EU Daily Market Wrap - 24th May 2019

EU Daily Market Wrap - 24th May 2019

Today's Highlights

  • Yield Curve Inverts its deepest since 2007

  • China to ban export of rare earths to the US

  • UK Health Secretary joins run to Tory leadership

Macro Review

Another risk-off session as we head into the core of this trading week with recession risk and China-Us tensions remaining the fulcrum of traders attentions. The renewed safe heaven inflow caused the US 10Y to hit new lows with the Treasuries Yield Curve to invert the most since 2007. The reaction comes after China decided to play a new card against the US threatening to ban the export of Export of Rare Earths to the US, which could represent a significant blow for US electronics and high-tech manufacturers. Three rate cuts from the FED are now discounted at higher probability, with the implied for January 2020 at 91% to cut.

US Equities traded lower extending losses below key technical areas with SP500 breaching the 2800 level with semiconductors and tech companies remain the biggest loser of this trade war.

The FX market was mainly led by gains in the USD with EUR breaching below the 1.1200 level and GBP remaining around its weekly lows. Further pressure on the single currency was also added by recent talks in Italy of a no-confidence vote against Deputy PM Di Maio.

Crude Oil extended losses below the 60 level amid growth concerns and USD strength. Gold traded in green amid a mixed session given risk-off sentiment and dollar strength.

EU Close

If you missed the morning briefing from the desk click HERE

Hope you enjoyed the session.

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