US equity and bond markets CLOSED overnight for the Memorial Day holiday.
Geopolitical concerns weighed on Europe's main markets - Germany's DAX down -0.58% and France's CAC -0.61%. Italy's MIB Index fell -2.08% following a volatile session that saw Italy's president seemingly set the country on a path back to fresh elections. President Sergio Mattarella vetoed the 5-Star Movement and League parties choice of a eurosceptic (81-year-old Paolo Savona) as Finance Minister and asked former International Monetary Fund (IMF) official Carlo Cottarelli to try and form government. Italian banks were under particular pressure, with Banco BPM SpA down -6.3% and with circuit breakers triggered that briefly halted trading. Italian 10-year government bond yields surged higher (up +23 basis points to 2.68%), while the interest-rate spread over similar German bunds widened above 2.30 percentage points, the highest since late 2013 - indicating a high level of market stress. Spain's IBEX 35 Index fell -0.60%, with Spanish Prime Minister Mariano Rajoy to face a vote of confidence in his leadership on Friday (1 June) as corruption convictions handed down to dozens of people linked to his People's Party (PP) threatened his six-year rule. The editorial sections of two major Spanish newspapers, El País and El Mundo, both called for early general elections on Saturday. The euro fell to its lowest level since November 2017 against the US dollar (US$1.1608) before settling little changed around US$1.1625. Elsewhere, the European Union's (EU) top trade official, Cecilia Malmstrom, will meet US counterparts Wilbur Ross and Robert Lighthizer in Paris on Wednesday (30 May) in a last-ditch effort to secure waivers from steel and aluminum tariffs and to engage Washington on efforts to tackle China's market-distorting policies. A temporary reprieve from US. steel and aluminum tariffs is due to expire on Friday (1 June).
