Morning Brew May 14 2025

Good morning,

Risk sentiment was strong yesterday as good economic data and good news from Donald Trumps middle East trip are well received.

The S&P is now positive for the year after the lower than feared inflation release yesterday, both headline and core US CPI for April came in softer than estimates at 0.2% MoM vs. Exp. 0.3% with clothing and new cars showing that companies are not yet passing tariff costs to consumers.

The US is considering allowing the UAE to purchase over a million advanced Nvidia chips, while Saudi Arabia collaborates with Nvidia to establish AI factories deploying 6,000 Blackwell GPUs, Nvidia shares gained 5.6%. Trump and MBS announced a pledge for $1 trillion investment
US500 rose 0.7% yesterday, the Nasdaq100 1.6% , the Dow gave up 0.6%, volumes were above average.

United Health remains in the headlines, Yesterday, CEO Andrew Witty resigned, shares fell 18% yesterday and are now down almost 50% since April 11^th.

Coinbase looks to join the S&P 500 on May 19, shares surge.

US Yields rose yesterday, despite lower inflation, the year end expectation for the Fed Rate is at 3.79, only at 2 cuts.

EURUSD is 1.1190, GBPUSD 1.3295 and USDJPY 147.08. Gold and Silver continue to trade volatile at 3225 and 32.72.

Overall, markets have recovered the losses from the tariff panic we saw in April. The result of liberation day for now is that DJT introduced tariffs of 10% globally and more on certain countries without negative market consequence. I am not sure that there was a plan to this regard but for now it in an interesting development.

John wrote an FX Update: The US dollar surged yesterday as USD bears capitulated on the US-China trade détente. The Chinese renminbi was stronger still. But after this capitulation, markets may look for new catalysts away from trade. The US treasury market may prove the next focus (again).

Koen took a look at IBIT Options :  IBIT options are fast becoming a real-time barometer for global investor risk appetite, blending the volatility of crypto with the structure of traditional finance. From directional LEAPS plays to income-generating put strategies, savvy investors now have sophisticated tools to navigate Bitcoin’s evolving role in institutional portfolios.

News from the middle east and peace talks in Ukraine will dominate market as there is little important data today. Tomorrow, US retail sales and Walmart earnings will be very significant.

Wednesday, May 14

- Germany Inflation (HICP)

- San Francisco Fed President Mary Daly speaks

Earnings: Sony, Tencent, Cisco,

Thursday, May 15

- UK GDP

- EU GDP

- U.S. Retail Sales (April): Important consumer spending data & Initial Jobless claims

- Fed Chair Jerome Powell speech: Closely watched for monetary policy signals

Earnings: Walmart, JohnDeere,

Friday, May 16

- EU Trade Balance,

- US House Prices & University of Michigan Sentiment