Economic Indicators & Central Banks:
- Australia’s CPI surged to 4% in May, up from 3.6% in April, complicating the central bank’s plans for rate cuts. This increase was mainly driven by higher housing and transport costs.
- European stocks followed the upward trend after a volatile Asian session and a rally in US session overnight, with markets awaiting new trading catalysts.
- China’s central bank once again loosened its grip on the Yuan as the currency traded near the lower end of its fixed daily trading band. A Bloomberg survey indicated that China’s export outlook is set to improve, supporting growth in the world’s second-largest economy despite slowing consumer spending.
- Treasuries lost ground with yields ending a few basis points higher as hawkish comments from the Fed’s Bowman combined with risk-on flows into the NASDAQ and a slightly better than expected confidence report weighed on bonds.
- Investors are likely to continue investing in US stocks at any sign of a pullback as the Fed moves closer to reducing interest rates, according to Societe Generale SA, which expects the easing cycle to begin early next year.
Asian & European Open:
- Asia stock indices rose, while Australian stocks declined. US stock futures edged higher in Asia, bolstered by a rebound in Nvidia shares.
- The bounce in Nvidia after its 3-day rout helped lift tech and in turn the NASDAQ and the S&P500. Nvidia climbed 6.8%,following a $430 billion sell-off. The NASDAQ ended with a 1.26% gain, while the S&P 500 was 0.39% in the green. The Dow dropped -0.76% with a -2.67% plunge in materials leading a broadbased decline.
- Rivian Automotive Inc. surged as Volkswagen AG announced a $5 billion investment to form a joint venture with the electric-vehicle maker.
Financial Markets Performance:
- The USDIndex firmed but off its 105.78 peak.
- USDJPY held just below the critical 160 per Dollar level, raising concerns about possible market intervention.
- The AUD strengthened to 0.6688 due to faster-than-expected inflation data.
- USOIL held a decline following an industry report indicating a small increase in US crude inventories ahead of official government data.
- Copper fell to its lowest level in over 2 months due to sustained pressure from weak Chinese demand. Gold remained largely unchanged.
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Andria Pichidi
Market Analyst
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