Markets traded cautiously on Monday as investors awaited a packed macro calendar later in the week, including U.S. GDP revisions and April PCE inflation. U.S. markets were closed for Memorial Day, leading to light global trading volumes. In Europe, inflation expectations and energy price dynamics were in focus, while in Asia, the Chinese yuan weakened further amid PBoC inaction. EMEA currencies faced pressure amid mixed commodity signals.
🇺🇸 United States Markets Update
Markets Closed: Memorial Day
- U.S. equity and bond markets were closed for the national holiday.
- No major data releases or Fed speakers.
- Traders focused on upcoming Durable Goods, Consumer Confidence, Q1 GDP Revision, and April Core PCE.
🇪🇺 Euro Zone Markets Outlook
Yesterday’s Key Developments
- ECB President Lagarde said inflation is “under control” but emphasized that future rate cuts will remain data-dependent.
- The 10Y German Bund yield was flat at around 2.58%.
- Euro Stoxx 50: ▲ +0.14%
- EURUSD: ▲ 0.09% to 1.0855
Notable Headlines
- EU natural gas prices climbed on reports of prolonged maintenance in Norway.
- Markets priced in a first ECB rate cut for June, with 65bps total easing expected by year-end.
🇬🇧 United Kingdom Markets Focus
Market Performance
- FTSE 100: ▲ +0.29%
- GBPUSD: ▲ 0.12% to 1.2758
- 10Y Gilt yield rose slightly to 4.24%.
Key News
- Traders are now split on whether BoE will start cutting rates in August or September.
- Focus shifts to upcoming UK housing data and comments from BoE’s Huw Pill this week.
🇨🇳 China
Market Performance
- CSI 300: ▼ -0.45%
- Offshore CNH weakened to 7.276/USD as the PBoC kept the fixing weaker than expected.
Key Drivers
- Concerns over capital outflows and sluggish domestic demand pressured risk sentiment.
- No new stimulus announcements.
🇯🇵 Japan
Market Moves
- Nikkei 225: ▲ +0.66%
- USDJPY: ▲ to 156.89, marking a fresh 10-day high
News
- BoJ Governor Ueda hinted at a possible rate hike in July if inflation stabilizes above 2%.
- Japan’s 10Y JGB yield rose to 1.02%, highest since 2011.
🌍 EMEA
Highlights
- 🇹🇷 Turkey: USDTRY remained stable at 32.22. Turkish 10Y yields held above 25.6% ahead of upcoming inflation data.
- 🇿🇦 South Africa: ZAR weakened to 18.45/USD as elections near. Political risk premium elevated.
- 🇧🇷 Brazil: BRL strengthened marginally despite rising inflation expectations.
🛢️ Commodities & Crypto – Markets Brace for U.S. Data Impact
Commodities
- Brent crude: ▲ +1.2% to $83.15 – boosted by geopolitical tensions in the Middle East.
- Gold (XAUUSD): ▼ -0.4% to $2,346 – profit-taking ahead of U.S. data.
- Copper: ▲ +0.3% on China restocking hopes.
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