27 June 2025
US stocks rose on Thursday amid renewed hopes for Fed easing and eased geopolitical concerns. The S&P 500 was up 0.8%.
US Treasuries extended gains with a slightly steeper curve, as economic data releases reinforced market expectations of Fed rate cuts this year. 2-year and 10-year yields fell 6bp and 5bp to 3.72% and 4.24% respectively.
European stock markets traded mixed as investors weighed latest comments from President Trump during the NATO summit. The Euro Stoxx 50 fell 0.2%. The French CAC closed flat, and the German DAX ended 0.6% higher. The UK FTSE-100 rose 0.2%.
European government bonds were range-bound. 10-year German bund yields edged up 1bp to 2.57% as 10-year French bond yields ended 1bp lower at 3.25%. In the UK, 10-year gilt yields closed at 4.47% (-1bp).
Asia stock markets traded mixed on Thursday. Japan’s Nikkei 225 rallied 1.6%, led by gains in AI-related technology shares as defence stocks got a lift from NATO’s agreement to raise security spending targets. India’s Sensex also gained 1.2%. Elsewhere, Korea’s Kospi and Hong Kong’s Hang Seng retreated 0.6% and 0.9% respectively following recent rallies. China’s Shanghai Composite also edged 0.2% lower.
Crude oil prices edged higher amid a broadly weaker US dollar on Thursday, as investors continued assessing the global oil demand and supply outlook. WTI crude for August delivery settled 0.5% higher at USD65.2 a barrel.
Banco de Mexico expectedly cut the policy rate by 50bp to 8.00%, in a spilt decision, given the soft growth outlook, fading inflation concerns and a resilient peso. The forward guidance turned more data dependent, indicating the possibility of smaller rate cuts ahead.
US PCE price index is expected to nudge higher in May to 2.3% yoy, from 2.1% yoy in April, on base effects.
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