• Wall Street equities closed mixed on May 7, as the DJI edged up by +0.08%, the S&P 500 rose by +0.13%, and the Nasdaq closed down by -0.10%.
• US stocks ended Tuesday’s session nearly unchanged with the S&P 500 reached a three-week high, while DJI hit a four-week high. Investors remained cautious, assessing the sustainability of the recent market rally amid economic data. Fed’s Kashkari’s hawkish comments on Tuesday questioned current Fed policies ability to achieve the 2% inflation target, suggesting interest rates may stay unchanged until inflation aligns.
• The 10-yr UST yields declined by -2.0 bps to 4.47%, while 2-yr yields remained unchanged at 4.82%. Traders are focusing on the prospect of Fed interest rate cuts this year following softer-than-expected labor data.
• Meanwhile, traders are closely monitoring comments from Fed officials for insights into the timing of the first rate cut. The probability of a rate cut in September is currently estimated at around 65%.
• In March, US consumer credit increased by USD6.3bn, falling short of expectations for a USD14.8bn increase.
• In Europe, Eurozone March retail sales rose by 0.8% MoM surpassing expectations of +0.7% MoM and marking the largest rise in 1-1/2 years, pointing to some strength from the European consumer and aligning with other economic data releases that reflect some traction in the bloc’s economy.
• Global bond yields moved higher on Tuesday, The German bund yield fell by -4.9 bps to 2.42%, while the 10-yr UK gilts yield declined by -9.7 bps to 4.12%. The Japanese 10-yr JGB yield closed down by -2.8 bps 0.87%.
