US bounces back from a long weekend
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Why did US equity markets rally after the long‑weekend tariff news?
The US is back from their long weekend and feeling hopeful, having gone into the weekend thinking there was a massive trade spat with Europe just a week away. But now it's a month away. A month is eons these days, isn't anything could happen. So equities are up, the dollar is down, plus a big fall in Japanese bond yields, all down to a government survey, apparently. Plus the RPN said today a cut is expected, and Australian inflation, which NAB predicts, might actually move up a little bit in April. It's the morning call for NAB. It's Wednesday, it's the 28th of May 2025. And yes, those investors in the United States obviously did have a good weekend because the Nasdaq climbed two and a half percent of the close on Tuesday just now, two point one percent for the S P and one point eight percent for the Dow, two and a half percent for the Russell two thousand as well.
Uh in Europe shares are also up naught point seven percent for the FTSE one hundred, not point eight percent for the DAX, not point four percent for the Eurostocks fifty. Uh the US dollar is quite a bit higher as well. Uh it's up naught point six percent to Just above ninety-nine point five on the DXY, and so consequently the Aussie down today, down 0.6% to below 64.5 US cents. The Yen is down one percent, 0.4% off the pound and the euro. And bond yields uh well bonds are higher, the yields are pushed lower, eight basis points off ten year treasuries today, down three basis points in Germany and France. Aussie ten years were down seven basis points yesterday to four point three one percent. Now on futures down to around 4.26%.
But look at this Japanese 30 year yields down 19 basis points. We'll look at why that is today. And oil lower as well, 0.9% off WTI and Brent. Brent is now down to 64 US dollars a barrel. And it's Taylor Nugent joining me today from NAB in Melbourne. So this bounce in USA equities, the the Europe deal that we
Perhaps that helped a little bit because that bounced back too.
Yeah, good good morning, Phil. It does seem like it was that uh, you know, renewed confidence around, you know, some more some progress on the the US EU uh trade negotiations, some catch up to that news over the weekend after coming back from holidays that was the driver, but you know, a pretty emphatic uh move in in equities in in the US. And as you say, consumer confidence uh look, I don't I don't think it's likely to be the main driver, but it certainly wasn't hurting and and played to play to those sorts of themes and I think you know when you look at the consumer consumer confidence numbers uh it was a twelve point three point jump to to ninety eight so that's the biggest monthly gain in in four years in in that series.
Um it was well above expectations Yeah, but
coming after the the lowest level for five years. You know, it was a bounce bounce back from a low level.
How did the Conference Board survey influence US and European stock moves?
That's
right. So yeah, I mean just showing just how sensitive sentiment numbers are to the you know, the swings in um in in kind of the policy approach towards trade and and tariffs that that we're seeing. Um a lot of that was driven, perhaps unsurprisingly, given that from the expectations measure, which was up to seventy two point eight from very, very soft levels around fifty five point four. But kinda as you say, even with that very stark turnaround it It leaves it below its its February levels. So, you know, a big bounce back, a a big reaction to that kind of thawing in in tensions, um, but certainly not at strong levels. I think the other thing to call out there is that there's quite a divergence here between this uh the jump in this measure and what we saw from the preliminary alternate University of Michigan sentiment measure recently.
Yeah.
And I think a lot of that just comes down to the the difference in survey timing. Um so the cutoff for this survey was the nineteenth of May. Um that captured a lot of that thawing after that pause on the the um very high US China tariffs uh which is back on the twelfth of May.
If you look at the moves, that's one thing.
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Chapters
8 chapters
1
Why did US equity markets rally after the long‑weekend tariff news?
0:01–2:42
2
How did the Conference Board survey influence US and European stock moves?
2:42–5:30
3
What explains the 19‑bp drop in Japan’s 30‑year bond yields?
5:30–7:54
4
How are US consumer‑confidence numbers reacting to the trade‑tariff thaw?
7:54–10:47
5
What do the latest Australian CPI and RBNZ expectations suggest for rates?
10:47–13:06
6
How are European inflation readings shaping ECB policy outlook?
13:06–14:20
7
What impact could upcoming FOMC minutes and BOE comments have on global rates?
14:20–14:25
8
What are the key market‑watch items for the week ahead (NVIDIA, RBNZ, tariffs)?
14:25–14:25