DAVY VIEW

Stock index futures point to declines of 0.5-1% for European markets this morning after the enormous 4% decline in the S&P 500 yesterday (May 18th). This followed disappointing results from Target, raising fears supply-chain issues and cost pressures are eating into profit margins. The US Treasury yield curve flattened as investors shunned risk assets, with the ten-year yield falling by over 10bps to 2.88%, closer to two-year yields at 2.66%.