European shares declined during a subdued trading session on Monday, with the Euro Stoxx 50 index ending the day 0.4% lower at 4,320 points.  Concerns regarding inflation and the possibility of further interest rate increases weighed on investor sentiment, while the market remained cautious ahead of a busy week with several important economic releases on the horizon, including the flash estimate of the Eurozone’s inflation rate, global manufacturing PMIs, and the highly anticipated US jobs report scheduled for release on Friday.  Elsewhere, US equity and bond markets were closed Monday for the Memorial Day holiday as were markets in the UK.  

Summary for 30.05.2023 

  • Asian equity markets mostly fell this morning as investors cautiously awaited the congressional vote on the tentative US debt ceiling deal and the latest purchasing managers’ index readings in China this week.  The Hang Seng Index led the decline, sliding to its slowest levels this year.  The S&P/ASX200, Nikkei 225 and Shanghai Composite indices also tumbled on Tuesday. 
  • European equity futures inched higher in tandem with their US counterparts as investors await the next steps on the US debt deal. 
  • Oil prices reversed early gains to trade lower on Tuesday as fears of more interest rate hikes by the Federal Reserve and slowing economic growth largely offset optimism over raising the US debt ceiling. 
  • China has declined a request by the US for a meeting between the defence chiefs at an annual security forum in Singapore this weekend, media reported on Monday, a new sign of strain between the powers. 
  • Spanish Prime Minister Pedro Sanchez is betting that he can exploit the quirks of Spain’s fractured political landscape to cling on to power after his Socialist party suffered a crushing defeat in Sunday’s regional elections.  Sanchez surprised his adversaries on Monday by dissolving parliament and triggering a snap general election within hours of learning the full extent of his losses in the previous day’s ballots. 
  • The White House and Republican congressional leaders geared up lobbying campaigns to win the approval of a deal to avert a US default as environmentalists, defence hawks and conservative hard-liners condemned concessions.  President Joe Biden is personally calling lawmakers to support this bill, while cabinet members and senior White House staff already had called at least 60 House Democrats by early Monday morning, a Democratic official said. 
  • Turkish President Recep Tayyip Erdogan has promised a team with “international credibility” to manage the nation’s finances.  Given his influence over everything from interest rates to infrastructure, how much credibility is unclear as market pressure builds.  A new cabinet is expected to be named at the end of the week after Turkey’s longest-serving leader extended his rule by another five years.   The lira extended its slump toward record lows against the dollar after Erdogan prevailed in a runoff vote on Sunday.