Morning wrap (26.06.2023)

• Feud between Russian Ministry of Defense and PMC Wagner escalated into a rebellion over the weekend with the latter taking control of a few Russian cities and marching an armored convoy towards Moscow

• However, a deal between Kremlin and PMC Wagner was brokered by Belarusian president Lukashenko and the short-lived rebellion was ended

• Given lack of any significant resistance from the Russian army against Wagner's advance on Moscow, war analysts wonder whether the uprising was staged

• As Wagner's mutiny started and ended before the opening of markets, we do not see any major reaction to the events. Oil and precious metals opened slightly higher

• Indices from Asia-Pacific traded mixed during the first session of a new week. Nikkei dropped 0.1%, S&P/ASX 200 declined 0.4%, Kospi gained 0.4% and Nifty 50 gained 0.1%. Indices from China traded 0.3-1.5% lower

• European index futures point to a more or less flat opening of the cash session on the Old Continent

• SNB Chairman Jordan said that recent rate hikes were likely not enough to bring inflation down

• Chinese travel activity has still not recovered after a pandemic. Data for recent Dragon Boat Festival holiday (June 22-24) showed travel was 22.8% below pre-pandemic 2019

• Summary of Opinions from BoJ June meeting showed that CPI inflation is not expected to drop below target towards the end of the year. On top of that, one member saw it as appropriate to make changes to yield curve control mechanism

• OPEC expects global oil demand to reach 110 million barrels per day by 2045

• Saudi Aramco head said that China and India account for over 2 million barrels of oil demand growth

• S&P Global lowered its Chinese GDP growth forecast for 2023 from 5.5 to 5.2%

• Cryptocurrencies are trading lower - Bitcoin drops 0.6%, Ethereum trades 0.9% lower and Dogecoin slumps 1.6%

• Energy commodities gain - oil trades 0.2% higher while US natural gas prices jump 2%

• Precious metals advance - gold trades 0.4% higher, silver jumps 1.6% and platinum adds 1.4%

• GBP and NZD are the best performing major currencies while USD and CHF lag the most

OIL.WTI opened higher following a short-lived Russian coup but all of the gains have been erased already. Source: xStation5