Rare Earths, Unemployment, and Risk Appetite in Focus

1. Trade Negotiations Between US and China: 

• Talks between the world’s two largest economies are set to continue through Tuesday. 

• Optimism grows that these talks will ease the bitter tariff war. 

• President Trump noted on Monday that talks are “going well” and he’s receiving “only good reports.” 

• Focus is now on China’s restrictions on rare earth metals and US limits on chip exports. 

2. UK Unemployment Rises: 

• The UK unemployment rate rose to 4.6% in April, the highest since July 2021. 

• Wage growth excluding bonuses slowed to 5.2% annually, below forecasts. 

• The Bank of England recently cut interest rates by 25 basis points to 4.25%, citing weaker global growth. 

3. Market Reaction and Commodities: 

• Risk appetite improved amid trade optimism, weakening demand for safe havens like gold. 

• Gold prices dipped ahead of key US inflation data due Wednesday. 

• Oil prices posted modest gains, supported by ongoing US-China talks and stalled US-Iran nuclear negotiations. 

• Both major oil contracts were on track for a fifth consecutive session of gains, building on last week’s 4% jump. 

🏁 Conclusion: 

The ongoing US-China trade talks are injecting optimism into global markets, lifting risk appetite while pressuring safe havens. However, broader economic signals, such as rising UK unemployment and inflation uncertainty, show that challenges remain. Markets are cautiously hopeful for de-escalation and a boost in global trade flow.