• Wall Street equities closed near flat on May 17, with the DJI grew by +0.34%, the S&P 500 inched up by +0.12%, and the Nasdaq edged down by -0.07%.
• US stock indexes closed mixed on Friday, consolidating just below this week's all-time highs. Stocks received support from dovish comments by Fed’s Bostic on Thursday evening, suggesting that if inflation moderates as expected and economic momentum continues, rate cuts could be considered toward the end of the year.
• The 10-yr UST yields surged by +4.0 bps to 4.42%, while 2-yr yields rose by +5.0 bps to 4.83%. Treasuries faced pressure on Friday due to weakness in European government bonds. The losses intensified after Fed’s Bowman stated she expects inflation to remain elevated for some time.
• US April leading indicators dropped by -0.6% MoM, below expectations of -0.3% MoM, marking the largest decline in six months.
• Meanwhile in Europe, ECB’s Schnabel warned against consecutive interest rate cuts in June and July, citing lingering inflation risks and advocating for a cautious approach, which tempered market sentiment.
• In Asia, China's industrial production rose +6.7% YoY in April (vs. +4.5% in March), beating expectations of +5.5%. However, retail sales grew +2.3% YoY, below the forecast of +3.7%. New home prices fell -0.58% YoY and used home prices dropped -0.94% YoY, both marking the largest declines in 9.5 years.
Global bond yields moved higher on Friday, the German bund yield rose by +5.5 bps to 2.51%, while the 10-yr UK gilts yield finished up by +4.8 bps to 4.12%. The Japanese 10-yr JGB yield closed up by +2.20 bps 0.95%.
