Market Information Tuesday 27 May 2025

China’s industrial profits continued to rebound in April, rising 3% year-on-year and signalling resilience in the face of U.S. tariffs and deflationary pressures. The growth, driven by high-tech and equipment manufacturing, reflects the impact of Beijing’s targeted policy support for private and small businesses. Despite a recent spike in tariffs — briefly reaching 145% before easing to 51.1% following a trade truce — China’s industrial sector has adapted by shifting exports and maintaining output growth. The macroeconomic picture remains mixed, with industrial momentum gaining but retail sales lagging, highlighting ongoing demand-side challenges.

U.S. stock futures surged after a delay in planned 50% tariffs on the European Union, offering a short-term reprieve from escalating trade tensions. Dow, S&P 500, and Nasdaq futures all rose nearly 1%, rebounding after last week’s broad market losses driven by tariff fears. The postponed deadline (to July 9) eased immediate investor concerns, boosting market sentiment despite ongoing uncertainty around U.S.-EU trade relations and upcoming economic data. Analysts noted that while the delay is welcome, broader macroeconomic risks—like slowing consumer confidence and Federal Reserve commentary—still loom large.

UK food inflation rose for the fourth consecutive month in May, reaching 2.8% year-on-year, as rising costs for fresh produce—especially red meat—pushed prices higher. While overall shop prices remained in deflation at -0.1%, thanks to falling non-food prices, underlying pressures are building. Retailers are facing mounting cost burdens from higher national insurance contributions, minimum wage increases, and upcoming packaging taxes, which could soon be passed on to consumers. This comes amid a broader surge in UK inflation, now at a 3.5% annual rate, driven by rising utility and tax bills—adding to concerns over household purchasing power and the macroeconomic outlook.

The 6M Euribor decreased with 2 basis points to 2.10% compared to previous business day. The 10Y Swap decreased with 2 basis points to 2.55% 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.