InvestMacro

By JustMarkets

At Monday’s close, the Dow Jones (US30) Index added 0.13%, while the S&P 500 (US500) Index gained 0.27%. The NASDAQ Technology Index (US100) closed positive 0.83%. Strengthening large-cap tech stocks boosted the broad market on Monday. However, concerns that the economy is losing momentum could limit the potential for further stock gains.

The ISM US Manufacturing Index for June unexpectedly fell by 0.2 to a four-month low of 48.5, weaker than expectations for a rise to 49.1. The ISM Goods and Services Price Sub-Index for June fell by 4.9 to a 6-month low of 52.1, weaker than expectations of 55.9.

Tesla (TSLA) shares rose more than 6% and led gains in the S&P 500 and Nasdaq 100 after Wells Fargo listed it as a tactical idea for the third quarter.

Equity markets in Europe were mostly up yesterday. Germany’s DAX (DE40) rose by 0.30%, France’s CAC 40 (FR40) closed higher by 1.09%, Spain’s IBEX 35 (ES35) Index added 1.04%, and the UK’s FTSE 100 (UK100) closed positive 0.03%. The S&P Eurozone Manufacturing PMI for June was revised upward by 0.2 to 45.8 from the previously reported 45.6. The German Consumer Price Index for June (EU harmonized) declined to 2.5% y/y from 2.8% y/y in May, which was in line with expectations. ECB President Lagarde said that the ECB does not yet have sufficient evidence that inflationary threats have passed, reinforcing expectations that the ECB will postpone further interest rate cuts. Today, the Eurozone will release Eurozone inflation data for June and unemployment data for May.

WTI crude oil futures rose to around $83.5 a barrel on Tuesday, hitting a two-month-high, driven by prospects for higher demand during the summer travel season. Prognoses from the American Automobile Association showed vacation travel up 5.2% year-over-year, with auto travel alone expected to rise 4.8% from a year ago. In addition, bets on a rate cut by the US Federal Reserve are providinxg support for oil prices after a recent slowdown in US inflation sparked optimism that a rate cut is imminent.

Asian markets traded mixed yesterday. Japan’s Nikkei 225 (JP225) was up 0.12%, China’s FTSE China A50 (CHA50) added 0.34%, Hong Kong’s Hang Seng (HK50) was not trading, and Australia’s ASX 200 (AU200) was negative 0.22%.

The offshore yuan depreciated to 7.30 per dollar, remaining at its lowest level in seven months, while weak guidance from the People’s Bank of China (PBoC) pressured investor sentiment. The Bank of China set the average rate at 7.1291 per dollar, the lowest since November 21, signaling a willingness to weaken the yuan further. The yuan’s depreciation is also supported by a stronger US dollar, driven by a sharp rise in US bond yields and speculation about Donald Trump’s possible return to the presidency.

The Japanese yen fell to 161.5 per dollar, sliding to new 38-year lows due to a sharp interest rate differential between Japan and the US. A lack of urgency from the Bank of Japan to normalize monetary policy is weighing on the currency. However, there is growing speculation that the BOJ may raise rates at its next meeting in late July. A weak yen raises the cost of imports, which adds to inflationary pressures and negatively affects household consumption. Meanwhile, Finance Minister Shun’ichi Suzuki reiterated on Tuesday that the government remains vigilant in monitoring exchange rate movements.

Minutes from the Reserve Bank of Australia’s (RBA) June meeting showed that policymakers emphasized the need to remain vigilant against upside risks to inflation, adding that a significant rise in prices could necessitate a significant rate hike. Nevertheless, the board sees an opportunity to bring inflation to the target level while maintaining stability in the economy and labor market. Markets are currently pricing in a one-in-three chance of a rate hike as early as August while ruling out the possibility of an RBA rate cut this year.

S&P 500 (US500) 5,475.09 +14.61 (+0.27%)

Dow Jones (US30) 39,169.52 +50.66 (+0.13%)

DAX (DE40) 18,290.66 +55.21 (+0.30%)

FTSE 100 (UK100) 8,166.76 +2.64 (+0.032%)

USD Index 105.82 −0.04 (−0.04%)

• – Australia RBA Meeting Minutes at 04:30 (GMT+3);
• – Eurozone Consumer Price Index (m/m) at 12:00 (GMT+3);
• – Eurozone Unemployment Rate (m/m) at 12:00 (GMT+3);
• – Canada Manufacturing PMI (m/m) at 16:30 (GMT+3);
• – Eurozone ECB President Lagarde Speaks at 16:30 (GMT+3);
• – US Fed Chair Powell Speaks at 16:30 (GMT+3);
• – US JOLTS Job Openings (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 Mark Galasiewski | Elliott Wave International

The U.S. government in early May sanctioned 300 Chinese entities for supplying machine tools and parts to Russia for its war against Ukraine, while in mid-May Russian president Vladimir Putin made a two-day visit to China. In turn I found myself thinking about how tensions between China and the United States could lead to open conflict, specifically over Taiwan.

The likelihood of conflict depends in part on the region’s social mood, as reflected in Asia’s stock market indexes. When social mood is negative, countries are more likely to behave aggressively.

Tensions in the region have been high. On May 23, China conducted a military drill that sent 111 warplanes plus several navy destroyers and frigates close to Taiwan and its outer islands. China said the drill meant to punish Taiwan for an offense committed by its new head of state, Lai Ching-te, who used his May 20 inauguration speech to suggest that Taiwan is not part of China.

Yet China appeared to end the provocative move after just two days, much like Iran quickly ended its reprisal drone attack on Israel in April. Both examples reflect the desire to limit the scope of new conflicts, consistent with the improving social mood and burgeoning rally in emerging markets.

As our “Bull versus Bear” chart shows, the mood in Taiwan remains positive amid the global tech boom: The Taiwan Index rose right through the military drill. In contrast, the mood in China remains severely negative, as reflected in the Shanghai Composite’s long-term pattern. That does raise the risk of Chinese aggression — or at the least increases the risk of accidents and miscalculations. As Singapore’s deputy prime minister Gan Kim Yong recently said at the Nikkei Forum in Tokyo, bad outcomes tend to follow during periods “when each side views the other as an adversary.”

Some geopolitical observers frame the Russia-Ukraine conflict as a proxy battle in a new cold war between the United States and its democratic allies, versus the China-dominated axis of autocratic states that includes Russia, North Korea and Iran.

Long-term charts offer perspective.

In 2020, the MSCI Asia-Pacific Ex-Japan Index ended a 26-year sideways pattern, while the MSCI World Ex-U.S. Index ended its own, similar 20-year-long sideways trend. This two-decade period is comparable to the 1929-1949 corrective period in the U.S. stock market. The Covid pandemic erupted toward the end of the triangless much like the 1948-1955 polio epidemic spread across the globe and killed half a million people a year at its peak.

The first proxy battle in the current cold war — Russia-Ukraine — erupted two years post-Covid during the correction in the index, much like the first proxy battle — the Korean War — in the earlier Cold War erupted in 1950 and lasted until 1953. The Russia-Ukraine war could follow that precedent by ending in a stalemate sooner than most observers imagine, even as the developing bull market in world ex-U.S. stocks contributes to years of relative peace. Then, once China becomes much stronger militarily, the next proxy battle in the cold war rivalry — perhaps over Taiwan — would be analogous to the Vietnam War when the U.S. dramatically escalated the fighting in 1965 and pulled out eight years later, as the communist government of North Vietnam in turn took over South Vietnam to reunite the country.

We’re watching the region’s stock market indexes closely.

If you’d like to learn more about Elliott wave price patterns, including the triangles mentioned above, EWI has made available the entire online version of the book Elliott Wave Principle: Key to Market Behavior.

By JustMarkets

On Wednesday, the US stock indices ended trading with an increase. The Dow Jones Index (US30) gained 0.09% on Thursday, and the S&P 500 Index (US500) added 0.09%. The NASDAQ Technology Index (US100) closed positive 0.30%. Stocks were supported amid weaker-than-expected US economic reports that lowered bond yields and reinforced speculation that the Federal Reserve may cut interest rates this year.

Markets are awaiting Friday’s release of PCE deflator data for May, the Fed’s preferred inflation gauge, to see if price pressures are easing. The year-over-year PCE Index is expected to fall to 2.6% from 2.7%. On a monthly basis, it is expected to rise 0.1%. The latest PCE Index data did not match expectations — US inflation unexpectedly halted in April. Overall, if the PCE Price Index report shows a further decline in inflationary pressures, it could further reinforce expectations of a Fed rate cut (70% as of today). This would likely hurt the US dollar. But suppose the inflation data does not show progress in reducing inflationary pressures. In that case, the likelihood of a rate cut in September would decrease, which would play into the hands of the US dollar and have a negative impact on risk assets and precious metals.

Boeing (BA) is up more than 2% after reporting that China’s safety regulator has cleared it to resume deliveries of wide-body airplanes to China.

Bitcoin stabilized above the $61,000 mark on Friday after falling to a near two-month low earlier this week amid renewed inflows into the US spot bitcoin ETFs. Data showed that inflows into the US spot bitcoin ETFs turned positive on June 25 and 26 after seven consecutive days of outflows. US fund assets also increased from $47 billion in early May to more than $52 billion as of June 26.

Equity markets in Europe were mostly down on Thursday. Germany’s DAX (DE40) rose by 0.30%, France’s CAC 40 (FR40) closed yesterday down 1.03%, Spain’s IBEX 35 (ES35) fell by 0.72%, and the UK’s FTSE 100 (UK100) closed negative 0.55%. The Eurozone Economic Confidence Index for June unexpectedly fell 0.2 to 95.9 versus expectations of a rise to 96.1. Eurozone M3 money supply for May rose 1.6% y/y, exceeding expectations of 1.5% y/y and the largest increase in 14 months. ECB Governing Council spokesman Kazimir said yesterday that he still sees significant upside risks to inflation, and the ECB can expect only one more interest rate cut this year. Swaps discount the odds of an ECB rate cut by 25 bps at 9% for the July 18 meeting and 67% for the September 12 meeting.

The UK economy grew 0.7% quarter-on-quarter in the first quarter of 2024, slightly above initial estimates of 0.6%. This is the strongest growth in two years, ending the recession that began last year. Services grew by 0.8%, up from 0.7% in the first estimate. The manufacturing sector grew by 0.6%, down from the 0.8% previously reported.

Sweden’s Central Bank left interest rates unchanged but changed its estimate for further rate cuts this year to “two or three” from two. Riksbank Governor Erik Thedeen said the inflation outlook had become more positive, especially for inflation expectations and wage growth, but two or three cuts were “an estimate, not a promise.” The Riksbank became one of the first major central banks to begin easing monetary policy this cycle in May when it cut rates by 25 basis points.

WTI crude oil prices rose above $82 a barrel on Friday as the escalating conflict in the Middle East overshadowed uncertainty on the demand side. Tensions between Israel and the Lebanese group Hezbollah have escalated after Hezbollah stepped up rocket fire and drone attacks on northern Israel in recent weeks, putting additional pressure on an Israeli government already mired in a war with Hamas. Major oil producer Iran may be drawn into the wider conflict, while Turkish President Erdogan expressed solidarity with Lebanon and called for regional support.

Asian markets were predominantly decreasing yesterday. Japan’s Nikkei 225 (JP225) was down 0.82%, China’s FTSE China A50 (CHA50) lost 0.32%, Hong Kong’s Hang Seng (HK50) was down 2.06%, and Australia’s ASX 200 (AU200) was negative 0.30%.

Japan’s Core Consumer Price Index in Tokyo in June 2024 rose by 2.1% year-on-year in June, beating market expectations and the Bank of Japan’s 2% target, strengthening the case for the central bank to continue policy normalization. Tokyo’s core inflation rate also accelerated for the second consecutive month after rising 1.6% in May. The Bank of Japan has been under sustained pressure to raise interest rates again as rising wages have boosted consumption. The Central Bank is also expected to defend its currency as the yen fell to a 38-year low, pushing up the cost of imports. Tokyo’s inflation data is widely seen as a leading indicator of nationwide price trends.

S&P 500 (US500) 5,482.87 +4.97 (+0.091%)

Dow Jones (US30) 39,164.06 +36.26 (+0.093%)

DAX (DE40) 18,210.55 +55.31 (+0.30%)

FTSE 100 (UK100) 8,179.68 −45.65 (−0.55%)

USD Index 106.05 +0.44 (+0.41%)

• – Japan Tokyo Core CPI (m/m) at 02:30 (GMT+3);
• – Japan Unemployment Rate (m/m) at 02:30 (GMT+3);
• – UK GDP (q/q) at 09:00 (GMT+3);
• – German Retail Sales (m/m) at 09:00 (GMT+3);
• – Switzerland KOF Economic Barometer (m/m) at 10:00 (GMT+3);
• – German Unemployment Rate (m/m) at 10:55 (GMT+3);
• – US PCE Price index (m/m) at 15:30 (GMT+3);
• – Canada GDP (m/m) at 15:30 (GMT+3);
• – US Chicago PMI (m/m) at 16:45 (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

On Wednesday, the US stock indices ended trading in a mixed direction. At the end of the day, the Dow Jones Index (US30) rose by 0.04%, and the S&P 500 Index (US500) added 0.16%. The NASDAQ Technology Index (US100) closed positive 0.49%. Stock gains on Wednesday were capped by a rise in bond yields after hawkish comments from Fed spokesman Bowman lifted 10-year bond yields to a weekly high and dampened expectations of a Fed rate cut this year.

FedEx (FDX) is up more than 15% after reporting better-than-expected Q4 adjusted EPS and estimating 2025 adjusted EPS above consensus. Additionally, Amazon (AMZN) is up more than 3% after announcing plans to launch an online store for low-priced clothing and home goods. Apple (AAPL) shares are up more than 1% after Rosenblatt Securities upgraded the stock to “buy” from “neutral” with a $260 price target. Moderna (MRNA) is down more than 10% and topped the list of losers in the S&P 500 and Nasdaq 100 after new data showed that the efficacy of its RSV vaccine fell sharply in its second year and was lower than competing vaccines.

Markets are awaiting Friday’s release of PCE deflator data for May, the Fed’s preferred inflation gauge, to see if price pressures are easing, which could pave the way for the Fed to cut interest rates. The consensus is that the May core PCE deflator fell to 2.6% y/y from 2.8% y/y in April. If the actual data comes in line with the estimate, it will have a negative impact on the US dollar but will be positive for rising stock indices.

Equity markets in Europe were mostly down on Wednesday. Germany’s DAX (DE40) fell by 0.12%, France’s CAC 40 (FR40) closed down 0.69%, Spain’s IBEX 35 (ES35) lost 0.80%, and the UK’s FTSE 100 (UK100) closed negative 0.27%. European equity markets opened lower on Thursday as investors became more cautious and reassessed the outlook for the global economy, inflation, and interest rates. In Europe today, traders will analyze consumer and business confidence data in Italy, retail sales data in Spain, and the Bank of England’s latest financial stability report. On Thursday, the EU leaders’ summit will start in Belgium.

WTI crude prices fell to around $80.5 a barrel on Thursday, retreating further from a near two-month high. An unexpected increase in US oil inventories added to concerns about weakening demand in the world’s top oil consumer. EIA data showed that the US crude inventories rose by 3.591 million barrels last week, defying market expectations of a 3 million barrel decline.

Silver prices (XAG/USD) held below $29 an ounce, near a six-week low, and were pressured by a strong dollar and Treasury bond yields after hawkish remarks from a Federal Reserve official. Meanwhile, investors continued to assess the outlook for silver demand in China, a major consumer, as industrial use of the metal is likely to suffer due to overcapacity in solar panel production.

Asian markets were predominantly up yesterday. Japan’s Nikkei 225 (JP225) rose by 1.26%, China’s FTSE China A50 (CHA50) added 0.09%, Hong Kong’s Hang Seng (HK50) gained 0.09%, and Australia’s ASX 200 (AU200) was negative 0.71%.

Japan’s 10-year government bond yield rose to 1.1%, the highest in almost a month, while the 2-year bond yield hit a two-week high near 0.35% amid strong retail sales data and a sharply weaker yen, raising bets that the Bank of Japan (BoJ) may raise interest rates at its July meeting. The data showed that retail sales in Japan rose 3% in May from a year earlier, accelerating from an upwardly revised 2.4% increase in April and well above market expectations for a 2% rise. Meanwhile, the yen fell to 160 per dollar, hitting its lowest level since 1986.

Australia’s 10-year government bond yield climbed above 4.4% to a more than three-week high as high inflation readings heightened fears that the Reserve Bank of Australia (RBA) may raise interest rates again as early as its next meeting in August.

S&P 500 (US500) 5,477.90 +8.60 (+0.16%)

Dow Jones (US30) 39,127.80 +15.64 (+0.040%)

DAX (DE40) 18,155.24 −22.38 (−0.12%)

FTSE 100 (UK100) 8,225.33 −22.46 (−0.27%)

USD Index 106.05 +0.44 (+0.41%)

• – Japan Retail Sales (m/m) at 02:50 (GMT+3);
• – UK BoE Financial Stability Report at 12:00 (GMT+3);
• – UK BoE Gov Bailey Speaks at 12:30 (GMT+3);
• – US Initial Jobless Claims (w/w) at 15:30 (GMT+3);
• – US Durable Goods Orders (m/m) at 15:30 (GMT+3);
• – US GDP (q/q) 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 JustMarkets

The US stock indices ended trading mixed on Tuesday. At the end of Tuesday, the Dow Jones Index (US30) was down 0.76%, while the S&P 500 Index (US500) added 0.39%. The NASDAQ Technology Index (US100) closed positive 1.26%. The broader market held its ground after the US Consumer Confidence Index for June came in stronger than expected.

The Conference Board’s US Consumer Confidence Index for June fell by 0.9 to 100.4, slightly stronger than expectations of 100.0. The S&P CoreLogic Composite-20 Home Price Index in the US for April fell to 7.20% y/y from 7.46% y/y in March, stronger than expectations of 7.00% y/y. The Richmond Fed survey of business activity in the US manufacturing sector for June declined to negative 10 from 0, weaker than expectations of 3. The Chicago Fed National Activity Index for June unexpectedly rose by 0.44 to 0.18, stronger than expectations of a decline to 0.25.

On Tuesday, Fed spokeswoman Bowman’s hawkish comments proved bearish for stocks when she said she sees several upside risks to the inflation outlook and “we are still not at a point where it is appropriate to lower the discount rate.” She added that she “does not see the Fed cutting the Funds rate this year and has pushed back her estimate for a rate cut to 2025.” Fed spokeswoman Cook said it would be appropriate for the Fed to cut interest rates “at some point,” but “the timing of any such adjustment will depend on how economic data evolve and what they mean for the economic outlook and balance of risks.” Markets estimate the odds of a 25 bps rate cut at 10% at the July 30–31 FOMC meeting and 65% at the September 17–18 meeting.

Canada’s annual inflation rate for May 2024 rose to 2.9% from a three-year low of 2.7% in the previous month, contradicting market expectations of a slowdown to 2.6%. Although inflation is expected to remain near the 3% mark in the first half of the year, the halt in the disinflationary trend belied earlier bets that the Central Bank (BoC) would continue to ease monetary policy. The Canadian dollar strengthened to 1.365 per dollar, the strongest level since the beginning of the month.

Equity markets in Europe were mostly down on Tuesday. Germany’s DAX (DE40) fell by 0.81%, France’s CAC 40 (FR40) closed down 0.58%, Spain’s IBEX 35 (ES35) lost 0.48%, and the UK’s FTSE 100 (UK100) closed negative 0.41%.

European equity markets opened higher on Wednesday, building on strong gains on Wall Street. However, investors remained cautious ahead of Friday’s US PCE inflation data, which could affect the Federal Reserve’s monetary policy outlook. The GfK consumer climate indicator for Germany fell to 21.8 in July 2024 from a marginally revised 21.0 in the previous period, missing market estimates of 18.9 and marking the first decline in five months. The interruption of the recent upward trend in consumer sentiment shows that recovery from the consumer downturn will be difficult. A sustained recovery in consumer sentiment requires a slowdown in inflation.

WTI crude futures climbed above $81 a barrel on Wednesday, recovering some of the previous session’s losses, even after industry data pointed to an unexpected rise in US crude inventories, adding to fears of weaker demand in the world’s top oil consumer. API data showed that US crude inventories rose by 0.914 million barrels last week, contradicting market expectations of a 3 million barrel decline. Official data from the US EIA will be released today.

Asian markets were predominantly up yesterday. Japan’s Nikkei 225 (JP225) rose by 0.95%, China’s FTSE China A50 (CHA50) was down 0.15%, Hong Kong’s Hang Seng (HK50) added 0.25% and Australia’s ASX 200 (AU200) was positive 1.36%.

The offshore yuan depreciated to 7.29 per dollar, hitting its lowest level in seven months, mainly due to weak Central Bank guidance and a stronger US dollar. The People’s Bank of China (PBoC) set the average rate at 7.1248 per dollar, the lowest since November, suggesting the central bank may be allowing the yuan to weaken gradually.

The Australian dollar rose to $0.667, hitting a two-week high after better-than-expected domestic inflation data bolstered bets that the Reserve Bank of Australia (RBA) may raise interest rates again after a hawkish pause in June. Australia’s monthly Consumer Price Index rose to 4% in May, accelerating from 3.6% in April and beating market expectations of 3.8%. The latest figure was also the highest since November last year.

S&P 500 (US500) 5,469.30 +21.43 (+0.39%)

Dow Jones (US30) 39,112.16 −299.05 (−0.76%)

DAX (DE40) 18,177.62 −147.96 (−0.81%)

FTSE 100 (UK100) 8,247.79 −33.76 (−0.41%)

USD Index 105.62 +0.15 (+0.14%)

• – Australia Consumer Price Index (m/m) at 04:30 (GMT+3);
• – German GfK Consumer Climate (m/m) at 09:00 (GMT+3);
• – US Building Permits (m/m) at 15:30 (GMT+3);
• – US New Home Sales (m/m) at 17:00 (GMT+3);
• – US Crude Oil Reserves (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 JustMarkets

On Monday, the Dow Jones (US30) Index added 0.67% and rose to a one-month high, while the S&P 500 (US500) Index fell by 0.31%. The NASDAQ Technology Index (US100) closed negative 1.09% and fell to a one-week low. Weakness in technology stocks on Monday weighed on the Nasdaq 100 and the overall market after Truist Advisory Services downgraded the technology sector to Neutral from Elevated, citing valuation issues.

The Dallas Fed’s survey of the US manufacturing outlook for June rose 4.3 to negative 15.1, slightly weaker than expectations of 15.0. Comments from FOMC officials were mixed yesterday. Chicago Fed President Goolsbee said that the Fed may need to consider whether restrictive policies are putting too much pressure on the economy. San Francisco Fed President Daly said that if inflation falls more slowly than expected, it would be appropriate for the Fed to keep interest rates high for longer, but if inflation falls quickly or the labor market cools more than expected, it would be necessary to cut rates. Markets estimate the odds of a 25bp rate cut at 10% at the July 30–31 FOMC meeting and 65% at the next meeting on September 17–18.

Equity markets in Europe were mostly up on Monday. Germany’s DAX (DE40) rose by 0.89%, France’s CAC 40 (FR40) closed up 1.03%, Spain’s IBEX 35 (ES35) added 1.27%, and the UK’s FTSE 100 (UK100) closed positive 0.53%. European equity markets opened lower on Tuesday as cautious sentiment prevailed ahead of key US inflation data, the first presidential debate between Joe Biden and Donald Trump this week, and the French elections that begin this weekend.

Germany’s IFO Business Climate Index for June unexpectedly fell by 0.7 to 88.6 against expectations of a rise to 89.6. ECB executive board spokeswoman Schnabel said yesterday that the risk of new inflation spikes means the ECB is not committing to a fixed rate and remains data-dependent. Swaps discount the odds of an ECB rate cut by 25 bps at 5% for the July 18 meeting and 66% for the September 12 meeting.

WTI crude oil prices held just below $82 a barrel on Tuesday, at their highest levels in nearly two months, as geopolitical risks in Eastern Europe and the Middle East continue to support oil prices. The EU also imposed sanctions on more than two dozen ships carrying Russian oil and banned the transshipment of Russian liquefied natural gas (LNG) into the EU for shipment to other countries. In the Middle East, the war between Israel and Hamas showed no signs of abating as international mediation backed by the US has so far failed to reach a ceasefire agreement.

Asian markets were predominantly rising yesterday. Japan’s Nikkei 225 (JP225) was up 0.54% for the week, China’s FTSE China A50 (CHA50) added 0.30%, Hong Kong’s Hang Seng (HK50) was unchanged for the day, and Australia’s ASX 200 (AU200) was negative 0.80%. Hong Kong stocks were up 135 points in Tuesday morning trading. The mood was buoyed after Chinese President Xi Jinping urged the country to boost innovation, particularly in some key technologies. Meanwhile, state media outlet Global Times reported that Beijing wants the EU to drop plans to impose preliminary tariffs on Chinese electric cars after the two sides agreed to discuss a possible compromise.

The Bank of Japan (BoJ) released a summary of opinions from its June meeting, showing that members were divided on how to proceed with the next interest rate hike. One member called for an early decision due to upside risks to inflation, while others urged caution and demanded more confirmation from upcoming data. Chief currency diplomat Masato Kanda said Japan is ready to take action against volatile yen movements at “any time,” emphasizing that currency movements should be stable and reflect fundamentals.

Malaysia’s annual inflation rate rose to 2.0% in May 2024 from 1.8% in the previous three months, exceeding market estimates of 1.9% and marking the highest level since August 2023.

The Australian dollar climbed above $0.666, hitting two-week highs and receiving support from a hawkish monetary policy outlook from the Reserve Bank of Australia (RBA), which is expected to cut interest rates much later than other major central banks. Markets have all but ruled out the possibility of an RBA rate cut this year and expect total easing to be just 43 basis points by the end of 2025.

The Reserve Bank of New Zealand (RBNZ) predicted at its last meeting in May that it would not start cutting rates until the third quarter of 2025. However, investors have fully factored in the rate cut in November, and more than 130 basis points of easing are expected by the end of 2025.

S&P 500 (US500) 5,447.87 −16.75 (−0.31%)

Dow Jones (US30) 39,411.21 +260.88 (+0.67%)

DAX (DE40) 18,325.58 +162.06 (+0.89%)

FTSE 100 (UK100) 8,281.55 +43.83 (+0.53%)

USD Index 105.49 −0.31 (−0.29%)

• – Canada Consumer Price Index (m/m) at 15:30 (GMT+3);
• – US CB Consumer Confidence (m/m) at 17:00 (GMT+3);
• – US FOMC Cook Speaks at 19:00 (GMT+3);
• – US FOMC Bowman Speaks at 21:10 (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

At the end of Friday, the Dow Jones (US30) Index added 0.04% (+1.61% for the week), while the S&P 500 (US500) Index fell 0.16% (+0.75% for the week). The NASDAQ Technology Index (US100) closed negative 0.18% (for the week +0.39%). Weakness in chip company stocks pressured the broader market on Friday, even as S&P US PMI reports showed that the US economy continues to grow. The S&P US Manufacturing PMI for June unexpectedly rose 0.4 to 51.7, stronger than expectations of a decline to 51.0. In addition, the S&P Services PMI for June unexpectedly rose 0.3 to a two-year high of 55.1, stronger than expectations for a decline to 54.0. Stocks also declined as the quarterly expiration of options and futures occurred on Friday, prompting traders to roll over existing positions or open new ones. About $5.5 trillion of positions expired on Friday, according to options platform SpotGamma.

Equity markets in Europe were mostly down on Friday. Germany’s DAX (DE40) was down 0.50% (for the week +0.86%), France’s CAC 40 (FR40) decreased by 0.56% (for the week +1.19%), Spain’s IBEX 35 (ES35) lost 1.15% (for the week -0.03%), and the UK’s FTSE 100 (UK100) closed negative 0.42% (for the week +1.12%). The S&P Eurozone Manufacturing PMI for June unexpectedly fell by 1.7 to a 6-month low of 45.6, weaker than expectations of a rise to 47.9. The S&P Composite PMI for June unexpectedly fell by 1.4 to 50.8, weaker than expectations for a rise to 52.5.

Friday’s dollar strength pressured commodity markets. WTI crude oil fell below $81 per barrel. Nevertheless, the market remains supported by geopolitical risks in the Middle East as Israeli forces moved further into the Gaza Strip and Yemeni Houthis carried out another attack on a ship in the Arabian Sea on June 24. Meanwhile, Israel and Lebanon’s Hezbollah stand on the brink of a new conflict. Ecuador’s state oil company, Petroecuador, also declared force majeure on some Napo heavy oil shipments due to the shutdown of a major pipeline and oil wells amid heavy rains. In addition, recent data points to a decline in US crude oil inventories amid a rebound in energy consumption.

Asian markets were predominantly up last week. Japan’s Nikkei 225 (JP225) gained 0.40%, China’s FTSE China A50 (CHA50) fell by 1.22%, Hong Kong’s Hang Seng (HK50) gained 1.01%, and Australia’s ASX 200 (AU200) was positive 0.93%. Asian stock markets opened lower on Monday, reeling from weakness on Wall Street, as shares of Nvidia and other artificial intelligence chip makers saw heavy selling after strong gains.

Singapore’s annual inflation rate for May 2024 rose to 3.1%, exceeding market forecasts of 3.0% and accelerating from April’s 2-year low of 2.7%. The annualized core inflation rate unexpectedly came in at 3.1%, the same as in the previous two months, beating the consensus forecast of 3.0%. Monthly, CPI rose by 0.7%, the highest since February, after rising 0.1% in April.

The Australian dollar weakened below $0.665, extending recent losses as the US dollar rose on strong US business activity data that dampened expectations of an interest rate cut by the Federal Reserve. Investors are also cautiously awaiting Australian inflation data this week after the country’s central bank said it discussed the need for a rate hike at its June meeting and did not consider the case for a rate cut.

S&P 500 (US500) 5,464.62 −8.55 (−0.16%)

Dow Jones (US30) 39,150.33 +15.57 (+0.04%)

DAX (DE40) 18,163.52 −90.66 (−0.50%)

FTSE 100 (UK100) 8,237.72 −34.74 (−0.42%)

USD Index 105.83 +0.24 (+0.23%)

• – New Zealand Trade Balance (q/q) at 01:45 (GMT+3);
• – Singapore Consumer Price Index (m/m) at 08:00 (GMT+3);
• – German Ifo Business Climate (m/m) at 11:00 (GMT+3);
• – Canada BoC Gov Macklem Speaks at 20:45 (GMT+3);
• – US FOMC Member Daly 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

At the end of yesterday, the Dow Jones (US30) Index was up 0.77%, while the S&P 500 (US500) Index decreased by 0.25%. The NASDAQ Technology Index (US100) closed negative 0.79%. Stocks initially went up on Thursday, with the S&P 500 and Nasdaq 100 setting new record highs amid gains in chipmaker stocks. Chipmakers initially rose Thursday after Dell Technologies (DELL) CEO tweeted that his company is building an artificial intelligence factory with Nvidia (NVDA) to power Elon Musk’s xAI’s Grok supercomputer. However, a 5% drop in Qualcomm (QCOM) shares triggered a prolonged liquidation in chip stocks, negatively impacting the broader market.

Minneapolis Fed President Kashkari said it will probably take a year or two for the US to return to an inflation rate of 2%, suggesting he favors keeping interest rates on hold for longer. Weekly US initial jobless claims fell by 5,000 to 238,000, indicating a weaker labor market than expected at 235,000. US housing starts in May unexpectedly fell by 5.5% m/m to a 4-year low of 1.277 million, weaker than expectations for a rise to 1.370 million. May building permits, an indicator of future construction, unexpectedly fell by -3.8% m/m to a nearly 4-year low of 1.386 million, weaker than expectations for a rise to 1.450 million. Markets estimate the odds of a 25 bps rate cut at 10% at the next FOMC meeting on July 30-31 and 60% at the next meeting on September 17-18.

Equity markets in Europe mostly went up yesterday. Germany’s DAX (DE40) rose 1.03%, France’s CAC 40 (FR40) closed 1.34% higher, Spain’s IBEX 35 (ES35) added 0.94%, and the UK’s FTSE 100 (UK100) closed positive 0.82%.

Eurozone new car registrations for May fell 3.0% y/y to 912,000. Eurozone Consumer Confidence for June rose by 0.3 to a 2-1/3 year high of 14.0, weaker than expectations of 13.8. May German PPI was unchanged m/m and fell by 2.2% y/y, weaker than expectations of 0.1% m/m and 2.0% y/y.

As expected, the Bank of England (BoE) left the bank rate unchanged at 5.25% on Thursday, with seven officials voting to keep the rate unchanged and two voting to cut it. The BoE said the decision not to cut rates was “finely balanced,” suggesting policymakers may be open to a rate cut in the coming months. UK retail sales rose by 2.9% month-on-month in May 2024, recovering from an upwardly revised 1.8% decline in April and well above forecasts for a 1.5% rise. That’s the biggest increase in four months.

The Swiss franc weakened by nearly 0.5% to nearly 0.89 per US dollar after the Swiss National Bank (SNB) cut its key interest rate by 25 bps to 1.25% for the second consecutive meeting. Policymakers noted a reduction in underlying inflationary pressures to keep monetary conditions accommodative. Swiss inflation was 1.4% in May.

WTI crude oil prices held above $81 a barrel on Friday and rose more than 3% for the week, posting a second consecutive weekly gain as lower US crude inventories and escalating conflict in the Middle East boosted oil prices. Data released on Thursday showed US crude inventories fell by 2.547 million barrels last week, beating forecasts for a 2 million barrel decline.

Asian markets traded flat yesterday. Japan’s Nikkei 225 (JP225) gained 0.16%, China’s FTSE China A50 (CHA50) was down 0.26%, Hong Kong’s Hang Seng (HK50) lost 0.52% on Thursday, and Australia’s ASX 200 (AU200) was little changed for the day. In China, local indices continue to decline for the sixth consecutive week as an uneven economic recovery and a lack of strong political support dampen investor sentiment. Earlier this week, the People’s Bank of China (PBoC) left key lending rates unchanged despite market pressure for further policy easing.

Japan’s core consumer price index, which excludes fresh food but includes fuel costs, rose by 2.5% year-on-year in May 2024, up from April’s 3-month low of 2.2% and marking the first increase since February amid a surge in energy prices, particularly electricity, as the government scrapped subsidies altogether. Meanwhile, the US Treasury Department added Japan to a list of countries monitored as currency manipulators.

S&P 500 (US500) 5,473.17 −13.86 (−0.25%)

Dow Jones (US30) 39,134.76 +299.90 (+0.77%)

DAX (DE40) 18,254.18 +186.27 (+1.03%)

FTSE 100 (UK100) 8,272.46 +67.35 (+0.82%)

USD Index 105.65 +0.40 (+0.38%)

• – Australia Manufacturing PMI (m/m) at 02:00 (GMT+3);
• – Australia Services PMI (m/m) at 02:00 (GMT+3);
• – Japan National Core Consumer Price Index at 02:30 (GMT+3);
• – Japan Manufacturing PMI (m/m) at 03:30 (GMT+3);
• – Japan Services PMI (m/m) at 03:30 (GMT+3);
• – UK Retail Sales (m/m) at 09:00 (GMT+3);
• – German Manufacturing PMI (m/m) at 10:30 (GMT+3);
• – 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);
• – Canada Retail Sales (m/m) at 15:30 (GMT+3);
• – US Manufacturing PMI (m/m) at 16:45 (GMT+3);
• – US Services PMI (m/m) at 16:45 (GMT+3);
• – US Existing 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 JustMarkets

At the end of the day yesterday, the Dow Jones Index (US30) gained 0.15%, and the S&P 500 Index (US500) gained 0.25%. The NASDAQ Technology Index (US100) closed positive 0.17%. Volatility on the indices was extremely low due to the bank holiday weekend in the US.

The Canadian dollar traded near 1.37 per US dollar, rebounding from a five-week low of 1.376 recorded on June 7, amid a weaker US dollar and increased foreign exchange inflows. The Canadian currency is also under pressure from rising debt levels and recent comments from Bank of Canada Governor Tiff Macklem about the possibility of further rate cuts, which could put further pressure on the loonie.

Equity markets in Europe were mostly down yesterday. The German DAX (DE40) decreased by 0.35%, the French CAC 40 (FR40) closed down 0.77%, the Spanish IBEX 35 (ES35) lost 0.10%, the British FTSE 100 (UK100) closed positive 0.17%.

In the Eurozone, market participants actively follow France’s political situation. Legislative elections are scheduled for June 30 and July 7, and the far-right Rassemblement National, which proposes measures such as cutting sales taxes and lowering the retirement age, is leading in the polls. As a result, France’s risk premium and bond yields rose sharply as investors began to worry about possible increases in government spending that could worsen France’s financial health. Meanwhile, Le Pen told Le Figaro that she is “respectful” of institutions and, if she wins, will not try to oust Macron in an attempt to appeal to moderates and investors.

Oil prices held near seven-week highs as geopolitical issues in the Middle East heightened supply concerns. Investors are cautiously awaiting today’s US oil inventories report from the Energy Information Administration, which has been postponed a day due to a national holiday.

Asian markets traded without a single dynamic yesterday. Japan’s Nikkei 225 (JP225) gained 0.23%, China’s FTSE China A50 (CHA50) declined 0.09%, Hong Kong’s Hang Seng (HK50) gained 2.87%, and Australia’s ASX 200 (AU200) was negative 0.11%.

The New Zealand dollar rose against the US dollar thanks to stronger-than-expected first-quarter GDP data. New Zealand’s economy grew by 0.2% in the first quarter compared to 0% in the previous quarter, beating expectations. On an annualized basis, GDP increased by 0.3% in the first quarter, compared to a contraction of 0.2% in the previous quarter. The strengthening GDP growth suggests that New Zealand is out of recession. In addition, the weakening US dollar has also helped the kiwi strengthen as the recent weak US retail sales report has increased the likelihood that the Federal Reserve (Fed) will cut interest rates in the coming months.

The offshore yuan fell to 7.28 per dollar, hitting its lowest level in more than seven months, following the central bank’s decision to set a much weaker official discount rate. The People’s Bank of China set the average rate at 7.1192 per dollar, the weakest since November 2023 and the biggest one-day move since April 16. Meanwhile, earlier on Thursday, the People’s Bank of China (PBoC) left key lending rates unchanged at the June fixing, matching market expectations. The 1-year prime rate (LPR) was left at 3.45% and the 5-year LPR at 3.95% after a record 25 basis points cut in February. Both rates are at historic lows, reflecting the fragile economic recovery and reinforcing calls for additional support measures from Beijing.

S&P 500 (US500) 5,496.80 +1.13 (+0.02%)

Dow Jones (US30) 38,818.90 -55.0 (-0.14%)

DAX (DE40) 18,067.91 −64.06 (−0.35%)

FTSE 100 (UK100) 8,205.11 +13.82 (+0.17%)

USD Index 105.24 −0.02 (−0.02%)

• – New Zealand QDP (q/q) at 01:45 (GMT+3);
• – China PBoC Loan Prime Rate (m/m) at 04:15 (GMT+3);
• – German Producer Price Index (m/m) at 09:00 (GMT+3);
• – Switzerland Trade Balance (m/m) at 09:00 (GMT+3);
• – Switzerland SNB Interest Rate Decision at 10:30 (GMT+3);
• – Switzerland SNB Monetary Policy Assessment at 10:30 (GMT+3);
• – Switzerland SNB Press Conference at 11:00 (GMT+3);
• – Norway NB Interest Rate Decision at 11:00 (GMT+3);
• – UK BoE Interest Rate Decision at 14:00 (GMT+3);
• – UK BoE MPC Meeting Minutes at 14:30 (GMT+3);
• – US Initial Jobless Claims (w/w) at 15:30 (GMT+3);
• – US Philadelphia Fed Manufacturing Index (m/m) at 15:30 (GMT+3);
• – US Crude Oil Reserves (w/w) at 18:00 (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.