Insights 
VT 
In April, the change in United States building permits decreased from 1.6% to -4.7%. The data points towards reduced construction activity during this period.
The EUR/USD currency pair fell to new three-day lows around 1.1130, influenced by the US Dollar’s strength as inflation expectations rose. GBP/USD also decreased to 1.3250 due to a stronger US Dollar prompted by growing consumer inflation expectations.
Gold Price Movement
Gold prices dropped below $3,200, reversing earlier gains, as the US Dollar regained strength and geopolitical tensions eased. This led to gold facing its biggest weekly loss of the year.
Ethereum climbed above $2,500 after increasing by nearly 100% since early April. The recent ETH Pectra upgrade resulted in over 11,000 EIP-7702 authorizations, boosting its uptake.
Meanwhile, President Trump’s May 2025 visit to the Middle East resulted in major deals aimed at strengthening US trade ties and technology exports. These initiatives are seen as measures to address trade imbalances and reinforce US leadership.
What we saw in April was fairly telling across a spread of key economic indicators, most of which point to a tilt in sentiment. A sharp drop in building permits, from a 1.6% rise to a -4.7% contraction, clearly signals a pullback in construction activity inside the US. This isn’t a minor fluctuation—it suggests decision-makers are hesitant to commit to longer-horizon projects, possibly due to the rising cost of capital or concerns around future demand. For us, this signals a shift in where capital might prefer to be deployed short term.
With that backdrop, pair reactions in the FX market were understandable. EUR/USD falling to 1.1130 and GBP/USD sliding to 1.3250 reflect a broader move back into the Dollar. It wasn’t just strength for strength’s sake—the uplift came after an increase in consumer inflation expectations. When US inflation expectations edge higher, participants often recalibrate positioning, anticipating that the Federal Reserve may keep rates elevated for longer. This naturally draws flows into the Greenback, and that’s exactly what played out.
For us, expectations about what the Fed might do next become more anchored to domestic signals. Keeping a tighter lens on stateside inflation print and employment dynamics may offer a tactical edge here. Dollar strength affects multiple channels, so you can assume this will continue to affect asset re-pricing well into the short term.
Commodity Market Dynamics
Commodities moved as well. With gold falling sharply below the $3,200 level, it’s clear that risk-on appetite made its return, particularly as some of the hotter geopolitical tensions became less pressing. Strength in the Dollar contributed to the sell-off in gold, making it relatively more expensive in other currencies. That weekly loss? The worst we’ve seen this year. When you compare that movement with previous volatility cycles, the setup suggests metal markets might lean more reactive than directional for now.
While traditional assets offered a dose of volatility, the digital space showed very different behaviour. Ethereum’s climb over the $2,500 mark, doubling since early April, was not just the product of market momentum. The Pectra upgrade brought real activity—over 11,000 EIP-7702 authorisations indicate that developers and users are actively integrating the new protocol changes. That sort of traction doesn’t happen without confidence in the system’s utility. In this context, ETH isn’t just moving on speculation; it’s reflecting active adoption.
As policy actions off the trading floor go, the May 2025 Middle East visit resulted in several long-term commercial deals. Enhancements in trade and technology ties were central themes, and from our perspective, these are long-duration bets aimed at shifting the balance in US favour. The projects appear geared toward stabilising existing imbalances and extending domestic influence via economic rather than military means. They may take time to filter into markets tangibly, but the agreements signal that forward intentions are being laid down well in advance.
So what does all this mean for positioning? Traders should not expect a one-directional narrative. The tug between inflation-led Dollar strength and scattered easing in geopolitical tensions creates potential for dislocations. In turn, these may present well-timed entries or short-covering rallies, depending on how positioning gets clogged. Tech still shows momentum, particularly where functionality upgrades deliver. Rate-sensitive assets are recalibrating to inflation data almost instantly. This quickened pace calls for sharper adjustment, not a wait-and-see approach.
We think the best approach near term is to watch how real economic data matches policy narrative. And price in the gaps before broad consensus does. It may not stay quiet for long.
