Highlights

• The Fed is expected to hold rates steady at 4.25–4.50% on May 7, despite Trump’s public pressure for cuts; Powell’s post-meeting comments will be closely watched for policy signals1.
• Trump orders a 100% tariff on all foreign-made films, extending trade protectionism to the entertainment sector and raising risks of retaliation2.
• The Taiwan dollar surged 5% in its biggest single-day gain since 1988, triggering heavy USD selling by exporters and insurers; the central bank called an emergency briefing amid volatility5.
• The EU plans to ban all Russian gas imports—including existing contracts—by end-2027; LNG negotiations with the US ongoing, with some EU states expressing reservations3.
• Israel’s cabinet approved indefinite military presence and expanded operations in Gaza, including plans to relocate 1.5–2 million Gazans, with escalation set to follow Trump’s regional visit49.
• Trump maintains tariffs on China, insists on a “fair” trade deal, and accuses China of economic collapse; no talks with Xi planned, but possible trade deal developments this week11.
• Reports highlight Chinese exporters using third countries to evade US tariffs (“place-of-origin washing”), raising enforcement and supply chain concerns10.
• Berkshire Hathaway names Greg Abel as CEO effective 2026; Warren Buffett remains as chairman and will continue daily work8.
• Turkey’s inflation fell for an 11th straight month to 37.86% in April, but the lira hit a historic low amid political turmoil and central bank rate adjustments7.
• The EU unveils a €500 million plan to attract US scientists, targeting talent affected by Trump-era policies and US research funding cuts12.
• OKX relaunches its DEX aggregator after a security pause, with wallet upgrades and a $ZKJ airdrop, boosting crypto market activity13.
• The EU signals readiness to double military aid to Ukraine if US-led peace efforts stall, shifting procurement to Ukrainian manufacturers6.

Commentary

Markets open this week facing a complex macro and geopolitical backdrop. The Fed’s expected pause on rates comes as President Trump intensifies public pressure for cuts, but with inflation still above target and unemployment ticking up, Powell is likely to maintain a cautious tone1. Traders should focus on the post-meeting press conference for any hint of policy shifts, especially given internal Fed divisions and the potential for labor market prioritization1. The BoE’s decision and upcoming US inflation data add further cross-asset event risk1.

Trade tensions remain front and center. Trump’s new 100% tariff on foreign films signals a willingness to weaponize tariffs beyond traditional goods, raising the specter of broader retaliation and uncertainty for entertainment stocks and multinational media conglomerates2. Meanwhile, the ongoing US-China standoff is complicated by reports of Chinese exporters circumventing tariffs, which could prompt stricter enforcement and supply chain adjustments—watch for volatility in industrials, logistics, and chipmakers, especially with potential new US semiconductor tariffs on deck10.

Currency markets are on high alert after the Taiwan dollar’s historic surge, which has triggered forced USD selling and market dislocations5. The move, driven by strong export demand and foreign inflows, has echoes of the 1985 Plaza Accord and may foreshadow further volatility in Asian FX5. The emergency central bank briefing will be key for gauging intervention appetite and spillover risk to EM currencies and global tech supply chains5.

Geopolitical risk is elevated with Israel’s planned escalation in Gaza and the EU’s push to cut Russian gas imports493. Energy markets could see renewed volatility as the EU’s ban timeline and LNG negotiations progress, with potential upside risk for US LNG exporters and European gas prices3. The EU’s readiness to double Ukraine military aid if US diplomacy fails also underscores persistent tail risk in the region, with implications for defense, energy, and grain markets6.

Elsewhere, Berkshire Hathaway ’s CEO succession removes a key overhang, likely supporting sentiment in the conglomerate’s shares8. In crypto, OKX’s DEX relaunch and airdrop could boost on-chain activity and sentiment13, while Turkey’s ongoing inflation and currency woes highlight continued fragility in EM assets7. Overall, traders should brace for cross-asset volatility, monitor central bank signals, and stay nimble amid shifting trade and geopolitical dynamics.