Highlights

• US and UK announce first Trump administration trade deal, cutting steel and car tariffs; GBP/USD rises 0.4% ahead of 3pm UK press conference 1.
• Fed holds rates at 4.25%-4.5% for third consecutive meeting; Powell warns Trump’s 145% China tariffs could boost inflation and slow growth, signals no imminent rate cuts 2.
• Trump publicly criticizes Powell post-Fed decision, claims “virtually no inflation” and touts tariff revenues 3.
• Bank of England cuts rates by 25bps to 4.25% (5-2-2 vote), citing tariff drag on UK growth; dovish tilt as central banks weigh global trade uncertainty 4.
• China’s MOFCOM urges US to revoke tariffs as precondition for progress in upcoming trade talks 6.
• Pakistan’s KSE-100 plunges 5.78% after Indian military operation; Indian equities resilient, Nifty50 at record 24,400 amid strong FII flows and stable rupee 7.
• OpenAI appoints Instacart CEO Fidji Simo as CEO of Applications after $40B SoftBank-led fundraising; company valued at $300B 8.
• Arizona signs law establishing Strategic Bitcoin Reserve, joining New Hampshire; Texas advances $500M annual BTC purchase plan; Bitcoin trades near $97,000 920.
• Google cuts ~200 ad sales jobs in strategic shift to enhance collaboration 10.
• Ukraine ratifies US minerals agreement and reconstruction fund; calls Putin’s May 8 ceasefire a “farce” amid ongoing Russian attacks 1516.
• Nintendo to launch Switch 2 on June 5 at $450, projects 15M units sold by March 2026; Q4 earnings beat, but FY sales and profit forecasts miss 17.
• April 2025 is the second warmest April globally, +0.60°C above 1991-2020 average, sustaining climate risk narrative 18.

Commentary

Markets open to a complex macro landscape dominated by fresh US-UK trade alignment, central bank caution, and intensifying global trade tensions. The Trump administration’s inaugural trade deal with the UK—cutting tariffs on steel and autos—offers a rare positive for transatlantic equities, with the pound rallying and UK rate cuts providing additional tailwinds 14. However, the broader global trade environment remains fraught: US tariffs on China have surged to 145%, prompting stern warnings from the Fed about inflation risks and growth headwinds, and drawing sharp rebukes from Beijing ahead of high-stakes trade talks 26.

Central banks are signaling diverging paths. The Fed’s hawkish pause, with Powell emphasizing uncertainty and resisting political pressure, contrasts with the Bank of England’s dovish rate cut, explicitly citing tariff-related growth risks 24. Scandinavian central banks (Riksbank, Norges Bank) held steady but flagged likely cuts later in the year, reinforcing a cautious, data-dependent global monetary stance 13. Fixed income traders should expect continued curve flattening and choppy rate expectations as inflation and trade data drive policy recalibration.

Equities face a mixed setup: US-UK trade optimism and dovish UK policy support risk sentiment, but global growth concerns and tariff escalation loom large 14. Tech remains in focus with OpenAI’s $40B raise and executive shakeup, while Google’s targeted layoffs signal ongoing cost discipline 810. Nintendo 's Switch 2 launch could catalyze sector rotation in consumer and gaming stocks, though softer forward guidance tempers enthusiasm 17. Meanwhile, geopolitical volatility—from South Asia to the Middle East—remains a background risk, but has so far failed to dent Indian equity resilience or broader global risk appetite 7.

On the commodity and currency front, the pound 's strength reflects trade deal optimism and BoE easing, while the dollar remains bid on safe-haven flows and Fed hawkishness 14. Bitcoin 's rally to near $97,000 is underpinned by accelerating US state-level adoption, with Arizona and Texas joining New Hampshire in building strategic reserves—a trend that could further legitimize crypto as a macro asset class 920.

Traders should watch for details from the US-UK trade press conference, further Fed and BoE commentary, and any escalation in US-China trade rhetoric. Monitor cross-asset volatility as central banks navigate the tariff shock, and keep an eye on crypto flows as state-level adoption accelerates. The balance of risk remains delicately poised between trade optimism and macro headwinds.