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Financial Markets Summary 30 May 2018

European cash equity markets are mostly higher at the closing bell (FTSE +0.6%, DAX +0.7%, CAC -0.5%, FTSE MIB -1.8%). US cash equity markets having added to earlier gains this afternoon to close firmly in the green (DJIA +1.3%, S&P +1.3%, NASDAQ +0.9%).

European Closing Report

Italian stocks have led the rebound as recent political uncertainty appeared to abate somewhat and government borrowing costs pulled back from multi-year highs – the ten year yield has shed around 20 basis points to 2.97%.

Late on, the Italian 5-Star party called for Savona to withdraw candidacy for Economy Minister to allow a government to be formed. We also saw a positive open on Wall Street where energy stocks have tracked a rally in crude prices this afternoon. 

US government bond yields have also risen today along with their core EU counterparts, supported by the improvement in risk sentiment and strong data seen in Europe earlier today. 

US releases were less impressive however with US Q1 GDP revised to +2.2% (f/c. +2.3%) from +2.3% and the ADP employment change coming up short at 178K (f/c. 190K) with a notable downward revision to April. 

The data kept the Dollar on the back foot while the Euro sits towards the top of the G10 pile on the improved mood surrounding Italy. We also saw the Canadian Dollar spike after the Bank of Canada dropped their reference to being cautious on rates in their policy statement. Still to come today, the Fed’s Beige Book at 19:00 BST.























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US Closing Report

Energy related stocks have outperformed by some margin as oil prices rose sharply with US crude futures settling at $68.21 (+$1.48). Investors also welcomed an improved mood surrounding the Italian political saga with the ten-year yield falling back below three-percent. 

Most recently, Italian 5-Star leader Di Maio proposed Savona should be in a 5-Star-League government but not as Economy Minister while League leader. He added that neither 5-Star or League have ever sought a Euro exit. 

US yields have risen meanwhile with the ten-year up around five basis points while the Dollar Index has shed around 0.7% after some soft macro releases earlier in the session – US Q1 GDP was revised lower to +2.2% (f/c. +2.3%) from +2.3% and the ADP employment change came up short at 178K (f/c. 190K) with a notable downward revision to April. 

We also saw the release of the Fed’s Beige Book which noted economic activity expanded moderately in late April and early May with few shifts in the pattern of growth.





















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