Adding to the uncertainty, US President Trump indicated a shift in trade policy strategy, stating that tariff levels and concessions would now be determined unilaterally, rather than through traditional negotiation. In response, the European Union warned that it is prepared to impose tariffs on up to US$113 billion of US goods should ongoing trade talks with Washington fail to produce a satisfactory agreement.
Meanwhile, sentiment improved in early Asian trading today, 7 May, following reports that China’s Vice Premier He Lifeng has been appointed as chief trade negotiator. A meeting with US Treasury Secretary Bessent and US Trade Representative Greer has been confirmed for the upcoming weekend (10–11 May) in Switzerland.
This news lifted S&P 500 and Nasdaq 100 E-mini futures by 0.8% during the Asian session. The US dollar also strengthened, particularly against safe-haven currencies like the Japanese yen and Swiss franc, gaining 0.5% at the time of writing.
However, the upcoming US-China discussions are widely seen as preliminary and aimed at easing tensions rather than finalizing a trade deal. As such, the current rally in index futures may be a short-lived “head fake,” rather than the start of a sustained rebound.
Gold (XAU/USD) saw a modest pullback, falling 1.6% in today’s Asian session after rallying nearly 6% over the previous two days. Despite this correction, the short-term uptrend remains intact, with the yellow metal still trading above its 20-day moving average, which is providing intermediate support around US$3,297.
In China, the People’s Bank of China (PBoC) lowered its seven-day reverse repurchase rate from 1.5% to 1.4% and cut the reserve requirement ratio (RRR) for banks by 50 basis points to support domestic demand and offset the impact of US tariffs. PBoC Governor Pan noted that the RRR cut would inject approximately 1 trillion yuan in long-term liquidity. These policy actions boosted investor confidence, lifting the Hang Seng Index by 1.5% in today’s Asian opening.
