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Geopolitics, Fed policy, and Bitcoin: The trio shaping today’s markets

Geopolitics, Fed policy, and Bitcoin: The trio shaping today’s markets

The global risk sentiment has found a foothold of stability, buoyed by a calming of geopolitical tensions and rising expectations that the Federal Reserve will lower interest rates later this year. This stability has rippled across asset classes, lifting US stock markets, tempering volatility, and even sparking renewed interest in cryptocurrencies like Bitcoin.

As a journalist tasked with unpacking this intricate scenario, I’ll explore how these factors interplay, what they mean for investors, and how upcoming data might sway the trajectory of markets in the near future.

The stabilisation of global risk sentiment

At the heart of the current market narrative is a perceptible shift in global risk sentiment. After months marked by uncertainty, driven in part by tariff disputes and geopolitical friction, the world seems to be exhaling, at least for now. This easing of tensions has allowed investors to step back from the edge of panic and refocus on growth opportunities. Meanwhile, the prospect of Federal Reserve interest rate cuts has injected a dose of optimism into the equation.

Lower interest rates typically signal cheaper borrowing costs, which can stimulate economic activity and make riskier assets, such as stocks, more appealing compared to the declining yields of bonds. Together, these forces have created a stabilising effect, one that’s visible in the performance of major financial indices and the behaviour of volatility gauges.

On Thursday, US stock markets closed on a high note, reflecting this newfound confidence. The Dow Jones Industrial Average climbed 0.94 per cent, the S&P 500 gained 0.80 per cent, and the Nasdaq Composite advanced 0.97 per cent. These gains weren’t a one-day fluke.

Asian equities opened higher on Friday, and US equity index futures hinted at a continuation of the upward trend when Wall Street reopened. This broad-based rally suggests that investors are embracing the narrative of reduced geopolitical risk and the promise of a more accommodative monetary policy from the Fed.

Perhaps the most telling indicator of this shift is the VIX, often dubbed the market’s “fear gauge.” After spiking to 52 in April amid tariff-fueled turmoil, a level that signaled heightened investor anxiety, the VIX has since retreated dramatically, sliding to 16.59. This decline signals a significant unwinding of fear, a return to a more measured risk appetite.

Historically, a VIX below 20 is associated with calmer markets, where investors are less preoccupied with hedging against sudden downturns and more inclined to pursue growth-oriented investments. The drop from 52 to 16.59 isn’t just a number. It’s a story of markets finding their footing after a stormy period.

Geopolitical concerns: From storm to calm

Geopolitical risks have long been a wild card in the financial world. Trade wars, political upheavals, and international conflicts can send shockwaves through markets, prompting sell-offs and spikes in volatility as investors scramble to assess the fallout.

April’s tariff disputes, for instance, were a textbook example of how quickly sentiment can sour when governments flex their economic muscle. The resulting uncertainty drove the VIX to its lofty peak, as markets braced for potential disruptions to global trade and economic growth.

But the past few weeks have painted a different picture. While the specifics of what’s driving this geopolitical détente aren’t fully detailed in the data, perhaps a cooling of trade rhetoric or diplomatic progress behind the scenes is at play; the effects are undeniable. Investors are no longer pricing in the same level of chaos, and that’s allowed risk assets to breathe.

It’s a reminder that markets don’t need perfect clarity to rally; they need the absence of immediate threats. This calm could be fleeting. Geopolitical risks are notoriously unpredictable, and a single headline could reignite volatility. For now, though, the respite is a welcome tailwind for risk sentiment.

Federal Reserve rate cuts: A beacon of hope

If geopolitical calm is the foundation, expectations of Federal Reserve interest rate cuts are the scaffolding propping up this stable sentiment. The Fed’s monetary policy is a linchpin for global markets, influencing everything from borrowing costs to currency values. When the Fed signals a dovish turn, lowering rates to spur growth, it’s like a green light for investors to take on more risk. That’s precisely what’s happening now, as markets increasingly price in rate cuts later this year.

This anticipation isn’t baseless speculation; it’s reflected in the bond market. On Thursday, US Treasury yields dipped, with the 10-year yield falling five basis points to 4.24 per cent and the two-year yield dropping six basis points to 3.71 per cent. Lower yields suggest that investors expect the Fed to ease policy, reducing the return on safe-haven assets like Treasuries and nudging capital toward equities and other growth-oriented investments.

Adding intrigue to the mix are renewed murmurs that President Donald Trump might be mulling a replacement for Fed Chair Jerome Powell. Such a shake-up could muddy the waters of monetary policy, but so far, the market’s reaction has been subdued, yields fell rather than spiked, indicating that investors are betting on rate cuts over political drama.

The US Dollar Index, meanwhile, slipped 0.54 per centto 97.15, a move that aligns with the narrative of rate cuts. A weaker dollar often boosts risk assets, especially in emerging markets, by easing the burden of dollar-denominated debt and lifting commodity prices.

Gold held steady at US$3,333 per ounce, a sign that investors aren’t rushing to safe havens, while Brent crude edged up 0.07 per cent to US$67.73 per barrel, buoyed perhaps by a slightly brighter demand outlook. These subtle shifts underscore how deeply Fed expectations permeate the financial ecosystem.

The PCE inflation data: A potential pivot point

While the present feels stable, the future hinges on data, specifically, the May reading of the personal consumption expenditures (PCE) price index, due Friday. As the Fed’s preferred inflation gauge, the PCE carries outsized weight in shaping policy decisions.

Analysts expect the headline PCE to rise 0.1 per cent month-on-month and 2.3 per cent year-on-year, with the core PCE (excluding volatile food and energy) ticking up 0.1 per cent month-on-month and 2.6 per cent year-on-year. These figures might seem incremental, but in the current environment, they’re anything but trivial.

If inflation surprises to the upside—say, climbing faster than anticipated—it could dampen hopes for rate cuts. A Fed wary of overheating might hold rates steady or even hint at tightening, which would likely dent risk sentiment and pressure equities.

Conversely, if the data indicates that inflation is cooling or holding steady, it strengthens the case for monetary easing, potentially fueling further gains in stocks and other risk assets. The market is leaning toward the latter scenario, given the recent behavior of yields and the dollar, but it’s a tightrope walk. Investors will dissect every decimal point of the PCE report, and their reactions could either cement this stability or unravel it.

Bitcoin’s bullish turn: A microcosm of risk appetite

Beyond traditional markets, the cryptocurrency space provides a fascinating lens on risk sentiment, with Bitcoin (BTC) taking centre stage. On Monday, Bitcoin surged 4.34 per cent to close at US$107,486, forming a bullish engulfing candlestick pattern that erased two days of bearish price action.

This technical signal, where a strong green candle fully engulfs the prior red candles, suggests a potential reversal, especially since Bitcoin held support above US$105,000 for two consecutive days. It’s a pattern that has caught the eye of traders, hinting at a shift in market structure and bolstering the cryptocurrency’s ongoing recovery.

But is this bullish setup reliable? To dig deeper, I’ve examined Bitcoin’s daily chart since January 2021, focusing on instances of the bullish engulfing pattern that meet specific criteria: the candle must engulf at least the previous two candles, emerge after a corrective phase, and be followed by a clear break of structure that confirms momentum.

The data reveals 19 such cases, with 15 leading to new local highs in subsequent days or weeks, a success rate of roughly 78 per cent. That’s a compelling statistic, suggesting a high likelihood that Bitcoin could continue to rise from here.

Yet, crypto markets are a different beast, driven as much by sentiment and speculation as by technicals. Despite the bullish signal, opinions remain split. Some view Bitcoin’s resilience as a sign of growing institutional adoption, while others warn of regulatory risks or macroeconomic headwinds. The upcoming PCE data could be a wildcard here, too, if inflation spikes and rate-cut odds fade, risk assets like Bitcoin might falter. 

My take: Cautious optimism amid uncertainty

Stepping back, the current stability in global risk sentiment feels like a delicate balance, one I view with cautious optimism. The retreat of geopolitical storm clouds and the Fed’s dovish tilt have created a fertile ground for risk assets, as seen in the stock market’s gains, the VIX’s slide, and Bitcoin’s technical breakout.

The dip in Treasury yields and the dollar’s softening only reinforce this narrative. But stability isn’t the same as certainty, and the PCE data looms as a potential inflection point. A benign report could propel markets higher; a hot one could spark a rethink.

For investors, this is a moment to savor the calm while keeping an eye on the horizon. The interplay of geopolitics, monetary policy, and economic indicators will keep markets dynamic, if not downright unpredictable. As for me, I see a world where opportunity and risk coexist in equal measure, a sentiment that’s stable for now, but never static.

 

Source: https://e27.co/geopolitics-fed-policy-and-bitcoin-the-trio-shaping-todays-markets-20250627/

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
j j j

From ADP to Bitcoin: How US economic indicators are shaping global financial landscapes

From ADP to Bitcoin: How US economic indicators are shaping global financial landscapes

Many would ask: how global risk sentiment has retreated in response to weaker-than-expected US economic data and related developments, offering a rich tapestry of interconnected events to unpack. From disappointing employment figures to surprising contractions in the services sector, and from mixed market reactions to intriguing movements in the cryptocurrency space, there’s a lot to explore.

My aim here is to share my perspective on these developments, weaving together facts, data, and informed insights. Let’s dive in.

The story begins with a trio of US economic reports that have collectively rattled investor confidence. First, the May ADP employment report delivered a sobering surprise: job growth fell significantly short of expectations. This isn’t just a statistical blip—it’s a signal that the US labour market, often a bedrock of economic stability, might be softening.

A weaker labour market can set off a chain reaction: fewer jobs mean less consumer spending, which in turn can dampen business investment and economic growth. With the official payrolls report looming on Friday, this ADP miss has heightened anticipation and anxiety about whether the trend will hold.

Then there’s the ISM services index, which unexpectedly slipped to 49.9 in May—the first sub-50 reading in nearly a year. For those unfamiliar, a reading below 50 indicates contraction, and in a sector that forms the backbone of the US economy, this is no small matter.

The abrupt pullback in demand, compounded by the pressures of higher tariffs, suggests that the economic slowdown—previously confined largely to manufacturing—may now be spreading. It’s a red flag that the broader economy could be losing steam, and it’s understandably spooked investors who rely on the services sector’s resilience.

The Fed’s latest Beige Book report only deepens the gloom. Covering the past six weeks, it notes that the US economy has contracted, with hiring slowing and both consumers and businesses voicing concerns about tariff-related price increases. This paints a picture of an economy under strain, where trade tensions are no longer abstract policy debates but tangible pressures on costs and confidence.

Tariffs, by raising the price of imported goods, threaten to squeeze profit margins and push inflation higher—twin challenges that could stifle growth if unchecked. Together, these three reports form a narrative of vulnerability that has sent global risk sentiment into retreat.

How have markets responded? The reaction has been a classic flight to safety, tempered by pockets of resilience. US stock markets closed mixed on Wednesday, reflecting the uncertainty. The Dow Jones dipped by 0.22 per cent, and the S&P 500 barely nudged up by 0.01 per cent, while the Nasdaq gained a modest 0.32 per cent. This split performance hints at cautious optimism in technology stocks, perhaps buoyed by their long-term growth potential, even as broader economic worries weigh on other sectors.

Meanwhile, US Treasuries rallied sharply, with yields tumbling across the curve. The 10-year Treasury yield fell 9.9 basis points to 4.355 per cent, and the two year yield dropped 8.5 basis points to 3.866 per cent. This surge in bond prices—driving yields down—signals that investors are seeking the relative safety of government debt, a move reinforced by expectations that the Federal Reserve might cut rates twice this year to cushion the economy.

The US Dollar Index weakened by 0.44 per cent, a decline that could stem from those same rate-cut expectations or broader doubts about the US economic outlook. A softer dollar often accompanies a shift toward safer assets, and here, gold played its traditional role as a haven, rising 0.6 per cent to US$3,373 per ounce.

On the flip side, Brent crude oil slid 1.2 per cent to US$65 per barrel, pressured by fears of waning global demand amid a slowing economy and reports that Saudi Arabia favours boosting OPEC+ output after July. These commodity movements underscore the interplay between economic health and resource markets—a dynamic that’s critical to watch.

Across the Pacific, North Asian equities offered a counterpoint, staging a strong rebound driven by technology and semiconductor sectors. This rally, mirrored by gains in Asian equity indices during early trading today, suggests that some investors still see opportunity amid the gloom, particularly in innovation-driven industries. Yet US equity index futures point to a lower open, hinting that Wall Street remains wary of the road ahead.

Now, let’s pivot to a fascinating subplot: the cryptocurrency market, where developments are adding both promise and peril to the mix. JPMorgan Chase’s decision to allow clients to use spot Bitcoin ETFs—like BlackRock’s iShares Bitcoin Trust (IBIT)—as collateral is a game-changer. Announced on June 4, this move applies globally across retail and institutional clients, marking a significant step toward integrating regulated crypto exposure into mainstream finance.

By treating Bitcoin ETF holdings akin to stocks or real estate in net worth and liquidity calculations, JPMorgan is signaling confidence in the asset class’s legitimacy. This builds on a trend: spot Bitcoin ETFs, approved in January 2024, now manage over US$128 billion in assets, a testament to their explosive growth and appeal.

This shift aligns with a broader evolution in the crypto landscape. Wells Fargo analysts recently noted that Bitcoin is entering an “institutional phase,” with new “Bitcoin treasury” companies emerging in the wake of MicroStrategy’s success. MicroStrategy, now rebranded as Strategy, holds a staggering 580,955 Bitcoins, acquired through a mix of equity, debt, and cash flow.

Its stock has soared 132 per cent over the past year, reflecting investor enthusiasm for its dual focus on Bitcoin and AI analytics. Similarly, Nasdaq-listed K Wave Media plans to raise US$500 million to build a Bitcoin treasury, aiming to emulate Japan’s Metaplanet. These moves suggest that corporations are increasingly viewing Bitcoin as a strategic asset—a hedge against inflation or a growth play in a digital age.

But it’s not all smooth sailing. Bitcoin, trading below US$105,000 on Wednesday, faces risks. Standard Chartered’s Geoffrey Kendrick warns that a drop below US$90,000 could trigger liquidations among non-crypto public companies holding Bitcoin, potentially halving corporate ownership. And then there’s the China factor. Reports from outlets like Financial Express and Hindustan Times claim that China has banned private Bitcoin ownership, sparking sell-offs among some investors.

Yet here’s the catch: there’s no official confirmation from Chinese authorities—no statements from the Cyberspace Administration, the People’s Bank of China, or other key regulators. The Financial Express cited a “Binance report,” but Binance’s official research offers no such update, and a linked source on Binance Square—a user forum—points only to a ticker page. Without a verifiable announcement, this “ban” smells more like rumour than reality, leaving the crypto market in a state of uneasy speculation.

So, what does all this mean for global risk sentiment? At its core, the retreat stems from a US economy showing cracks—soft jobs data, a shrinking services sector, and tariff-fuelled angst. Investors are responding rationally: piling into Treasuries and gold, dialing back on riskier bets like oil, and watching the dollar weaken. Yet the picture isn’t uniformly bleak. Tech stocks and North Asian equities hint at resilience, while the crypto market straddles a line between institutional embrace and regulatory shadows.

Looking ahead, the implications are multifaceted. For stocks, the mixed signals suggest selective opportunities—tech may hold up better than industrials if the slowdown deepens. Bonds, buoyed by rate-cut bets, could see further gains if the Fed turns dovish. Commodities like gold will likely shine in uncertainty, while oil faces demand headwinds.

The dollar’s trajectory hinges on Fed policy and global confidence in US growth. And for Bitcoin, JPMorgan’s move is a bullish signal, but unconfirmed China risks loom large—investors should tread carefully until clarity emerges.

In my view, we’re in a moment of heightened uncertainty, where economic data, market reactions, and geopolitical rumors are colliding. I’d advise readers to stay vigilant—watch Friday’s payrolls, track Fed rhetoric, and dig beyond headlines on China.

Diversification feels wise here: balancing safe havens with calculated risks in tech or crypto could navigate this choppy terrain. The global economy isn’t collapsing, but it’s wobbling, and how it steadies itself will shape sentiment for months to come. That’s the story as I see it—grounded in data, alive with human stakes, and open to the twists still unfolding.

 

Source: https://e27.co/from-adp-to-bitcoin-how-us-economic-indicators-are-shaping-global-financial-landscapes-20250605/

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
j j j

How is the UK-US trade deal shaping cryptocurrency and stock market trends?

How is the UK-US trade deal shaping cryptocurrency and stock market trends?

I’m excited to dive into the multifaceted implications of the recent UK-US trade deal and its ripple effects across macroeconomic indicators, equity markets, foreign exchange, commodities, fixed income, and even the booming cryptocurrency sector.

This deal, alongside other economic developments, paints a complex yet fascinating picture of where the world economy might be headed in the coming months.

Below, I’ll offer my detailed perspective on these topics, weaving together the facts and data provided to give you a comprehensive view of what’s happening and why it matters.

Macroeconomic developments: A trade deal with big implications

The UK-US trade deal is a landmark agreement that’s making waves in the global economic landscape. At its core, it maintains a 10 per cent tariff on UK goods entering the US—a compromise from the steeper tariffs initially floated by the Trump administration. This tariff level strikes a balance, protecting some US industries while still fostering trade with a key ally.

What really stands out, though, is the deal’s hefty commitments: the UK will purchase US$10 billion worth of Boeing planes, a massive win for the American aerospace giant and a boost to US manufacturing jobs.

Meanwhile, Rolls Royce gets a golden ticket to export parts tariff-free, which could supercharge its revenue and strengthen the UK’s position in the high-tech engineering sector. The goal here is clear—both nations are aiming to juice up their export opportunities and rake in more revenue, a strategic move in a world where trade tensions have been simmering for years.

But this deal doesn’t exist in a vacuum. President Trump’s upbeat comments about upcoming tariff talks with China add another layer of intrigue. If those negotiations—set to kick off in Switzerland this weekend—go well, we could see a broader easing of trade barriers, which would be a game-changer for global markets.

Imagine a scenario where the US, UK, and China start aligning their trade policies more closely; it could unlock a flood of economic activity and calm jittery investors who’ve been on edge since the trade wars kicked off.

On the domestic front, though, the US economy is sending mixed signals. Nonfarm labor productivity dropped by 0.8 per cent in the first quarter, which sounds alarming until you dig into the details. Oxford Economics chalks this up to one-off quirks—think temporary disruptions or statistical noise—rather than a sign of deeper trouble.

At the same time, labor costs shot up by 5.7 per cent , but here’s the kicker: this doesn’t seem to point to runaway wage growth. Employers might just be shelling out more for benefits or overtime rather than hiking base salaries across the board. Jobless claims offer a brighter spot, falling to 228,000 against expectations, with continued claims steady at 1.879 million.

Even with tariffs in play, the labor market’s holding firm—last week’s uptick was just a blip tied to New York’s school spring break. Looking ahead, we’ll get a clearer read on labor trends by the July FOMC meeting, but for now, don’t hold your breath for a June rate cut. The Fed’s likely to sit tight until the data paints a sharper picture.

Equity markets: Riding the wave of trade optimism

Over in the equity markets, the mood is unmistakably upbeat, and it’s easy to see why. The S&P 500 climbed 0.6 per cent , the Nasdaq leapt 1.1 per cent , and the Dow tacked on 255 points—all fuelled by this trade deal and a sigh of relief over cooling geopolitical tensions. Trump’s been vocal about this, urging investors to “buy stocks now” and calling the UK deal a breakthrough for American exports.

Sure, that 10 per cent tariff lingers, but the Boeing purchase and Rolls Royce perk more than offset the sting for many market watchers. His hint at possible tariff cuts with China, depending on those Switzerland talks, only adds to the bullish vibe.

Tech stocks are the stars of this rally. Tesla revved up 3.1 per cent , Palantir rocketed 7.8 per cent , and heavyweights like Apple and Alphabet clawed back some recent losses. It’s a classic case of trade optimism lifting all boats—well, almost all. Arm stumbled 6.2 per cent after a gloomy forecast, and Eli Lilly shed 3.2 per cent as healthcare stocks took a hit across Europe and North America.

After hours, Coinbase tripped too, dropping 2.6 per cent after missing revenue targets and reporting a jaw-dropping 94 per cent plunge in net income, thanks to a markdown on its crypto holdings. It’s a reminder that even in a rising market, not every company’s riding the same wave.

Europe’s markets echoed this positivity on Thursday, with the STOXX 50 up 1.1 per cent and the STOXX 600 edging up 0.4 per cent. Tech and financials led the charge—ASML, UniCredit, Santander, and Intesa Sanpaolo all jumped over three per cent —while AB InBev toasted a 3.2 per cent gain on solid earnings.

But it wasn’t all rosy: pharmaceuticals dragged things down, with Novo Nordisk sliding four per cent after slashing guidance on its obesity drug, and Mercedes Benz tanked six per cent after cutting dividends amid economic headwinds.

The EU’s keeping a close eye on this US-UK deal, too, warning of retaliatory tariffs on US goods if its own trade talks falter. Meanwhile, central banks are in a holding pattern—the Riksbank and Norges Bank stood pat, but the Bank of England trimmed rates, adding another twist to the monetary policy mix.

In Hong Kong, the Hang Seng Index rose 0.8 per cent to 22,881, stretching its winning streak to six sessions. The Fed and HKMA holding rates steady, paired with Trump’s trade deal buzz, lit a fire under consumer and tech stocks.

China’s central bank, the PBoC, pitched in with rate cuts and growth-friendly policies, though financials lagged, and worries about Beijing’s fiscal plans and looming economic data kept gains in check. It’s a delicate balance—optimism is high, but there’s still plenty of uncertainty in the air.

Cryptocurrencies: Bitcoin and Ethereum steal the spotlight

Now, let’s talk crypto, because it’s impossible to ignore the fireworks here. Bitcoin’s charging toward its January 2025 peak of US$109,000, recently blasting past US$99,800. What’s driving this? A perfect storm of institutional buying, ETF inflows, and the buzz from these US-UK-China trade talks.

If it punches through that psychological US$100,000 barrier, analysts see it soaring to US$110,000 or even US$120,000. State-level regulations in the US are turning more crypto-friendly, too, giving this rally some serious legs. It’s not just hype—Bitcoin’s becoming a legit player in the financial world.

Ethereum’s no slouch either, trading at US$3,762.59 with a whopping 29.61 per cent gain this week alone, including a US$120 spike in 24 hours. Analysts are more cautious here, pegging a May price around US$1,665 and a year-end range of US$1,445 to US$2,900.

But don’t sleep on ETH—it’s the backbone of hot trends like DeFi, NFTs, and tokenisation. While Bitcoin grabs headlines, Ethereum’s quietly building the infrastructure for the next wave of digital finance.

Currencies and gold feel the heat, yields shift with the tide

The trade deal’s shaking up the forex market, too. The British pound’s getting a lift as investors cheer the UK’s Boeing buy and Rolls Royce boost, even with that 10 per cent tariff in place. The Japanese yen, though, is lagging—likely a victim of the dollar’s muscle flexing on the global stage.

Speaking of which, that dollar strength is hammering gold, which has slumped for two straight days. It’s a textbook move: when the greenback shines, safe-haven assets like gold tend to take a backseat.

In the bond world, yields are getting cheaper, especially at the front and belly of the curve. Think shorter- and medium-term Treasuries here—this shift suggests markets are recalibrating after the trade news and mixed economic data.

Investors might be betting on steady or slightly higher rates down the line, or just adjusting to a world where trade deals could juice up growth without sparking inflation fears just yet.

My POV: A pivotal moment with plenty of unknowns

So, what’s my view on all this? The UK-US trade deal is a big deal—pun intended. It’s a pragmatic step that keeps trade flowing while dodging the all-out tariff wars some feared. That US$10 billion Boeing haul and Rolls Royce’s tariff-free exports are concrete wins, and if Trump’s China talks bear fruit, we could be on the cusp of a broader trade thaw.

Economically, the US is in a weird spot—productivity’s down, labor costs are up, but the job market’s steady as a rock. It’s not screaming recession, but it’s not exactly a boom either. The Fed’s got a tough call ahead, and I’d bet they hold off on any big moves until summer.

The equity markets are loving this trade optimism, and I get it—stocks thrive on stability and growth signals. Tech’s leading the pack, but those healthcare and crypto stumbles show how uneven this rally is. Europe and Hong Kong are in sync, though local quirks like pharma woes and China’s fiscal tightrope keep things interesting.

Crypto’s the wild card—Bitcoin’s on a tear, and Ethereum’s got staying power. If you’re an investor, this feels like a moment to watch closely, not jump in blind.

The pound’s pop and gold’s dip make sense in this dollar-driven world, and those yield shifts hint at markets still figuring out what’s next. Overall, this deal’s a shot in the arm for global trade, but it’s not a cure-all. The China talks, labor trends, and sector shakeouts will tell us whether this is a turning point or just a blip.

For now, I’m cautiously optimistic—there’s potential here, but plenty of hurdles too. Stay tuned; the next few months could be a wild ride.

 

Source: https://e27.co/how-is-the-uk-us-trade-deal-shaping-cryptocurrency-and-stock-market-trends-20250509/

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
j j j