The current market is in turmoil due to the repeated policies of the Trump administration, and investors are eager to see how the Federal Reserve will respond to potential crises. From tariff swings to stock market fluctuations, the uncertainty of the White House is testing the wisdom of the Federal Reserve in maintaining market stability, and historical experience shows that the world's most important central bank has a series of "trump cards" in its hands.

Last week, US President Trump said he did not intend to fire the chairman of the Federal Reserve and hinted at progress on tariffs. Investors' appetite for risky assets improved, and the US dollar and US stocks rebounded, suppressing gold prices. After gold prices were blocked and fell back at the 3,500 mark, more short-term long profit-taking also dragged down gold prices. Investors were relieved by hopes of easing trade tensions and President Trump's abandonment of his threat to fire the chairman of the Federal Reserve. The dollar rebounded against major currencies, and the US dollar index rose to a near one-week high, slightly below 100.00.

On the other hand, a person familiar with the matter revealed in the middle of last week that the Trump administration is considering reducing tariffs on Chinese imports, adding that any action would not be unilateral. Trump continued to talk about his government's trade negotiations with China, although Beijing denied the existence of negotiations. At the same time, U.S. Treasury Secretary Bessant also said that trade tensions may ease and any trade agreement reached with China may significantly reduce tariffs. Overall, the market is very pleased with the rumors that China may negotiate and is seeing this trend have a significant impact on the market.

Review of market performance last week:

Before the weekend, the three major U.S. stock indexes closed higher collectively, with most large technology stocks rising. Trump's latest comments on tariffs put trade tensions in the spotlight. The Dow Jones Industrial Average rose more than 2% last week, closing up 40,113.50. The S&P 500 rose more than 4% last week, setting a record for the longest winning streak since January. It closed at 5,525.21. The Nasdaq Composite Index rose 6% last week. The stocks of the "Seven Big Tech Companies in the U.S. Stock Market", led by electric car Tesla, all rose, with intraday gains of more than 9% and gains of about 18% in the past five trading days. It closed at 17,382.94.

Spot gold performed a "dance on the edge of a knife" last week. After hitting a record high of $3,500/ounce, gold prices suffered a "high-altitude dive". The market fluctuated violently amid Trump's "repeated jumps" in tariff remarks. When gold prices were pushed close to $3,500, they fell by more than $150 in a single day. Finally, they closed at around $3,319/ounce on Friday, with a weekly amplitude of 7.21%. Behind this extreme market is the fierce collision between institutional quantitative models and retail emotional trading. The 25% increase in gold prices this year is facing a severe test: Is it a bull market correction or a trend reversal? How will Trump's 100th day rally in his second term this week affect the gold market has become the focus of market attention.

Silver prices rose slightly to about $33.090 an ounce last week, retreating from gains earlier last week, as signs of easing global trade tensions boosted the dollar, putting pressure on dollar-denominated commodities. The dollar strengthened as U.S. President Trump claimed that trade talks with China were ongoing, and signs of progress in negotiations with Japan and South Korea further boosted investor sentiment.

The dollar saw its first weekly gain since mid-March last week, as the market showed optimistic expectations for trade tensions. Last week, there were conflicting signs about whether tariffs were easing, which made the dollar fluctuate. The dollar index rose 0.35% last weekend after closing at around 99.60 after four consecutive weeks of declines. Later, Cleveland Fed President Beth Hammack said that if economic data supports it, interest rate cuts could be as early as June. This comment briefly put pressure on the dollar, but then rebounded on trade optimism.

The dollar index is currently at a key technical turning point. The index has experienced a clear downward trend recently, and rebounded after hitting a nearly 3-year low of 97.91. It is worth noting that the dollar index is now testing the important psychological level of 100.00, which is also the previous support-turned-resistance level.

The euro closed flat against the dollar last week at $1.1363. If the euro/dollar continues to rise to $1.20 in May, doves will demand a sharp half-basis point rate cut by the European Central Bank in June, according to the poll. After rising to 1.1573 this month, a 41-month high, the euro/dollar may rise further next month. The dollar rose more than 1.0% against the yen to around 143.70 on Friday. Japanese Finance Minister Katsunobu Kato said after meeting with U.S. Treasury Secretary Benson that the two sides did not discuss setting exchange rate targets. Trump previously accused Japan of weakening the yen to give its exporters an advantage.

British retail sales data was unexpectedly strong last week, and the pound rose slightly by 0.17% against the dollar to around $1.3318 for the week. The data showed that retail sales grew 0.4% in March, better than the 0.4% decline expected by economists in a Reuters poll. Overall retail sales grew 1.6% in the first quarter, the strongest in four years. Last week, the AUD/USD pair fell below $0.64 as the dollar strengthened amid signs of easing global trade tensions. But it still edged up 0.33% for the week, closing at $0.6397. However, the AUD/USD pair faces headwinds amid ongoing U.S.-China trade tensions. Australia’s close trade ties with China make it particularly sensitive to developments between the two economic giants. Traders continue to watch the fluid global trade landscape.

Oil prices edged higher on Friday but fell on a weekly basis, with Brent crude futures settling 32 cents higher at $66.87 a barrel, down 1.6% for the week, weighed down by expectations of oversupply and uncertainty over tariff talks. U.S. crude rose 23 cents to $62.98 a barrel, down 1.25% for the week. Oil prices fell to a four-year low earlier this month as tariffs sparked investor concerns about global demand and a sell-off in financial markets. Traders now believe that crude oil prices are unlikely to rise further in the short term due to the ongoing trade war between the world's largest consumers and market speculation that OPEC+ may accelerate production increases from June.

Bitcoin rebounded above $93,000 before the weekend, surging sharply from the $84,000 level at the beginning of the week. The US-China trade war has reversed, with US President Trump hinting that the 145% tariff on China may be significantly reduced, saying that China and the United States are negotiating tariffs. Bitget Exchange was shocked to sue Chinese KOL before the weekend, but the team came out to deny the rumor.

The yield on the 10-year US Treasury bond fell about 3 basis points to 4.29% on Friday, extending Thursday's drop of nearly 4 basis points as traders closely watched the development of the trade war and hoped for a possible easing. On the other hand, Cleveland Fed President Beth Hammack said that the central bank could take action as early as June as long as there is clear evidence about the direction of the economy. The market currently expects a 25 basis point rate cut in June and a total of three rate cuts by the end of the year.

Market Outlook This Week:

Trump Welcomes 100 Days in Office; Non-agricultural Data Released in Succession

The rebound of the US stock market last week will face intensive events, data and financial reports this week.

Of course, the biggest "black swan" in the global market is still US President Trump. If he feels that he can challenge the stability of the market again after the US stock market has risen for four consecutive days, no matter how good the data and financial reports are, they cannot save it. At the same time, as a symbolic node, Trump will usher in the "100 Days of Administration" of his current term on April 30.

Harvard University professor and former US Treasury Secretary Lawrence Summers commented last week that the first 100 days of the "Trump 2.0 Administration" may be the most unsuccessful of all new presidents in the United States since World War II, and this is the "judgment of the market."

Putting aside Trump, this week's economic schedule is already extremely busy.

The US will release the first quarter GDP data on Wednesday, which will reveal to what extent the concerns of US companies and consumers about tariffs during the period from January to March this year have damaged economic growth. This week is also "non-farm week" - JOLTS job openings on Tuesday, ADP private sector employment data on Wednesday, and non-farm payrolls on Friday will provide updates on the state of the US labor market.

The eurozone will also usher in a series of GDP, inflation, PMI and consumer confidence data to show the impact of "Trump tariffs" on Europe.

Elsewhere, the Bank of Japan will announce its interest rate decision on Thursday and release its first economic forecast for the fiscal year ending March 2028. Local media in Japan expected on Sunday that the Bank of Japan would not adjust interest rates next week, while lowering its GDP growth forecasts for 2025 and 2026 to reflect the impact of the global trade war. At the same time, inflation expectations may also be lowered, which may trigger a depreciation of the yen.

In addition, Canada will usher in a national election on the 28th. Poll data shows that the Liberal Party led by Mark Carney, former governor of the Bank of Canada and the Bank of England, is in the lead driven by the "anti-Trump wave".

The long-short game of the US dollar: technical breakthroughs under the puzzle of trade dialogue may be gaining momentum

Fundamentals may be the main driver of the US dollar in the near future, especially the change in the attitude of US President Trump. US Treasury Secretary Benson commented that trade tensions with other economies are likely to ease, adding that tariffs would be significantly reduced if a trade deal is reached with other economies, which was also confirmed by Trump. In addition, the US President stopped further attacking Federal Reserve Chairman Powell, which reduced the pressure on the Fed to cut interest rates, which may support the US dollar.

On Friday, the market focused on the US April employment report, which is expected to show a slowdown in the US job market. If this is the case, it may suppress the US dollar as it may strengthen the market's dovish expectations of the Fed.

The US dollar index is currently at a key technical turning point. From the technical trend, it can be seen that the index has experienced a clear downward trend recently, breaking through the lower track of the descending channel and hitting a low of 97.91 before rebounding. It is worth noting that the exchange rate is now testing the important psychological level of 100.00, which is also the resistance level of the previous support.

At present, a number of factors may continue to put pressure on the US dollar, including slowing US economic growth and recession concerns, which may eventually lead to the Fed lowering interest rates, thereby dragging down the US dollar. International investors may reduce their exposure to US dollar assets and rebalance their portfolios away from the US capital market due to the decline of "American exceptionalism".

How to choose the 3,300 mark when Trump holds a rally on his 100th day in office?

Spot gold fell slightly by 0.24% last week. Although the price of gold finally closed above $3,300 last week, the trend of gold prices can be described as ups and downs. Intraday transactions have fluctuated by more than $100 many times. Under the situation of trade tensions, the market has a high risk aversion sentiment, pushing the price of gold above the historical high of $3,500. The lowest price of gold fell back to around $3,260 during the week. At the moment when tariffs are deadlocked, any remarks made by Trump on tariffs have not reduced the risk of the market. Instead, they have increased market uncertainty and increased the volatility of gold prices. So far this year, gold has risen by more than 25%.

Earlier last week, investors withdrew $1.27 billion from the SPDR Gold Shares ETF, the largest single-day outflow since 2011. Meanwhile, gold hit an all-time high above $3,500, suggesting there may be some profit-taking. Similar outflows in 2011 coincided with the peak of gold's last super cycle, marking a long period of consolidation for gold that was not broken until 2020. But there is no guarantee that this will be a turning point, and there are still many positive factors at play, including trade uncertainty, safe-haven demand, central bank demand, and Wall Street's calls for further increases in spot gold prices.

This week, the gold market will usher in the release of the World Gold Council's first quarter "Gold Demand Trends" report, coupled with Trump's 100th day rally on Tuesday, which may become an important window for gold prices to choose to test the 3,500 mark again or continue to fall from 3,300.

The Russia-Ukraine agreement has sent another positive signal, and US oil may choose the $60 mark again this week

Oil prices fell to a four-year low earlier this month as tariffs triggered investor concerns about global demand and a sell-off in financial markets. Due to the ongoing trade war between the world's largest consumers and market speculation that OPEC+ may accelerate production increases from June, traders now believe that crude oil prices are unlikely to rise further in the short term.

However, the recent spread between the two oils {Brent and WTI} remains supported, in a backwardation of nearly $1/barrel, indicating tight supply in the spot market. In addition, according to CCTV, on April 25 local time, US President Trump said on his social media platform that the negotiations and meetings with Russia and Ukraine on that day went smoothly. If the Ukrainian war ends and more Russian oil can enter the global market, it is also possible to increase oil supply.

This week, oil prices focus on further news on the Russia-Ukraine agreement. If there is more positive news, it will help release the supply of Russian crude oil. In addition, focus on tariff-related news and Friday's non-agricultural data. Trump held a rally on Tuesday to celebrate his 100th day in office. Perhaps he will make some remarks on tariffs. If tariff tensions ease, US oil is expected to test the $60/barrel mark. On the contrary, in the short term, the two oils are expected to test the $68.00 and $65.00/barrel marks again.

Conclusion:

The Beige Book report released by the Federal Reserve last week released a heavy signal: the Trump administration's tariff increase policy is triggering a chain reaction across the United States, with prices rising rapidly in many places and economic activities slowing down significantly.

Faced with this "tariff shock wave", the Federal Reserve chose to wait and see. Although the May meeting is likely to keep interest rates unchanged, the market has bet on starting a rate cut in June. The warning of "significant deterioration in the outlook" in the Beige Book and Powell's attention to this report suggest that the policy shift may be earlier than expected. When the number of times the report mentions uncertainty soared to 80 times, the US economy, a speeding train, may be forced to pull the handbrake.

Starting from the beginning of this week, the financial market will usher in a heavy data release schedule, including the US first quarter GDP preliminary value, the US April employment report, the Bank of Japan's interest rate decision, and the eurozone's preliminary inflation and GDP data and other heavyweight economic indicators, as well as Trump's 100th day rally in office.

Overview of important overseas economic events and matters this week:

Monday (April 28): Beijing Xiangshan Forum Preliminary Meeting held in Beijing (until 30), BRICS Foreign Ministers Meeting (until 29), Canada held federal elections

Tuesday (April 29): Eurozone Economic Sentiment Index in April, US S&P/CS 20-city Unadjusted House Price Index in February, US JOLTs Job Vacancies in March, US Conference Board Consumer Confidence Index in April

Wednesday (April 30): China's official PMI data in April, China's Caixin Manufacturing PMI in April, Eurozone GDP in the first quarter, Germany's GDP in the first quarter, US GDP in the first quarter annualized quarterly rate initial value, US ADP employment in April, US core PCE price index in March, US core PCE price index in the first quarter, World Gold Council released the first quarter "Gold Demand Trends" report

Thursday (May 1): Bank of Japan announced interest rate decision and economic outlook report & Ueda Kazuo press conference, many global exchanges closed due to Labor Day

Friday (May 2): Eurozone April CPI, US non-farm payrolls report, ECB economic bulletin

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