Risk assets traded higher at the start of the week, supported by optimism around US–China trade negotiations and improving consumer sentiment. Momentum peaked mid-week after the US Court of International Trade blocked most of the new tariffs imposed by the President Donald Trump’s administration, boosting market confidence. However, gains were reversed by week’s end, as the administration announced plans to appeal the ruling, and comments from US Treasury Secretary Scott Bessent citing stalled trade talks further weighed sentiment. Meanwhile, April’s core Personal Consumption Expenditures inflation data aligned with expectations at 0.1% month-over-month and 2.5% year-over-year, indicating stable inflation pressures. Investment-grade credit spreads widened by 2–8 basis points, underperforming the broader rates rally into the weekend.

• The US Personal Income Month-on-Month came in higher than expected at 0.8% vs 0.3% in a Bloomberg Survey
• The US GDP Growth Rate Quarter-on-Quarter came in negative but slightly higher than expected at –0.2% vs –0.3% in a Bloomberg Survey
• The US ISM Manufacturing PMI came in lower than expected at 48.5 vs 49.5 in a Bloomberg Survey