- U.S. indexes closed yesterday's session firmly under the radar, on a wave of sell-offs in the major technology sector. The Nasdaq 100 lost nearly -2.2%, the S&P 500 nearly -0.9%, but the DJIA closed the session flat, while the Russell 2000 climbed more than 3.5% higher, to levels not seen since local peaks in March, this year
- After m/m inflation fell for the first time since 2021, the market is pricing in a Fed rate cut in September with a near 90% probability and giving about a 25% chance of up to three rate cuts, later this year. Yields on 10-year Treasury bonds, however, returned above 4.2% and recovered 4 basis points from yesterday's lows
- A drop in U.S. inflation and a weakening dollar, as well as strong performance of real estate developer stocks ahead of the Chinese Communist Party plenum (over 6% of the benchmark) and new restrictions on short selling supported sentiment in the Chinese stock market. The Hang Seng gained more than 2.2% today, despite the sell-off in the US;
- Asian technology companies lost the vast majority of their ground, while a sell-off in U.S. megatechs supported 'concerns' about capital turnover from major technology companies, amid a reversing inflation trend in the U.S.
- Japanese indexes fell on a wave of strong yen appreciation that prompted speculation yesterday about possible currency intervention. The Nikkei lost more than 2%, and the Topix lost nearly 1%. Shares of semiconductor giant Advantest lost more than 5% after yesterday's 5% sell-off at Nvidia
- Today, major U.S. banks will report results: JP Morgan, Wells Fargo and Citigroup. Analysts at FactSet estimate that profit in the banking sector will fall by about 10% y/y in Q2 2024. In the U.S. market, options on a number of key underlying assets will expire today, which could 'support' the recovery scenario next week and curb dealers' appetite for hedging, amid a sudden surge in the 'delta'
- Despite yesterday's sell-off in the tech sector, the global stock market is on track to close out its 6th straight week of gains, its best streak since March, this year
- Gold retreats to the area of $2407 per ounce, but is still trading close to the May maximums. EURUSD is holding near 1.087
- Bitcoin is trading near $57,000; the rally to $60,000 was halted yesterday when sentiment on the Nasdaq 100 weakened
- The VIX index is trading more than 7% higher today; European index futures suggest a slightly higher opening to the session on the Old Continent
- Fed Goolsbee dovishly signalled that "(...) As inflation falls, leaving Fed policy rate steady means the Fed is tightening policy. (...) The June CPI report was excellent; improvement on shelter inflation profoundly encouraging."
- Singapore's annualized GDP rose 2.9% y/y vs. 2.7% forecast and 2.7% previously
- The main macro reading today will be US producer inflation (PPI) (1:30 PM BST) and preliminary US consumer sentiment and inflation expectations according to the University of Michigan survey (3 PM BST)
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