Morning Wrap: ASX 200 to rise, S&P 500 rallies on EU tariff delay, Yields ease on Japan's debt plan

ASX 200 futures are up 51pts (+0.60%) as of 8:30 am AEST.

In a nutshell:

• Major US benchmarks surged after the Memorial Day holiday, driven by Trump's EU tariff delay and lower bond yields

• Bond yields eased after Japanese authorities considered lowering debt sales following the recent market rout

• Fisher & Paykel, Webjet Travel both top FY25 earnings expectations

Let's dive in.

S&P 500 SESSION CHART

S&P 500 gaps up, trend higher and closes at best levels (Source: TradingView)

OVERNIGHT MARKETS

• Major US benchmarks finished broadly higher and at best levels

• S&P 500 has recouped most of last week's 2.6% decline

• Today’s big story – US markets resumed trading after being closed in the previous session, equities boosted by the delayed 50% EU tariff deadline and speculation that Japan may dial back bond issuance

• Japan news drove bond yields broadly lower, with the US 10-year flailing 6 bps to 4.44%

• Japanese bond yields eased after signs that the finance ministry may reduce issuance of super-long bonds (BBG)

• Treasury cuts size of its four- and eight-week bill auctions to preserve its borrowing authority under the debt ceiling (BBG)

• Mexican stocks hit record high on smaller trade impact, weaker US dollar and broader Latin Americas rally (BBG)

STOCKS

• Nvidia's earnings report could boost US market as investors have $7tn parked in cash funds (BBG)

• Tesla's European sales dropped 49% in April despite broader electric vehicle growth (RT)

• Yum Brands' KFC to invest £1.49bn in UK and Ireland, creating over 7,000 jobs and expanding outlets (RT)

• Trump Media aiming to raise $3bn from equity and convertible debt to buy cryptocurrencies (FT)

CENTRAL BANKS

• Minneapolis Fed's Kashkari says major shifts in US trade and immigration policy creating uncertainty for Fed to move cut before September (BBG)

• Fed's Barkin elevated uncertainty has led businesses to freeze hiring and hold off on future investment decisions (BBG)

• RBNZ expected to cut by another 25 bps this week and maintain easing bias (BBG)

• Bank of Korea expected to ease by 25 bps this week after GDP contraction, benign inflation (RT)

TARIFFS

• Mexico sees USMCA review starting in late September or early October (RT)

• EU agrees to accelerate trade talks with US following Trump's extension of tariff deadline (BBG)

• Top trade officials from China and EU to meet in early June to step up engagement efforts amid Trump's tariff threats (BBG)

ECONOMY

• China industrial profit up 3% in April, driven by a government trade-in program and demand for manufactured proucts (BBG)

• China plans new strategy to boost high-tech production amid US manufacturing pushback (BBG)

• US May consumer confidence surged to 98 vs. 88 consensus, marks the biggest jump in four years thanks to easing trade tensions (BBG)

• US April durable goods orders fell 6.3% month-on-month vs. ests of an 8.1% decline, mainly attributed to a sharp decrease in commercial aircraft orders (BBG)

• European consumer confidence improved in May, recovering from April's decline, but remains below long-term averages (WSJ)

• UK food inflation up 2.8% in May, the highest in a year as supermarkets battle higher operating costs due to the UK government's revenue-raising budget (BBG)

• Swiss exports to the US tumbled 36% in April due to Trump's tariff policy (BBG)

• France's inflation rate falls to four-year low of 0.6% in May, driven by lower energy costs (BBG)

ASX TODAY

• 4DS responds to ASX price query, not aware of any information driving the share price up 71% in last three sessions (4DS)

• Fisher & Paykel reports FY25 NPAT of NZ$377.2m vs. guidance NZ$320-370m and NZ$361m consensus, final dividend of 24 cps and guides to FY26 NPAT of NZ$390-440m vs. NZ$428m consensus (FPH)

• Goodman Group reports Q3 operational update, LFL net property income up 4.5% year-on-year, reaffirms FY25 guidance of 9% EPS growth and 30 cent dividend (GMG)

• Lendlease’s retirement living business Keyton could receive bids from Barings, GIC and AustralianSuper (The Aus)

• MinRes says its on schedule to achieve Onslow Iron nameplate capacity of 35Mtpa by 1Q26, revises volume guidance to 7.8-8.0Mt vs. prior 8.5-8.7Mt (MIN)

• Web Travel Group reports FY25 revenue of $328.4m vs. $325m ests, NPAT of $79.2m vs. $78.8m ests, FY26-to-date global bookings up 29% year-on-year, targeting record EBITDA in FY26 (WEB)

WHAT TO WATCH TODAY

• Further upward momentum: ASX 200 to extend gains and trade within ~1% of all-time highs. All US sectors were higher overnight, led by Discretionary and Tech.

• Uranium: Global X Uranium ETF rallied 3.5% overnight and up 16% in the last three sessions. Its now within 1% away from marking a fresh 11-year high. Though most local names like Boss Energy, Paladin and Deep Yellow are still 25-50% off early 2024 highs.

• FPH, Web Travel Group: Both stocks reported FY25 results that topped consensus expectations.

• REA Group: REA shares tumbled 3.5% on Tuesday after the company confirmed it received a notice from the ACCC, requiring REA to provide information regarding certain subscription offerings. This was announced around 2 pm, so it'll be interesting to see if it drives further downside today.

BROKER MOVES

• South32 downgraded to Neutral from Buy; target cut to $3.40 from $3.70 (CITI)

• Telstra upgraded to Outperform from Neutral; target up to $5.28 from $3.39 (MQG)

Stocks trading ex-dividend: 

• Wed 28 May: None

• Thu 29 May: 360 Capital Mortgage REIT (TCF) – $0.06, Otto Energy (OEL) – $0.001, Technology One (TNE) – $0.066

• Fri 30 May: Pengana International Equities (PIA) – $0.014

Other ASX corporate actions today: 

• Dividends paid: None

• Earnings: Champion Iron (CIA), Web Travel Group (WEB)

• IPOs: None

• AGMs: Eagers Automotive (APE)

Economic calendar (AEST):

• 11:30 am: Australia Inflation (Apr)

• 4:00 am: FOMC Minutes