As California spends over half its budget providing 15 million residents with Medi-cal coverage - a substantial portion of whom are 'undocumented,' one state Democrat has proposed new legislation that would allow college students to sleep in their vehicles as the Golden State grapples with a worsening homeless crisis. 

Brad Butterfield pauses after checking the top of his RV for leaks in Arcata on Aug. 24, 2024. Photo by Alexandra Hootnick for CalMatters

Left-wing Assemblymember Corey Jackson introduced a bill mandating that California State University chancellors and community college district governing boards collaborate with basic needs coordinators and campus security to establish an overnight parking program by late 2026, Fox News reports.

"This bill confronts a harsh reality to many of our students who are sleeping in their vehicles or other displaced settings as they are unable to find affordable housing, and that's jeopardizing their education," the California Democrat said. "What I am proposing is practical, immediate relief, overnight parking programs that turn campus lots into safe, temporary havens while the state works on lasting solutions."

"We are in a housing crisis. We are in a homelessness crisis, and it's not an either or approach. It's a both and all of the above approach," he added.

The Community College League of California released a survey revealing that three in five California community college students face housing insecurity, with one in four experiencing homelessness.

While America is the home of the free (or at least it used to be) and sleeping in one’s car should be one’s prerogative, the bill raises questions about California Gov. Gavin Newsom’s (D) handling of his state’s housing affordability.

Fox News reports:

Newsom's office, citing 2024 records, stressed that homelessness is increasing nationwide by more than 18%, while California's national trend is closer to 3%, lower than 40 other states. Newsom also touted the state's more than 71,000 year-round shelter beds, which a spokesperson said is double the amount created during the 5-year period prior to the Newsom administration.

Unsurprisingly, California Republicans are not fans of the proposal and say California Democrats should focus on solving the root of the issue.

"After wrecking affordability in California, Democrats have nothing left but bad ideas," California Assembly Republican Leader James Gallagher said in a statement to Fox News. "They’re now proposing to let students sleep in cars because they can’t fix the housing crisis they created. This isn’t innovation. It’s desperation from a party that spent decades raising costs, blocking new housing and wasting billions on programs that failed. Letting students live in parking lots isn’t a solution. It’s proof their policies have completely collapsed."

A California lawmaker proposed a bill that would allow California college and university students to sleep in their cars.  (Fox News Digital)

Fox News contributor Hugh Hewitt had this to say about the plan: "The problem in California is there are not enough homes and apartments. It's a supply problem created over 50 years of no-growth, left-wing policies that are anti-housing. The solution is not to create homeless encampments, and each one of these will become that. People are going to enroll in the community college for 18 bucks a credit, and then they're going to put their car in the community college parking lot."

Newsom's office, when reached for comment, refused to weigh in on the bill: "California is bucking not only national increases but reversing long-term trends in the state from decades of inaction prior to this administration. California’s progress in addressing homelessness is outperforming the nation.”

*  *   *

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Authored by James Howard Kunstler,

“In order for a system to be stabIe, it requires negative feedback, also known as consequences.”

- Barrie Drain

“Fighting fascism,” for the American Jacobins who lead the Democratic Party, means opposing any attempt to flush the corruption out of the entrenched bureaucracy, just as their pet phrase “our democracy” actually refers to the matrix of grift and despotic activism that drives their political operating system. That is exactly how and why the USAID was so crucial to spread captured taxpayer spoils as NGO salaries for the gender studies grads to play “activist,” so as to inflict their special brand of sadistic power madness over the land — to keep the game going.

Now, USAID is scattered to the winds and all they have left is their installed base of federal judges and the horde of lawfare lawyers who feed them bogus cases to halt the remaining work of Mr. Trump’s executive branch clean-up operation.

Remember: Robespierre, leader of the Jacobins in the French Revolution, was a lawyer. 

Their version of defending “our democracy” in 1793 was the Reign of Terror that sent at least 17,000 political opponents to the guillotine.

Rep. Jamie Raskin (D-MD)

Rep. Jamie Raskin (D-MD) is the Democrats’ Robespierre. He is promising his own reign of terror when his party recaptures Congress in the 2026 “midterm” election.

Norm Eisen is his chief lawyer and legal strategist. His sole aim is recapture power in order to restore the Democrats’ sadistic regime of thought-control and the money-flows that feed it. That’s where things stand for the moment. You can sense how this tension is tending toward something that looks like civil war.

Someone needs to investigate the relationship between the lawfare squad and the judges to see how closely they worked together.

It appears that Norm would write prosecution memos, articles, etc., (as well as go on CNN) to act as an analyst when in reality he was running the… pic.twitter.com/hdkDggzlt4

The game now is to goad President Trump into any kind of executive action in defiance of this legal insurrection that would subject him to impeachment after January 2027, when a new Congress is seated, theoretically with a Democratic majority. There are several flaws in the Raskin / Eisen plan-of-action. One is their supposition that the Democratic Party is popular enough to win a Congressional majority in 2026, or that they will enjoy the installed devices of electoral cheating to achieve victory no matter what.

The party is currently blundering wildly in support of obviously insane actions that a vast majority voters oppose, such as stopping the deportation of illegal immigrants, allowing men to compete in women’s sports, and opposing proof of citizenship in federal elections. Which is to say that the voters are onto exactly how crazy and destructive the Democratic Party has become.

The question is: what can be done about this lawfare insurrection. An easy solution would be for Congress to pass a law restricting the power of federal judges to issue orders that affect the nation as a whole outside their own designated districts. Senate Judiciary Committee Chair Charles Grassley has introduced the Judicial Relief Clarification Act of 2025. Grassley argues that nationwide injunctions, which allow a single district judge to block federal policies across the country, represent judicial overreach and disrupt the constitutional balance of powers.

In the House, Rep. Darrel Issa (R-CA) has introduced the No Rogue Rulings Act of 2025 (HR 1526, passed on April 9) to complement Sen. Grassley’s bill. The Constitution is somewhat vague about the composition of a federal judiciary below the Supreme Court, and essentially leaves the matter to Congress to set parameters for the power of federal judges. Congress can also alter or abolish districts, such as the DC federal district from which so much partisan Democratic Party lawfare has emanated under political activist Judges James Boasberg, Amy Berman Jackson, Tanya Chutkan, and Beryl Howell (all of them involved in the sadistic prosecutions of J-6 defendants).

The bills from each house next must go through a reconciliation process that boils them down to a single piece of legislation that can be sent to Mr. Trump for the presidential signature. The House passage is likely assured. The hang-up is that under Senate rules, the Democrats could mount a filibuster that would require 60 votes to break. The Republicans only control the chamber by a 53 to 47 majority, and no Democrats have signaled any intention to vote in favor of such a bill. In any case, the entire process would take months and might not succeed at all.

A much simpler remedy would be for the Supreme Court (SCOTUS) to rule in any of a number of cases now on their docket that the lawfare antics of the federal judges amount to interference with an independent executive branch — in short, that the judiciary can’t usurp the executive powers of the President, which include the conduct of foreign policy, the ability to manage personnel in executive agencies, and certain issues around the spending of taxpayer dollars.

A different sort of remedy would be the application by the DOJ of federal statute 18 USC 371, Conspiracy to Defraud the United States against Norm Eisen and his colleagues-in-lawfare for attempting to maliciously bury the executive branch in litigation for the purpose of nullifying the executive powers of the president. Beyond all that is the abyss: a nullified election, a paralyzed chief executive, and a constitutional crisis that has the potential to lead to civil violence. The Democrats seem willing to go there, perhaps even avid for it.

The Jacobins of 1793 were mad for blood, too, and they spilled a whole lot of it. By the summer of 1794, the blood was finally spouting out of their own necks. . . and then the Jacobin reign of terror came to a sudden and complete end. Heed their example.

There has been lots of confusion over the past week whether Trump has - or has not - spoken to Xi Jinping, to set trade negotiation talks in motion. According to Trump, he has and more than once...

Reporter: Have you spoken to President Xi since the tariffs?@POTUS: “I don’t want to comment on that but I’ve spoken to him many times.” pic.twitter.com/TAkK0EjXhA

... while China has repeatedly denied it has had any contact with its US counterparts, which is to be expected: admitting it is negotiating would be seen as a carte blanche for other countries to do the same, ending any attempts at negotiation "cartelization" Beijing may have tried to impose.

Unfortunately, the problem is that both sides tend to.... exaggerate reality, which makes a definitive conclusion either way challenging. And absent 3rd party confirmation either way, the market is forced to flip a coin to decide who is telling the truth. Unless, of course, there was 3rd party confirmation, which now appears to be the case.

According to an overnight report in The JoongAng, one of the three biggest newspapers in South Korea, and the newspaper of record for South Korea, it was "confirmed that the United States and China have begun behind-the-scenes contacts in relation to the 'tariff war' waged by US President Donald Trump."

Again, as noted above, after Trump said he had been in contact with China every day, the Chinese side, through a Foreign Ministry spokesperson briefing, said that Trump was effectively lying: "we have never had any consultations or negotiations with the United States, and (the related remarks) are all fake news.” The Chinese Ministry of Commerce also denied this, saying, “Economic and trade negotiations (with the United States) are not underway.”

However, in its overnight report, JoongAng Ilbo confirmed that at around 7 am ET on the 24th, a high-ranking official from the Chinese Ministry of Finance entered the Treasury building located right next to the White House in Washington D.C. accompanied by about 10 attendants.

At around 7:00 AM on the 24th (local time), a high-ranking official from the Chinese Ministry of Finance (equivalent to the Ministry of Planning and Finance) was seen entering the US Treasury Department headquarters building in Washington, D.C., accompanied by about 10 attendants. The photo shows Chinese attendants waiting for the meeting between the two sides to end. They were wearing ID cards for attending the G20 Finance Ministers' Meeting, and their nationality was written as 'China' on the ID cards. Washington=Correspondent Kang Tae-hwa;

According to the report, the exact identities of the senior officials leading the dozen or so entourage have not been confirmed, "but they were all wearing the identification required for entry into the G20 finance ministers and central bank governors meeting currently taking place in Washington." It was the same type of identification worn by Lan Poan, China’s Minister of Finance, when he met with Choi Sang-mok, the Minister of Strategy and Finance, who visited the U.S. the day before.

Deputy Prime Minister and Minister of Strategy and Finance Choi Sang-mok, who is visiting Washington, D.C. to attend the G20 Finance Ministers' Meeting and the International Monetary and Financial Committee (IMFC), is greeting Chinese Finance Minister Lan Poan on the 23rd (local time). Courtesy of the Ministry of Strategy and Finance.

The Korean newspaper adds that "Chinese officials strongly blocked the press from taking photos of high-ranking officials entering the U.S. Treasury building this morning." 

The Chinese officials then reportedly said that “we have no authority to block the freedom of the press,” but added “we have the right to refuse to allow our personnel to be photographed,” and demanded that the press delete all photos taken on their smartphones.

When the press asked him to reveal the identity of the person who had blocked the interview, he refused, saying, “I have no obligation to reveal my identity.” However, the ID card he was wearing had his name, photo, and nationality written as “China.”

The 'Treasury Department Meeting' between the US and China on this day began at around 7:00 AM, about an hour before Deputy Prime Minister Choi and Minister of Trade, Industry and Energy Ahn Duck-keun began the '2+2 Trade Consultation' with US Treasury Secretary Scott Besent and US Trade Representative (USTR) Jamison Greer. As a result, the Korea-US tariff negotiations were conducted following the US-China backroom contacts.

A diplomatic source told JoongAng Ilbo, “The fact that the treasury channels of both the U.S. and China are actually operating means that both countries have reached a critical point under domestic and international pressure due to the current retaliatory tariffs,” and predicted that “the results of the backroom negotiations between the two sides could be a major turning point in the tariff war.” 

As for why China has been extremely secretive about the process, the source told the South Korean outlet that “since this tariff war is unfolding as a battle of pride with the leaders of both countries directly appearing, it may not be easy to create some kind of ‘win-win structure." He added that "the fact that China visited the U.S. Treasury Department in person could be an extremely sensitive issue for China."

Remarkably, Trump may have been telling the truth... again.

Source: The JoongAng

Walmart in China rolled out a new program this week to support Chinese exporters reeling from President Trump's 145% tariffs on U.S.-bound goods. The initiative offers exporters a chance to pivot their strategy by selling domestically through Walmart's hundreds of stores across the world's second-largest economy. 

The new program was announced on Walmart's WeChat account on Thursday and comes in response to the Chinese government's call for the "integrated development of domestic and foreign trade."

Here's a snippet of Walmart's WeChat statement:

Walmart's supplier recruitment system was recently launched, and we sincerely invite high-quality companies with the same values ​​to join us and jointly create high-quality, high-value products for customers. In order to actively respond to the call for the integrated development of domestic and foreign trade, Walmart has opened a green channel for qualified foreign trade companies, simplified the access process, accelerated the approval efficiency, and helped related companies quickly expand the domestic market.

As of 2024, Walmart operated nearly 400 retail stores and clubs across more than 100 cities in China, supported by almost two dozen distribution centers. In the most recent quarter, Walmart reported a 28% net sales growth in the country. 

China's Ministry of Commerce has been working with domestic retailers and e-commerce platforms to redirect export-oriented goods toward domestic consumers, aiming to prevent a shock to the manufacturing sector. This initiative also includes JD.com's move to help offload unsold export inventory within the domestic market. 

Some of the latest trade headlines suggest China is already under pressure, while the lag in any shock is about to hit the shores of U.S. West Coast ports as soon as next week...  

• Amazon Cancels Orders, Walmart Pulls Forecast As Tariffs Take Hold

• Are China Road Traffic Indicators Set To Collapse As Tariff War Cancels Factory Orders

• Chinese Sellers On Amazon Panic After Trump's Tariff Bazooka

• Liberation Day Fallout: China's Port Volumes Sink After Trump's Tariff Blitz

• Chinese Plastics Factories Face Mass Closure As U.S. Ethane Supply Evaporates

• "Our Export Orders Disappeared": Chinese Factories Shutting Down, Laying Off Workers, FT Finds

• First Tariff Shock Set To Hit Port Of Los Angeles, With Ripple Effects Across The Broader Economy

So, what about the U.S.? Why hasn't Walmart set up an 'America First' campaign to promote products from mom-and-pop companies with patriotic signage such as "Made in America" at stores nationwide?

Authored by Zachary Stieber via The Epoch Times,

The Department of Agriculture (USDA) told states on April 24 to take steps to make sure illegal immigrants do not receive benefits under the Supplemental Nutrition Assistance Program (SNAP), colloquially known as food stamps.

States must at a minimum verify the identity of program applicants, collect applicants’ Social Security numbers, compare the Social Security numbers to the federal government’s Social Security death data, and check whether the applicants are listed in a Department of Homeland Security database as being in the country illegally, John Walk, the USDA’s acting deputy undersecretary for food, nutrition, and consumer services, said in a memorandum to states.

The USDA released a letter from Homeland Security Secretary Kristi Noem that advised states that they can now use the Department of Homeland Security’s database for free.

State agencies must also verify U.S. citizenship for applicants “for whom there is an indicia that the applicant’s claim to United States citizenship (whether natural born, naturalized, acquired, or derivative) is questionable,” Walk wrote.

Federal law allows U.S. citizens and some legal immigrants to receive SNAP benefits but prohibits illegal immigrants from receiving food stamps. About 11.7 percent—approximately $10.5 billion—of the SNAP benefits paid by the USDA in fiscal year 2023 were improper, including improper payments to illegal immigrants, the Government Accountability Office said in a 2024 report.

States “did not always verify certain program eligibility requirements,” including citizenship, the report stated.

USDA officials are also encouraging states to require the verification of U.S. citizenship for each SNAP applicant, as the law allows states to mandate verification of certain factors and increase the number of in-person interviews of applicants.

“Benefit fraud is unacceptable in all forms, including use by illegal aliens. This guidance serves as a foundation for future compliance endeavors that will not only deter, but end access to benefits by illegal aliens. I appreciate your attention and assistance in making certain only those eligible receive SNAP benefits,” Walk said in the memo.

Walk cited President Donald Trump’s Feb. 19 executive order directing the USDA to “enhance eligibility verification systems, to the maximum extent possible, to ensure that taxpayer-funded benefits exclude any ineligible alien who entered the United States illegally or is otherwise unlawfully present in the United States.”

USDA Secretary Brooke Rollins earlier this year sent a letter to states that said her guiding principles for SNAP included taking action to minimize fraud and waste while enforcing legal requirements.

“The days in which taxpayer dollars are used to subsidize illegal immigration are over,” Rollins said in a statement on Thursday. “Today’s directive affirms that the U.S. Department of Agriculture will follow the law—full stop.”

As we have shown on several recent occasions, the US-China trade war is notable in that while the Xi and Trump admins are clearly going at it, their core "support" organizations such as the Fed and PBOC have taken on decidedly different paths: while the Chinese central bank (which is controlled by the communist party) is doing everything to prop up markets and the yuan, and give Beijing the upper hand when it comes to market leverage in the war with Trump, the Fed is doing just the opposite, allowing the dollar to tumble and letting stocks slide, refusing to intervene in the market. 

In fact one of the biggest tension points in recent weeks has been Trump's anger at Powell, and his desire to "remove" the Fed chair due to the Fed's reluctance to cut rates now, versus cutting them in September 2024, when the market was at all time highs and the Biden economy was reportedly so much stronger.

China PPT: propping up Chinese stocks literally every day

Fed's Powell: fuck your calls pic.twitter.com/VGXMNNwccv

Perhaps not surprisingly, with every passing day this dynamic only gets more acute, because while the Fed is desperately seeking reasons to avoid cutting rates such as predicting inflation may jump in a year or so - despite increasingly dovish comments from the likes of Fed officials Waller and Hammack who realize that the US would be in recession long before inflation kicks in - China’s leadership overnight vowed to stabilize the economy and society, "as the country is now at a critical stage in handling the unprecedented trade war with the United States."

In an economic-analysis meeting on Friday, the 24-man Politburo, China's main decision-making body headed by President Xi Jinping, said authorities would roll out specific plans to support companies and individuals affected by the trade war.

They pledged to “coordinate domestic economic work with international economic and trade engagements, resolutely focus on doing our own affairs, steadfastly expand high-level opening up, and focus on stabilizing employment, businesses, markets, and expectations”, according to a meeting readout released by Xinhua.

“By enhancing the certainty of high-quality development, we can effectively respond to the uncertainties brought by drastic changes in the external environment,” it said.

In other words, the PBOC will continue doing more of the same, creating a false sense of stability, even as stateside, the Fed encourages the all too real sense of instability.

The Politburo meeting typically sets the tone for the country’s economic work in the second quarter. This year, it has come amid uncertainty over how the world’s second-largest economy will fare in an escalated tariff war with the US while trying to meet leadership’s annual growth target of “around 5 per cent”, after a solid start in the first quarter saw gross domestic product rise by 5.4%, but the growth rate is expected to tumble in coming months.

To boost the role of domestic consumption in driving economic growth, Beijing will strive to increase the income of the lower- and middle-income groups while vigorously developing service consumption, the authorities said. Which is desperately needed since unlike the US, China does not have a social safety net, and therefore how long its economy can remain stressed depends entirely on how long the middle class refuses to revolt.

Beijing will also step up measures to stabilize the housing market, including renovating dilapidated housing in urban areas and refining policies for the acquisition of commercial housing inventory, according to the readout. On the other hand, why Beijing has failed to do this for the past 5 years ever since China suffered a spectacular collapse in its housing sector which crushed the middle class, is anyone's guess. Actually, it's not a guess: the reason why China can not do anything to forcefully stabilize its housing market is because China has way too much debt, and any attempt for massive fiscal stimulus will lead to a quick sugar high... and epic crash shortly after. And Beijing is well aware of this, which is why China has perfected the art of jawboning constantly and doing absolutely nothing.

In response to Trump tariff hikes, China vows to unleash much more stimulus, as it has every week for the past 3 years.

Luckily, at 330% debt/GDP China has lots of fiscal space for stimulus

Oh wait... pic.twitter.com/UmJL9ZwjnQ

There's more: authorities said they will also maintain stability and boost vitality in the capital markets, in other words the PBOC and "National Team" plunge protection teams will be even more active... while Powell goes fishing.

The Politburo reiterated that Beijing would implement a more proactive fiscal policy and moderately loose monetary policy, by accelerating the issuance of government bonds and cutting the reserve requirement ratio and key policy interest rates at an appropriate time.

It will also launch new lending facilities to boost technological innovation, consumption and trade.

To support companies significantly impacted by tariffs, the proportion of job-retention refunds from unemployment insurance funds will be increased, the readout added. “We must focus on ensuring people’s livelihoods,” it said correctly, although it will be short by a few trillion yuan when it's all said and done.

Earlier this week, the International Monetary Fund cut its forecast for China’s economic growth this year to 4%, down from 4.6%, while slashing the US growth outlook to 1.8%, a 0.9% drop from its January projection, as the trade war between the two countries raises the risk of a prolonged decoupling.

And speaking to just how debt-constrained China truly is, the Politburo meeting did not announce any new stimulus measures beyond the budget approved in the National People’s Congress in March, but it "reflects the government’s readiness to launch new policies" when the economy is affected by external shocks, according to Zhang Zhiwei, president and chief economist at Pinpoint Asset Management.

“It seems Beijing is not in a rush to launch a large stimulus at this stage,” Zhang said. “It takes time to monitor and evaluate the timing and the size of the trade shock.” Actually, the only reason China is not in a rush to launch a large stimulus, is because it can't: if it does, all it does is buy a few quarters of time before a far more dire crash as deflationary debt-crisis spreads across the country.

Apple is turbocharging its "friend-shoring" strategy, thanks in large part to President Trump's ongoing trade war with Beijing, by initiating plans to shift all iPhone production for the U.S. market from China to India starting next year, according to the Financial Times, citing sources. The move marks a significant step toward diversifying Apple's supply chain away from China, in an effort to avoid tariffs.

The sources said the continued diversification of the supply chain into India may suggest that iPhone production could be ramped up to 60 million units by the end of 2026, or the amount required to satisfy the U.S. market.

Apple still relies heavily on Chinese suppliers for components, but final assembly is being relocated to Indian facilities operated by Foxconn and Tata Electronics. Unbeknownst to U.S. consumers, Apple has already ramped up production of Indian-made iPhones to avoid the 145% tariffs Trump imposed on China. 

Daniel Newman of the Futurum Group research firm said Tim Cook's friend-shoring of iPhone production out of China to India (for the U.S. market) "is going to be an important move for the company to be able to maintain its growth and momentum," adding, "We are seeing in real time how a company with these resources is moving at relative light speed to address the tariff risk."

In Trump's first term—or around 2017—Apple began manufacturing iPhones in India, starting with the iPhone SE through its manufacturer, Wistron, in Bengaluru. By 2019, Apple had expanded its manufacturing footprint in the country to begin assembling the iPhone XR, and by 2022, it began production of the iPhone 14 in Tamil Nadu. 

The latest data from the International Data Corporation showed that U.S. consumers purchased 28% of Apple's 232.1 million global handset shipments in 2024.

Earlier this month, Trump imposed a reciprocal tariff of 26% on India, although it was paused several days later while New Delhi and Washington negotiators discussed a new trade agreement. U.S. Vice President JD Vance is on a trip this week in India, telling reports that US-India trade talks were making "very good progress."  

For more color on Apple's trading partners and latest shipments, the supply chain platform Sayari shows Apple India Private Limited's activity, sourcing mostly from China...

It only took Trump's trade war to get CEO Tim Cook very serious about diversifying supply chains out of China into friendlier countries. While friend-shoring is a must, what about re-shoring? 

Authored by James Rickards via DailyReckoning.com,

It’s a subject we analyze continually, and we have recommended gold as part of a sound investment portfolio for years. Today the dollar price of gold is hovering near all-time highs over $3,300 per ounce.

Gold has been on a tear lately. It was $1,830 as of October 5, 2023. At today’s prices, that marks a 75% surge in just 18 months. Gold has outperformed stocks by a wide margin this year, but it has also outperformed stocks for the past twenty-five years. Gold was around $250 per ounce in 1999. The gain since then is 1,180% or almost 12 times the starting price.

This is not the first bull market for gold. In the gold bull market of 1971 to 1980, gold rose 2,185%. In the gold bull market of 1999 to 2011, gold rose 670%. There were notable gold bear markets from 1981 to 1999 and again from 2012 to 2015. There were no bull or bear markets before 1971 because the world was on a gold standard and the price was fixed at $35.00 per ounce from 1944 to 1971. Still, the upward trend in gold prices is relentless and undeniable. Taking the entire period from 1971 until today including bull and bear markets gold has risen over 9,000%. Not bad.

Of course, that’s all in the past. What investors want to know is where do we go from here? The short answer is up significantly.

Here’s Why

The most fundamental reason for the rise in gold prices is simple supply and demand. Central banks predominantly from developing markets moved from being net sellers to net buyers of gold in 2010. Total gold reserves of central banks have risen significantly since then from just over 30,000 metric tonnes (mt) to over 35,000mt today.

The top buyers were the central banks of Russia, China, Turkey, Poland and India. Russia increased its reserves by 1,684mt to a total of 2,333mt. China increased its reserves by 1,181mt to a total of 2,235mt. Iran is also a major buyer of gold, but it is non-transparent, and its purchases and reserves are not publicly known.

At the same time gold demand has been growing, gold output is flat. Global mining output of gold was about 130 million ounces in 2018 and was about 120 million ounces in 2024. Output declined slowly from 2018 to 2022 and then recovered slowly over the course of 2023 and 2024 but the change in both directions was slight.

Gold production is projected to grow slightly from today until 2030 but is still not projected to exceed the 2018 high. In short, gold production by miners is flat. This does not mean that we are at “peak gold” or that new discoveries are not being made. They are. What it means is that gold is becoming harder to find and costs of production (especially water and energy) are going up, so the total output trend is flat.

Continually increasing demand with flat output is a recipe for higher gold prices.

The second driver of higher prices is the role of BRICS+. From an original membership of Brazil, Russia, India and China in 2009 (South Africa joined in 2010), the group has expanded to include Egypt, Ethiopia, Indonesia, Iran and the UAE. It’s waiting list of additional members who will be added in the years ahead includes Malaysia, Nigeria, Turkey and Vietnam among others.

There was much discussion in 2023 and 2024 about a new BRICS currency that would displace the U.S. dollar in trade among members and might ultimately prove to be an acceptable reserve currency to rival the dollar. In fact, no such alternative currency is in the works. It might happen in the future but it would take ten years or longer properly to design and implement.

Instead, the BRICS are building a new payments system using proprietary cables, secure servers and highly encrypted message traffic protocols along with a blockchain-type ledger. Payments are in local currencies in the new payment channels that cannot be disrupted by western powers.

This begs the question of how trade imbalances accumulating in local currencies can be settled and converted into more liquid assets. The traditional answer was dollars. In short, the BRICS+ already have a new global currency, which is actually quite old – it’s gold. This is one reason why BRICS+ members are among the largest buyers of gold bullion.

The Everything Hedge

Importantly, gold is not just an inflation hedge, in fact it is an imperfect inflation hedge in terms of strict correlation. Gold prices have skyrocketed in recent years even as inflation has remained relatively tame (despite an inflation surge in 2022). A better model is to think of gold as the “everything hedge.”

The vectors of uncertainty are everywhere. These include tariffs, tax policy, the Department of Government Efficiency (DOGE), the War in Ukraine, the rise of China, a likely recession, left-wing violence, and even the status of Greenland and the Panama Canal among others.

It’s difficult to forecast how any one of these situations will turn out, let alone all of them and their complex interactions. Stocks and bonds can be volatile as a result. Gold is the one safe haven asset that powers through them all and offers investors some peace of mind. It is truly the everything hedge.

These drivers are sending gold prices higher and putting a floor under current price levels so that investors can enjoy potential upside with reduced concern about the downside. That’s what we call an asymmetric trade, which greatly favors investors.

Finally, there’s a simple bit of math combined with behavioral psychology that could propel gold prices to the $10,000 per ounce level in far less time than most analysts believe.

Investors naturally focus on dollar gains in the price of gold. When gold goes from $1,000 per ounce to $2,000 per ounce, investors cheer on the $1,000 gain. The same is true when gold goes from $2,000 per ounce to $3,000 per ounce. Again, investors pat themselves on the back for another $1,000 per ounce gain.

What investors don’t realize at least initially is that each $1,000 per ounce gain is easier than the one before. This phenomena involves the interaction of simple math and more complicated behavioral psychology.

The psychology is a matter of what’s called anchoring. The investor anchors on the number of $1,000 as a fixed gain and treats each such gain as the same. In pure dollars, they are the same. You make $1,000 per ounce as each benchmark is passed.

But here’s the conversion of those dollar benchmarks with each gain translated from dollars per ounce to percentages of the prior baseline:

Because each $1,000 per ounce gain begins from a higher level, the percentage gain associated with each dollar gain is less. The increase from $1,000 to $2,000 per ounce is a heavy lift. The increase from $9,000 to $10,000 per ounce is not much more than a good month. (Gold has been going up 1% to 2% daily with recent volatility).

This math is what gives rise to a gold buying frenzy. We’re not there yet. Gold buying has been limited mostly to central banks and large institutions such as sovereign wealth funds (SWFs). Retail interest in the U.S. has been slight although retail buyers have been more active in India and China. Once the frenzy kicks in those $1,000 benchmarks will be passed quickly. That’s why it’s not too late to become a gold investor. Don’t kick yourself about the gains you’ve missed. Instead, look forward to the gains that are coming.

How To Invest

The two main ways to invest in gold are what I call paper gold and physical gold bullion. Paper gold refers to securities and futures linked to the price of gold such as exchange-traded funds (GLD is the most liquid ticker), COMEX gold futures or unallocated gold purchase agreements available from large banks. Paper gold will give you price exposure and the potential for gains, but you do not own gold bullion. Many things can go wrong with a paper gold strategy including early termination of contracts, closure of futures exchanges or the failure of a dealer bank. You may find that you’re out of the gold market just when you most want to be in it.

Physical bullion is my preferred way to invest in gold. American Gold Eagle coins from the U.S. Mint in one-ounce or one-quarter ounce denominations are practical. For larger amounts you can look at 1-kilo gold bars from a reputable refiner. Do not buy “rare” or “pre-1933” gold coins unless you are a collector or numismatic expert. The premium for such coins is high and they are not worth the extra expense. Gold is gold.

Do not store your bullion in a safe deposit box. Banks are the first place the government will lock down in a crisis. Your gold could be seized. Use a private storage company like Brinks or install a home safe. If you’re using a home safe there are several techniques you can use to protect it. The best protection is not to tell anyone you have gold. That way no one will come looking.

Authored by Amin Haqshanas via CoinTelegraph.com,

Central banks, particularly China, may start to shift away from US Treasurys, exploring alternatives such as gold and Bitcoin, according to Jay Jacobs, BlackRock’s head of thematics and active ETFs.

In a recent interview with CNBC, Jacobs said that geopolitical tensions and rising global uncertainty are accelerating diversification strategies among central banks.

He pointed to a long-term trend where countries have been reducing their reliance on dollar-based reserves in favor of assets like gold and, increasingly, Bitcoin.

“This whole diversification away from traditional assets and into things like gold and also crypto [...] probably began three, four years ago,” Jacobs explained.

He said that recent geopolitical fragmentation has intensified the push toward alternative stores of value.

Jacobs referenced growing concerns about the freezing of $300 billion in Russian central bank assets following its invasion of Ukraine, suggesting that such events have prompted countries like China to rethink their reserve strategies.

BlackRock executive Jay Jacobs on CNBC. Source: YouTube

Geopolitical fragmentation to shape global markets

During the interview, Jacobs said BlackRock, the world’s largest asset manager, has identified geopolitical fragmentation as a defining force for global markets over the coming decades:

He noted that this environment is fueling demand for uncorrelated assets, with Bitcoin increasingly viewed alongside gold as a safe-haven asset.

“We’ve seen significant inflows into gold ETFs. We’ve seen significant inflows into Bitcoin. And this is all because people are looking for those assets that will behave differently,” Jacobs said.

Investors highlight Bitcoin decoupling

Notably, Jacobs is not alone in stressing Bitcoin’s declining correlation with US equities. Several analysts have also observed that Bitcoin is beginning to decouple from the US stock market.

On April 22, Alex Svanevik, co-founder and CEO of the Nansen crypto intelligence platform, said Bitcoin’s price is showcasing its growing maturity as a global asset, becoming “less Nasdaq — more gold.”

He added that Bitcoin was “surprisingly resilient” amid the trade war compared to altcoins and indexes like the S&P 500, but remains vulnerable to economic recession concerns.

Source: Alex Svanevik

Echoing this sentiment, QCP Capital said in an April 21 Telegram note that Bitcoin seemed to be sharing some of gold’s limelight as a hedge against macroeconomic uncertainty.

“With equities finishing last week in the red and extending an April drawdown, the narrative of BTC as a safe haven or inflation hedge is once again gaining traction. Should this dynamic hold, it could provide a fresh tailwind for institutional BTC allocation,” it wrote.

Having been widely mocked - and quantitatvely denigrated by Goldman Sachs - this morning's final print for UMich consumer sentiment for April is now a must watch.

As a reminder, Goldman explained that the Michigan measure has been especially susceptible to the tariff news recently for three reasons.

First, inflation expectations in the survey have become extremely partisan. 

Second, the share of respondents in the Michigan survey who are Democrats has always been consistently higher than the share of respondents who are Republicans

Third, switching from a phone-based to an online-based data collection process has led to more extreme answers on inflation expectations.

These three issues together have boosted short-term inflation expectations in the Michigan survey by about 1.3pp and long-term inflation expectations by 0.5pp since 2024Q4. In particular, the change in distribution across political parties and increased partisanship together generated an outsized 1.0pp boost to the 1-year inflation expectation in February.

So, with all that in mind, let's see what the final data looks like - did it get even crazier?

The short answer is - YES!

UMich 1Yr inflation expectations rose to 6.5% (slightly lower than the 6.8% expected but still the highest since Nov 1981) while the 5-10Y expectations jumped to 4.4%  - the highest since June 1991...

Source: Bloomberg

The gaping chasm of propaganda-driven fear is evident below the surface with Republicans expected 0.4% inflation while Democrats expect - wait for it - 8.0% price rises in the next year (Independents also saw inflation expectations rising)...

Source: Bloomberg

Source: Bloomberg

Bear in mind that Democrat's 1Yr inflation expectations are now more than 2 times higher than they were in June 2021 when inflation would actually rise to 9%. Back then the Democrats were only off by a factor of 3x.

The final April sentiment index declined to 52.2 from 57 a month earlier, but this was considerably better than the 50.8 preliminary number and the median estimate of 50.5 in a Bloomberg survey of economists.

"While this month’s deterioration was particularly strong for middle-income families, expectations worsened for vast swaths of the population across age, education, income, and political affiliation," Joanne Hsu, director of the survey, said in a statement. 

“ Consumers perceived risks to multiple aspects of the economy, in large part due to ongoing uncertainty around trade policy and the potential for a resurgence of inflation looming ahead."

The survey showed the expectations index plunged 11.4 points, the sharpest drop since 2021, to 52.6 this month. The current conditions gauge decreased to a six-month low of 63.8.

Source: Bloomberg

After five straight months of disappointments, April saw the biggest beat for headline UMich sentiment since June 2024...

Source: Bloomberg

“ Labor market expectations remained bleak,’’ Joanne Hsu, director of the survey, said in a statement. 

“ Even more concerning for the path of the economy, consumers anticipated weaker income growth for themselves in the year ahead. Without reliably strong incomes, spending is unlikely to remain strong amid the numerous warnings signs perceived by consumers.”

Compare UMich's survey for the longer-term inflation expectations, according to Democrats, to what the market is pricing in...

Source: Bloomberg

Is it really any surprise that even Fed Chair Jay Powell dismisses this survey's farcical numbers as a partisan outlier.

US equity futures are mixed after three days of gain, with tech leading, highlighted by GOOG (+5.6% amid strong earnings results last night), META (+3.5%), and TSLA (+1.6%). S&P futures first rose to session highs during the Asian session, when sentiment was first buoyed by dovish remarks from Fed officials Christopher Waller and Beth Hammack, which bolstered expectations for a potential interest-rate cut as soon as June; but the session highlight was a Bloomberg report that China was considering suspending its 125% tariff on some US imports including plane leases, indicating a shift in the game theoretical "game of chicken" balance and suggesting a deal may come sooner than expected as pain levels are rising for Beijing. Later, foreign ministry spokesman Guo Jiakun reiterated that China is not in talks with the US over tariffs, contradicting Trump and underscoring the complexities for investors tracking headlines out of Washington and Beijing. Futures then slumped to session lows just after 6am ET after Time published an interview with Trump (which took place on April 22) in which the president said China's President Xi has called him (something China denies), said he would not call XI himself, and when asked if high tariffs are still present a year from now, Trump said that would be a "total victory" adding that he expects trade deals in the next 3-4 weeks. In other words, if China may have been offering an olive branch before the interview, those hopes were dashed after its publication and S&P futures reflected that, sliding to session lows down about 0.4% after earlier they rose by the same amouint.

The dollar strengthened, while the yen and Swiss franc retreated as investor demand for non-US haven assets waned. Gold slid 1.5%. Treasuries extended their gains from Thursday; Bond yields dropped (2-, 5-, 10-yr yields are 0.8bp, -0.2bp, -1.6bp lower). Commodities were mixed with Base Metals higher and Precious Metals lower.  The US session includes revised April University of Michigan sentiment gauges, and Fed’s external communications blackout ahead of the May FOMC meeting starts Saturday.

In premarket trading, Alphabet shares jumped as much as 5% after posting first-quarter revenue and profit that exceeded analysts’ expectations, buoyed by continued strength in its search advertising business. Alphabet was the top gainer in the Magnificent Seven stocks (Alphabet +4.9%, Meta +3.2%, Amazon +0.5%, Tesla +0.9%, Nvidia +0.4%, Microsoft -0.2%, Apple -0.8%; Alphabet rises 4.9%). Intel tumbled 7% as CEO Lip-Bu Tan gave investors a stark diagnosis of the chipmaker’s problems, along with the sense that it will take a while to fix them. Gilead drops 3.9% after the biopharmaceutical company posted 1Q revenue that fell short of estimates as sales of Trodelvy and Veklury disappointed. Here are some other notable premarket movers:

• Eastman Chemical Co. (EMN) falls 2.3% after the chemicals and plastics maker provided a disappointing second-quarter profit forecast, citing factors including tariffs between the US and China.
• Hasbro rises 1.0% as Citi upgrades to buy, citing underlying momentum of the toymaker’s business.
• Ironwood Pharmaceuticals climbs 9.3% after the company reaffirmed its revenue forecast for the full year.
• Sphere Entertainment rises 13% after its wholly-owned unit MSG Networks reached a deal to restructure the debt of its subsidiaries and amend the media rights agreements with the New York Knicks and the New York Rangers.
• T-Mobile falls 5.7% after the company reported fewer new wireless phone subscribers than analysts expected in the first quarter.
• Skechers USA slides 6.9% after the footwear company said it’s not providing financial guidance and withdrawing its previous annual outlook due to macroeconomic uncertainty.

On the trade front, Bloomberg News reported that China is considering suspending its 125% tariff on some US imports. Later, Foreign Ministry spokesman Guo Jiakun reiterated that China isn’t in talks with the US over tariffs, contradicting President Donald Trump and underscoring the complexities for investors tracking headlines out of Washington and Beijing.

“We are currently in tariff purgatory,” said Joachim Klement, strategist at Panmure Liberum. “There is no fundamental change to the outlook, so markets latch on to noise and get constantly whipsawed by the ever-changing utterances of Donald Trump and his cabinet.”

Confirming that, in an interview Time published with Trump just after 6am ET, and which took place on April 22, Trump said China's President Xi has called him even though China has denied this; when asked if high tariffs are still present a
year from now, Trump said that would be a "total victory." 

• In the interview, Trump said tariffs are still necessary.
• "If we still have high tariffs, whether it’s 20% or 30% or 50%, on foreign imports a year from now, will you consider that a victory?", he responded, "Total victory"
• When asked if he would call Xi (if Xi did not call him), Trump replied "No".
• US Treasury Secretary Bessent and Secretary of Commerce Lutnick "did not tell me" to do a 90-day pause.
• ”1 certainly don’t mind having a tax increase" on millionaires
• Being serious when talking about acquiring the Panama canal, Greenland, and making Canada the 51st state
• Trade deals expected in the next 3-4 weeks

More recently, on Thursday, Trump said his administration was talking with China, even as Beijing denied the existence of negotiations and demanded the US revoke all unilateral tariffs. Meanwhile, the US and South Korea could reach an “agreement of understanding” on trade as soon as next week, said Treasury Secretary Scott Bessent. 

Traders also took some early comfort from hopes that the Fed may reduce interest rates earlier than expected. Markets currently favor a quarter-point cut in June and a total of three such reductions by year-end. Fed Governor Christopher Waller said he’d support rate cuts in the event aggressive tariffs under President Trump’s trade policies hurt the jobs market, speaking on Bloomberg Television. Cleveland Fed President Beth Hammack told CNBC the central bank could move on rates as early as June if it has clear evidence of the economy’s direction.

While the dollar was on course for its first weekly gain in a month, Bank of America strategists said investors should sell into rallies in US stocks and the greenback, cautioning that the conditions for sustained gains are missing. The dollar is in the midst of a longer term depreciation while the shift away from US assets has further to go, according to the BofA team led by Michael Hartnett. The trend would continue until the Fed starts cutting rates, the US reaches a trade deal with China and consumer spending stays resilient. The depreciation of the dollar is the “cleanest investment theme to play,” according to Hartnett.

The Stoxx 600 rises 0.3%, on track for a fourth day of gains as worries about trade tensions between China and the US subsided, with most significant moves triggered by a continued deluge of earnings, including from Saab and Safran. Alten and Hemnet are among the biggest laggers. Here are the biggest movers Friday:

• IMCD shares rise as much as 8.5% after the chemicals maker’s earnings met expectations, which analysts said was a relief given yesterday’s plunge on the shock news its CEO was leaving
• Saab shares gain as much as 4.3%, reversing earlier declines of 5.2%. The Swedish defense firm’s 1Q earnings beat expectations, though their order intake missed
• Safran shares rise as much as 4.8% after the French aerospace and defense firm reported adjusted revenue for the first quarter that beat the average analyst estimate
• Yara shares rise as much as 5.7% after the Norwegian agricultural chemicals firm reported adjusted Ebitda for the first quarter that beat the average analyst estimate
• Accor shares rise as much as 5.6% to the highest level this month. Analysts say the French hotel operator’s results are favorable, noting positive demand commentary and expectations for net unit growth throughout the year
• Saint-Gobain rises as much as 4.3% after the construction materials producer’s 1Q. Analysts are generally positive on the results, with Morgan Stanley praising the firm’s consistent delivery
• Alten shares slide as much as 12% after the French IT firm reported a 5.5% drop in organic sales in 1Q, warning that some of its major clients are freezing or postponing projects due to tariff uncertainties
• Hemnet shares drop as much as 11%, their worst drop since October, after the Swedish property platform missed expectations in the first quarter, giving up gains leading into the results
• Kemira shares fall as much as 15%, the steepest drop in almost 14 years, after the Finnish chemicals company warned over the impact on end-markets of increased economic uncertainty
• Mobico Group shares plunge as much as 11% after the company announced it is selling its school bus business in North America. Analysts said the price tag is disappointing

Asian equities also advanced after a Bloomberg report said Beijing is weighing a suspension of its 125% tariff on some US imports, though the Chinese Foreign Ministry spokesman Guo Jiakun later denied that they’re in talks with the US.

Earlier in the session, Asian stocks gained as signs of progress in trade negotiations boosted sentiment, with a major regional benchmark erasing all losses driven by Trump’s April 2 Liberation Day announcement of reciprocal tariffs. The MSCI Asia Pacific Index rose 0.9%, with TSMC and Tencent among the biggest contributors. Benchmarks in Taiwan, Hong Kong, Japan and South Korea all advanced. The key MSCI Asian index joins benchmarks in India, Korea, Australia and Indonesia in recouping losses from this month’s tariff selloff. The regional gauge is on track to cap its second-straight week of gains. Meanwhile, stocks and bonds tumbled in India, as traders braced for a potential worsening of the geopolitical situation with neighboring Pakistan. Indian shares were the worst performers in Asia on Friday, while the rupee and the nation’s bonds also slid, indicating growing angst among traders over any further ramping up of tensions between the two nuclear-armed nations. Markets are closed in Australia and New Zealand for holidays Friday. Key events to watch next week include rate decisions in Japan and Thailand as well as China PMI data.

In FX, the Bloomberg Dollar Spot Index rose as much as 0.4% and is set to notch its first weekly gain in a month. The greenback gained versus all G-10 currencies;  The Japanese yen is among the weakest of the G-10 currencies, falling 0.5% against the greenback; USD/JPY rises 0.8% to 143.85.  

In rates, Treasury futures rose to session highs in early US trading, with yields 1bp-4bp richer across a flatter curve, outperforming European bonds after stronger-than-expected UK retail sales data. The 10-year yield near 4.29% was ~3bp richer on the day, outperforming German counterpart by 5bp, UK by 2bp. Among US yield-curve spreads, 2s10s and 5s30s are 1bp-2bp flatter.  Shorter-dated maturities also underperform in Germany where two-year borrowing costs rise 4 bps.

In commodities, WTI falls 0.5% to $62.50 a barrel. Bitcoin rises 2% to just shy of $95,000. Haven assets underpeform, with gold falling nearly $50 to below $3,300/oz.

Looking at today's calendar, the US session includes revised April University of Michigan sentiment gauges, and Fed’s external communications blackout ahead of the May FOMC meeting starts Saturday.

Market Snapshot

• S&P 500 mini -0.2%
• Nasdaq 100 mini -0.3%
• Russell 2000 mini -0.5%
• Stoxx Europe 600 +0.1%
• DAX +0.4%
• CAC 40 +0.7%
• 10-year Treasury yield -3 basis points at 4.28%
• VIX +0.4 points at 27
• Bloomberg Dollar Index +0.3% at 1227.23, 
• euro -0.3% at $1.1353
• WTI crude -0.3% at $62.6/barrel

Top Overnight News

• China has exempted some U.S. imports from its 125% tariffs and is asking firms to identify critical goods they need levy-free, according to businesses notified, in the clearest sign yet of Beijing's concerns about the trade war's economic fallout. RTRS
• Apple plans to import most of the iPhones it sells in the US from India by the end of next year, accelerating a shift beyond China, people familiar said. The goal will require Apple to double its India capacity. BBG
• President Trump signed an executive order boosting the deep-sea mining industry, while the order instructs the Commerce Secretary to expedite permits under the Deep Seabed Hard Mineral Resource Act, as well as instructs the Commerce and Interior Departments to issue a report on opportunities for seabed mineral exploration on the US outer continental shelf.
• China aims to implement more growth-supporting measures amid rising challenges from hefty U.S. tariffs. The government will seek to coordinate policy measures to support domestic economic aims amid external economic and trade struggles. the government intends to cut interest rates and the amount of cash banks are required to set aside at the central bank, while making full and effective use of existing fiscal and monetary policies, the Politburo said. WSJ
• Bessent says South Korea trade negotiations are moving along at a faster pace than anticipated. Nikkei
• US Republicans in Congress are to unveil a $150bln defense spending package including $27bln for Trump’s Golden Dome missile defense and $29bln for shipbuilding.
• Japan is considering a proposal that would see it boost purchases of US soybeans to compensate for a drop in China demand. Nikkei
• Tokyo inflation picked up to 3.4% in April, its fastest in two years and supporting the BOJ’s rate-hike stance. BBG
• A US-India trade agreement under discussion will cover 19 categories, including greater market access for farm goods, e-commerce, data storage and critical minerals, people familiar with the matter said, the first step toward a deal that may help the South Asian nation evade higher tariffs on its goods. BBG
• UK retail sales unexpectedly rose for a third straight month in March, helped by record-breaking sunshine. But GfK data showed consumer confidence slid to the weakest level in 17 months in April. BBG
• Russia’s oil producers are drilling at the fastest pace in at least five years, preparing for potential OPEC+ output hikes and possible sanction relief. Activity is more than a third above pre-war levels. BBG
• Fed's Kashkari (2026 voter) said a resolution of trade frictions would relieve uncertainty and would be optimistic, while he is worried that businesses will resort to layoffs amid uncertainties and noted some businesses say they are scenario planning for potential layoffs if uncertainty lasts although he is not seeing an uptick in layoffs yet. Furthermore, Kashkari said the frequency of announcements out of Washington has created a challenge for policymakers and for everybody.

Trade/Tariffs

• China held a meeting on responding to trade frictions, according to the Commerce Ministry; said Trade frictions enter a high-intensity phase and are facing difficulties and challenges China said to stay confident in handling trade tension; adopt strategic approaches. To focus on preventing and resolving trade risks. Trade frictions enter a high-intensity phase and are facing difficulties and challenges. Cultivate new opportunities in crisis.
• China's Foreign Ministry said it is not having any consultations or negotiations with the US on tariffs; on tariff exemptions, said not familiar with specifics
• China is said to consider exempting some US goods from tariffs as costs increase with Chinese authorities considering removing additional levies for medical equipment and some industrial chemicals like ethane, according to Bloomberg citing sources familiar with the matter. It was also reported that several Chinese tech companies confirmed that eight tariff codes related to semiconductors and integrated circuits are now exempt from additional tariffs, according to Caijing.
• US Treasury Secretary Bessent said he had a good meeting with South Korea and they are moving faster than thought, while they will talk technical terms and could get to terms next week.
• South Korea's Trade Minister said South Korea and the US agreed in principle on the framework for trade talks. It was also reported that South Korea's Finance Minister said they will try their best to produce meaningful results by July 8th and that autos were in focus during talks, while the two countries reached common ground on discussing measures on tariffs and non-tariff barriers, economic security, investment cooperation, and currency policy. Furthermore, technical-level talks between South Korea and the US will be held in Seoul on May 15th-16th and South Korea's Industry Minister said they reached a common ground on shipbuilding cooperation with the US.
• Japanese Finance Minister Kato met US Treasury Secretary Bessent and told him that US tariffs are deeply regretful, while they agreed the FX rate should be set by markets and that excessive volatility has an adverse effect on the economy. It was also reported that Japan is weighing buying more US soybeans as part of a tariff deal and is also considering boosting US corn imports.
• Canadian Finance Minister Champagne said they need to fight against the US tariffs, which are still affecting a large portion of Canadian goods. Furthermore, he said the scheduling was too tight for a bilateral meeting with US Treasury Secretary Bessent but they did interact at the G7 meeting in Washington.
• US reportedly seeks India trade deal on e-commerce, crops, and data storage, according to Bloomberg sources.

A more detailed look at global markets courtesy of Newsquawk

APAC stocks mostly gained as the region took impetus from the rally on Wall St amid trade-related optimism after President Trump suggested that the US and China held talks despite a denial by the latter. However, conditions were somewhat quieter for most of the session with the absence of markets in Australia and New Zealand for a holiday, although there was a slight boost on reports that China is said to consider exempting some US goods from tariffs. Nikkei 225 rallied at the open but with further gains initially capped as participants digested firmer-than-expected Tokyo CPI before the China tariff story provided a late tailwind. Hang Seng and Shanghai Comp were somewhat varied as the Hong Kong benchmark rallied amid strength in   property, tech and casino stocks, while the mainland lagged following the conflicting statements by the US and China on whether trade talks took place.

Top Asian News

• China's Politburo said China's fiscal policy will be more proactive, economic recovery needs to be further reinforced; China to cut RRR and rates when needed and in a timely manner; Vows to fully prepare emergency plans for external shocks. Use well moderately loose monetary policy China to cut RRR and rates when needed and in a timely manner. To create new structural monetary tools Vows to fully prepare emergency plans for external shocks. Improve policy toolbox for stabilising employment and the economy. Implement established policies early. Will speed up issuance of ultra-long bonds.
• PBoC Governor Pan affirmed monetary policy is to be moderately loose and said they will defend global economic stability, while he vowed to drive the Chinese economy and said China’s economy is off to a good start, continues to rebound positively, and the financial market is running smoothly.
• China’s Finance Minister attended the G20 meeting in Washington and said the current world economic growth momentum is insufficient and tariff wars and trade wars have further affected economic and financial stability.
• Japanese PM Ishiba said he decided on a package of measures to deal with US tariffs and instructed cabinet members to do the utmost to aid small and medium-sized enterprises that will be affected.
• Donald Trump Jr is to meet South Korean business leaders on April 30th, according to Yonhap.
• PCA sees China's April car sales up 14.4% to 1.75mln Units, via Bloomberg

European bourses (STOXX 600 +0.4%) opened entirely in the green with sentiment boosted by positive trade updates from China, and following a stellar Alphabet earnings report. However, around the time of the European cash open, sentiment waned a touch - but this ultimately proved fleeting. European sectors opened with a strong positive bias but is a little more mixed now. Travel & Leisure takes the top spot, with the sector propped up by post-earning strength in Accor (+4%) and Evoke (+1%). The former topped Q1 revenue expectations and highlighted that it saw “no cracks in demand” so far (re. hotels).

Top European News

• SNB Chairman Schlegel said the main instrument is interest rate, but forex interventions can also be used to influence monetary conditions. Trade policy situation is creating high uncertainty for all countries, including Switzerland; could fragment the global economy Economic slowdown in Switzerland cannot be ruled out. Price stability cannot prevent trade policy-related uncertainty, but remains very important.
• UK will reportedly be expected to pay a fee to guarantee UK companies access to a EUR 150bln EU weapons fund, according to the FT citing diplomats.

FX

• DXY is nursing some of its recent losses after retreating amid the broad risk-on sentiment on Wall St. Price action during the European morning has been rather contained, with the index in a 99.43-99.89 range at the time of writing. Sentiment today has been boosted by reports that China is considering exempting some US goods from tariffs as costs increase.
• EUR gave back some of the prior day's gains after hitting resistance just shy of the 1.1400 handle as the greenback regained composure. EUR/USD resides in a 1.1315-1.1394 intraday range.
• JPY breached the 143.00 level to the upside which was facilitated by a rebound in the dollar and the positive risk appetite, while there were also some suggestions of Gotobi demand, whilst a flight out of safe-havens were seen on reports that China is said to consider exempting some US goods from tariffs as costs increase. Tokyo CPI data saw an acceleration, but failed to lift the JPY.
• GBP faded some of Thursday's advances and eventually gave up the 1.3300 status as the Dollar picked up. Little reaction was also seen this morning to the substantial beat in UK Retail Sales, which was stronger-than-expected. On the trade front, UK Chancellor Reeves said she understands US concerns on trade imbalances, especially in China and they don't always agree with the US on policy prescriptions but is confident a trade deal can be done.
• Antipodeans are both subdued amid the upticks in the Dollar and overall cautious risk tone amid the uncertain trade environment, whilst markets were closed on both sides of the Tasman for ANZAC Day.
• PBoC set USD/CNY mid-point at 7.2066 vs exp. 7.2898 (Prev. 7.2098).

Fixed Income

• USTs are flat in what has been a rangebound morning thus far as traders digest the latest Bloomberg reports on China, which suggest China is said to consider exempting some US goods from tariffs as costs increase. UST futures rate in a narrow 111.02+ to 111.09 range at the time of writing; docket ahead is thin.
• German debt is taking a breather after steadily climbing to just shy of the 132.00 level, whilst a slew of ECB commentary failed to trigger much price action. In terms of a recent ECB commentary on tariffs, ECB rhetoric leans towards an initial disinflationary narrative around tariffs, with Lagarde calling them a negative demand shock and noting the net inflation impact remains unclear. Knot flagged that a 25% US tariff could shave 0.3ppts off EZ growth.
• Gilts are conforming to price action across peers despite little notable move seen from the above-forecast UK retail sales metrics. On the trade front, UK Chancellor Reeves said she understands US concerns on trade imbalances, especially in China and they don't always agree with the US on policy prescriptions but is confident a trade deal can be done. Gilt Jun'24 futures currently reside around the middle of a 92.90-93.14 range.

Commodities

• The crude complex has been choppy, trading on either side of the unchanged mark. Early morning sentiment was boosted by reports that China is to consider exempting some US goods from tariffs as costs increase. Around the European cash open, some modest pressure was seen in the complex, but the downside has since stabilised. Brent'Jun 25 currently trading within a USD 66.48-67.11/bbl range.
• Precious metals hold a negative bias, with losses in spot gold more pronounced vs peers, due to the positive risk tone and relatively stronger Dollar. XAU currently towards the lower end of a USD 3,287.16-3,370.79/oz range.
• Base metals are entirely in the red, with losses driven by the relatively stronger Dollar and potentially due to the conflicting commentary of US-China trade talks. 3M LME Copper currently trading in a USD 9,359.5-9,458.8/t range.
• UK's Unite said TotalEnergies (TTE FP) workers balloted for strike action and that around 50 Unite members based on the Elgin Franklin and North Alwyn platforms are involved.
• Iranian oil minister said Tehran will sign USD 4bln agreement with Russian companies to develop seven oil fields, via state TV.
• ExxonMobil (XOM) reports flaring event at Joliet, Illinois refinery (275k BPD).

Geopolitics: Middle East

• "Haaretz citing sources: No significant progress in the negotiations of the exchange deal between Hamas and Israel so far", according to Al Jazeera
• China, Russia, and Iran IAEA representatives met with the IAEA Director General on Thursday and had in-depth communication on how the IAEA can play its role in serving the political and diplomatic settlement process of the Iranian nuclear issue.
• US is poised to offer Saudi Arabia an over USD 100bln arms package during President Trump’s visit to the kingdom in May.

Geopolitics: Ukraine

• Russian Foreign Minister Lavrov said the US and Russia are moving in the right direction towards the deal.
• NATO Secretary General Rutte said he had a good meeting with US President Trump and discussed Ukraine, while he does not know if Russian President Putin wants peace but added that something is on the table for Russia-Ukraine and the ball is in Russia's court. Furthermore, Rutte said it is not accurate that the US pressured Ukraine to accept a deal that favours Russia.

Geopolitics: Other

• "AFP quotes Pakistani official: overnight exchange of fire on border with India", via Sky News Arabia.

US Event Calendar

• 10:00 am: Apr F U. of Mich. Sentiment, est. 50.5, prior 50.8

DB's Jim Reid concludes the overnight wrap

Back from Luxembourg and last night stayed up late to watch the final episode of the latest series of "The White Lotus", one of the most famous dramas of the last few years. If you ever think your life is going through a tough patch please watch this program as many of these guys have some serious issues!!!

At times the series was so uncomfortable that it was a relief to get back to markets and to trade wars. However for now markets continue to recover with US assets in particular catching up on lost performance after the recent normalisation of policy from the US administration. My view is that the damage to US exceptionalism will be longer lasting but that it’s understandable that there’ll be a relief recovery after the US has come back from the brink policy wise. It’s also worth noting that before Liberation Day the Mag-7 were notably underperforming, especially since DeepSeek’s arrival onto the scene and a generally disappointing Q4 earnings season for the group. See my CoTD from yesterday here for more on this. How the Mag-7 perform from here will dictate a lot of the US exceptionalism trade.

We had the latest taste of this with Alphabet’s earnings yesterday evening. Google’s parent delivered a decent revenue and earnings beat, mostly driven by its search advertising business, and announced a 5% dividend increase. Its shares rose by close to 5% in post-market trading, following on a +2.37% gain in the regular session. S&P 500 (+0.51%) and NASDAQ 100 (+0.62%) futures are trading higher overnight helped by these results. Next stop for the Mag-7 will be the releases from Microsoft, Meta, Amazon and Apple on Wednesday and Thursday next week. So a big couple of days ahead next week. Interestingly the FT have just broken a story as we go to print saying that Apple plans to shift the assembly of all US-sold iPhones to India as soon as next year. This is a big move away from China and shows how the geopolitics are shifting. It's a big win for India.

As trade and geopolitics are reshaping, for now investors are becoming more relaxed about the near-term outlook with few signs of deteriorating data as yet and some dovish comments from Fed officials yesterday, which reassured investors that the Fed would still cut rates if the labour market deteriorated. So collectively, that helped the S&P 500 (+2.03%) to post a third consecutive gain for the first time since Liberation Day. And in another sign that market stress was easing, the VIX index (-1.98pts) fell to its lowest since the April 2 tariff announcements, closing at 26.47pts.

Those comments from Fed officials really helped to support the market yesterday, as they were notably more dovish than Chair Powell, who’d sounded a lot more concerned about inflation. For instance, Fed Governor Waller repeated his previous view that tariffs just represented a one-time price effect, and said that if he saw “a significant drop in the labor market, then the employment side of the mandate, I think, is important that we step in.” Earlier, we also heard from Cleveland Fed President Hammack, who said that if they had “clear and convincing data by June, then I think you’ll see the committee move if we know which way is the right way to move at that point in time”. So that was seen as opening the possibility of a rate cut sooner than expected, and futures moved to price in 85bps of cuts by the December meeting, up +6.0bps on the day. And in turn, Treasuries saw a strong rally, with the 10yr yield (-6.7bps) falling back to 4.32%, marking its third consecutive decline.

Aside from those remarks, the other good news yesterday was that the labour market appeared to remain in decent shape for the time being. For instance, the weekly initial jobless claims were at 222k over the week ending April 19, in line with expectations. Moreover, that was completely in line with where they’ve been over recent weeks, having oscillated between 216k-225k for the last 8 consecutive weeks now. So yet again, there was no obvious sign that layoffs were increasing, and we even saw continuing claims (for the week ending April 12) fall back to 1.841m (vs. 1.869m expected), which was their lowest since late-January.

All that helped to spur a strong market rally, with most US assets continuing to unwind their post-Liberation Day moves. For instance, the S&P 500 (+2.03%) posted a third consecutive gain, and it was actually the first time since February 2023 that the index has managed three consecutive gains of more than +1% a day. Tech stocks led the advance, with the Magnificent 7 (+2.94%) now up by +9.67% over the last three sessions.

When it came to the latest on tariffs, the most notable headline was Trump suggesting that his administration has been talking with China on trade. This came in contrast to comments from China officials earlier in the day, who said that there were no trade negotiations currently happening and that the US should revoke its unilateral tariffs if they wanted to start trade talks. Overnight Bloomberg are reporting that China is considering carving out exemptions to its tariffs on US goods given the stress it's causing in some areas. So whatever officials say there seems to be movement on both sides to pull back from the most extreme position of the last few weeks.

In terms of other trade talks, Treasury Secretary Bessent said that the US and South Korea could reach an “agreement of understanding” as soon as next week. This followed similar comments earlier in the week on progress in talks with India and added to the sense that the US is keen to announce some agreements soon, even if these represent only rough outlines of the eventual deals.

Back in Europe, markets also put in a decent performance for the most part, which was similarly supported by more robust data than expected. In particular, the Ifo’s business climate indicator from Germany unexpectedly rose to a 9-month high of 86.9 in April (vs. 85.2 expected). Fiscal expansion plans must be helping. Moreover, the expectations component only saw a modest pullback to 87.4 (vs. 85.0 expected), thus avoiding the sharp drop that was widely expected.

That backdrop helped to support European assets across the board, with the STOXX 600 (+0.36%) posting a modest gain by the close. It also meant that the index is now up just over 10% from its low on April 9, just before Trump announced the 90-day tariff extension. In the meantime, sovereign bonds also put in a strong performance, with yields on 10yr bunds (-5.0bps), OATs (-7.2bps) and BTPs (-8.4bps) all coming down. And that got further support from ECB officials, particularly as Olli Rehn said that they shouldn’t rule out a larger cut, and chief economist Philip Lane said “there’s no reason to say we’re always going to do the default 25”.

In Asia, Japanese markets are the best performers with the Nikkei (+1.83%) and the Topix (+1.37%) trading sharply higher after the Japanese government unveiled a package of emergency measures to counter the impact of tariffs. Elsewhere, the Hang Seng (+1.36%) and KOSPI (+1.02%) are performing well. Mainland Chinese stocks are a little more subdued with the CSI (+0.30%) and the Shanghai Composite (+0.15%) only a touch higher. Even with the Apple news mentioned above, Indian stocks (-0.90%) are lower as tensions are very elevated with Pakistan at the moment around Kashmir. Meanwhile, Australian markets are closed for a holiday.

Early morning data showed that Tokyo CPI grew more than expected, rising to a two-year high of +3.5% y/y in April (v/s +3.3% expected) amid a recovery in private spending. It followed a +2.9% increase the prior month. Core CPI rose +3.4% y/y in April (v/s +3.2% expected) after advancing +2.4% the previous month thus increasing speculation over more interest rate hikes by the BOJ.

To the day ahead now, and US data releases include the University of Michigan’s final consumer sentiment index for April. Elsewhere, we’ll get UK retail sales for March. Otherwise, central bank speakers include the BoE’s Greene.