[New York Pre-Market Update] U.S.-EU Trade Deal Optimism Sparks Pre-Market Rebounds; Japanese Bonds Stabilize

# Global Equities Surge Amid US-EU Trade Talks and Japanese Bond Market Stability On May 27, global stock markets experienced a significant rebound, driven by the renewal of trade negotiations between the United States and the European Union and Japan's initiatives to stabilize its bond market. Wall Street opened on a positive note after the U.S. Memorial Day holiday. The S&P 500 futures rose by 1.5%, while Nasdaq 100 futures advanced 1.6%, and Dow Jones Industrial Average futures climbed 1.4%, signaling a widespread rally. Simultaneously, Europe’s Stoxx 600 index increased by 0.4%, and the MSCI World Index saw minimal fluctuations. # Japan’s Bond Market Stabilization Fuels Global Bond Rally Japan's government's strategic intervention to calm its domestic bond market triggered a global rally in long-term bonds. Yields on Japan’s 30-year government bonds plummeted by 19 basis points in a single day. European bond markets rallied as well, buoyed by France's lower-than-expected inflation, which supported European sovereign bonds. In the U.S., Treasury yields, previously under pressure due to former President Donald Trump’s tax cuts and a Moody's credit downgrade, saw a resurgence in safe-haven demand. This demand led the U.S. 10-year Treasury yield to drop by 4 basis points, closing at 4.47%. # US Dollar Strengthens; Euro and Pound Weaken The U.S. dollar regained strength, with the Bloomberg Dollar Spot Index rising 0.3%. The euro fell 0.3% to $1.1353, and the British pound slipped 0.1% to $1.3550. The Japanese yen saw a significant depreciation of 0.9% against the dollar, trading at 144.07 yen per dollar. # Analysts Advocate for Government Market Engagement Kathleen Brooks, Research Director at XTB, stated, “Countries with deteriorating fiscal conditions, like the U.S. or the U.K., could benefit from directly assessing market demand for their bonds. Market-informed budget negotiations could yield more practical outcomes.” Evelyn Gomez Lierhti, strategist at Mizuho Securities, commented, “Government actions to address domestic bond market volatility send positive signals to investors.” # Trade Policy Risks Challenge Dollar Stability Kenneth Brou, foreign exchange strategist at Société Générale, noted, “President Trump’s unpredictable tariff policies undermine investor confidence in policy consistency.” He added, “The gradual outflow of funds from U.S. assets may take weeks or months,” maintaining a bearish outlook on the dollar. The dollar has already declined over 7% against major currencies this year. # Corporate News Boosts Market Optimism Corporate news further fueled market enthusiasm. Bloomberg reported that Salesforce is in talks to acquire software company Informatica, boosting Informatica’s stock by 5.3%. Additionally, Trump Media & Technology Group’s plans to invest $2 billion in equity capital and $1 billion in convertible bonds for cryptocurrency purchases led to a 6.6% rise in its share price. # Mixed Trends in Digital Assets In the digital asset market, Bitcoin(BTC) remained stable at $109,623, while Ethereum(ETH) surged 3.4%, reaching $2,653. Analysts attributed Ethereum’s rally to alignment with tech stocks and optimism about Trump Media’s cryptocurrency investment plans. # Commodity Markets: Oil and Gold Decline In commodities, U.S. West Texas Intermediate (WTI) crude dropped 0.6%, settling at $61.18 per barrel. Spot gold prices declined 1.7%, trading at $3,288.42 per ounce. Analysts connected the drop in commodities to falling bond yields and a strengthening dollar. --- This global market rebound highlights the significant impact of geopolitical events, fiscal policies, and corporate dynamics on investor sentiment, urging caution amid ongoing uncertainties in trade and monetary policy.