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    European Markets at Record High, US Futures Rose – May 25

    Dollar Index Drops along with Oil Prices

    European stocks visited record peaks on Tuesday. Investors’ spirits were buoyed by the rise of tech shares and a billion-dollar merger of Germany’s largest property developers.  The Stoxx 600 jumped 0.4% to an all-time high of 446.47 points, thereby surpassing its early-May high of 446.19. US equity futures were also up, after the Federal Reserve’s officials assured investors that inflation would be short-lived. The dollar index, measured against its six major peers, dropped to the lowest level since January.

    The DAX in Germany advanced 0.8% and, in doing so, reached a record top. The index was brought up by the news that Europe’s largest residential property group Vonovia SE would purchase Deutsche Wohnen for about 18 billion euros, equivalent to 22 billion dollars. As soon as the news was revealed, Deutsche Wohnen climbed a whopping 15.5%. Venovia sank 4.1%. Europe’s wider real estate index jumped 1.7% to the highest level in over a year.  

    Treasury yields crawled lower. MSCI Asia-Pacific equity index headed for the highest close in two weeks, after CSI 300 gauge in China rose more than 3% on the country’s attempt to reduce the prices of raw materials. Miners, by contrast, came under pressure after China’s announcement that it would tighten control of some commodities. Tech stocks in Europe advanced 1.2% in the wake of their US peers’ overnight surge. 

    Oil slid after the largest two-day gain since March. Brent crude shed 0.6% to trade at $68 per barrel. WTI gave up 0.8% to $65.50 per barrel. Gold jumped 0.17% to $1.884.21 per ounce. 

    Traders are advised to watch the following moves in markets on Tuesday:

    Stocks

    The Stoxx Europe 600 gained 0.4% during the early European session. S&P 500 futures added 0.3%. Nasdaq 100 futures advanced 0.5%. The MSCI Asia Pacific Index jumped 1.1%. The MSCI Emerging Markets Index was 1.3% higher. The Japanese Nikkei rose 0.67%. The Topix soared 0.3%. The Hang Seng surged 1.75%. The DAX in Germany advanced 0.8%. The FTSE 100 was little changed. The CAC in France edged 0.05% higher. 

    Currencies

    The USD Index lost 0.1%. The euro added 0.3% to $1.2248. The Japanese yen remained unchanged, trading at 108.77 per dollar. The offshore yuan edged 0.1% higher to trade at 6.4011 per dollar. The British pound climbed 0.1% to $1.4173. The Australian and the Canadian dollars were little changed, trading at 0.7758 and 1.2044 against the greenback respectively. The USD/CHF pair retreated 0.25% at 0.8950.  

    Commodities

    Brent crude shed 0.6% to trade at $68 per barrel. WTI gave up 0.8% to $65.50 per barrel. Gold jumped 0.17% to $1.884.21 per ounce. Silver fell 0.68% to $27.72 per ounce. Platinum rose 0.5% to $1,184.48 per ounce. Copper declined 0.38% to $450.85.

    Bonds

    The yield on 10-year Treasuries sank one basis point to 1.59%. Germany’s 10-year yield decreased one basis point to -0.15%. Britain’s 10-year yield was little changed at 0.81%. 

    Looking forward:

    Traders should watch the following events this week:

    • Bank of Indonesia rate decision is made on Tuesday, Reserve Bank of New Zealand policy decision is revealed on Wednesday, and Bank of Korea rate decision is announced on Thursday.
    • CEOs of the largest U.S. banks, including JPMorgan and Goldman Sachs, will testify before lawmakers in the Senate Banking and House Financial Services committees on Wednesday.
    • U.S. initial jobless claims, GDP, durable goods, pending home sales are published on Thursday.

    Have a productive trading day!

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