Greetings from Copenhagen, and welcome back to our weekly outlook covering the key economic events to watch this week.

As usual, we start with the latest developments on the trade pause between China and the U.S., and we’re finally beginning to see small signs that trade may be resuming between the two. This is exactly what markets—and likely also the administration—want to see in order to avoid a full-blown slowdown in the U.S. economy.

We have yet to see trade deals with immediate effect, which is ultimately what’s needed for trade to fully resume—and for the equity rally to continue in a meaningful way. But here’s the catch: if the U.S. economy and global trade fully reopen with oil prices below $60/barrel, we could be on the cusp of a massive rebound in manufacturing activity over the next 5–6 months, mimicking the early stages of a new cycle. We’re approaching oil levels that have historically preceded sharp upward surprises in economic data. Still, this boom scenario hangs by a thread.

First, one must remember that current oil prices are approaching the pain threshold for U.S. producers, as highlighted in the latest Dallas Fed energy survey (Chart 1.b), meaning Trump and co. have limited room for error. They’ll need to secure deals fast to get the U.S. economy back in motion. Second, trade needs to resume quickly to avoid a material impact on early June data. Both the NFP and parts of the ISM survey will be collected next week for the May report, so we’ll need either 1) a rebound in sentiment or 2) a pickup in actual trade activity for the numbers not to disappoint.

Chart 1.a: Shipments Are Improving—But Not Enough