Daily summary: US100 loses 1,4% amid weaker US consumption data with no 'dovish' surprise in PCE

• The last session on European trading floors was dictated by buyers, despite noticeably weaker sentiment on Wall Street. The DAX, FTSE and CAC40 posted modest gains today. Inflation data from the Eurozone surprised on the upside, while retail sales in Germany came in below forecasts

Euro area, CPI inflation for May

• Headline: 2.6% YoY vs 2.5% YoY expected (2.4% YoY previously)
• Core: 2.9% YoY vs 2.7% YoY expected (2.7% YoY previously)

• The PCE reading came in virtually in line with expectations for inflation data, but private consumption data performed weaker. As a result, risky assets like stocks and cryptocurrencies, as well as the U.S. dollar and yields are losing today, as we didn't see a 'downward' surprise in the PCE report, and the consumption data, while performing weaker, is still not weak enough to force the Fed to change its stance

U.S. index futures erased initial gains after the PCE data and are now losing. The US100 is trading down 1.4% and the US500 down 0.44%, while the US30 is trading up 0.3%

US PCE data (for April) 

• Headline (annual). 2.7% Expected: 2.7% YoY. Previous: 2.7% YoY
• Headline (monthly). 0.25% Expected: 0.25% MoM. Previous: 0.3% MoM
• Core (annual). 2.8% Expected: 2.76% YoY. Previous: 2.8% YoY
• Core (monthly). 0.249% Expected: 0.25% MoM. Previous: 0.3% MoM
• US personal income. 0.3% Expected: 0.3% MoM. Previous: 0.5% MoM
• US consumer spending. 0.2% Expected: 0.3% MoM. Previous: 0.8% MoM
• US PCE real personal consumption. -0.1% Expected: 0.1% MoM. Previous: 0.5% previously MoM

• EURUSD is trading up a modest 0.1% today, while dollar index contracts are losing slightly, amid a 4 basis point drop in the yield on the 10-year U.S. Treasury bond, to 4.508%
• Shares of apparel manufacturer GAP are gaining more than 20% today, as the company raised forecasts and expects further margin expansion in 2024. Earnings per share and revenue in Q1 came in well above forecasts. Industry commentators assessed that consumers are also turning to the Old Navy brand thanks to the trend of looking for savings and cheaper, less recognizable but quality products
• AI-related companies are losing today following the release of results. Dell disappointed investors with poor profitability and worse prospects for revenue growth in its AI server segment, resulting in a more than 20% decline. The share price recovered slightly during the session and is currently trading about 18% below yesterday's closing price. 
• Marvell Technologies also saw declines, with its revenue in every segment except Data Center seeing such severe declines that overall, despite nearly doubling its Data Center sales, the company saw its overall revenue fall by 13%. 
• Chinese indices posted declines today, supported by weaker PMI data releases and a sell-off among ETFs, which in May saw the biggest sell-off in Chinese stocks since February 2023. According to UBS, the government support dedicated to the market so far has proved insufficient, while data continues to suggest problems for the economy. Hang Seng futures were down 1.4% today
• Coffee futures lose more than 5% amid heavy rainfall in Vietnam, one of the key exporters that has recently struggled with a drought complicating the coffee market's supply picture
• Precious metals are succumbing to supply pressures today. Of these, the strongest discounts are seen in palladium, which is down nearly 5% today. Silver also joins the downward series and loses more than 2% today. Gold is the most stable, with only 0.7% declines. 
• Cryptocurrencies are recording declines, with Bitcoin, the largest of them, losing almost 1.6%. Ethereum is doing slightly better. A trend of risk aversion is still visible among digital assets