Market Comment | Risk-off mood abated on tariff delay.

Summary

Early cautiousness driven by the gloomy German economic outlook dissipated after the Trump administration stated that it will delay the 10% tariff on some Chinese imports until the end of the year. Equities picked up while sovereign bond yields were mixed.

Key points

• Key points:
• The U.S. Treasury yields halted its downward trend whereas the 10Y German bond yield hit a new record low.
• Information technology leads the gains in the S&P while its implied volatility declined to levels below 20.
• Germany’s ZEW indicator of Economic Sentiment fell more than expected, suggesting a significant worsening of Germany’s economic outlook.

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