The rise in US Treasury yields has caused concerns, analysis of short-term trends of spot gold, silver, crude oil and foreign exchange on May 12

Global Market Review

1. European and American market trends

The three major U.S. stock index futures rose sharply before the trading session, with the Nasdaq 100 Futures Small rising 3.43%, Dow Jones Futures Small rising 1.98%, and S&P 500 Futures Small rising 2.56%. European stocks rose by an expansion, with the Italian MIB index rising by more than 2%, the German DAX index rising by 1.56%, and the French CAC40 index rising by 1.29%.

2. Interpretation of market news

The rise in US Treasury yields has caused concerns

⑴Eurizon pointed out in the report that the rise in US Treasury yields is worrying, suggesting that there are still problems with US debt and fiscal policy. ⑵ Previously, due to tariff uncertainty, the U.S. stock market, bond market and foreign exchange market had fallen for several consecutive weeks, but after China and the United States reached a tariff agreement, the stock market and the US dollar rose, but U.S. bonds did not benefit. ⑶ Although the trade agreement has a positive impact on economic growth, high interest rates indicate that the U.S. fiscal trajectory remains the focus of market concerns. ⑷ The avaforexcn.company believes that the ongoing budget negotiations in Congress are crucial to the bond market. ⑸ Tradeweb data shows that the 10-year U.S. Treasury yield rose by 6 basis points to 4.437%.

Nissan plans to lay off more than 10,000 employees worldwide

As the continued deterioration of operating performance, Nissan has decided to lay off more than 10,000 employees at home and abroad in order to improve its operating conditions. Based on previous plans, Nissan will cut about 15% of its employees as a whole, reaching 20,000 people. Nissan is expected to announce its relevant plans at the financial report conference on the 13th.

Canadian 10-year Treasury yield risesTo four-week highs

⑴ Canada's 10-year Treasury bond yield rose to 3.26%, the highest level in four weeks. ⑵In the past four weeks, Canada's 10-year Treasury bond yield has risen by 14.35 basis points. ⑶ This yield has dropped by 45.60 basis points in the past 12 months.

Extreme weather and climate change hit Africa's early warning capacity urgently needs to be strengthened

The 2024 African Climate State Report released by the World Meteorological Organization on the 12th showed that extreme weather and climate change are seriously affecting all aspects of Africa's social and economic development, aggravating problems such as hunger, insecurity and population displacement. The report pointed out that 2024 was the hottest or sub-hot year in Africa on record, and the past decade was also the hottest decade. Sea surface temperatures in the surrounding seas in Africa hit record highs, especially the Atlantic Ocean and the Mediterranean Sea. Southern Africa has experienced severe droughts, with Malawi, Zambia and Zimbabwe being particularly affected, with food production falling sharply and power and economic activities suffering heavy losses. Eastern Africa suffered fatal floods, affecting more than 700,000 people. West and Central Africa also suffered severe floods due to heavy rainfall, hundreds of people died and hundreds of thousands were forced to move.

Gasy oil prices rise with crude oil

⑴ U.S. gasoline futures prices rise to above $2.10 per gallon, the highest level since early April, following the rise in crude oil prices. ⑵ Joint statement of Sino-US trade talks eased concerns about global economic and energy demand and pushed gasoline prices to rise. ⑶ Although petrol prices usually rise in spring due to increased travel, recent signs that trade tensions may have pre-memorial day holiday demand. ⑷ U.S. gasoline inventories rose by 188,000 barrels last week, the first increase in two months.

The yen exchange rate faces huge speculative pressure

⑴ With tariff cuts, the scale of speculative bets for the yen appreciation is only slightly lower than the historical high set in early May. ⑵ The current $15 billion long bet on the Japanese yen is almost twice the record of $8 billion set in 2017. ⑶ Large-scale speculative bets usually trigger market reversals. ⑷ Tariff cuts reduce demand for safe-haven assets and increase the possibility of a depreciation of the yen.

Hungary's budget deficit expanded in April

⑴ Hungary's budget deficit in April was 376.4 billion forints (about US$1.04 billion), and the deficit from the beginning of the year to April has accounted for 71% of the annual target. ⑵Surge in debt services and pension spending offsets the increase in income, leading to an expansion of the deficit. ⑶ Hungarian Prime Minister Orban Victor's government plans to reduce the proportion of budget deficit to GDP this year from 4.9% in 2024 to 4%. ⑷ As the economic recovery has not met expectations, the Hungarian government has lowered its economic growth expectations in 2025 and raised its deficit target. ⑸ The Hungarian economy fell into stagflation in the first quarter, with output the same as the same period last year, and the inflation rate was at the highest level in the EU.

Bank of England officials on inflation and tariffs

⑴ UKCentral Bank official Clare Lombardelli said UK inflation data is the dominant factor in monetary policy decisions, not tariff concerns. ⑵Tariffs have little direct impact on the UK economy, so the focus is on inflation. ⑶ Service industry and salary data show that inflation is gradually falling, but it is still above the target level. ⑷ She stressed that inflation still needs to be monitored continuously to ensure that it has a stable decline to the target range.

The market lowered its expectations for the ECB rate cut

⑴ The euro zone benchmark German government bond yield rose to a one-month high, and the market's expectations for the ECB rate cut fell sharply. ⑵ European Central Bank Management avaforexcn.committee member Schnabel said the central bank should stop cutting interest rates as global economic turmoil is pushing up price pressures and inflation may exceed the target of 2% in the medium term. ⑶ The joint statement of Sino-US trade talks is good for market risky sentiment. ⑷ Germany's 10-year government bond yield rose 6.5 basis points to 2.62%, the highest level since April 11. ⑸ The market expects the ECB deposit rate to be 1.75% in December, higher than the previous estimate of 1.55% to 1.67%. ⑹Berenberg chief economist Schmiding believes that the Sino-US trade agreement may pave the way for more trade agreements, including agreements with Europe. ⑺Schmidt also pointed out that the eurozone will experience a very slow growth period in the second and early third quarters. ⑻This week the U.S. will release consumer price index and retail sales data to show the initial impact of tariffs.

The impact of trade optimism on the euro

⑴Convera strategist George Vessey said the euro may still face pressure. ⑵ After the U.S. and China agreed to significantly reduce tariffs, the market's optimism about the downgrade of the global trade war has heated up. ⑶ The positive signal of trade negotiations strengthens the reverse correlation between risky assets and the euro trend. ⑷ Recently, the euro has been regarded as a tool to hedge against U.S. policy uncertainty, and the stock market has benefited from inflows of safe-haven funds when it falls. ⑸ As trade tensions ease, risk appetite is improving. ⑹Any further trade progress could accelerate the euro's decline. ⑺FactSet data shows that the euro fell to a one-month low of $1.1083.

German foreign investment has declined for three consecutive years

⑴German Federal Foreign Trade and Investment Agency (GTAI) stated that the number of foreign investment in Germany declined for the third consecutive year in 2024. ⑵There were 1,724 new and expanded projects in 2024, a decrease of 2% from 1,759 in 2023. ⑶FDI in Europe fell by 4.6%, while Western Europe fell by nearly 6%. ⑷The total foreign investment in 2024 was 23.2 billion euros, down from 34.8 billion euros in 2023 and 25.3 billion euros in 2022.

The U.S. avaforexcn.commerce Secretary says 10% benchmark tariff will continue

U.S. avaforexcn.commerce Secretary Lutnik said, "We do expect a 10% benchmark tariff to be imposed for the foreseeable future." The media pointed out that data shows that American avaforexcn.companies are currently trying to pass costs on to consumers. Consumer confidence has dropped sharply in the weeks since Trump announced the increase in tariffs on April 2; prices of some household goods have also risen.

3. Trends of major currency pairs in the New York Stock Exchange before the market

Euro/USD: As of 20:20 Beijing time, the euro/USD fell and is now at 1.1108, a drop of 1.25%. Before the New York Stock Market, the price of (Euro vs. U.S. dollar) fell on the last trading day, and with bear correction trend dominant, its trading followed a slash as negative signals on (RSI) emerged, reaching our morning target of 1.1145, which represents the 50% Fibonacci correction level for the last bull market on a short-term basis (from 1.0730 to 1.1572).

GBP/USD: As of 20:20 Beijing time, GBP/USD fell and is now at 1.3183, a drop of 0.87%. Before the New York Stock Exchange, the (GBPUSD) price fell in recent intraday trading, affected by reaching EMA50 resistance, which puts it under negative pressure, especially in the short term, bear market correction wave dominates, with negative overlap signals appearing in the short term, and in addition, it reaches an exaggerated overbought level avaforexcn.compared to the price trend, which indicates that a negative divergence is beginning to form, which strengthens the bear market trend scenario.

Spot gold: As of 20:20 Beijing time, spot gold fell, now at 3230.48, a drop of 2.83%. Before the New York Stock Exchange, the (gold) price fell on the last trading day, affected by breaking through the bullish bias line on a short-term basis. As the trading is below EMA50, it continues to bear negative pressure, and in the case of negative signals on (RSI), it breaks through the support level of $3,250.

Spot silver: As of 20:20 Beijing time, spot silver fell, now at 32.301, a drop of 1.22%. Before the New York Stock Exchange, the (silver) price fell in the last trading day. After testing a bear trend line on a short-term basis, with the emergence of negative signals on (RSI), after reaching the overbought level, it faces negative pressure due to trading below EMA50, reaching our morning target of $31.90.

Crude oil market: As of 20:20 Beijing time, U.S. oil rose, now at 63.450, an increase of 3.98%. Before the New York City market,Crude oil prices have expanded their gains in recent intraday trading, successfully breaking our morning target of $61.70, as bullish correction trends dominate the short-term and pushing it further upside after successfully getting rid of overbought conditions as positive signals on (RSI).

4. Institutional View

PwC: British insurance avaforexcn.companies should welcome the US-UK trade agreement

PwC UK insurance owner Alex Bertolotti said that the bilateral trade agreement between the UK and the United States should be "welcome" by British insurance avaforexcn.companies because it reduces the secondary impact on supply chains and claims costs. Last Thursday, U.S. President Trump and British Prime Minister Prime Minister Stamer announced a limited trade deal that retains 10% tariffs Trump imposed on British exports but reduces U.S. tariffs on U.S. cars exported to British cars. "Although insurance avaforexcn.companies are not expected to be directly affected, they will welcome the reduction in secondary impact on their supply chains, which should reduce costs, and they can be passed on to customers by reducing premiums." Citigroup: Global short-term bond yield gains may slow down

Citigroup Research Rate Strategists said in a report that previous rises in global short-term bond yields may be losing momentum, at least a brief respite in the short term. There are still some factors that are unfavorable to the bond market, including the first trade agreement reached between the United States and the United Kingdom, the voting differences between the United Kingdom's central bank at its meeting last week, and the wait-and-see position shown by the Federal Reserve.

Danske Bank: Risk sentiment is expected to continue this week

Anderson, co-head of fixed income and foreign exchange research at Danske Bank, said in a report that the trend of improving market risk appetite since last week is expected to continue this week after positive news of weekend trade negotiations. "In the past week, the market has shown a recovery in risk sentiment, largely because of the initial signs of easing in the trade war." U.S. Treasury Secretary Bescent also said that the talks between the two sides were fruitful and revealed that the United States will release more details on Monday.

The above content is about "[Aihua Foreign Exchange Market Review]: The rise in US Treasury yields has caused concerns. Analysis of short-term trends of spot gold, silver, crude oil and foreign exchange on May 12" was carefully avaforexcn.compiled and edited by Aihua Avatrade Foreign Exchange Editor. I hope it will be helpful to your trading! Thanks for the support!

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