The Dow Jones added 135 points, to close at a fresh record high of 40,003, the S&P 500 edged higher by 0.1%, while the Nasdaq finished slightly lower. The focus on interest rates and inflation continues to dominate market discussions, with investors closely monitoring economic data and statements from Fed officials for any changes in rate expectations. On the corporate front, Shares of Walmart and Caterpillar added 1% and 1.5%, respectively, pushing the Dow Higher. Reddit shares surged 10% after the company announced a content partnership with OpenAI. In contrast, Meme stocks declined for a third session, with GameStop falling 19.7% and AMC dropping 5.2%. On the week, the S&P 500 added 1.4% and the Nasdaq advanced 1.9%, both marking a fourth consecutive winning week, which would be a first since February. The Dow booked its fifth positive week in a row, with a 0.9% gain for the period.

The S&P/TSX Composite index surged 0.7% to a new high of 22,465 on Friday, driven by gains in the materials and energy sectors despite pressure from tech stocks. Key mining equities led the rally, benefiting from higher metal prices, especially copper and gold, driven by increased demand from China. First Quantum soared by 7.6%, followed by Cameco up 6.4%, and Ivanhoe Mines up 6.2%. Heavyweights Agnico Eagle and Barrick Gold also gained more than 1.8%. Similarly, as oil prices rose, Canadian Natural, Cenovus, and Suncor gained over 1%. On the economic front, Canadian investors set a record by acquiring $35.6 billion in foreign securities in March, totaling $51.5 billion for the quarter. Meanwhile, foreign investors increased their holdings of Canadian securities by $14.4 billion in March, rebounding from a $4.3 billion divestment in February. For the week, the TSX posted a gain of 0.7%.

US stocks struggled for traction in the afternoon session, with the three major averages hovering near record highs touched on Wednesday. The Dow Jones was edging closer to the 40,000 level, up 0.1%, while the S&P 500 remained mostly flat, and the Nasdaq dipped by 0.1%. The focus on interest rates and inflation continues to dominate market discussions, with investors closely monitoring economic data and statements from Fed officials for any changes in rate expectations.On the corporate front, meme stocks declined for a third session, with GameStop falling 24.2% and AMC dropping 4.7%. In contrast, Reddit shares surged over 11% after the company announced a content partnership with OpenAI. For the week, the S&P 500 is up 1.5% and the Nasdaq has gained 2.3%, both on track for their fourth consecutive winning week, which would be a first since February. The Dow is set for its fifth positive week in a row, with a 1% gain for the period.

The DAX held early losses and closed 0.2% lower at 18,704 on Friday, extending the previous session loss, and in line with a muted session for European equities. Traders continued to assess the monetary policy outlook, with comments from Fed officials suggesting interest rates will remain elevated for some time while in Europe, ECB member Schnabel said the central bank should be cautious about rate cuts beyond June. At the same time, mixed data coming out of China also weighed on investors' mood. On the corporate front, Siemens lost 1.4% to a 4-week low of €172 and Zalando slipped 3.2% to stretch its poor momentum. The financial sector, however, was in the green, with Deutsche Boerse (1.6%) and Commerzbank (2%) booking gains. On the week, the DAX edged 0.5% lower despite hitting a record-high on Wednesday.

The Russian GDP expanded by 5.4% annually in the first quarter of 2024, slightly ahead of market estimates of 5.3%, and accelerating from the 4.9% expansion in the third quarter, according to preliminary estimates. The acceleration extended the strong momentum for Russian output following last year’s rebound from the 2022 crash, triggered by Western sanctions following Russia’s invasion of Ukraine. Still, markets have placed doubts on the sustainability of such rebound, as the expansion has largely relied on state-funded investment on arms and ammunition for its war effort, which are due to bring little return and hamper Russians’ living standards. Russia's Centre for Macroeconomic Analysis warned that inflation remains high, while the country’s labor force crisis triggered by military mobilization and its resulting diaspora of working-aged men pressure capacity. The IMF expects Russia’s GDP to expand by 3.2% this year, while the Ministry of Economy expects growth to be 2.8%.

The CAC 40 eased by 0.3% to close at 8,167 on Friday, continuing its previous session’s downturn as investors assessed the monetary policy landscape. Comments from Fed officials suggesting prolonged high interest rates, along with ECB member Schnabel’s cautious stance on rate cuts post-June, contributed to the prevailing caution. Schneider Electric notably dropped by 1.6% following its partnership announcement with Crux, a sustainable-finance technology firm, aimed at obtaining production-tax credits from solar module developer Silfab Solar. Significant decliners included Teleperformance, down 2.7%, Kering, pressured by poor retail sales growth in China despite Richemont’s strong performance, with a loss of 2.7%, and Legrand, down 2.3%. The CAC 40 concluded the week with a nearly 0.7% decline.

The annual inflation rate in Russia edged up to 7.8% in April 2024 from 7.7% in March, matching the market forecasts. Upward pressure came from prices of food (8.3% vs 8.1%) and non-food products (7% vs 6.7%). Meanwhile, the cost slowed marginally for services (8.1% vs 8.3%). The core inflation rate accelerated to 8.3% in April from 7.8% in the previous period. On a monthly basis, consumer prices increased by 0.5%.

European stocks closed slightly lower on Friday, easing for the second session after Wednesday’s multi-decade highs as markets continued to assess the latest corporate developments and the magnitude of incoming rate cuts by the ECB. The Stoxx 50 dropped 0.2% to close at 5,063 and the Stoxx 600 was trimmed by 0.1% to close at 523. Governing Council member Schnabel said the central bank should be cautious about rate cuts beyond June, echoing her Latvian counterpart Kazaks’s remarks yesterday and dampening equity investor’s optimism over lower interest rates. The luxury sector was in the spotlight after Swiss Richemont reported strong sales and jumped by 5.3%, lifting the pan-European index. Still, poor retail sales from China limited the impact on the Eurozone’s benchmark Stoxx 50, with Hermes adding 0.5% while LVMH and Kering both booked losses. In the meantime, industrial giants Siemens and Schneider both retreated 1.5%, while 3% slides for Prosus and Adyen pressured tech shares.

The FTSE 100 experienced a decline on Friday as global markets also showed weakness, fueled by concerns of prolonged high interest rates. Money markets in the UK are anticipating a potential 60 bps interest rate cut by the BoE in 2024, with the initial cut expected in August. Personal goods companies took the biggest hit on the FTSE 100, dropping more than 2%. Additionally, travel & leisure, and auto stocks fell over 1% each, while major oil companies saw a 0.4% decrease. However, industrial metals and mining sectors saw a rise of over 1.5%. Among individual stocks, Auto Trader Group fell around 4% following a downgrade by Morgan Stanley, while GSK dropped 0.7% after selling its remaining stake in Haleon for 1.25 billion pounds ($1.52 billion).

In the US, investors will be closely monitoring speeches by several Fed officials, the FOMC meeting minutes, and key economic indicators including the S&P Manufacturing and Services PMI, durable goods orders, and new and existing home sales. The earnings season is nearing its end, with reports expected from major corporations such as Palo Alto Networks, Lowe’s, Nvidia, PDD Holdings, TJX Companies, Analog Devices, Synopsys, Target, and Intuit. Globally, attention will be on interest rate decisions in China, New Zealand, South Korea, and Turkey. Inflation rates will be released for Canada, the UK, Japan, and South Africa. Additionally, Manufacturing and Services PMI data will be published for Australia, Japan, India, France, Germany, the Euro Area, and the United Kingdom. Consumer confidence figures will be reported for Australia, the UK, and the Euro Area, along with retail sales data for the UK and Canada and trade balance for the Euro Area and Japan.

The S&P/TSX Composite index edged up 0.2% to surpass the 22,350 mark on Friday, with the materials and energy sectors leading the gains amid pressure from the tech sector. Key mining equities benefited from the overall increase in metal prices, particularly copper and gold, with First Quantum rising by 3.2%, followed by Barrick Gold at 1.1%, Agnico Eagle Mines at 1%, and Wheaton Precious Metals at 0.9%. Similarly, as oil prices climbed, Canadian Natural, Cenovus, and Suncor gained upwards of 0.5%. Conversely, tech stocks faced selling pressure due to concerns about prolonged higher interest rates in the US, with heavyweight Shopify losing 1%. For the week, the TSX was poised for modest gains of around 0.2%.

The Indian rupee strengthened past 83.4 per USD, the highest in over three weeks, enjoying some respite after increased bets of a Fed rate cut by September eased pressure from a strong greenback. Still, limited room for the RBI to intervene in currency markets and support the rupee limited buying appetite for the local currency. Expectations of rate cuts by the PBoC and sustained weakness in the yen exacerbated sharp selling pressure for riskier currencies across Asia. Consequently, investors pared expectations on the RBI’s room for rupee support, as its usual defense against a strong dollar would drive Indian goods and services to be less attractive against Asian rivals in global markets. Still, a resilient Indian economy and hawkish expectations for the RBI prevented an even sharper downturn. In its latest meeting, the central bank noted that upside risks to inflation due to higher food prices warrant a prolonged period of terminal interest rates.

Stocks in the US were around the flatline on Friday, easing for a second consecutive session, after the three major averages hit record levels Wednesday. Traders continue to assess the timing of the first interest rate cut by the Fed, at a time economic data is pointing to some cooling in the economy, although price pressures persist and comments from several officials indicate higher-for-longer borrowing costs. Materials outperformed while utilities recorded the biggest decline. On the corporate front, meme-stocks declined for a third session, namely GameStop (-24.9%) and AMC Entertainment (-4.5%). Reddit on the other hand, was up about 15% after the company announced a content partnership with OpenAI. Among megacaps, Microsoft (-0.3%), Nvidia (-0.4%), Meta (-0.8%) and Tesla (-0.8%) were in the red while Apple (+0.2%), Amazon (+0.1%) and Alphabet (+0.3%) booked small gains. On the week however, the S&P 500 is up 1.4% so far, the Dow Jones added 0.9% and the Nasdaq gained 2.2%.

The French 10-year OAT yield rebounded to 3%, after hitting a 4-week low of 2.9% on May 15th. This increase followed remarks by ECB board member Isabel Schnabel, who cautioned against further rate cuts after June. In an interview, Schnabel suggested that a rate cut in June might be justified based on data and new Eurosystem staff projections. However, she highlighted the uncertainty beyond June, emphasizing the difficulty of achieving stable inflation. Conversely, US data released this week indicated a slowdown in inflation and economic growth in April, increasing expectations for Federal Reserve rate cuts. Markets are now pricing in 68 basis points of ECB rate cuts in 2024, down from 72 basis points on Thursday, and 46 basis points for the Fed, down from 50 basis points in the previous session.

The Italian 10-year BTP yield rose to the 3.8% level, moving away from the 4-week lows of 3.7% reached on May 15th, following remarks by ECB board member Isabel Schnabel, who cautioned against further rate cuts after June. In an interview, Schnabel suggested that a rate cut in June might be justified based on data and new Eurosystem staff projection, however, she highlighted the uncertainty beyond June, stressing the difficulty of achieving stable inflation. On the other hand, US data released this week indicated a slowdown in inflation and economic growth for April, raising expectations for Federal Reserve rate cuts. Markets are now pricing in 68 basis points of ECB rate cuts in 2024, down from 72 basis points on Thursday, and 46 basis points for the Fed, down from 50 basis points in the previous session.

Stock futures in the US were around the flatline on Friday, easing for a second consecutive session, after the three major averages hit record levels Wednesday. Traders continue to assess the timing of the first interest rate cut by the Fed, at a time economic data is pointing to some cooling in the economy, although price pressures persist and comments from several officials indicate higher-for-longer borrowing costs. On the corporate front, meme-stocks declined for a third session, namely GameStop (-22.5%) and AMC Entertainment (-4.7%) before the opening bell. Reddit on the other hand, was up about 6% in premarket trading after the company announced a content partnership with OpenAI. Among megacaps, Microsoft (0.5%), Nvidia (0.2%) and Amazon (0.3%) were in the green while Apple and Alphabet traded around the flatline and Meta (-0.4%) and Tesla (-0.2%) lost in premarket trading. On the week however, the S&P 500 is up 1.4% so far, the Dow Jones added 0.9% and the Nasdaq gained 2.2%.

Foreign investors increased their exposure to Canadian securities by a net $14.37 billion in March 2024, the most since June last year, above market expectations of $3.51 billion, and compared to a revised net divestment of $4.28 billion in February. Foreign investment in debt securities was moderated by a divestment in equity securities. Foreign investors resumed their investment in Canadian debt securities, acquiring a significant $17.9 billion worth of these instruments. Government bonds, both federal (+$6.7 billion) and provincial (+$4.0 billion) instruments, as well as private corporate bonds (+$6.9 billion) accounted for most of the activity. On the other hand, non-resident investors divested $3.5 billion of Canadian equity securities in March, mainly sales of shares of the banking sector and, to a lesser extent, shares of the trade and transportation industry.

The yield on the Indian 10-year government bond was below 7.1%, holding close to the seven-week low of 7.08% on May 16th, tracking the decline in sovereign yields in economies with exposure to US credit markets as investors increased bets of a Fed rate cut in the third quarter. Demand for Indian bonds was also supported by large inflows of foreign investment, mainly due to the inclusion of G-Secs in bond funds of major asset managers. JPMorgan noted about $8 billion of inflows from overseas investors into the instruments that are eligible for the bank’s index since September, ahead of their inclusion in June. Additionally, the Malaysian branch of UOB launched a rupee-denominated India bond fund in April, adding momentum to the trend. Still, the decline in yields was limited by the RBI’s extension of its “Withdrawal of Accommodation” policy, spurring central bank bond sales reflecting the bank’s view that excessive liquidity in the economy may be contributing to inflation.

The BSE Sensex rose 253 points, or 0.3%, to close at 73,917 on Friday, its highest in over two weeks, marking the second straight session of gains. Mahindra & Mahindra witnessed a significant surge of nearly 6% in its share price, buoyed by strong financial results for the March quarter and positive outlook commentary from brokerage firms. Metal stocks also advanced, benefiting from factors such as a cooling US inflation and measures from China to stimulate its housing market. For the week, the BSE posted a 1.7% rise, a reversal from a steep loss in the prior week, largely due to positive Q4 earnings and signs of cooling inflation in the US that fueled bets of interest rate cuts from the Fed.

The UK 10-year government bond yield rose to 4.119% following statements from several Federal Reserve officials suggesting that interest rates may remain elevated for longer. Despite a recent inflation drop, the Fed hesitates to trust this trend after multiple months of disappointing data. Traders are forecasting approximately 47 basis points of easing by the Fed this year, with a rate cut in November already factored in. Additionally, there is speculation of up to 60 basis points of cuts by the Bank of England in 2024, starting with the first cut in August. Investors are eagerly anticipating next week's UK inflation rate data to better gauge the timing of potential rate cuts.

The British pound declined for the second consecutive session, falling below $1.265 from a 5-week high of $1.269 on May 15, after multiple Federal Reserve officials hinted at the possibility of keeping interest rates elevated for an extended period. Despite an initial outlook for inflation to decrease following softer-than-expected data, Fed officials remained cautious due to consistently disappointing inflation figures over the past few months. Traders are now anticipating approximately 47 basis points of easing from the Fed throughout the year, with a rate cut in November already fully factored in. In the UK, there is a possibility of around 60 bps of cuts by the Bank of England in 2024, starting as early as August. Investors are eagerly awaiting next week's inflation rate data for further insight into the timing of the first-rate cut.

Annual inflation rate in the Euro Area was confirmed at 2.4% in April of 2024, the same as in March, and holding at levels not seen in nearly three years. A year earlier, inflation rate was much higher at 7%. A slowdown was recorded in cost of services (3.7% vs 4%) and non-energy industrial goods (0.9% vs 1.1%) while prices for energy continued to decline (-0.6% vs -1.8%). On the other hand, prices of food, alcohol and tobacco rose slightly more (2.8% vs 2.6%). Meanwhile, the core rate which excludes energy, food, alcohol & tobacco, fell for a 9th straight month to 2.7%, the lowest level since February 2022. Compared to the previous month, the CPI in the Eurozone rose 0.6%, after a 0.8% increase in March. In its Spring 2024 Economic Forecast, the European Commission said the inflation is set to fall faster than previously expected and hit 2.1% in 2025.

The CAC 40 fell 0.6% to 8,137 on Friday, extending the previous session loss, as investors navigated through the monetary policy outlook. Remarks from Fed officials hinted at a prolonged period of elevated interest rates, coupled with ECB member Schnabel's cautionary stance on rate cuts beyond June, contributed to the cautious atmosphere. Moreover, mixed economic data from China exacerbated on investors' sentiment. Nearly all sectors registered losses for the day, and Schneider Electric was among those affected, experiencing a roughly 2% drop following its announcement of a partnership with Crux—a sustainable-finance technology firm—to procure production-tax credits from solar module developer Silfab Solar. Notable decliners included Kering, Unibail-Rodamco-Westfield, Saint-Gobain, Engie, Eurofins Scientific, Teleperformance SE, and Legrand, witnessing share dips ranging from 1.4% to 2.7%.

The FTSE MIB edged down by 0.1% to trade near the 35,400 mark on Friday, in line with its European peers, as traders continue to asses the monetary policy outlook, with comments from Fed and ECB officials indicating that interest rates are likely to remain elevated for an extended period. On the corporate front, Interpump Group was the session's biggest laggard, declining by 2.5%. Other notable decliners included Prysmian, Iveco Group, and Campari, each falling over 1%. Conversely, Saipem emerged as a top-performing stock, gaining more than 2% after securing a new offshore contract worth approximately 850 million dollars in Angola from Azure Energy. For the week, the FTSE MIB is on track for a 2% increase.

Hong Kong’s economic growth was confirmed at 2.7% year-on-year in the first quarter of 2024, sharply easing from a 4.3% growth in the previous period but above initial market estimates of 0.9%. There was a broad slowdown in growth for private consumption (1% vs 3.5% in Q4) and fixed investments (0.3% vs 17.5%), while government spending continued to decline (-3% vs -5.2%). On external trade, growth accelerated for goods exports (6.8% vs 2.8%), but slowed for services exports (8.4% vs 21.2%), while imports slowed for both goods (3.3% vs 3.8%) and services (17.2% vs 26.7%). On a seasonally adjusted quarterly basis, the economy expanded 2.3%, picking up from a 0.2% rise in the prior quarter and marking the largest expansion in a year.

The ruble-based MOEX Russia index traded muted at 3,490 on Friday, as investors positioned themselves for preliminary GDP results and monthly inflation reading due after the closing bell. They also followed the events from the second day of Putin's visit to China. On the corporate front, the leaders of growth were NorNickel (2.7%), PIK (2.7%), GLTR (91.3%), MMK (1.3%), and Aeroflot (1.2%). NorNickel benefited from higher nickel prices since unrest continued in New Caledonia mining region. Meanwhile, losses were seen by MKB (-1.8%), Ros Agro (-1.1%), Gazprom (-1.1%), and Tatneft (-0.9%). Markets also remained attentive to Rosseti, which would be holding the meeting to decide on dividends. Weekly, the index was poised for 1.2% gain. The IPO boom, improved quarterly results, and return to dividends offset worries over tight-for-longer monetary policy by CBR.

The Hang Seng climbed 177.08 points or 0.91% to end at 19,553.61 on Friday, reversing losses in the morning trade while rising for the second session after China launched fresh efforts to revive the property sector by easing mortgage rules. Beijing also urged local governments to buy unsold houses from builders for conversion into affordable ones. Meanwhile, the PBoC cut minimum down payment for first-time homebuyers to 15% and 25% for second-home purchases. Markets climbed to their highest level in 9-1/2 months, jumping 3.1% for the week, boosted by the issuance of ultra-long bonds by Chinese authorities to fund key projects. Traders shrugged off mixed data in the mainland for April, as industrial output growth beat estimates and the jobless rate hit a five-month low while retail sales slowed. Property stock led the upturn, followed by consumers, tech, and financials. Ping An Insurance jumped 5.8% while China Overseas Land and Semiconductor Manufacturing climbed 4.6% and 1.7%, each.

The DAX lost 0.5% to trade around 18650 on Friday, extending the previous session loss, and tracking a cautious mood in Europe. Traders continue to asses the monetary policy outlook, with comments from Fed officials suggesting interest rates will remain elevated for some time while in Europe, ECB member Schnabel said the central bank should be cautious about rate cuts beyond June. At the same time, mixed data coming out of China also weighed on investors' mood. On the corporate front, Siemens lost 1.6% to a 4-week low of €171.76 and Infineon declined 1.3%. The banking sector however, was in the green, with Deutsche Bank (0.7%) and Commerzbank (0.5%) booking gains. On the week, the DAX is down about 0.5%.

The Euro dipped below $1.086, falling from a 5-week high of $1.089 on May 15th, following cautious comments from European Central Bank board member Isabel Schnabel. Schnabel stated that the ECB should approach rate cuts beyond June with care. She mentioned that a rate cut in June could be appropriate based on incoming data and new Eurosystem staff projections, but highlighted the uncertainty surrounding future rate cuts beyond June. In the US, however, recent data showing a cooling economy in April has reinforced expectations for Federal Reserve rate cuts. Market forecasts show 68 basis points (bps) of ECB rate cuts and 46 bps for the Fed in 2024.

The German 10-year Bund yield rose past 2.47% on Friday following remarks from ECB board member Isabel Schnabel cautioning against further rate cuts post-June. Schnabel stated in an interview that a rate cut in June might be warranted depending on data and new Eurosystem staff projections. However, she emphasized the uncertainty beyond June, noting the challenge of achieving stable inflation. In contrast, US data released this week indicated a slowdown in inflation and economic growth in April, heightening expectations for Federal Reserve rate cuts. Market expectations for ECB rate cuts in 2024 decreased from 72 on Thursday to 68 basis points, while Fed rate cuts decreased from 50 to 46 basis points.