Markets edge higher on US-China trade deal

Global equity markets rose modestly on Monday following an unexpected announcement that the United States and China had reached a trade agreement after high-level talks in Switzerland. US futures led the gains after Treasury Secretary Scott Bessent said the negotiations had produced “substantial progress,” while China’s Vice Premier He Lifeng described the outcome as “an important consensus.”

Despite the upbeat rhetoric, reaction across Asia remained muted, with stocks posting only modest gains. Investors appear to be taking a wait-and-see approach, preferring to hear the full details in Bessent’s scheduled briefing later Monday before reassessing the long-term implications.

The deal, while lacking specifics for now, is seen as a positive step in dialing down tensions that have dominated the trade narrative in recent months. US Trade Representative Jamieson Greer said the deal would help address what the administration had previously labeled a “national emergency” in trade, and both sides have agreed to establish a formal consultation mechanism going forward.

Gold under pressure as risk sentiment improves

Gold prices started the week on the defensive, falling as the tone in global markets turned cautiously optimistic. With safe-haven demand easing, traders rotated out of bullion, awaiting clearer signals on whether the US-China trade agreement will prove durable.

Markets are pricing in a de-escalation in geopolitical tension, at least in the short term. But many are still wary of the stop-start nature of recent policy shifts and are unlikely to reprice risk assets significantly until more concrete implementation steps are revealed.

US inflation and retail data may reveal early tariff effects

Markets now turn their attention to what could be the real market-moving force this week: a deluge of macroeconomic data, especially from the United States. April’s CPI and PPI releases are expected to provide the first meaningful snapshot of how newly imposed 10–145% import tariffs are beginning to filter into price levels. While annual comparisons will be watched, month-on-month movements could be more telling at this early stage of the tariff cycle.

Equally important is the April retail sales report, which will offer a look at how US consumers are reacting to early price increases and the broader uncertainty around future costs. The University of Michigan’s consumer sentiment and inflation expectations surveys on Friday will also provide valuable insight into the psychological toll of trade disruptions on households.

Central banks tread carefully amid mounting risks

In Japan, the focus is on whether the BoJ will delay its next rate move further. The central bank’s Summary of Opinions and preliminary Q1 GDP figures will be closely watched. A negative print would reinforce expectations that the BoJ remains on hold amid weakening domestic demand and heightened global uncertainty.

From the UK, GDP and labor market data will be scrutinized, though they are unlikely to shift the Bank of England from its current policy path of one 25bp cut per quarter. Instead, markets are watching for follow-up developments on the new US-UK trade framework, especially sector-specific announcements that could affect investment flows.

In Australia, wage and jobs data will be key, but are expected to support the RBA’s current easing trajectory. With inflation slowing and domestic growth concerns lingering, a rate cut later this month remains the base case.

Key data highlights this week:

• Tuesday: BoJ opinions; Australian sentiment/confidence; UK employment; Germany ZEW; US CPI
• Wednesday: Japan PPI; Australian wages; Canada building permits
• Thursday: Australia jobs; UK GDP Eurozone industrial output; US PPI, retail sales, manufacturing indices
• Friday: Japan GDP; Eurozone trade; US housing, inflation expectations, UoM sentiment