Daily Summary, May 26

Good morning, here are the latest highlights in financial news!

Trump Delays EU Tariffs, Markets Rebound

  • European stock markets are set to open higher this morning after U.S. President Donald Trump announced a delay to the planned 50% tariffs on European Union goods. The tariffs, initially scheduled for June 1, are now postponed until July 9 following discussions with European Commission President Ursula von der Leyen.

  • Futures indicate a strong start: Germany’s DAX futures are up 1.6%, France’s CAC 40 futures up 1.3%, and the Euro Stoxx 600 up 1.54% as of early trading. The UK market remains closed for a public holiday.

  • The euro has rallied to its highest level against the U.S. dollar since April 30, as investor confidence in U.S. assets remains subdued. The U.S. dollar index dropped below 99 for the first time in May.

Market Sentiment and Outlook

  • Last Friday’s tariff threats triggered sharp sell-offs in both U.S. and European equities, but the postponement has prompted a broad rebound. Analysts suggest traders are betting that new tariff threats may be more rhetoric than reality.

  • Despite the rebound, investor sentiment remains cautious due to the unpredictable nature of U.S.-EU trade relations. European equity ETFs have attracted significant inflows this year, outpacing U.S.-focused funds, as investors seek stability amid ongoing trade tensions.

  • Trading volumes are expected to be lighter today, with both U.S. and UK markets closed for holidays.

Macro Data and Economic Indicators

  • This week, attention will turn to key inflation data. The U.S. Federal Reserve’s preferred inflation gauge (PCE for April) is due on May 30, which could influence global sentiment and rate expectations.

  • France and Germany will release consumer price data on Tuesday and Friday, respectively. Broader eurozone inflation figures are expected next week.

  • April’s volatility, driven by tariff headlines, has not yet translated into significant inflationary pressures in the latest consumer and producer price data.

Nordic Highlights

  • In corporate news, Nordic construction group Sentia announced its intention to list on Euronext Oslo Børs. Sentia, a major player in Norway and Sweden’s construction sector, aims to leverage the listing for future growth and strategic opportunities. The company reported 2024 revenues of NOK 10.6 billion and employs around 1,400 people.

  • Nordic equity markets are likely to follow the broader European rebound, though local developments such as Sentia’s listing may attract additional attention.

Sector Watch

  • Retailers remain cautious, with some announcing price increases in response to ongoing uncertainty. Walmart and Nike have already implemented or announced price hikes, while others are prepared to follow if conditions deteriorate.

  • The 10-year U.S. Treasury yield continues to climb, adding to market volatility. Should yields surpass 4.63%, further pressure on equities is expected.

Summary

European and Nordic markets are rebounding this morning after Trump’s decision to delay tariffs on EU goods, easing immediate trade concerns. The euro is strengthening, and sentiment is recovering, but volatility remains elevated amid unpredictable U.S.-EU relations and upcoming inflation data. In the Nordics, Sentia’s planned Oslo listing is a notable development. Investors are advised to remain vigilant as macroeconomic and geopolitical risks continue to shape the landscape