Slightly softer tones observed in early trades
- German DAX futures -0.3%
- French CAC 40 futures -0.2%
- UK FTSE futures -0.2%
The slight weakness to start the session is largely ascribed to a late fall in US equities overnight, after Fed dove James Bullard came up with some not-so-dovish remarks by ruling out a 50 bps rate cut in July.
Overall risk sentiment today is more balanced with Treasury yields a little higher and US equity futures practically unchanged:
It's all about the Trump-Xi meeting to set the tone for markets now. Fed fund rates futures are still pricing in a ~21% probability of a 50 bps rate cut in July but if trade talks take a turn for the better, expect that to be priced out and for the dollar to gain further ground.
