Presentations by regional representatives of the Federal Reserve system are expected today

Dmitry Lukashov IFC Markets

Top daily news

The statement of the head of the FRS Jerome Powell that the tightening of monetary policy should not be rushed, provoked a correction. The dollar index dropped after strong growth in the previous week, while quotes of precious metals and stock indices, on the contrary, rose. Today, investors expect statements from three regional directors of the Federal Reserve System at once. Oil prices have hit new highs since October 2018 in anticipation of the OPEC + meeting on July 1. Investors do not exclude that oil quotes will reach $ 100 per barrel next year.

Forex news

Currency Pair	Change
EUR USD	+0.02%
GBP USD	+0.15%
USD JPY	+0.21%
AUD USD	+0.02%

On Tuesday, the US dollar index fell for the second day in a row. This happened against the background of the statement of the head of the Federal Reserve Jerome Powell that the US central bank will need time to tighten monetary policy. In his opinion, the surge in inflation in May to 5% is temporary. New York Fed director John Williams said the debate over the timing of the Fed's rate hike is far from over. U.S. yield 10-year Treasury on Monday fell to 1.354% per annum, which is the lowest in 4 months. Now it has slightly adjusted upward. Recall that the next Fed meeting will be held on July 28. Last week, the US Dollar Index posted its highest growth of 1.9% since March 2020. The main positive was the Fed's decision to raise the rate twice in 2023. Moreover, 7 out of 18 directors of the Federal Reserve offered to carry out the first-rate hike next year. Today, three FRS representatives are expected to speak at once: Michelle Bowman, Raphael Bostic and Eric Rosengren.

Stock market news

Indices	Change
Dow Jones Index	+0.2%
S&P 500	+0.51%
Nasdaq 100	+0.79%
US Dollar Index	-0.02%

On Tuesday, the change in US stock indexes rose for the second day in a row. Nasdaq has updated its all-time high. The postponement of the FRS rate hike has a negative impact on the dollar exchange rate, but at the same time, it supports the stock market. Nvidia, a maker of computer graphics cards, rose 2.5% yesterday on the back of demand for video cards from cryptocurrency miners. In 2 years, Nvidia quotes have skyrocketed almost 6 times. Microsoft shares (+ 1.1%) hit their all-time high yesterday. The company's capitalization has almost reached $ 2 trillion. Additional positive for the stock market was the data on sales of residential buildings in the secondary market in May (8.5 million). They exceeded the forecast (5.72 million). Markit Manufacturing PMI for June and new home sales in May are due in the US today. The forecast is positive. US index futures are currently trading higher.

Commodity market news

Commodities	Change
WTI Crude	+0.67%
Brent Crude Oil	+0.84%

World oil prices hit their highs yesterday since October 2018. This was facilitated by the recovery of the global air travel and international tourism market after the coronavirus pandemic. Bank of America does not rule out that oil prices will reach $ 100 per barrel next year. The independent American Petroleum Institute announced a decrease in US oil reserves for the week by 7.2 million barrels. Their decline has been observed for the 5th week in a row. Investors are looking forward to the next OPEC + meeting, which will take place on July 1. Russia, under Western economic sanctions, calls on the cartel to increase oil production more than previously planned (+ 441 thousand barrels per day, bpd). However, the final increase in oil production in July will be greater anyway, since Saudi Arabia will additionally increase production by 400 thousand bpd. Following the planned hikes for July, OPEC + 's total production will be 5.76 million bpd less than the pre-covid level in May 2020. A smooth recovery in oil production should take place by the end of the year but will depend on world prices and demand.

Gold market news

Metals	Change
Gold	+0.31%
Silver/US Dollar	+0.65%

Gold quotes dropped slightly on Tuesday. In general, there is a correction and an increase in prices for precious metals against the background of a decline in the US dollar index and low yields on US government bonds.

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Author

Dmitry Lukashov

IFC Markets

Dimtry Lukashov is the senior analyst of IFC Markets. He started his professional career in the financial market as a trader interested in stocks and obligations.

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