Bonds surged after business activity across Europe encountered an unexpected setback, prompting traders to amp up wagers on monetary easing.
The yield on Germany’s benchmark 10-year bonds fell six basis points, dragging the rate on US Treasuries lower, after manufacturing and services PMI readings for Europe’s two biggest economies fell short of expectations. A separate index for the whole of the euro-zone also dropped more than forecast in June. Traders now see a second ECB cut by October and an 80% chance of a third this year, up from about 65% on Thursday.
Gilts also jumped, boosted by a UK PMI reading that showed private sector companies reported slower growth than expected. Money markets are now fully pricing two quarter-point cuts in 2024 and the BOE hinted it was nearing a first move after a monetary-policy meeting on Thursday.
The euro slipped as much as 0.3% to $1.0671, its lowest in a week. The currency has been under pressure since French President Emmanuel Macron’s surprise decision to call a snap election after his party’s poor performance at the European Parliament elections, sliding from around $1.09.
“The French PMIs are out and we’re maybe getting the first glimpses of the contagion from the political turmoil to the real economy,” said Valentin Marinov, head of G-10 foreign-exchange research and strategy at Credit Agricole. The positive impact from the Euro 2024 football tournament, which is being hosted by Germany, seems to be “already starting to fade as well,” he said.
The pound is also taking a hit from growing expectations that rate cuts are imminent, falling to a five-week low versus the dollar. It has lost around 0.3% so far this week, putting it on track for its third straight week of losses.
Canadian stocks are on a roll in 2025 as the country prepares to name a new Prime Minister.
Two C-level leaders reveal the new time-saving tools they've implemented and what advisors are doing with their newly freed-up hours.
The RIA led by Merrill Lynch veteran John Thiel is helping its advisors take part in the growing trend toward fee-based annuities.
Driven by robust transaction activity amid market turbulence and increased focus on billion-dollar plus targets, Echelon Partners expects another all-time high in 2025.
The looming threat of federal funding cuts to state and local governments has lawmakers weighing a levy that was phased out in 1981.
RIAs face rising regulatory pressure in 2025. Forward-looking firms are responding with embedded technology, not more paperwork.
As inheritances are set to reshape client portfolios and next-gen heirs demand digital-first experiences, firms are retooling their wealth tech stacks and succession models in real time.
