Global markets showed resilience amid growing optimism over U.S.-EU trade relations, with equities broadly stable and U.S. dollar gains holding firm. Investor sentiment was lifted by signs of easing trade tensions, after U.S. President Donald Trump welcomed the EU’s willingness to engage in dialogue, stepping back from proposed tariffs on European imports.

Equity Market Snapshot:

• European indices edged higher: Germany’s DAX hit a record high, supported by strong defence sector performance.

• The U.S. market focus shifted to Nvidia’s earnings, with expectations of a 66% revenue surge fueling hopes of a renewed tech rally.

• Asian markets were mixed, with China and Hong Kong slightly down, while Japan's Nikkei remained flat after a three-day rally.

Bond Market & Fiscal Concerns:

• Long-dated government bond yields climbed globally, driven by concerns over fiscal sustainability in major economies like the U.S., Japan, and the UK.

• Japan’s weak 40-year bond auction and the recent U.S. fiscal policy developments, including Trump’s expansive tax cut proposals, highlight ongoing worries about debt levels.

• The U.S. 30-year Treasury yield rose to 4.98%, signaling mounting pressure from bond investors.

Currency & Commodity Moves:

• The U.S. dollar index remained firm after recent gains, while the euro held steady and the New Zealand dollar rose slightly after a central bank rate cut.

• Oil prices rose on supply concerns after the U.S. restricted Chevron’s crude exports from Venezuela.

• Gold prices rebounded, recovering from a previous sharp drop.

Key Takeaway:

While investor confidence is buoyed by improving trade rhetoric and strong tech earnings expectations, rising long-term yields point to deeper structural concerns about government debt and fiscal discipline globally. Market participants are closely watching central bank moves and fiscal signals to gauge the sustainability of current trends.