Trade Talks Stir Hopes, Markets Hold Steady

• US-China trade talks made notable progress over the weekend. Treasury Secretary Bessent said “substantial progress” was achieved, while China’s Vice Premier He Lifeng called it “an important first step.” No formal measures were announced.
• US Treasury yields ended the week steady, with front-end rates up 1–2bps and the 10-year unchanged at 4.38%, as trade optimism was offset by caution ahead of this week’s data.
• Fed rate cut expectations have eased further, with ~66bps now priced for 2025 — the lowest since reciprocal tariffs were announced and down from ~100bps at the start of May.
• Focus this week will be on US CPI and any trade-related headlines, while locally the Q1 Wage Price Index and April Labour Force Survey will be key data points.