Morning wrap (13.06.2024)

6:46 AM 13 June 2024
  • Despite Federal Reserve more cautious inflation outlook and higher inflation projections, Wall Street reached new all-time highs as investors still expect that rates will fall probably twice in 2024, with 70% probability on first cut in September
  • Futures on US indices rise after higher than expected Broadcom (AVGO.US) earnings. The quarterly report lifted company stock 15% higher in US after market. Semiconductors producer lifted full-year guidance and announced 10-1 stock split; the company has 5% weigh in Nasdaq 100. Broadcom's revenue jumped 43% YoY on higher AI chips demand 
  • The S&P 500 ended yesterday's session above 5,400. Treasury yields moderated decline following the chair Powell press conference. Fed swaps fully price in 25 bp interest rate cuts in November and December. 
  • Federal Reserve expect now four rate cuts in 2025, planning just one cut this year (down from three expected by policymakers in March.)  In the statement, we could see a little change about inflation: "modest further progress towards the committee's 2% inflation objective" vs "lack of additional progress" included in May. US core consumer price index had cooled yesterday, to the slowest pace in more than 36 months
  • Sentiments on Asian session were weak today. Before the BoJ interest rate announcement on Friday, Japanese stocks continued to drop this week, but Nikkei was losing only slightly today, with Topix falling more than 0.6%. Market fears that the Bank of Japan may reduce bond purchases
  • AUDUSD loses almost 0.3% today after strong Australian job market data. Unemployment in May came in line with expectations of 4% (4.1% previously), but employment change was higher than expected with 39.7k reading vs awaited cooling to 30k after and 38.5k previously. Also, participation rate rose to 66.8% from 66.7% in April
  • Stocks in South Korea rose, and KOSPI was rising more than 1.2% today. Also, Chinese stocks in Hong Kong rose, and Hang Seng Index has ended Asian session with almost 0.5% gains
  • Chinese electric cars producers noted some gains after analysts noted that the market had anticipated the European Union's announcement of tariff rises.
  • The EURUSD exchange rate rose above 1.08 yesterday and is holding those gains today; giving back only a negligible portion of them. Interestingly, contracts on the dollar index (USDIDX) are simultaneously trading more than 0.1% higher
  • Among precious metals, we see decidedly weaker sentiment. Silver is losing almost 1.9%, and gold contracts are retreating more than 0.5%, although they are still trading near $2310 per ounce
  • Brent and WTI crude oil are losing slightly, while NATGAS is trading flat. Among agricultural commodity contracts, we see little volatility
  • Wheat rebounded above $615 per bushel after erasing entirely the day before yesterday's dynamic gains and falling to $610 per bushel. The WASDE report failed to push the price below the $600 support
  • Cryptocurrencies are mostly trading lower; Bitcoin is trading down 1.5%, with investors paying below $68,000 for 1 BTC today. Ethereum remains above $3500


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