Market Commentary: Monday 12th May

Risk sentiment is strong, with S&P 500 futures up 1.5% and Nasdaq 100 futures up 2.1%, while Asian equities have rallied 0.8% to start the week. This comes after headlines revealed that the first formal trade talks between the US and China made “substantial progress” and the two sides were “not as far apart as expected,” according to US negotiators. More details will follow, with Treasury Secretary Bessent scheduled to speak to the media at 8 a.m. UK time, where we’ll see whether the rally in futures can be sustained.

Some pressure had been building on the US, with concerns over supply-chain disruptions and empty shelves, as Chinese exports to the US fell 20% in April. It is expected that even with tariff relief, recovery will take time.

Elsewhere, Russian and Ukrainian leaders may meet this week, which could further lift risk sentiment. The optimism around trade and geopolitics has left gold (XAU) slightly lower at $3,277. Cryptocurrencies remain strong, with Bitcoin at $103,961 and Ether at $2,498.

Looking ahead, we have a flurry of inflation data this week, with reports from the US tomorrow, and from several European nations and Japan throughout the week.

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