📆 Friday, May 23
► After a turbulent week characterized by concerns about US fiscal policy and bond volatility, the European markets are trading slightly lower. The Stoxx 600 falls by 0.2 %, while the DAX is currently trading little changed. The FTSE 100 is trading significantly weaker (-1.0 %) and the French CAC 40 is also down almost 0.7 %. Traders remained defensive despite positive global PMI data as uncertainty over Trump's tax reforms and Apple's tariff warning weighed on sentiment. Yields across Europe eased slightly, helping to calm nerves after a sharp sell-off in global bonds midweek. However, after strong gains in recent weeks, European (and US) equities still have room for corrections, according to SmartTrader chief analyst Robert Lindner. Trump's new comments on trade with the EU are a strong additional headwind that is likely to reverse the recent gains, which were mainly based on trade optimism.
► US stock futures are sharply lower in pre-market trading, with the S&P 500 and Nasdaq 100 down more than 1.1%, and Dow futures down 1.0%. Wall Street was on track for its worst week since April’s early slide, driven by concerns over fiscal stability and long-end Treasury supply. A warning from Apple about potential tariff impacts added a new layer of risk as well. Also Trump aggressive answer on Apple tariffs warning and the US president saying that trade discussions with the EU “are going nowhere” and so he’s “recommending a straight 50% Tariff on the European Union, starting on June 1, 2025” are new and significant headwinds on equities and risk sentiment. Despite strong US PMI data, traders remained very cautious. The 30-year Treasury yield eased to below 5%, and the dollar extended losses (DXY -0.56%), reflecting a shift in sentiment toward non-USD assets.
► Asian equities finished mixed, though the MSCI Asia Pacific Index (+ 0.81%) notched a sixth consecutive weekly gain. The Nikkei closed higher (+ 0.47%), but was weighed down by yen strength and rising yields. China’s CSI 300 ended lower (-0,81 %), as Beijing’s muted policy stance dampened upside. Hong Kong’s Hang Seng recovered slightly (+ 0.24), while also Australia and South Korea gained, lifted by tech and energy sectors. A softer USD “supported” local currencies and risk appetite across emerging Asia. The bond markets were relatively calm, although traders continued to wait for new catalysts from US data and geopolitical developments, as well as keeping a close eye on developments in trade talks.
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