InvestMacro

By JustMarkets

The US stock indices traded yesterday without a single trend. The Dow Jones Index (US30) decreased by 0.11%, and S&P 500 (US500) gained 0.88%. Technology Index NASDAQ (US100) added 0.11% yesterday. The rise in Nvidia stock and slight progress in the debt ceiling negotiations boosted bullish investor sentiment.

Shares of NVIDIA (NVDA) surged by 27% to $956.52 billion, bringing its market capitalization close to $1 trillion, after reporting better-than-expected first-quarter results and forecasts that markedly beat Wall Street estimates. The chipmaker said it expects second-quarter revenue of about $11 billion, well above analysts’ expectations of $7 billion, as the growing need for artificial intelligence supports the outlook for chip demand. Nvidia’s record surge led Monolith Power Systems (MPWR), which provides power management solutions for some Nvidia chips, up by 16%, while Taiwan Semiconductor Manufacturing (TSM) and Advanced Micro Devices (AMD) also got a boost.

Rating agency Fitch warned that the US credit rating could be in jeopardy as the impasse over the government debt ceiling brings the world’s largest economy closer to possible default.

An upward revision to US economic growth figures (from +1.1% to +1.3%) in the first quarter and lower-than-expected initial jobless claims, indicating a stronger economy, increased the likelihood of a Fed rate hike at the June meeting to 50% from 20% a day earlier.

Equity markets in Europe were mostly down yesterday. Germany’s DAX (DE30) fell by 0.31%, France’s CAC 40 (FR40) lost 0.33% on Thursday, Spain’s IBEX 35 (ES35) decreased by 0.43%, and the British FTSE 100 (UK100) closed negative 0.74% yesterday.

Crude oil prices fell about 3% on Thursday after Russian Deputy Prime Minister Alexander Novak, who is also the country’s oil minister, said he expected no new moves from OPEC+ at the June 4 meeting. A day ago, Saudi Arabia’s energy minister hinted at the possibility of another round of production cuts, but this information has not been confirmed. OPEC+ is highly likely to keep production unchanged.

Gold hit a 2-month low as worries about raising the US government debt ceiling and expectations of high-interest rates forced investors to switch to the dollar. Gold is inversely correlated to the dollar index and government bond yields. But the medium-term outlook for the yellow metal remains bullish as the US Federal Reserve will end its tightening cycle in the summer, which will lead to falling government bond yields.

Asian markets traded yesterday without a single dynamic. Japan’s Nikkei 225 (JP225) gained 0.39%, China’s FTSE China A50 (CHA50) fell by 0.51%, Hong Kong’s Hang Seng (HK50) ended the day down 1.93%, India’s NIFTY 50 (IND50) added 0.20%, and Australia’s S&P/ASX 200 (AU200) ended Thursday with a negative 1.05%.

The Bank of Japan (BOJ) may abandon the bond yield ceiling this year if risks such as global banking sector problems abate. Until it becomes clear that wages will continue to rise steadily next year, the Bank of Japan should refrain from raising the short-term interest rate from the current level of 0.1%. However, as long as short-term borrowing costs remain low, the Central Bank can lift the 0.5% cap on 10-year bond yields without hurting the economy too much. The Bank of Japan is likely to wait until worries about global banking problems and the US debt ceiling standoff subside.

Consumer confidence in New Zealand in May was unchanged from the previous month and remained at a low level as consumers continue to suffer from high inflationary pressures.

S&P 500 (F) (US500) 4,151.28 +36.04 (+0.88%)

Dow Jones (US30)32,764.65 −35.27 (−0.11%)

DAX (DE40) 15,793.80 −48.33 (−0.31%)

FTSE 100 (UK100) 7,570.87 −56.23 (−0.74%)

USD Index 104.24 +0.35 +0.34%

• – Japan Tokyo Core CPI (m/m) at 02:30 (GMT+3);
• – Australia Retail Sales (m/m) at 04:30 (GMT+3);
• – UK Retail Sales (m/m) at 09:00 (GMT+3);
• – US Core Durable Goods Orders (m/m) at 15:30 (GMT+3);
• – US PCE Price index (m/m) at 15:30 (GMT+3);
• – US Michigan Consumer Sentiment (m/m) at 17:00 (GMT+3).

By JustMarkets

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

By JustMarkets

The US stock indices ended Wednesday’s trading in decline, as negotiations between the White House and Republican representatives to raise the US debt ceiling were seriously delayed. By the close of trading, the Dow Jones Index (US30) decreased by 0.77%, while the S&P 500 Index (US500) lost 0.73%. Technology Index NASDAQ (US100) fell by 0.61% yesterday.

The lack of progress on raising the US government’s $31.4 trillion debt limit before the June 1st deadline, with several rounds of inconclusive negotiations, has irritated investors as the risk of a catastrophic default grows. There are only seven calendar days left until June 1st, with about three days to process all the paperwork if there is a deal. Therefore, the US politicians have only four days left to find common ground.

The Fed meeting minutes showed that future rate hikes are less certain and preferred to keep policy flexibility as inflation continues to outpace the trend and the impact of the banking crisis remains uncertain. Some participants noted that, based on their expectation that progress in bringing inflation down to 2% may remain unacceptably slow, additional policy tightening would likely be needed at future meetings. Federal Reserve Chairman Chris Waller suggested that the Central Bank may skip a hike in June but is still leaning toward a rate hike in July depending on inflation data.

Equity markets in Europe were mostly down yesterday. Germany’s DAX (DE30) fell by 1.92%, France’s CAC 40 (FR40) lost 1.70% on Wednesday, Spain’s IBEX 35 (ES35) was down 1.14%, Britain’s FTSE 100 (UK100) closed negative 1.75% yesterday.

Germany’s leading indicator, the Ifo index, fell from 93.6 to 91.7 for the first time after a six-month rise. The first drop in the Ifo index in six months is evidence of fading optimism. Recent bank turmoil appears to have caught up with German company valuations. The report indicates that falling purchasing power, a shrinking industrial order book, and the impact of the most aggressive monetary policy tightening in decades will lead to weak economic activity in the region. In addition to these cyclical factors, the ongoing war in Ukraine, demographic changes, and the ongoing energy transition will put structural pressure on the German economy in the coming months.

The UK Consumer Price Index fell from 10.1% to 8.7% (forecast 8.2%) y/y. But core inflation (excluding food and energy prices) unexpectedly rose from 6.2% to 6.8% y/y. As a result, overall inflation declined, but inflationary pressures remain persistent in key sectors. In this situation, the British Central Bank has no choice but to keep raising rates.

WTI crude oil jumped over 2% yesterday after an excessive weekly drop in US crude inventories. Oil demand is rising in anticipation of road, air, and sea transportation in the summer, which is usually accompanied by an increase in the price of “black gold”.

Asian markets were also mostly down yesterday. Japan’s Nikkei 225 (JP225) decreased by 0.89%, China’s FTSE China A50 (CHA50) lost 1.50%, Hong Kong’s Hang Seng (HK50) ended the day down 1.62%, India’s NIFTY 50 (IND50) added 0.34%, while Australia’s S&P/ASX 200 (AU200) ended Wednesday negative 0.63%.

NVIDIA Corporation (NVDA) rose sharply yesterday after the video card maker beat expectations for its first-quarter earnings and projected higher revenue due to strong demand from artificial intelligence development. Nvidia’s positive outlook improved the outlook for the chip-making sector, with Southeast Asia a major region.

Concerns about a new wave of COVID in China hit regional stocks. The Chinese government has warned that a new outbreak could peak by the end of June. Although symptoms of a new variant of COVID are mild, markets fear further disruptions to China’s economic recovery.

S&P 500 (F) (US500) 4,115.24 −30.34 (−0.73%)

Dow Jones (US30)32,799.92 −255.59 (−0.77%)

DAX (DE40) 15,842.13 −310.73 (−1.92%)

FTSE 100 (UK100) 7,627.10 −135.85 (−1.75%)

USD Index 103.89 +0.40 +0.39%

• – German GDP (q/q) at 09:00 (GMT+3);
• – US GDP (q/q) at 15:30 (GMT+3);
• – US Initial Jobless Claims (w/w) at 15:30 (GMT+3);
• – US Pending Home Sales (m/m) at 17:00 (GMT+3);
• – US Natural Gas Storage (w/w) at 17:30 (GMT+3).

By JustMarkets

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

By Chad Hanna, Penn State 

After a three-year hiatus, scientists in the U.S. have just turned on detectors capable of measuring gravitational waves – tiny ripples in space itself that travel through the universe.

Unlike light waves, gravitational waves are nearly unimpeded by the galaxies, stars, gas and dust that fill the universe. This means that by measuring gravitational waves, astrophysicists like me can peek directly into the heart of some of these most spectacular phenomena in the universe.

Since 2020, the Laser Interferometric Gravitational-Wave Observatory – commonly known as LIGO – has been sitting dormant while it underwent some exciting upgrades. These improvements will significantly boost the sensitivity of LIGO and should allow the facility to observe more-distant objects that produce smaller ripples in spacetime.

By detecting more events that create gravitational waves, there will be more opportunities for astronomers to also observe the light produced by those same events. Seeing an event through multiple channels of information, an approach called multi-messenger astronomy, provides astronomers rare and coveted opportunities to learn about physics far beyond the realm of any laboratory testing.

Ripples in spacetime

According to Einstein’s theory of general relativity, mass and energy warp the shape of space and time. The bending of spacetime determines how objects move in relation to one another – what people experience as gravity.

Gravitational waves are created when massive objects like black holes or neutron stars merge with one another, producing sudden, large changes in space. The process of space warping and flexing sends ripples across the universe like a wave across a still pond. These waves travel out in all directions from a disturbance, minutely bending space as they do so and ever so slightly changing the distance between objects in their way.

Even though the astronomical events that produce gravitational waves involve some of the most massive objects in the universe, the stretching and contracting of space is infinitesimally small. A strong gravitational wave passing through the Milky Way may only change the diameter of the entire galaxy by three feet (one meter).

The first gravitational wave observations

Though first predicted by Einstein in 1916, scientists of that era had little hope of measuring the tiny changes in distance postulated by the theory of gravitational waves.

Around the year 2000, scientists at Caltech, the Massachusetts Institute of Technology and other universities around the world finished constructing what is essentially the most precise ruler ever built – the LIGO observatory.

LIGO is comprised of two separate observatories, with one located in Hanford, Washington, and the other in Livingston, Louisiana. Each observatory is shaped like a giant L with two, 2.5-mile-long (four-kilometer-long) arms extending out from the center of the facility at 90 degrees to each other.

To measure gravitational waves, researchers shine a laser from the center of the facility to the base of the L. There, the laser is split so that a beam travels down each arm, reflects off a mirror and returns to the base. If a gravitational wave passes through the arms while the laser is shining, the two beams will return to the center at ever so slightly different times. By measuring this difference, physicists can discern that a gravitational wave passed through the facility.

LIGO began operating in the early 2000s, but it was not sensitive enough to detect gravitational waves. So, in 2010, the LIGO team temporarily shut down the facility to perform upgrades to boost sensitivity. The upgraded version of LIGO started collecting data in 2015 and almost immediately detected gravitational waves produced from the merger of two black holes.

Since 2015, LIGO has completed three observation runs. The first, run O1, lasted about four months; the second, O2, about nine months; and the third, O3, ran for 11 months before the COVID-19 pandemic forced the facilities to close. Starting with run O2, LIGO has been jointly observing with an Italian observatory called Virgo.

Between each run, scientists improved the physical components of the detectors and data analysis methods. By the end of run O3 in March 2020, researchers in the LIGO and Virgo collaboration had detected about 90 gravitational waves from the merging of black holes and neutron stars.

The observatories have still not yet achieved their maximum design sensitivity. So, in 2020, both observatories shut down for upgrades yet again.

Making some upgrades

Scientists have been working on many technological improvements.

One particularly promising upgrade involved adding a 1,000-foot (300-meter) optical cavity to improve a technique called squeezing. Squeezing allows scientists to reduce detector noise using the quantum properties of light. With this upgrade, the LIGO team should be able to detect much weaker gravitational waves than before.

My teammates and I are data scientists in the LIGO collaboration, and we have been working on a number of different upgrades to software used to process LIGO data and the algorithms that recognize signs of gravitational waves in that data. These algorithms function by searching for patterns that match theoretical models of millions of possible black hole and neutron star merger events. The improved algorithm should be able to more easily pick out the faint signs of gravitational waves from background noise in the data than the previous versions of the algorithms.

A hi-def era of astronomy

In early May 2023, LIGO began a short test run – called an engineering run – to make sure everything was working. On May 18, LIGO detected gravitational waves likely produced from a neutron star merging into a black hole.

LIGO’s 20-month observation run 04 will officially start on May 24, and it will later be joined by Virgo and a new Japanese observatory – the Kamioka Gravitational Wave Detector, or KAGRA.

While there are many scientific goals for this run, there is a particular focus on detecting and localizing gravitational waves in real time. If the team can identify a gravitational wave event, figure out where the waves came from and alert other astronomers to these discoveries quickly, it would enable astronomers to point other telescopes that collect visible light, radio waves or other types of data at the source of the gravitational wave. Collecting multiple channels of information on a single event – multi-messenger astrophysics – is like adding color and sound to a black-and-white silent film and can provide a much deeper understanding of astrophysical phenomena.

Astronomers have only observed a single event in both gravitational waves and visible light to date – the merger of two neutron stars seen in 2017. But from this single event, physicists were able to study the expansion of the universe and confirm the origin of some of the universe’s most energetic events known as gamma-ray bursts.

With run O4, astronomers will have access to the most sensitive gravitational wave observatories in history and hopefully will collect more data than ever before. My colleagues and I are hopeful that the coming months will result in one – or perhaps many – multi-messenger observations that will push the boundaries of modern astrophysics.

About the Author:

Chad Hanna, Professor of Physics, Penn State

This article is republished from The Conversation under a Creative Commons license. Read the original article.

By JustMarkets

The US stock indices ended Tuesday with a negative result. By the close of trading on the stock market Dow Jones (US30) decreased by 0.69%, and S&P 500 (US500) was 1.12% lower. The Technology Index NASDAQ (US100) fell by 0.26% on Tuesday. Stock indices are down again due to growing concerns about the US default. Yesterday lawmakers concluded another round of debt ceiling talks without a deal. The lack of progress comes just days before June 1st, when the US may default on its debt. But it is worth realizing that the likelihood of default is low because such debates happen almost every year and every time politicians agree. But this time, the politicians really delayed the deadlines.

The minutes from the last FOMC meeting will be released today. Despite the hawkish statements from Fed officials, about 88% of traders continue to believe that the US central bank will suspend the tightening cycle at the June meeting.

The latest economic data showed that the US manufacturing PMI fell into contraction territory from 50.2 to 48.5. The service sector was much better, with the PMI rising from 53.6 to 55.1. The drop in the manufacturing sector is the first wake-up call for the US Federal Reserve in terms of high-interest rates starting to have a negative impact on the economy.

Equity markets in Europe were mostly down yesterday. Germany’s DAX (DE30) decreased by 0.44%, France’s CAC 40 (FR40) fell by 1.33% on Tuesday, Spain’s IBEX 35 (ES35) lost 0.41%, and the British FTSE 100 (UK100) was down by 0.10% yesterday.

The May Eurozone PMI report showed that fears of higher core inflation should be centered around services, while goods inflation is slowing. Services business activity continues to point to strong growth despite the index dropping from 56.2 to 55.9. Meanwhile, manufacturing business activity showed a slowdown for the first time in 6 months. The more than six-month decline in the index indicates a weakening of the manufacturing sector. The divergence between services and manufacturing is growing, with services inflation accelerating again.

According to the International Monetary Fund’s updated forecasts on Tuesday, the British economy will avoid a recession this year. The IMF now thinks the British economy will grow by a modest 0.4% this year, partly as a result of rising wages. Despite the more optimistic estimate, the IMF said that inflation is likely to remain high in the coming years and will not return to the Bank of England’s target of 2% until mid-2025.

At the moment all the factors are adding up to the rise in oil prices. First, the Canadian wildfires are reducing oil supplies in North America. Second, demand in the US is expected to increase after Memorial Day, which unofficially marks the start of summer road trips in America. Third, Saudi Arabia’s energy minister threatened yesterday to cut production sharply if oil prices fall below $70 a barrel. Fourthly, analysts still expect the growth of demand in China (the biggest oil importer).

Asian markets were mostly down yesterday, except the Indian index. Japan’s Nikkei 225 (JP225) decreased by 0.42%, China’s FTSE China A50 (CHA50) fell by 1.57%, Hong Kong’s Hang Seng (HK50) ended the day down 1.25%, India’s NIFTY 50 (IND50) added 0.18%, and Australia’s S&P/ASX 200 (AU200) ended Tuesday negative 0.05%.

The Central Bank of New Zealand (RBNZ) expectedly to raise interest rates by 25 basis points to 5.5%, the highest level in more than 14 years. The RBNZ also said that inflation remains too high and still predicts a recession this year. According to the monetary policy statement (MPS) accompanying the rate decision, the RBNZ expects the official monetary rate at the current level of 5.5% to be the peak and remain at that level until the middle of next year.

S&P 500 (F) (US500) 4,145.58 −47.05 (−1.12%)

Dow Jones (US30)33,055.51 −231.07 (−0.69%)

DAX (DE40) 16,152.86 −71.13 (−0.44%)

FTSE 100 (UK100) 7,762.95 −8.04 (−0.10%)

USD Index 103.56 +0.36 +0.35%

• – New Zealand Retail Sales (m/m) at 01:45 (GMT+3);
• – New Zealand RBNZ Interest Rate Decision at 05:00 (GMT+3);
• – New Zealand RBNZ Monetary Policy Statement at 05:00 (GMT+3);
• – New Zealand RBNZ Press Conference at 06:00 (GMT+3);
• – UK Consumer Price Index (m/m) at 09:00 (GMT+3);
• – Eurozone German Ifo Business Climate (m/m) at 11:00 (GMT+3);
• – UK BoE Gov Bailey Speaks at 16:00 (GMT+3);
• – US Crude Oil Reserves (w/w) at 17:30 (GMT+3);
• – US FOMC Meeting Minutes at 21:00 (GMT+3).

By JustMarkets

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

By JustMarkets

The US stock indices traded multidirectional yesterday. By the close of the stock market Dow Jones Index (US30) decreased by 0.42%, S&P 500 (US500) was up by 0.02%. The Technology Index NASDAQ (US100) gained 0.50% on Monday.

The uncertainty in the financial markets still remains. On the one hand, there is still no decision by politicians concerning the US government debt increase. On the other hand, the FOMC is divided on whether to raise the interest rate in June by another 0.25% or to stop the tightening cycle. At the moment, the CME FedWatch tool shows a 75% chance that the US Fed will keep interest rates unchanged next month. But a week ago, there was a 95% chance of that scenario.

On Monday, Intel Corp. (INTC) revealed some new details about the artificial intelligence (AI) computing chip it plans to introduce in 2025. The company plans to radically change its development strategy to compete with Nvidia (NVDA) Corp. and Advanced Micro Devices (AMD) Inc. At a supercomputer conference in Germany on Monday, Intel said its future Falcon Shores chip would have 288 gigabytes of memory and support 8-bit floating-point computing. These specifications are important for artificial intelligence models like ChatGPT services.

Yesterday, China banned some sales of Micron Technology Inc (MU) chips to key industries in its country, citing national security concerns. MU shares fell more than 3%.

Equity markets in Europe also traded without a single dynamic yesterday. German DAX (DE30) decreased by 0.32%, French CAC 40 (FR40) lost 0.18% on Monday, Spanish IBEX 35 (ES35) was up by 0.57%, British FTSE 100 (UK100) closed positive 0.18% yesterday.

The European Central Bank needs to raise interest rates some more and then leave them in restrictive territory for a while to bring inflation down to its medium-term target of 2%, Spanish Central Bank Governor Pablo Hernández de Cos said Monday. Investors expect the ECB to raise borrowing costs above 4% by the end of the summer.

Analysts at UBS are forecasting gold prices rising to $2100 an ounce by the end of 2023 and to $2200 an ounce by the end of 2024 as the reasons are given for the preservation of increased geopolitical risks and high inflation.

Oil prices rose Monday in response to a more positive tone in negotiations between the White House and its congressional Republicans to raise the US national debt ceiling before the June 1 default deadline. Higher demand and gasoline prices have also influenced energy trade sentiment ahead of the upcoming Memorial Day celebration on May 29, which unofficially marks the start of summer car travel in the United States.

European gas prices, which have been falling in recent weeks, are expected to remain low amid record-high supplies of liquefied natural gas by US exporters. European Union gas supplies are safe for the summer, and it is too early to tell if the EU will be able to prevent price shocks in the winter.

Asian markets were mostly up yesterday, except for the Australian index. Japan’s Nikkei 225 (JP225) gained 0.90% on the day, China’s FTSE China A50 (CHA50) jumped by 1.11%, Hong Kong’s Hang Seng (HK50) gained 1.17% on the day, India’s NIFTY 50 (IND50) added 0.61%, and Australia’s S&P/ASX 200 (AU200) was negative 0.22% on the day.

Japan’s Nikkei 225 reached a 33-year high. Japanese stocks have been on the rise over the past two weeks, boosted in large part by strong seasonal reports and bets that the Bank of Japan will maintain its ultra-loose policy. Data on Tuesday showed that the country’s manufacturing sector rose unexpectedly in May, while service sector growth hit a record high, indicating some resilience in the world’s third-largest economy.

S&P 500 (F) (US500) 4,192.63 +0.65 (+0.016%)

Dow Jones (US30)33,286.58 −140.05 (−0.42%)

DAX (DE40) 16,223.99 −51.39 (−0.32%)

FTSE 100 (UK100) 7,770.99 +14.12 (+0.18%)

USD Index 103.26 +0.06 +0.06%

• – Australia Manufacturing PMI (m/m) at 02:00 (GMT+3);
• – Australia Services PMI (m/m) at 02:00 (GMT+3);
• – Japan Manufacturing PMI (m/m) at 03:30 (GMT+3);
• – Japan Services PMI (m/m) at 03:30 (GMT+3);
• – Singapore Consumer Price Index (m/m) at 08:00 (GMT+3);
• – Eurozone French Manufacturing PMI (m/m) at 10:15 (GMT+3);
• – Eurozone French Services PMI (m/m) at 10:15 (GMT+3);
• – Eurozone German Manufacturing PMI (m/m) at 10:30 (GMT+3);
• – Eurozone German Services PMI (m/m) at 10:30 (GMT+3);
• – Eurozone Manufacturing PMI (m/m) at 11:00 (GMT+3);
• – Eurozone Services PMI (m/m) at 11:00 (GMT+3);
• – UK Manufacturing PMI (m/m) at 11:30 (GMT+3);
• – UK Services PMI (m/m) at 11:30 (GMT+3);
• – US Manufacturing PMI (m/m) at 16:45 (GMT+3);
• – US Services PMI (m/m) at 16:45 (GMT+3);
• – US New Home Sales (m/m) at 17:00 (GMT+3).

By JustMarkets

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

By ForexTime

Article by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

By JustMarkets

Problems with the US debt ceiling were back in the spotlight late last week. Investors are scared by the likelihood of default if politicians can’t reach an agreement. While the probability of such a scenario is low, the rise in the dollar last week showed how investors were buying dollars as a safe haven currency. At the close of the stock market on Friday, the Dow Jones Index (US30) decreased by 0.33% (+0.32% for the week), and the S&P 500 Index (US500) fell by 0.14% (+1.58% for the week). The Technology Index NASDAQ (US100) was down 0.24% on Friday (+2.90% for the week).

US President Joe Biden and House Speaker Kevin McCarthy will meet again today to continue negotiations on raising the debt ceiling. Speaking to reporters at the US Capitol, McCarthy said positive discussions had taken place to resolve the crisis. Before leaving Japan after the G7 summit earlier Sunday, Biden indicated that he was willing to cut spending along with tax adjustments to reach an agreement, but the Republicans’ latest ceiling proposal was unacceptable.

In his speech Friday, US Federal Reserve Chairman Jerome Powell hinted at a pause in the rate hike cycle, indicating that the Fed can afford to examine the situation, given how far it has come. Minneapolis Fed President Neel Kashkari also said he might support keeping interest rates on hold at the Central Bank’s next meeting in June to give officials more time to assess the impact of past rate hikes and inflation forecasts.

Stock markets in Europe were mostly up on Friday. German DAX (DE30) jumped by 0.69% (+1.93% for the week), French CAC 40 (FR40) gained 0.61% on Friday (+0.65% for the week), Spanish IBEX 35 Index (ES35) added 0.50% (-0.11% for the week), British FTSE 100 (UK100) was on the rise by 0.19% (+0.03% for the week).

G7 leaders on Saturday agreed to a new initiative to counter economic coercion and pledged to take measures to ensure that any actors attempting to use economic dependence as a weapon would fail and face the consequences. The world is facing an alarming increase in cases of economic coercion aimed at exploiting economic vulnerabilities. Analysts believe that China will be the first to be affected. In turn, the G7 countries call on China to put pressure on Russia to end the war in Ukraine and respect Taiwan’s status and fair trade rules. The statement also commits G7 leaders to deepen cooperation to strengthen supply chains and calls for a greater role for low-income countries in building economic resilience.

Britain on Friday published plans to ban imports of Russian diamonds, copper, aluminum, and nickel and announced new sanctions against Russia targeting companies linked to suspected Ukrainian grain theft.

Oil prices fell Friday as investors fear that US policymakers will fail to agree on a new debt ceiling and trigger a default that would hurt the economy and reduce fuel demand. On the other hand, according to energy company Baker Hughes Co. the number of oil rigs in the US, an indicator of future production, fell by 11 last week to 575, the biggest weekly drop since September 2021. Analysts at the National Australia Bank said that while the possibility of additional rate hikes adds to concerns about weak demand in the United States, oil prices could rise because of stronger demand in China during 2023.

Asian markets traded without a single trend last week. Japan’s Nikkei 225 (JP225) jumped by 4.27% for the week, China’s FTSE China A50 (CHA50) fell by 1.60% for the week, Hong Kong’s Hang Seng (HK50) was down 0.38% for the week, India’s NIFTY 50 (IND50) lost 0.80%, and Australia’s S&P/ASX 200 (AU200) was up 0.31% for the week.

The People’s Bank of China on Monday (PBoC) kept its key lending rate near an all-time low of 3.65%, but the slowdown in the country’s growth has markets bracing for a possible rate cut this year.

In the commodities market, futures on natural gas (+14.43%), cotton (+7.6%), orange juice (+6.86%), gasoline (+6.16%), coffee (+4.29%), cocoa (+2.85%), and WTI oil (+2.66%) showed the biggest gains last week. Futures on soybeans (-6.1%), corn (-5.12%), and wheat (-4.76%) showed the biggest drop.

S&P 500 (F) (US500) 4,191.98 −6.07 (−0.14%)

Dow Jones (US30)33,426.63 −109.28 (−0.33%)

DAX (DE40) 16,275.38 +112.02 (+0.69%)

FTSE 100 (UK100) 7,756.87 +14.57 (+0.19%)

USD Index 103.19 -0.39 -0.38%

• – China PBoC Loan Prime Rate at 04:15 (GMT+3);
• – Hong Kong Consumer Price Index (m/m) at 11:30 (GMT+3);
• – US FOMC Member Bullard Speaks at 17:50 (GMT+3);
• – US FOMC Member Bostic Speaks at 17:50 (GMT+3).

By JustMarkets

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

By JustMarkets

US stock indices rose yesterday, despite the growth of the dollar index. At the close of the stock market yesterday, the Dow Jones Index (US30) gained 0.34%, the S&P 500 Index (US500) added 0.94%, and the Nasdaq Technology Index (US100) jumped by 1.51%.

White House economic adviser Lael Brainard said Thursday that a default on the $31.4 trillion US debt would lead to a recession in the US economy. Brainard also pointed out that Biden’s negotiating team has been instructed not to agree to any Republican proposal to raise the debt ceiling that would deprive Americans of health care or plunge any of them into poverty. Republicans, who are threatening to default on the government, are trying to convince Democrats to accept tougher job requirements for some federal aid programs, as well as cut spending in exchange for lifting the borrowing limit.

“Hawkish” Fed officials (Laurie Logan and James Bullard) oppose a June rate hike pause. On Thursday, interest rate futures markets showed a 33.3% chance of a rate hike in June, up from a 90% chance just a week ago. Fed governor and vice presidential candidate Philip Jefferson, speaking Thursday, also said that while progress on inflation is slowing, it is too early to feel the full impact of these rapid rate hikes. Powell is scheduled to speak on Friday, and investors expect him to update his views in light of new economic data.

Shares of Walmart Inc (WMT) jumped by 1.3% after the largest US retailer reported first-quarter sales were up 8%.

Stock markets in Europe were mostly up yesterday. Germany’s DAX (DE30) added 1.33%, France’s CAC 40 (FR40) decreased by 0.64% yesterday, Spain’s IBEX 35 (ES35) was up 0.17% Thursday, Britain’s FTSE 100 (UK100) closed the day positive 0.25%.

The Turkish lira fell to a record low against the dollar on Thursday after incumbent President Tayyip Erdogan’s lead in the presidential election came as a surprise, while the country’s sovereign dollar bonds stabilized after a three-day drop following the election.

Oil fell by 1% Thursday as the dollar continued to rise on expectations of uncertainty in talks over a higher US government debt ceiling. The oil refineries in China in April increased by 18.9% compared to last year. Chinese refineries maintained a high growth rate to meet recovering domestic fuel demand and build stocks ahead of the summer tourist season.

The US dollar approached a six-month high against the yen on Friday amid rising US Treasury bond yields as uncertainty over debt ceiling talks in Washington raised expectations of higher interest rates. Gold has an inverse correlation to the dollar index and government bond yields, which is why it fell for a third straight day. But UBS analysts predict gold will reach $2,100 by the end of 2023 and $2,200 an ounce by March 2024, urging investors to keep the yellow metal in their portfolios.

Asian markets traded flat yesterday. Japan’s Nikkei 225 (JP225) gained 1.60% yesterday, China’s FTSE China A50 (CHA50) lost 0.26% over the day, Hong Kong’s Hang Seng (HK50) gained 0.85%, India’s NIFTY 50 (IND50) was 0.28% lower, while Australian S&P/ASX 200 (AU200) closed positive 0.52%.

Japan’s nationwide core consumer price index rose from 3.1% to 3.4% year-over-year, returning to 40-year highs after declining in the first quarter and foreshadowing increased pressure on the Bank of Japan to finally tighten policy this year.

Preliminary polls suggest that the Reserve Bank of New Zealand (RBNZ) will raise interest rates by another plus 0.25% at its May 24 meeting, but there will be a pause after that. The country’s largest banks, ANZ, ASB, Bank of New Zealand, Kiwi Bank, and Westpac, are also expecting a 25 basis point increase next week. Although the RBNZ was one of the first major global central banks to tighten monetary policy, inflation in the first quarter is still 6.7%, more than three times the RBNZ target of 2.0%.

S&P 500 (F) (US500) 4,198.05 +39.28 (+0.94%)

Dow Jones (US30)33,535.91 +115.14 (+0.34%)

DAX (DE40) 16,163.36 +212.06 (+1.33%)

FTSE 100 (UK100) 7,742.30 +19.07 (+0.25%)

USD Index 103.53 +0.65 +0.63%

• – New Zealand Trade Balance (m/m) at 01:45 (GMT+3);
• – Japan National Core Consumer Price Index at 02:30 (GMT+3);
• – Canada Retail Sales (m/m) at 15:30 (GMT+3);
• – US FOMC Member Williams Speaks at 15:45 (GMT+3);
• – US FOMC Member Bowman Speaks at 16:00 (GMT+3);
• – US Fed Chair Powell Speaks at 18:00 (GMT+3);
• – Eurozone ECB President Lagarde Speaks at 22:00 (GMT+3).

By JustMarkets

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.