All eyes on Beijing
Global markets are poised for major geopolitical news ahead of today’s summit between Chinese President Xi Jinping and US President Donald Trump.
The talks may deliver a more positive outcome than previous discussions, with China treading carefully around its Middle East energy needs (historically, it has been a major buyer of Iran’s oil) while the US will be seeking support as it attempts to resolve the US–Iran conflict. The two sides may also look to de-escalate trade tensions.
Markets were firmer ahead of the summit, with the S&P 500 up 0.6% and the Nasdaq up 1.2%.
The US dollar was mostly stronger, with its biggest gains in Europe. The Aussie defied the trend, with AUD/USD up 0.2%.
Aussie hits highs even as wages cool
Australia’s wage price index rose 0.8% in Q1, matching expectations and holding steady from the previous quarter.
Annual wage growth edged down to 3.3% from 3.4%. Private sector pay grew 3.2%—its weakest reading since late 2022—while public sector growth fell to 3.3% from 4.0%, with enterprise agreements driving more than half of the quarter’s gains.
Pay pressures are clearly easing, but we still expect the RBA to raise rates by 25 basis points in August, lifting the policy rate to 4.60%.
AUD/USD closed at its highest level in over four years and remains just below its 6 May peak of 0.7278. Near-term support sits around the 21-day moving average at 0.7178, with the 50-day moving average near 0.7102 the next level to watch if selling picks up. To the upside, 0.7278 remains key resistance.
AUD/EUR hit its highest level since November 2024.
Services inflation keeps Fed cuts off the table
Chicago Fed President Goolsbee called April’s inflation data “unexpectedly disappointing,” with concern centred on services prices rather than oil or tariff costs.
The message was clear: services inflation needs to at least stabilise—and ideally decline—because energy prices alone cannot explain recent moves. Consumer prices rose 3.8% year-on-year in April, the fastest pace in three years.
The labour market appears broadly stable, but with underlying inflation still elevated, the case for rate cuts anytime soon is becoming harder to justify.
In Asia FX, USD/SGD is trading around 1% above the 1.2586 low last seen on 28 January, with the 21-day moving average at 1.2733 and the 50-day at 1.2751 marking the next resistance levels.
The pair is trading near the lower end of its Bollinger range, which may begin to attract USD buyers.
USD mostly higher ahead of Xi-Trump summit
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 11 – 15 May
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*The FX rates published are provided by Convera’s Market Insights team for research purposes only. The rates have a unique source and may not align to any live exchange rates quoted on other sites. They are not an indication of actual buy/sell rates, or a financial offer.
