Fed hawkishness continued to weigh on global risk assets on Tuesday as investors awaited key US inflation data later this week. The US 10-year yield surged as Fed Governor Waller emphasized the need for several more months of favorable inflation data before considering rate cuts. Meanwhile, sentiment in the Eurozone improved, China posted strong industrial profits, and commodity markets faced renewed pressure from rising yields.
🔹 Summary
Markets traded mixed on Tuesday as investors digested hawkish Fed commentary and awaited key US inflation data later this week. US Treasury yields rose after Fed Governor Waller suggested more evidence is needed before considering rate cuts. Meanwhile, Eurozone sentiment improved and China’s industrial profits rebounded sharply. Oil prices slipped, and gold faced pressure from rising yields.
🌎 COUNTRY BREAKDOWN
🇺🇸 United States
The persistent Fed hawkishness continues to influence rate expectations, pushing potential cuts further into Q4.
- Macro & News
- Fed’s Waller: “Need several more months of favorable inflation data before easing.”
- Markets pushed back rate cut expectations further into Q4.
- Indices
- S&P 500: +0.02% at 5,306
- Nasdaq 100: -0.19% at 18,504
- Bonds
- 10Y Treasury yield: ↑ 5.5 bps to 4.57%
- FX
- DXY: +0.16% at 105.09
- EUR/USD: -0.22% at 1.0842
🇪🇺 Euro Area
- Macro & News
- Eurozone Economic Sentiment Index improved to 96.0 (prev: 95.6)
- German 10Y bund yield hit 2.66%, the highest in over 6 months.
- Indices
- Euro Stoxx 50: +0.39%
- DAX: +0.75%
- Bonds
- German 10Y yield: ↑ 5 bps to 2.66%
- FX
- EUR/USD: -0.22% at 1.0842
🇬🇧 United Kingdom
- Macro & News
- Market participants focus on Thursday’s BoE Consumer Credit & Mortgage data.
- Indices
- FTSE 100: +0.25%
- Bonds
- 10Y Gilt: ↑ 6.2 bps to 4.30%
- FX
- GBP/USD: -0.18% at 1.2758
🇨🇳 China
- Macro & News
- Industrial profits rose +4.3% YoY in April (prev: -3.5%)
- Policy speculation mounts ahead of the upcoming politburo meeting.
- Indices
- Shanghai Composite: -0.46%
- Hang Seng: -1.04%
- FX
- USD/CNH: +0.11% at 7.2480
🇯🇵 Japan
- Macro & News
- No key economic data released.
- BoJ Governor Ueda reaffirms policy normalization is dependent on wage and inflation progress.
- Indices
- Nikkei 225: -0.11%
- Bonds
- 10Y JGB: ↑ 1.4 bps to 1.04%
- FX
- USD/JPY: +0.23% at 157.18
🌍 EMEA (Emerging Europe, Middle East & Africa)
- Turkey:
- USD/TRY: +0.12% at 32.24
- BIST 100: +0.40%
- South Africa:
- Market calm ahead of today’s national election.
- USD/ZAR: flat at 18.29
🛢️ Commodities & 🌐 Crypto
🛢️ Commodities
- WTI Crude: ↓ 1.0% to $78.25
- Brent Crude: ↓ 0.9% to $82.50
- Gold: ↓ 1.2% to $2,339
- Silver: ↓ 2.0% to $31.84
Key News:
- Oil prices fell as traders await this weekend’s OPEC+ meeting (June 2).
- Gold slipped as US yields surged on Fed rate delay talk.