📆 Thursday, May 8
► European markets trade higher, supported by trade optimism and selective earnings strength. The Stoxx 600 is trading 0.7% higher, driven by gains in autos and industrials. Bot Germany’s DAX and France’s CAC 40 are more than 1% up. The FTSE 250 hit a two-month high (up 1.1%) on reports of a pending US-UK trade deal – which Trump call “full and comprehensive”. German export data came in strong and rose 1.1% M/M resulting in a much stronger than expected trade surplus, while imports fell more than expected. German industrial production rose much more than expected at 3% M/M vs. 0.8% expected. Siemens Energy gained 3.5% after downplaying tariff risks, while Maersk dropped 2.6% following a downgraded transport market outlook. Infineon rose 3.3% after solid results and a lowered outlook for the year, which was still in line with expectations. The Bank of England cut the prime rate again, with five members of the MPC voting in favor of a quarter point (25bps) cut, while four members voted against. In an immediate reaction, the GBP benefited from the (continued) cautious tone in the statement and the split vote.
► US stock futures rose after President Trump hinted at big trade deals (he meant the deal with the UK) and markets digested the Fed's decision to keep interest rates on hold. In pre-market US trading, S&P 500 futures were up around 1% and Nasdaq 100 futures were up 1.3%. The Fed flagged rising inflation and unemployment risks and showed no urgency for rate cuts. The dollar rose 0.2% today extending gains from yesterday, while Treasury yields rose as July rate cut expectations eased slightly.
► Asian markets posted mixed results as investors weighed the Fed’s cautious tone against trade optimism. The MSCI Asia Pacific Index fell 0.7%. China’s Shanghai Composite gained 0.62% and Hong Kong’s Hang Seng added 0.45% amid renewed hopes for tariff negotiations. Japan’s Nikkei edged up 0.05% following improved services PMI data, while India’s Sensex slipped 0.19% amid geopolitical tensions. The latest (small) interest rate cuts by the People's Bank of China continued to support sentiment, as did news of the first trade agreements following Trump's “Liberation Day”.
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