Financial markets remained subdued early Thursday as investors awaited the outcome of the summit between US President Donald Trump and Chinese President Xi Jinping, as well as upcoming US macroeconomic data releases, including Import Price Index, Export Price Index, Retail Sales, and weekly Initial Jobless Claims figures for April [1][2]. The US Dollar continued to strengthen, with the USD Index consolidating around 98.50 after closing two consecutive days in positive territory, buoyed by a sharp rise in annual producer inflation to 6% in April from 4.3% in March, surpassing expectations of 4.9% [1]. The US Dollar was the strongest against the Japanese Yen this week, with a 0.81% gain [1].
WTI, the US crude oil benchmark, declined below $97.00, trading around $96.70 during early European hours as traders awaited the Trump-Xi summit's outcome in Beijing [2]. The summit is expected to address several key issues, including the US conflict with Iran, trade relations, the Ukraine crisis, and the Korean peninsula [1][2]. According to Xinhua News Agency, Xi Jinping told US CEOs that China's door would only open wider, expressing optimism about future opportunities for US companies in China [2]. Trump is anticipated to urge Xi to encourage Tehran to agree to a peace deal and reopen the Strait of Hormuz, a vital chokepoint for oil trade, following his recent warning that Iran's response to US proposals was unsatisfactory and threats to resume bombing [2].
The International Energy Agency (IEA) reported that global oil supply will fall short of total demand this year due to the Iran war's impact on Middle East oil production and rapid inventory depletion. The IEA now forecasts a global oil supply drop of around 3.9 million barrels per day across 2026, a significant revision from its previous forecast of a 1.5 million bpd drop [2]. Any positive developments from the US-China talks could further pressure WTI prices in the near term [2].
US stock index futures were reported to be trading moderately higher in the European session on Thursday [1].
CONCLUSION
Markets are in a holding pattern as investors await both the outcome of the Trump-Xi summit and key US economic data. The US Dollar remains strong, while WTI oil prices have edged lower amid geopolitical uncertainty and supply concerns. The summit's results and upcoming data releases are likely to set the tone for market direction in the near term.