📆 Tuesday, May 13
► European markets are posting modest gains as optimism from Monday’s tariff truce gives way to caution ahead of key US inflation data. The Stoxx 600 is up 0.2%, lifted by Bayer (+11%) after a strong earnings beat. France’s CAC 40 is trading 0.1% higher, while Germany’s DAX is flat. The UK’s FTSE 100 (+ 0.15%) is also little changed as investors digest weak UK labor data, with unemployment rising to 4.5% — a 2.5-year high. Munich Re dropped 3.6% after warning about wildfire-related losses. Market sentiment overall is not euphoric anymore even as the latest ZEW sentiment surveys showed strong signs of improvement. The market is also waiting for more updates on US-China (and general) tariff talks.
► US futures are trading lower as investor focus shifts from the tariff ceasefire to upcoming CPI inflation data and its implications for Fed policy. S&P 500 and Nasdaq 100 futures are down 0.3% and 0.4%, respectively. This follows Monday’s sharp rally — the best session since April 9 — driven by the announcement of a 90-day US-China tariff pause. However, average effective tariffs remain high (or significantly higher than before Trump's “Liberation Day”) and political uncertainty persists. Government bond yields are falling and the US dollar is slightly weaker, which indicates that the strong risk appetite has subsided.
► Asian markets ended mixed after Monday’s rally, as optimism over the US-China trade détente faded slightly. The MSCI Asia Pacific Index rose 0.7%, while Chinese shares notched a second consecutive weekly gain. Japan’s Nikkei rose significantly (+1.4%), supported by a stable yen. However, India’s Sensex (-1.6%) underperformed, falling amid rising tensions with Pakistan. Asian currencies broadly strengthened against the USD, led by the yen and yuan, as investors sought defensive positioning ahead of key US data and possible renewed trade negotiations.
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