• Wall Street equities retreated on May 29, with the DJI drifted by -1.06%, the S&P 500 fell by -0.74%, and the Nasdaq closed down by -0.58%.
• US stocks dipped in the red on Wednesday, with the Dow reaching a 3.5-week low. Rising bond yields and concerns about prolonged high Fed interest rates pressured stocks. The 10-year T-note yield hit a 4-week high, driven by an unexpected rise in May consumer confidence and weak demand for 2-year, 5-year, and 7-year T-note auctions.
• The 10-yr UST yields surged by +7.0 bps to 4.61%, while the 2-yr yields rose by +2.0 bps to 4.96%. Weak demand at the Treasury’s USD44bn 7-year T-note auction pushed T-notes to their lowest levels Wednesday, with a bid-to-cover ratio of 2.43, the lowest in 13 months.
• The US MBA weekly mortgage applications dropped by 5.7% in the week ended May-2024. The purchase mortgage sub-index fell by 1.1%, and the refinancing mortgage sub-index decreased by 13.6%. The average 30-year fixed-rate mortgage rose by 4 bps to 7.05% from 7.01% the previous week.
• The Fed Beige Book noted 'slight or modest' economic expansion across most regions since early April, with retail spending flat to slightly up due to reduced discretionary spending and heightened consumer price sensitivity. Employment saw slight gains in eight of twelve districts, and prices rose modestly as consumers resisted further price increases.
• In Euro, German May CPI (EU harmonized) rose +2.8% YoY, stronger than expectations of +2.7% YoY and the largest increase in 4 months. Meanwhile, the German GfK consumer confidence index for June climbed +3.1 points to a 2-year peak of -20.9, beating forecasts of -22.5.
• Global bond yields moved higher on Wednesday, the German bund yield surged by +9.8 bps to 2.69%, while the 10-yr UK gilt yield jumped by +11.9 bps to 4.40%. The Japanese 10-yr JGB yield rose by +5.5 bps to 1.09%.
