Ipek Ozkardeskaya
Swissquote Bank Ltd
While last week began on optimism that inflation could allow the Fed to cut rates as early as in September, this week begins on pessimism that the latter will probably not be possible. The US markets are closed today, but the US 2-year yield ended last week near 4.95% and the probability of a September cut fell to a coin flip. But regardless, the US stock markets continue to trade near record levels. The S&P500 and Nasdaq both closed last week a few points below their ATH levels, boosted by a fresh shot of energy after Nvidia reported another set of blowout results and a strong forecast – under these conditions, it will be hard for the tech rally to expand to the rest of the market.
In China and nearby, the CSI 300 and HSI index are better bid this Monday morning, the Chinese stimulus measures are supportive of gains, but the rising tensions with the West are threatening the Chinese companies’ revenue expectations.
Here in Europe, investors will also be focused on fresh inflation data for May. If this week’s inflation data shows no surprise, the dovish divergence between the European Central Bank (ECB) and the Federal Reserve (Fed) should prevent the EURUSD from clearing the 1.09 offers.
This report has been prepared by Swissquote Bank Ltd and is solely been published for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any currency or any other financial instrument. Views expressed in this report may be subject to change without prior notice and may differ or be contrary to opinions expressed by Swissquote Bank Ltd personnel at any given time. Swissquote Bank Ltd is under no obligation to update or keep current the information herein, the report should not be regarded by recipients as a substitute for the exercise of their own judgment.
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