30th May, 2025

Against a backdrop of ongoing uncertainty surrounding tariffs, EU risk markets look set to get the final trading day of May off to a mixed start. However, thanks to solid progress seen in recent weeks, whatever happens today it looks set to be a great month for risk bulls, whether that be in the equity space or the synthetic credit complex.

In the case of the former, a virtually flat close on Thursday left Stoxx50 ahead by 4.09% for the month while gains have been considerably more impressive stateside with S&P500 and Nasdaq currently sporting monthly respective gains worth 6.16% and 9.91%.

In the synthetic credit space, ahead of today’s session, iTraxx Main sits 10.5 points tighter on the month with the Crossover index a mighty 50 points tighter.

Given those gains, the residual uncertainty surrounding trade, and with today marking month end, one wonders if there could be some risk of profit taking, the question being what could provide the trigger?

There’s certainly no shortage of data where the day will start with Germany which is publishing its Retail Sales data. Spain, Italy and Germany will also publish their May preliminary inflation numbers. Individual German states are set to report respective CPIs from 08:00 BST.

Then it's across the pond where markets are expecting a soft print for April’s Core PCE inflation due to weak consumption. Consensus estimates are for the MoM reading to come in at 0.1% and YoY to post 2.5%. April’s personal spending will reflect the slowdown in economic activity and contribute to the disinflation as it is expected to dip down to 0.2% from March's 0.7%.

Other data from the US comprises April Advance goods Trade Balance and Michigan Consumer Sentiment final numbers for May.

Rates markets get a break from supply while there are a handful of central bank speakers on tap, although note that ECB officials remain in blackout on approach to next week’s policy meeting, ahead of which markets remain fully priced for a 25bps rate cut.

For more on latest developments see the European Breakfast Briefing.

Friday’s expected supply

The European primary bond market drew a predictable blank on Thursday as much of the continent observed the Ascension Day holiday, something which many participants are likely to bridge into the weekend. Should nothing at all pop up today then the weekly single currency total would finish up at EUR33.75bn, more than the average EUR21bn estimate put forward in our weekly estimate poll but just short of the highest combined guess of EUR35bn. Friday also marks month-end with the EUR478.278bn total (all sectors) currently the 12th largest monthly euro figure on record and the second highest for a May ever, only beaten by May 2020 at EUR548.922bn.

It was a rather subdued issuance day in the high-grade primary market on Thursday. Six borrowers managed to raise USD4.9bn in new debt, nearly half of which came from a USD2bn PNC5.5 subordinated note deal from HSBC Holdings, the bank’s second trip to the market this week. For more colour, see THE ENDGAME.

What to watch Friday

** Key Data: GE Apr Retail Sales (07:00), SP May P CPI (08:00), IT Q1 F GDP (09:00), IT May P CPI (10:00), GE May P CPI (13:00), US Apr Personal Income/Spending (13:30), US Apr Core PCE Price Index (13:30), US Apr P Wholesale Inventories (13:30), US May MNI Chicago PMI (14:45) and US May F Uni of Michigan Sentiment (15:00)

** Key Events: Fed’s Logan (01:25) & Daly (21:45) speak, along with ECB’s Muller (08:30) & Panetta (09:30)

** Auctions: No major term auctions scheduled for Friday 30^th May

All times BST