ECB President Lagarde Speaks, Richmond Manufacturing Index, Eurozone Consumer Confidence

The EUR/USD pair advanced on Monday, closing the session above the 1.1500 mark, supported by continued weakness in the US Dollar (USD). The US Dollar Index fell to its lowest level since early 2022, as market sentiment deteriorated amid growing concerns over the outlook for the US economy.

Adding to the pressure on the greenback, US President Donald Trump escalated his criticism of Federal Reserve Chair Jerome Powell on Monday via social media, labeling him a “major loser” and warning that the US economy could slow if the Fed fails to promptly cut interest rates. This sparked renewed fears of political interference in monetary policy and heightened speculation over Powell’s future at the central bank.

Meanwhile, geopolitical developments are providing additional support to the euro. According to a Reuters report, the European Union is considering easing methane regulations on US liquefied natural gas (LNG) imports in a bid to advance trade negotiations. The European Commission is reportedly preparing proposals aimed at reducing trade tensions with the US, with energy cooperation potentially forming a key pillar of a broader deal.

Gold prices kicked off the week with strong gains on Monday, climbing over 2.5% to reach a new record high of $3,444 per ounce amid rising concerns over political threats to the Federal Reserve’s independence.

Investor demand for the safe-haven asset has surged following renewed pressure from US President Donald Trump on the Federal Reserve.

Last week, Powell signaled a cautious stance, noting that the Fed is in a “wait-and-see” mode. Escalating tensions between the White House and the central bank, combined with ongoing trade policy uncertainty, have weighed heavily on the US Dollar.

Interestingly, gold’s rally comes even as US Treasury yields continue to rise. The 10-year Treasury yield added four basis points to 4.373%, while real yields—measured by 10-year Treasury Inflation-Protected Securities—climbed 3.5 basis points to 2.14%. Typically, rising yields are a headwind for non-yielding assets like gold, but the current climate of economic and political uncertainty appears to be overriding traditional correlations.

Oil prices fell on Monda as renewed optimism over US-Iran nuclear negotiations and ongoing fears of demand destruction weighed on the market.

Sentiment shifted as the US and Iran reported progress in talks aimed at reviving the 2015 nuclear agreement. Iran’s foreign minister said both sides had agreed to begin drafting a framework for a potential deal, while a US official described the discussions as making "very good progress."

The easing of geopolitical tensions comes even as the US imposed fresh sanctions last week on a Chinese independent refinery allegedly processing Iranian crude, underscoring Washington’s continued pressure on Tehran.

Meanwhile, OPEC+—the coalition of oil producers including OPEC members and allies like Russia—is still expected to move forward with its planned output increase of 411,000 barrels per day in May. However, any supply boost may be partially offset by voluntary cuts from members that have recently exceeded their quotas.

US equities ended sharply lower on Monday as renewed trade tensions and escalating political pressure on the Federal Reserve unsettled investors, sending major indexes tumbling and volatility spiking.

The sharp selloff came amid market unease over fresh comments from President Donald Trump and his administration regarding tariffs and Federal Reserve independence. White House economic adviser Kevin Hassett stoked speculation by hinting that the administration is examining whether Trump has the authority to remove Fed Chair Jerome Powell. This follows a renewed barrage from Trump, who accused Powell of acting too slowly on interest rates and called for immediate cuts.

This week’s earnings reports from major tech companies could help determine whether markets regain their footing. Alphabet and Tesla are set to report results, becoming the first among the so-called "Magnificent Seven" mega-cap tech stocks to release quarterly figures.

With political risk swirling and economic uncertainty looming, investors will be closely monitoring upcoming corporate earnings and macroeconomic data. April’s flash manufacturing and services PMIs are due this week and could provide critical insight into the strength of the US economy amid rising policy risks.