Morning Note: AN update on market news.

Market News

The yield on the US 10-year Treasury note has fallen back below 4.5% as last week’s PCE inflation figures offered investors another relief that the Fed still has room to cut rates this year. Core PCE prices slowed in April from March, while the headline monthly and the annual rates steadied, matching forecasts. Gold drifted back to $2,325 an ounce.

US equity markets ended last week on a positive note – S&P 500 (+0.8%) – and are currently expected to nudge higher at the open this afternoon. This morning in Asia, markets were also firm – Nikkei 225 (+1.1%); Hang Seng (+2.0%). China’s manufacturing activity grew at the fastest in almost two years in May, the Caixin PMI showed. The rupee and Indian shares rallied on signs of a resounding victory for Narendra Modi.

The FTSE 100 is currently trading 0.6% higher at 8,337, while Sterling buys $1.2725 and €1.1731.

This week, an ECB rate cut will be a rare bright spot in the troubled euro region as policymakers face pressure to push growth-friendly policies.

The oil price fluctuated after OPEC+ set out a plan to restore some production as early as October. Brent currently trades at $81 a barrel. Saudi Aramco’s $12bn share sale sold out shortly after it opened yesterday, people familiar said. The order book reflected a mix of local and foreign investors.

Ships diverted from the Red Sea continue to send ripple effects around the globe, with on-time arrivals dropping to 52%. Delivery times are particularly slow for goods traveling to Europe and the US East Coast from China.

Source: Bloomberg