Risk appetite remained relatively high in the market yesterday as US inflation figures for April came in slightly below expectations at 2.3% YoY, with core inflation holding at 2.8%. Separately, the NFIB survey showed that small business optimism fell moderately in April. Against this backdrop, US Treasury yields were broadly unchanged.
In the eurozone, the ZEW survey showed German investor expectations rose more than expected in April, with respondents citing lower interest rates, the prospect of a new government and an improvement in tariff disputes. Their assessment of the current environment was less optimistic. Eurozone government bond yields rose slightly, while peripheral spreads were flat.
Equity indices rose in most developed markets, with the S&P500 erasing its year to date losses. In the currency market, the dollar weakened, giving back some of its gains from the previous session. In commodities, oil prices rose as Trump's threat to increase sanctions on Iranian crude if a nuclear deal is not reached added to optimism over the US China trade truce.
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