Asia-Pacific FX news wrap: US & China officials upbeat on trade talks

• BlackRock’s spot bitcoin ETF, IBIT, sees the longest streak of net inflow this year so far
• Bank of England speakers Monday: Lombardelli, Greene, Mann, Taylor
• Japan PM Ishiba: Autos, agriculture, airplane parts are all separate from security matters
• PBOC sets USD/ CNY reference rate for today at 7.2066 (vs. estimate at 7.2429)
• Goldman Sachs forecasts – Brent/WTI average $60/56 in the rest of 2025, and $56/52 in 2026
• Awaiting the joint statement from China and the US on Geneva trade talks – no time set
• Japan: April bank loans rise slower than March; March current account surplus as expected
• South Korean initial exports data for May – down 23.8% y/y in first 10 days of the month
• Trade ideas thread – Monday, 12 May, insightful charts, technical analysis, ideas
• UK hiring outlook hits post-COVID low as employer confidence weakens
• Heads up for Chinese President Xi to speak publicly on May 13
• Trump says prescription drug and pharma prices will be reduced almost immediately
• US equity index futures liking the vibes from US and China officials
• Globex is open! US equity index futures open higher.
• FT: Chinese companies accelerating a purge of foreign components from their supply chains
• ICYMI – Chinese CPI and PPI data over the weekend showed risk of further deflation spiral
• China says Geneva trade talk meeting a first step; differences &frictions remain; win-win
• No details on US-China trade talks but both US and China officials are upbeat
• Trump says he is about to make “one of the most important and impactful” tweet ever!
• Monday open levels, indicative FX prices, May 12, 2025 – USD/JPY up, EUR/USD down
• Trump Tweets “Great Progress” in U.S.-China Trade Talks – But Final Deal Remains Uncertain
• Trump sends a positive message on trade with China
• India and Pakistan declare immediate ceasefire
• Trump: There is a baseline of 10% tariffs but could be excemptions
• Forexlive Americas FX news wrap: Canadian jobs market continues to crack

US and China initial trade talks wrapped up in Geneva on Sunday with positive comments coming from both sides. In summary:

China side:

• a mechanism for further talks has been agreed (agreed to establish a ‘China-US trade consultation mechanism’)
• the joint statement to come will be “good news for the world”

US side:

• Bessent said there had been “substantial progress”
• Greer said that “perhaps the differences were not so large as maybe thought”

The two will issue a joint statement on Monday, no time for it has been confirmed, where more details are promised. US equity futures gapped higher upon reopening for the week and have not shown much retracement at all. Hopes are up for substantive details of improvement in China-US trade relations. Hopes have risen before and dashed, so we’ll how this goes today.

Across FX USD/JPY gapped higher and has partially retraced. EUR/USD gapped lower and has fully filled that gap.

Oil gapped higher and has retraced.

Further, Fed rate cut bets faded back a little and gold dipped.

Also of news, Trump says he’ll sign an executive order, at 9 am US Eastern time on Monday, slashing US prescription drug prices by up to 80%,. Trump wants to align US prices with the world’s lowest, calling it a long-overdue fix for fairness. Aligning US prices with the world’s lowest sounds a very ambitious goal. Doubts have been raised about courts blocking such moves.

From Japan today we had Prime Minister Ishiba saying that the he would not accept a trade agreement with the US that excludes auto tariffs.

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