May Day went by on a positive note, with markets shrugging off the sharp contraction in US GDP growth, attributing this to an abnormally high jump in imports and cuts in Government expenditure. The tariff imposition caused a massive jump in imports to avoid the Trump tariffs, skewing the US GDP numbers, also impacted by the severe re-configuration of the Government under DOGE. Markets digested this and the positive developments on the trade negotiations front, to turn positive into the trading month of May. Equities continued to recover and bond yields fell. The US Dollar recovery continued, with the EUR falling back below 1.1300, while the GBP slumped to 1.3250.The resurgent reserve hit the commodity currencies, with the NZD falling below 0.5900, while the AUD crashed back to 0.6350. The Bank of Japan looks to have completed their rare flutter with interest rate rises, holding rates at 0.50%, calming Asian markets. The Australian trade surplus exploded, as exports jumped more than 7%, although the currency appears to be the major factor. Al eyes now turn to the all-important US Non-Farm Payrolls data, set to be released Friday.
