Analysts at ANZ explained that US data releases continued to impress with the May Philadelphia Fed index providing further evidence of accelerating momentum.
“Interestingly, bond yields and the USD didn’t respond and paused for breath after the strong moves seen recently. But sentiment around the US remains buoyant.”
“European leaders met in Sofia and were united in their position over their response to US tariffs and Iran.”
“Brussels is prepared to negotiate on trade with the US and discuss WTO reform, but there must be no threat of tariffs. Europe is committed to the Iran agreement.”
“Washington did not respond and the focus there was very much on the resumption of trade talks with China.”
“Risk assets were generally supported.”
“The FTSE 100 rose 0.7% to close at a record high, while the DAX and CAC 40 finished up 0.9% and 1.0% respectively. Initially that sentiment was reflected in US stocks too, although gains have been pared as tech stocks weigh, with the S&P 500 down 0.2% at the time of writing.”
“The yield on the US 10-year note consolidated at 3.11% and the 2-10s spread pushed wider, reaching 54bps. Oil and gold prices held roughly steady.”