Eurozone bond yields ended four consecutive declines, and short-term trend analysis of spot gold, silver, crude oil and foreign exchange on May 28

Global Market Review

1. European and American market conditions

The three major futures indexes all fell, Dow futures fell 0.25%, S&P 500 futures fell 0.21%, and Nasdaq futures fell 0.21%. The German DAX30 index fell 0.06%, the UK FTSE 100 index rose 0.05%, the French CAC40 index fell 0.02%, and the European Stoke 50 index fell 0.05%.

2. Market news interpretation

European bond yields ended four consecutive declines

⑴ On May 28, 2025, eurozone government bond yields rose slightly, ending the four consecutive days of downward trend. Investors are waiting for the progress of tariff issues, which may affect the economic outlook. ⑵ U.S. President Trump said that the EU is proactive in launching trade negotiations, but he reiterated that he would impose terms of trade if an agreement cannot be reached. ⑶ Germany's 10-year government bond yield (eurozone benchmark) rose 2 basis points to 2.55%, before falling to a low of 2.513% on May 8. ⑷ U.S. stock futures fell after a sharp rise the previous day, when expectations of eased tariff tensions boosted market sentiment. ⑸ Markets expect that if U.S. tariffs lead to a sharp slowdown in the euro zone economy, the ECB may relax monetary policy to prevent inflation from falling below targets. ⑹The market expects the probability of the ECB cutting interest rates by 25 basis points next week is 90%, and the deposit rate is expected to be 1.70% in December. ⑺European Central Bank chief economist Philip Lane said that although most factors point to the continued decline in euro zone inflation, EU trade talks with the United StatesThe risk of failure in judgment may push up inflation. ⑻ Germany's unemployment rose faster than expected in May, but ING's global macroeconomic director Kasten Brzeski said the labor market showed signs of bottoming out. ⑼ The yield on the 10-year U.S. Treasury bond rose 4 basis points in London trading, while the yield on the 10-year Italian Treasury bond rose 2 basis points to 3.55%. ⑽The gap between Italy and Germany's Treasury bond yields is 97 basis points, and Barclays lowered the target range of the gap from 90-140 basis points to 70-120 basis points.

The Russian Central Bank warned of oil prices and maintained high interest rates

⑴ On May 28, 2025, the Russian Central Bank stated in its report that tight monetary policy has led to a slowdown in credit growth and signs of anti-inflation, but pointed out that low oil prices are the main risk to the Russian economy. ⑵ The central bank said that tight monetary policy is a necessary temporary measure to achieve sustainable inflation decline, and the Russian central bank has maintained its benchmark interest rate at 21% since October 2024. ⑶ Russian Economic Minister Maxim Reshetnikov called on the central bank to consider factors for slowing inflation at its interest rate meeting on June 6. ⑷ Over the past two years, Russia's surge in military spending has driven economic growth, but it has also triggered inflation, and the central bank has curbed economic overheating through high interest rates. ⑸ Russia's GDP growth in the first quarter slowed to 1.4% from 4.5% in the previous quarter. ⑹ The central bank pointed out that the external environment is still difficult, and global market volatility, trade conflicts and potential sanctions risks against Moscow still exist. ⑺The Russian Central Bank said further declines in oil prices could become a "main risk" to the Russian economy, as it would reduce export and budget revenue. ⑻ However, due to the low debt level of Russia and the accumulation of large reserves during the period of high oil prices, the risk of financial stability is generally limited. ⑼ The central bank also said that the increase in debt restructuring by the end of March by large and medium-sized Russian xmserving.companies is a temporary trend, and most xmserving.companies can withstand interest rate risks, but banks still need to regularly stress test the loan portfolio.

OPEC+ may discuss the 2027 baseline this week and agree to increase production in July

⑴On May 28, 2025, OPEC+ will discuss the 2027 production baseline at a meeting on Wednesday, and at the meeting on Saturday, it may agree to further accelerate production growth in July. ⑵OPEC+, including the Organization of Petroleum Exporting Countries (OPEC) and its allies (such as Russia), has been discussing a new baseline issue, namely the starting level of production cuts or increase in each member state. ⑶ The baseline issue is controversial, as some member states (such as the UAE and Iraq) have increased oil production capacity and demanded higher quotas, while others (such as African countries) have seen a decline. ⑷ Wednesday’s meeting may require OPEC headquarters to prepare a mechanism to help determine the baseline assessment for 2027, but no changes to production policies are expected. ⑸ On Saturday, eight OPEC+ members who are gradually increasing production may agree to increase production by 411,000 barrels per day in July, the same as the increase in May and June. ⑹OPEC+2Since 2022, the production cuts of three floors have been agreed, two of which will last until the end of 2026, and the other floor is being gradually lifted by eight members. ⑺In April, eight OPEC+ members began to lift the latest production cuts and achieved an increase of 411,000 barrels per day in May and June. ⑻Earlier this month, sources said that in addition to increasing production by 411,000 barrels per day in July, the Eight countries may also lift the remainder of the latest production cut by the end of October.

The Swiss government reached an agreement on the issue of US tariffs and prepared for negotiations

⑴ On May 28, 2025, the Swiss Federal Council held consultations on the impact of US tariffs and reached an agreement. ⑵ The Swiss government statement said that although exporters and their suppliers are affected by US tariff policies, overall economic development is not expected to decline. ⑶ The Swiss Federal Council said that further development is still uncertain, and the global economic slowdown is having a suppressive effect on the Swiss economy. ⑷ Switzerland hopes to strengthen economic relations with the United States and resolve customs issues. ⑸ The Swiss Federal Council has adopted a draft negotiation mandate on trade and economic issues, preparing to negotiate with the United States.

Europe credit default swap costs remain stable

⑴On May 28, 2025, the euro credit default swap (CDS) costs remain stable, and investors remain cautious before Nvidia announced its financial report on Wednesday. ⑵ Rostro chief market analyst Joshua Mahony pointed out that Nvidia's financial report is a major highlight at the corporate level this week. The xmserving.company is the second largest xmserving.company in the world and will release its financial report after the close of the US market. ⑶ According to S&P GlobalMarket Intelligence data, the iTraxxEurope Crossover index tracking Euro junk bond CDS remained unchanged at 300 basis points.

Lagarde stressed the importance of the euro's international status

⑴ European Central Bank President Lagarde reiterated that the European Central Bank is xmserving.committed to enhancing the euro's international reserve status and using it as an alternative to the US dollar. ⑵ Although the euro accounts for less than the US dollar in reserve currencies, it far exceeds other xmserving.competitors, except for gold. ⑶Lagarde's remarks are at a time when the market is skeptical about the dollar's safe-haven position and the role of the US economy, and the US's trade policy has also triggered market turmoil. ⑷ She pointed out that when doubts arise about the stability of the US dollar and the US financial market, its impact on currency use is undeniable. ⑸ Lagarde calls on the EU to enhance the attractiveness of the euro through policy reforms and joint debt issuance to cope with the uncertainty of the United States. ⑹ She also stressed that the military restructuring in Europe will attract investors seeking geopolitical guarantees, as these investors tend to invest in the assets of reliable military allies. ⑺Lagarde's speech was regarded by the market as a "combat slogan", showing the European Central Bank's confidence in the structural advantages of the euro. ⑻The nominal exchange rate of the euro has risen to an all-time high, which is not conducive to exports, but helps Europe to make ambitious new projects (such as defense, green energy)and Tech) provide additional debt financing. ⑼The financing demand in Europe will be huge in the next few years, with an additional €1.5 trillion per year expected to be raised to 2028, and then to 2030, with an annual demand of €1.4 trillion per year.

Bank of Japan's long-term government bond holdings fell for the first time in 16 years

⑴ As of the end of March 2024, the Bank of Japan (BOJ)'s long-term government bond holdings fell for the first time, down 11.4 trillion yen from the same period last year to 574.2 trillion yen, the first decline since 2008. ⑵BOJ paid 1.25 trillion yen (about US$8.3 billion) in excess reserve interest due to rising interest rates to recover market liquidity and drive short-term borrowing costs to close to 0.5%. ⑶ Due to the decline in bond prices due to monetary tightening, the valuation loss of BOJ Treasury bond holdings reached 28.6 trillion yen, the largest loss since the current accounting method was adopted in 2004. ⑷BOJ withdrew from the massive stimulus plan in fiscal year 2024 and raised short-term interest rates to 0.25% and 0.5% in July 2024 and January 2025 respectively, while starting to gradually reduce bond purchases. ⑸ BOJ's total treasury bond holdings (including short-term debt) fell by 13.7 trillion yen to 575.9 trillion yen, a decline for the first time in three years. ⑹BOJ plans to conduct a mid-term review of the bond purchase reduction plan as of March 2026 at next month's policy meeting and formulate plans for April 2026 and beyond. ⑺BOJ Governor Kazuo Ueda said that despite the huge scale of the central bank's balance sheet, it is difficult to predict how much it should shrink, and its scale has exceeded Japan's GDP.

The Japanese government urges its own universities to consider accepting international students from American universities

Shiko Abe, the Minister of Science of the Japanese Ministry of Literature and Culture, said on the 27th that Japanese universities have been asked to consider accepting international students who may not be able to continue to attend American universities due to US government policies. At a press conference, Toshiko Abe said she had instructed Japanese universities to "try to take supportive measures as much as possible, such as accepting international students who have been admitted to American universities so that they can continue their studies." She said that the United States is the most popular study abroad destination for Japanese students, and many Japanese students have expressed concerns about their future study in the United States. The University of Tokyo is one of the most well-known institutions in Japan. Its management recently revealed in an interview with Japanese media that the calibration is considering temporarily accepting international students in the United States affected by US policies. A spokesman for Kyoto University told AFP that the correction is considering accepting young researchers from American universities.

The EU says it plans to cut carbon emissions by 54% by 2030

On May 28 local time, the European xmserving.commission announced that the EU is expected to cut carbon emissions by 54% by 2030, slightly lower than its 55% emission reduction target. According to reports, the EU as a whole is approaching the goal of achieving the 55% carbon emission reduction promised by the European Climate Act and reaching at least 42.5% of renewable energy. On the same day, the Executive Vice President of the European xmserving.commission Ribera said,Despite opposition from member states, the European xmserving.commission is still preparing to set a target of cutting emissions by 90% by 2040.

3. Trends of major currency pairs in the New York Stock Exchange before the New York Stock Exchange

Euro/USD: As of 20:20 Beijing time, the euro/USD fell and is now at 1.1313, a drop of 0.14%. Before the New York Stock Exchange, the (EUR versus USD) price rose in recent intraday trading, and after reaching oversold levels, negative signals began to appear on (RSI), which provided positive momentum to help achieve these gains, with bullish trends dominant and trading accompanied by a slight bearish tendency.

GBP/USD: As of 20:20 Beijing time, GBP/USD fell and is now at 1.3472, a drop of 0.26%. Before the New York market, (GBPUSD) price fell in the last intraday trading, the pair attempted to gain positive momentum that could help it recover and rise again, by looking for higher lows that could help it rise again, dominating the main bullish trend on a short-term basis and trading along a slash, where positive pressure from trading above its EMA50 continues to exist, and (RSI) reaches oversold levels, which are exaggerated xmserving.compared to the price action, suggesting a positive divergence.

Spot gold: As of 20:20 Beijing time, spot gold rose, now at 3310.56, an increase of 0.31%. Before the New York Stock Exchange, the (gold) price rose in recent intraday trading, taking advantage of its dynamic support represented by the exchange above the EMA50, as well as the emergence of positive signals on (RSI), and the dominance of the bull market on a short-term basis.

Spot silver: As of 20:20 Beijing time, spot silver fell, now at 33.195, a drop of 0.13%. Before the New York Stock Exchange, the (silver) price rose in recent intraday trading, supported by positive signals on (RSI), despite reaching overbought levels, and continues to be actively supported as its trading above the EMA50 and is dominant in the short term.

Crude oil market: As of 20:20 Beijing time, U.S. oil rose, now at 61.500, an increase of 1.02%. Before the New York Stock Exchange, (crude oil) prices rose in recent intraday trading, supported by positive signals on (RSI), as their trading was below ema50, its trading follows the short-term major bear market trend line, so there is persistent negative pressure.

4. Institutional View

Deutsche Bank: The euro is still difficult to replace the dollar

xmserving.commerzbank analyst Thu Lan Nguyen pointed out in a report that the euro seems unlikely to replace the dollar as the global dominant currency. She said the dollar's dominance is based on its role in cross-border transactions. When Macron was elected French president in 2017, the euro was close to challenging the dollar in this regard - Macron advocated strengthening eurozone integration at the time, which reduced investors' risk concerns about the euro to a certain extent, but this optimism quickly subsided after the election. Nguyen pointed out that a currency facing the risk of splitting the currency zone is obviously difficult to establish its status as a ‘carrier currency’. This means that the euro is still difficult to replace the dollar.

Dutch International: The recovery of the US dollar may still be limited

Dutch International analyst Francisco Pessole pointed out in a report that the recovery of the US dollar may still be limited due to market concerns about slowing US economic growth and budget deficits. He said the rebound in data from the World Federation of Large Enterprises in May U.S. Consumer Confidence Survey has pushed the dollar to strengthen. However, if market confidence in U.S. economic growth is to be rebuilt, more positive data support is still needed, and deficit concerns “will not dissipate in the short term.” The US dollar continues to face "downside risks" in the short term. "The upward trend of consumer confidence data unexpectedly reduced these risks, but we are still cautious about chasing the US dollar index to break through the 100 mark."

The above content is all about "[XM Group]: Eurozone bond yields ended four consecutive declines, and the short-term trend analysis of spot gold, silver, crude oil and foreign exchange on May 28" was carefully xmserving.compiled and edited by the editor of XM Forex. I hope it will be helpful to your trading! Thanks for the support!

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