This week's bout of bond market anxiety eased a touch on Thursday, but investors wary of heavy sovereign debt sales and election uncertainty are bracing for a jumpy June.At the root of the week's angst has been more evidence of still-brisk U.S. economic growth and sticky worldwide inflation that questions the degree of interest rate cuts ahead that have been long-assumed by markets. Jobless updates and a GDP revision top today's diary.
And despite a European Central Bank rate cut being a nailed-on certainty for next week, the jump back in long-term yields spread to Europe too. Euro zone benchmark German 10-year yields hit another six-month high on Thursday with above-forecast German annual inflation numbers for May cause for concern ahead of Friday's euro-wide readout and dragging full-year ECB easing bets lower.
S&P500 futures remained in the red first thing on Thursday - with implied volatility for the next month jumping back close to 15 for the first time since May 2. In company news, Salesforce forecast second-quarter profit and revenue below Wall Street estimates on Wednesday due to weak client spending on its cloud and enterprise business products, sending its shares down more than 16% after the bell.
And Saudi Arabia may announce a landmark secondary share offering in oil giant Aramco later on Thursday, pending final approval, people with knowledge of the matter said.* U.S. second estimate of Q1 GDP and PCE, preliminary Q1 corporate profits, weekly jobless claims, April international trade balance, April wholesale/retail inventories, April pending home sales
Canada's Finance Minister Chrystia Freeland said on Tuesday that the federal budget presented to the Parliament last month had created conditions for interest rates to come down. The government has "been very mindful of acting in such a way that would create conditions that support the decline in inflation, or creating conditions that would make it possible for the bank to bring interest rates down," she told reporters at a conference in Ottawa.