carl
Wall Street experienced a late surge in tech stocks, offsetting earlier declines, while Treasuries remained strong due to hopes of interest rate cuts following disappointing manufacturing data. Asian markets showed slight weakness, and oil prices continued to decline amid concerns about increased supply later in 2024. Gold prices remained stable as investors awaited US economic data for clues about future interest rates. GameStop saw gains after a significant bet by Roaring Kitty was revealed in a Reddit post. In the UK, spending growth slowed in May due to higher bills and unfavorable weather. Bank of Japan Governor Kazuo Ueda indicated readiness to adjust monetary support if prices rise as anticipated. The upcoming release of Friday’s non-farm payrolls report is significant, serving as a key gauge for market sentiment regarding future US interest rates. The European Central Bank is expected to implement a rate cut on Thursday, while the Bank of Canada will announce its decision on Wednesday. The FTSE 100 began Monday with a promising rally but ended in the red due to a decline in shares of pharmaceutical giant GSK. Futures indicate a quiet start for Tuesday.
British Spending Growth Slows in May
British consumers faced gloomy conditions in May due to wet weather and persistent financial pressures. A survey revealed that spending growth hit its lowest point in over three years. Barclays reported that spending on their customers’ debit and credit cards only increased by 1.0 per cent compared to the previous year, down from 1.6 per cent growth the previous month, marking the weakest rise since February 2021. Additionally, the British Retail Consortium revealed that sales at member stores rose by a modest 0.7 per cent annually, recovering from April’s 4.0 per cent decline but significantly lower than the 3.9 per cent growth recorded a year earlier.
BOJ Ready to Shift Monetary Policy if Prices Meet Forecast: Ueda
Bank of Japan Governor Kazuo Ueda announced that the central bank might adjust its monetary policy if core inflation increases as projected. He mentioned in parliament that any changes in the economic outlook or associated risks could lead to a revision of interest rates. Japan’s Finance Minister Shunichi Suzuki and the Philippines’ Central Bank Governor Eli Remolona also signalled their readiness to intervene in the markets. Currently, the yen has fallen by 0.2 per cent against the dollar to ¥156.41, while the Philippine peso remains unchanged at 58.67 pesos.
South Korea’s Inflation Hits 10-Month Low
South Korea’s consumer inflation dropped to a 10-month low at 2.7 per cent in May, below market expectations. Monthly, the CPI rose by 0.1 per cent. Agricultural prices fell by 2.5 per cent, while petroleum and personal service prices increased by 0.3 per cent and 0.4 per cent, respectively.
What’s Coming Up
The main economic focus in the coming days will be the European Central Bank’s interest rate decision on Thursday, amidst a slew of early-month data releases. There is an approximately 80 per cent expectation that the Bank of Canada will reduce its rate to 4.75 per cent during Wednesday’s meeting, with a total anticipated cut of 59 basis points for the year. Key data releases to monitor include the US employment figures and EU GDP data on Friday. Country-specific purchasing managers’ index (PMI) data will be released earlier in the week, providing global economic comparisons. The US jobs report is particularly significant as it will be the final major economic indicator before the Federal Reserve’s monetary policy meeting on June 11-12.
In India, Prime Minister Narendra Modi is projected to secure a record-tying third consecutive term on Tuesday when the 642 million votes from the world’s largest election are counted.
Asian Markets Dip Amidst Disappointing US Manufacturing Data
The Dow Jones Industrial Average decreased by 0.30 per cent to 38,571.03, while the S&P 500 inched up 0.11 per cent to 5,283.40, and the Nasdaq Composite climbed 0.56 per cent to 16,828.67. Major tech stocks such as Apple, Amazon, Alphabet, and Meta saw gains, though Microsoft and Tesla experienced declines. Nvidia jumped 4.9 per cent after CEO Jensen Huang announced the rollout of their next-generation AI chip platform in 2026. GameStop soared 21 per cent following a Reddit post by stock influencer Keith Gill, also known as “Roaring Kitty,” which revealed a $116 million investment in the gaming retailer.
European markets showed positive momentum with EUROSTOXX 50 futures up 0.10 percent and FTSE 100 futures flat at 8273.5. In the US, S&P 500 futures edged up 0.04 per cent, and Nasdaq futures added 0.05 per cent. In Asian markets, Hong Kong’s Hang Seng Index rose by 0.41 per cent in early trading, and China’s CSI300 Index edged up by 0.21 per cent. Australian shares (AXJO) fell by 0.14 per cent, and Japan’s Nikkei index (N225) dropped by 0.49 per cent. US crude oil prices fell by 0.63 per cent to $73.75 per barrel, and Brent crude declined to $77.93 per barrel. Both benchmarks reached four-month lows on Monday after OPEC+ decided to start reversing some production cuts from October. Spot gold prices saw a slight increase, trading at $2,347.96 per ounce.
