Markets Wrap: Stocks Flat In Quiet Session With US, UK And China Closed For Holiday

Jon Government

U. S. markets are closed for the Memorial Day holiday, and with UK and Chinese markets also closed for various holidays, it has been a quiet start to the week, with S&P futures essentially unchanged, trading at 2,415, up 0.06%, a new all time high.
European stocks opened marginally lower in quiet trading but have since erased the dip to trade little changed, while shares in British Airways owner IAG dipped in early Spanish trading as the airline pushed to recover from a massive technology failure that disrupted hundreds of flights. The Stoxx Europe 600 Index was flat at 391.24, down 0.03%. Italian assets underperformed after Renzi comments on early elections, with banks selling off and bund/BTP spread widening. BTP futures have extended their slide in thin liquidity, with the 10y yield now higher by 7bps fueled by Renzi comments and supply concession. The Italian FTSE MIB fell 2% with traders citing rising risks that the euro zone’s third largest economy could head to early elections in the autumn. “The latest news out of Italy seems to suggest that a new electoral law is indeed in the making,” LC Macro Advisers’ founder Lorenzo Codogno says. “The four major parties appear to converge towards the so-called German system, i.e. a purely proportional system with a 5 percent entry threshold.”
In Asia, South Korea’s Kospi fell for the first time in seven sessions, slipping from an all time high. North Korea tested another missile although the launch had little impact on risk assets. Australian bonds pared opening gains and slip into negative after sluggish 20-year auction; 10-year yield rises two basis points; ASX 200 down. Nikkei little changed; Chinese developers surge in Hong Kong. Chinese developers lifted the Hang Seng Index, with China Evergrande Group surging to a record in Hong Kong. Bunds have meandered through the session with a speech from the ECB president Mario Draghi at 2:00pm BST in focus, but volumes are also especially light.

This post was published at Zero Hedge on May 29, 2017.