investingLive European markets wrap: A little risk respite as Nvidia earnings eyed

Headlines:

• A steadier mood as we get into European trading, still no US-Iran breakthrough yet
• EUR/USD continues its run lower amid increasing Fed hike bets, surging Treasury yields
• Gold extends the losses as Fed rate hike risks increase amid prolonged US-Iran stalemate
• ECB policymaker Wunsch warns we are at the beginning of an inflation problem
• Soon to be ECB policymaker Moulin says it’s too soon to say if ECB needs to act in June
• What did the U.S. walk away with from the China summit?
• China to buy 200 Boeing jets and ease rare earth curbs in US trade breakthrough
• UK inflation underwhelms in April but it comes with some major caveats
• Euro area headline inflation confirmed to pick up further in April amid Middle East war
• Germany producer prices nudge higher in April as higher energy prices continue to bite

Markets:

• Slight recovery in equities; DAX up 0.5%, CAC 40 up 0.7% on the day
• S&P 500 futures up 0.3%, Nasdaq futures up 0.5%
• Oil prices down with WTI crude down 1.9% to $102.15
• 10-year Treasury yields down 3 bps to 4.64%
• US dollar little changed, hold more mixed on the day
• Gold up 0.3% to $4,493
• Nvidia earnings, FOMC meeting minutes eyed next

It was another quiet session but defined by a steadier risk mood in markets for the most part. That comes after the more defensive risk tone in the earlier half of the week.

Oil prices and bond yields come off the boil a little and that is helping to provide some respite to broader markets. That being said, the US-Iran conflict continues to drag on and there is still no breakthrough on talks. So, that will continue to pose a headwind to overall risk sentiment amid a lack of positive headlines.

WTI crude is down 1.9% to $102.15 with bond yields in the US and Europe cooling off a little today. 10-year yields in the US are down 3 bps to 4.64% while 10-year yields in France are down 5 bps to 3.94% on the day.

That’s helping to see equities breathe a sigh of relief with European indices posting modest gains of around 0.5% to 0.6%. Meanwhile, S&P 500 futures are seen up 0.3% on the day.

In FX, the dollar is holding steadier with changes being very light across the major pairs. EUR/USD is flat near 1.1600 with large option expiries in play while USD/JPY is flat and hugging the 159.00 level amid potential intervention risks.

Besides that, we’re seeing precious metals recover a bit of ground at least with gold up 0.3% to $4,493 and silver up 2.6% to $75.75 so far today.

Nvidia earnings and the FOMC meeting minutes will be the two major things to look out for in US trading later. So, keep an eye out for that alongside the usual US-Iran shenanigans once again.

This article was written by Justin Low at investinglive.com.