Global stock markets rose on Monday on positive updates from China, in which they are looking to loosen some of its strict COVID-19 restrictions. The U.S. market posted solid gains in the early session but was soon erased due to rising Treasury yields, eventually all three major indices closed up marginally by around 0.3%. Twitter share price fell after Musk accused them of failing to reveal more information regarding spam and fake accounts.
European equities rallied too, driven by banks and commodity-linked stocks, with both London’s FTSE 100 and German DAX hiked 1% and 1.34% respectively. Markets are now expecting the ECB to rise interest rates this year, in which a 50bps hike is being priced in. Meanwhile, UK prime minister Boris Johnson survived a bruising confidence vote on Monday evening, however, more than one-third of the MPs still want to eject him.
In Asia, Australia’s ASX 200 dropped soon after the opening of today’s trading session, currently down by 0.8%, while Japan’s Nikkei 225 index increased 0.4%. Shares in Did, the Chinese equivalent of Uber, jumped 24.32% in New York on news that the Chinese regulators allow the company to resume business after cyber probe. Investors are now expecting piecemeal improvement in regulatory pressure on the Chinese Internet sectors.
Brent crude price surged higher on Tuesday on expected demand recovery in China, currently trading at $122.31 per barrel. In contrast, bitcoin price dropped sharply today, now below $30K at around $29.3K. U.S. hedge fund Elliott Management sued London Metal Exchange for $450mn over nickel market chaos.
Figure 1 (Source: IS Prime) USD/JPY daily : Lagging behind central banking counterparts, the BOJs' reluctance in raising interest rates has left the Japanese yen in long-term depreciation.
Headliner to Review
- The Chinese Services PMI in May continue to decline, came out to be 41.4. However, such reduction was not as severe as those seen in April.
Headliner to Watch
- The Japanese final quarterly GDP figure is due to release on Wednesday, forecasted to contract further by 0.3%.
- The Italian retail sales figure is expected to increase marginally by 0.1%, month-to-month.
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