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Sweden’s economy and households are already feeling the heat from U.S. President Donald Trump’s trade tariffs, the country’s finance minister said.

Broadcom’s artificial intelligence business is at the center of the company’s recent boom.

Inflation in Russia hit 8.3% in the first quarter of the year, with the effects of the war in Ukraine continuing to be felt in the economy.

The week began with OPEC adding barrels once again and there was also a mid-week report that Saudi Arabia wanted to keep adding 411K bpd in August and potentially September.

Despite all that, oil is having a great week, up 6.5%. Perhaps some of that was relief that OPEC didn’t add even more barrels on the weekend but it’s a move that’s caught the market by surprise.

I highlighted a potential inverted head-and-shoulders pattern at the start of the week and now we’re at the point where it could break the neckline. Such a move would need to crack $65 first and it’s late in the week for that but this could be a very interesting spot in the week ahead.

Market positioning is short and there is a big gap on the chart back up to $70-71 that could lead to a quick squeeze. Time spreads have been surprisingly bullish and there is optimism around trade. If Trump locks in a trade deal or two in the week ahead — particularly with sub-10% tariffs, then we could see some relief in risk assets generally, including oil.

WTI crude oil is up $1.34 to $64.72 today and trading at a session high.

Update: In a sense of what’s driving some of the optimism, the Baker Hughes US oil rig count is out and nine rigs were dropped in the past week, leaving total rigs at 442. They’ve been falling fast.

This article was written by Adam Button at www.forexlive.com.

Philly Fed President Patrick Harker was a model central banker. He never made waves, was thoughtful and always professional. He’s retiring at month-end and is out with some comments:

• It’s still possible the Fed can cut later this year
• Uncertainties make it very hard to divine monetary policy outlook
• Worries that the quality of economic data is eroding
• We’re increasingly flying blind on data

You tend to get a bit more candor at this point in a central banker’s career but obviously he will no longer have any say. His successor will get a vote next year.

This article was written by Adam Button at www.forexlive.com.

Disney’s economic impact report arrives on the heels of its announcement of a new theme park in Abu Dhabi and the opening of rival Universal’s Epic Universe.

I’m open to two vastly diverging views here:

1) Debt and deficits don’t matter because of AI

The view is that AI will make people so productive and efficient that government debt won’t be a problem. It’s a positive take on progress in a world that’s now seen many generations of positive impacts from technology.

2) We’re monetizing

The fiscal rubicon has been crossed. The Tea Party in the US is 10 years old and the whole thing is a joke now. Trump is calling to end the debt ceiling altogether and a budget that ingrains deficits at +6% of GDP is coming at a time when there is a major demographic hit coming on the fiscal side. There is no way out, DOGE is already a laughingstock.

It’s hard to believe that in 1971 the US dollar was fully backed by gold. In 50 years it’s all come undone, and the currency will inevitably face major devaluation, just like every other currency in history.

The thing is…

If you believe in either of these scenarios, you might invest in the same things. Equities are inherently inflation-protected because companies (at least ones that aren’t over-levered) have pricing power. The post-covid inflationary episode was great for stock markets if AI is transformative, the gains from productivity will be felt far before the costs of unemployment.

Along the same lines, an AI boom would be fantastic for commodity demand, especially in things like industrial metrals and anything that benefits from rising power demand. On the flipside, if there is devaluation then hard assets like commodities will hold their value and potentially benefit from a flight to quality.

Heads I win, tails you lose.

This article was written by Adam Button at www.forexlive.com.

The Trump administration on Friday asked the Supreme Court to lift a court order to reinstate U.S. Department of Education employees who were terminated.