At the close of trading on Friday, the Dow Jones Index (US30) decreased by 0.32% (+1.16% for the week), while the S&P 500 (US500) lost 0.37% (+2.35% for the week). NASDAQ Technology Index (US100) closed negative by 0.68% on Friday (+2.73% for the week).
The US Federal Reserve officials are expected to speak this week, including the testimony of the head of the Fed before the US Congress. Investors are on alert for any more hawkish signals regarding monetary policy, especially after the Fed noted a higher final interest rate this year. Any hawkish remarks would increase the likelihood of a rate hike at the July meeting, which would be negative for stocks but positive for the dollar index.
Following a meeting between US Secretary of State Anthony Blinken and Chinese Foreign Minister Qin Gang, the United States and China failed to overcome their most serious differences, but they were able to discuss them in a potentially constructive way and agreed to continue negotiations. China's foreign ministry stated that Sino-US relations are at their lowest level since they were established. Despite Blinken's presence in Beijing, the prospects for any significant breakthrough on the most difficult issues facing the planet's two largest economies are slim.
Equity markets in Europe were mostly up on Friday. German DAX (DE30) gained 0.41% (+1.90% for the week), French CAC 40 (FR40) jumped by 1.34% (+1.91% for the week), Spanish IBEX 35 (ES35) increased by 0.68% (+1.60% for the week), British FTSE 100 (UK100) added 0.19% (+1.06% for the week).
In the Eurozone, the inflation rate did not change compared to the previous month. Consumer inflation remained at 6.1% in annual terms, while core inflation (excluding food and energy prices) remained at 5.3% y/y. This increases the likelihood of another 0.25% rate hike at the ECB's July meeting.
Crude oil markets are seeing a slight profit-taking after last week's strong gains. Oil prices are also down as markets anticipate further interest rate cuts from China.
Asian markets traded higher last week. Japan's Nikkei 225 (JP225) jumped by 3.99% for the week, China's FTSE China A50 (CHA50) increased by 3.12%, Hong Kong's Hang Seng (HK50) ended the week up by 3.08%, and Australia's S&P/ASX 200 (AU200) ended the week positive 2.13%.
The People's Bank of China (PBoC) is expected to cut its benchmark lending rate further on Tuesday after the bank cut medium- and short-term lending rates last week. Although the move sparked a strong rally in Chinese markets last week, they have still been trading relatively lower since the beginning of the year, as worries about the country's slowing growth persist. Goldman Sachs (GS) cut its economic growth forecast for China, joining a number of other investment banks. Interest rate hikes by global central banks are negative for Asian markets, given that they limit the flow of foreign capital into the region and also reduce the attractiveness of risky assets.
S&P 500 (F) (US500) 4,409.59 −16.25 (−0.37%)
Dow Jones (US30)34,299.12 −108.94 (−0.32%)
DAX (DE40) 16,357.63 +67.51 (+0.41%)
FTSE 100 (UK100) 7,642.72 +14.46 (+0.19%)
USD Index 102.30 +0.18 (+0.18%)
- – Hong Kong Unemployment Rate (m/m) at 11:30 (GMT+3);
- – Canada Producer Price Index (m/m) at 15:30 (GMT+3).
by , 2023.06.19
We advise you to get acquainted with the daily forecasts for the major currency pairs.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.
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