TENTATIVE PROGRESS
Global equities rallied as there were signs of trade tensions easing while US Treasury yields fell amid the prospect of lower policy rates.
Trade negotiations are again likely to remain in focus this week but economic data may also be of note. Major releases include US Q1 GDP (tomorrow), ISM manufacturing (Thursday) and the employment report (Friday) as well as Eurozone Q1 GDP (Thursday).
Early in the week, there were concerns that President Trump was seriously looking at firing Fed Chair Powell, but Trump subsequently stated he had "no intention" of doing so.
Global PMIs - a business sentiment survey - fell in April driven by declines in services that more than offset a rise in manufacturing. Survey results suggested that the impact of tariffs is being felt via frontloading of orders, increased price of imports into the US and reduced business confidence amid ongoing uncertainty, with the employment subcomponent broadly falling.
Tariff developments were mixed with some tentative signs of the trade war between the US and the rest of the world de-escalating. US Treasury Secretary Bessent stated that a US-China trade war was "not sustainable" but that concessions would be needed by both sides to agree a deal. There were also reports that US trade deals with both Japan and India were close to being completed.
Global stocks rallied after President Trump clarified that he was not seeking to fire Fed Chair Powell, while signs of somewhat thawing trade tensions also supported sentiment. The S&P 500 ended the week up by 4.6% while the EuroStoxx 600 rose by 2.8%.
US government bond yields were lower last week as softer PMI data increased the likelihood of central banks lowering their policy rates due to the slower growth backdrop.
The yield for US 10-year Treasuries fell (bond prices rise as yields fall) by 7bps to 4.26% while that for the equivalent German bund was flat, ending the week at 2.47%.
- Tue 29th US - Job Openings and Labour Turnover Survey (JOLTS), consumer confidence • Germany - GfK consumer confidence
- Wed 30th US - GDP, PCE inflation • Eurozone - GDP
- Thu 1st US - ISM manufacturing, initial jobless claims • Germany - IFO business survey
- Fri 2nd US - Employment report • Eurozone - Consumer-price inflation, unemployment
This is intended as a general review of investment market conditions. It does not constitute investment advice and has not been prepared based on the financial needs or objectives of any particular person.