📆 Thursday, May 22
► European markets fell sharply as rising US bond yields and growing deficit fears drove global volatility. The Stoxx 600 declined 1.0%, with autos, banks, and industrials leading losses. Germany’s DAX dropped 0.9%, while France’s CAC 40 slid 1.0%. The FTSE 100 fell 0.7% with the UK 10-year yield approaching 4.75%. A weak 20-year US Treasury auction spilled into Europe, sending regional yields higher. German / French yields also rose moderately but are still well below March-April highs. The ECB’s cautious tone failed to calm nerves as inflation and budget risks lingered. Markets braced for sustained volatility and a potentially longer path toward monetary easing.
► US futures traded flat to very slightly higher after Wednesday's 1.6% slump in the S&P 500. Thursday's early rebound (+0.1%–0.2%) reflected tentative bargain-hunting, but sentiment remained fragile. The sharp rise in 30-year Treasury yields to 5.1% signaled investor concern over fiscal management and longer-term inflation. Wall Street’s optimism over easing trade tensions gave way to renewed deficit fears, with bipartisan critiques of the Trump-era tax framework resurfacing. Focus now turns to jobless claims and Fed speeches, which could further shape policy expectations.
► Asian markets also closed lower amid nervousness on the bond markets and regional caution. Japan's Nikkei 225 fell 0.84% as the yen strengthened and yields rose (even to ATH on longer-dated bonds). The Chinese CSI 300 fell very slightly by 0.07%, with energy and consumer stocks seeing light buying. The Kospi fell sharply (- 1.22%), while the Australian ASX 200 fell by 0.45%. In Hong Kong, the Hang Seng fell 1.2%, with Alibaba (among others) remaining under pressure. The rise in bond yields in the US, UK and Japan weighed on risk appetite for equities. Investors continued to focus on the unstable budget situation in the US and uncertainty over the global interest rate path.
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