Market Information Monday 12 May 2025

U.S. Treasury Secretary Scott Bessent and USTR Jamieson Greer clinched a Geneva deal with China to trim America’s $1.2 trillion goods trade deficit, with details due Monday and no tariff cuts announced. It was the first senior U.S.–China economic meeting since Trump’s tariff blitz, noted for its swift, constructive progress. President Trump hailed it as a “total reset” to open China further to U.S. business despite the ongoing triple-digit duties.

Core US inflation is set to accelerate in April, with core CPI forecast of 0.3% as companies begin passing higher tariff costs onto consumers. Retail sales are expected to stall in April following a 1.5% Q1 surge, reflecting growing consumer anxiety over rising prices. Businesses are caught between absorbing tariff-driven cost increases and risking lost sales, even as the Fed warns of trade-policy risks to both inflation and employment.

After the Trump import tariffs in early April, the junk bond market was almost at a standstill, but now companies in the US and Europe dare to issue risky bonds again at higher yield spreads. Especially in Europe, trading is picking up on expectations of an ECB rate cut in June, supporting bond prices. Analysts call the correction a healthy reset and see attractive yields in high yield bonds with less volatility than equities.

The 6M Euribor decreased with 2 basis points to 2.13% compared to previous business day. The 10Y Swap increased with 1 basis point to 2.51% compared to previous business day.

In the attachment, today’s market data on money and capital market rates as well as other rates are presented.