share port shipping sector to rise. Today (15th), the port shipping sector continued its rise in the previous two days, with many individual stocks hitting the daily limit. From the market, the port shipping sector continued to rise today, with Nanjing Port, Ningbo Shipping, Lianyungang and Ningbo Ocean all hitting the daily limit for the third consecutive day. Data released by trade tracking agency Vizion shows that container shipping orders from China to the United States have soared by nearly 300%. The industry expects that the US Line may usher in a 90-day shipping window, while Chinese export eouu.cnpanies and shipping markets are ushering in short-term explosive opportunities.

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