The United Kingdom
The United Kingdom’s FTSE 100 Index pulled back last week and broke the eight-week gaining streak. The United Kingdom’s market was closed on Monday for the spring bank holiday. The FTSE 100 Index opened lower on May 29 and was trading at three-week low price levels in the morning session.
The FTSE 100 Index lost strength last week amid US-North Korea tensions, uncertainty about the outcome of US-China trade talks, and concerns about possible US auto tariffs. The sentiment weakened on Tuesday as Italy’s anti-establishment Five Star and League parties gave up the efforts to form a government in Italy, which increased the political tensions. Also, there’s political uncertainty in Spain. Prime Minister Mariano Rajoy will face a no-confidence vote on Friday, which also weighed on European markets.
At 4:30 AM EST, the FTSE 100 Index was trading at 7,640.25 with a drop of 1.2%. The iShares MSCI United Kingdom (EWU) declined 0.9% to $36.21 on Friday.
After declining last week, Germany’s DAX 30 Index started this week on a weaker note by closing lower on Monday. Carrying forward the weakness, the DAX 30 Index opened lower on May 29 and was trading at one-month low price levels in the morning session. The DAX 30 Index moved lower on Monday amid weakness in the industrials, construction, and basic resources sectors. Political uncertainty in Italy and Spain increased the safe-haven demand, pushed German bonds higher on Tuesday, and sent Germany’s ten-year bond yield to 2018 lows.
At 4:45 AM EST, the DAX 30 Index was trading at 12,632.50—a drop of 1.8%. The iShares MSCI Germany (EWG) declined 0.22% on Monday.
France’s CAC 40 Index closed lower on Monday amid weakness in the financials and basic materials sectors. The index clocked its fourth consecutive daily loss. The CAC 40 Index opened May 29 on a weaker note and was trading at one-month low price levels in the morning hours amid political concerns in Italy. The call by Italy’s anti-establishment parties for new elections increased the uncertainty in the market and dented the market sentiment in European markets on Tuesday.
At 4:50 AM EST on May 29, the CAC 40 Index was trading at 5,372.5—a drop of 1.7%. The iShares MSCI France (EWQ) declined 1.0% on Monday.
Next, we’ll discuss how the US Dollar Index and Treasury yields performed in the early hours on May 29.