The Dow Jones Index (US30) fell by 0.55% to a two-week low on Tuesday, while the S&P 500 Index (US500) gained 0.03%. The NASDAQ Technology Index (US100) closed positive 0.59%. Minneapolis Fed President Kashkari's comments were somewhat hawkish for Fed policy and negative for stocks when he said the US economy remains "remarkably resilient" and the Fed should monitor whether inflation is slowing enough to justify an interest rate cut.

This Friday, markets await the PCE deflator data for April, the Fed's preferred inflation gauge, to see if and when the Fed will start cutting interest rates. The core PCE deflator for April is expected to be unchanged from March at 2.8% y/y.

Nvidia (NVDA) shares are up more than 4%, leading the Nasdaq 100 stock as it continues its rally from last Thursday when the company reported better-than-expected first-quarter earnings and projected better-than-expected second-quarter earnings. Shares of Dell Technologies (DELL) are up over 3%, complementing last Thursday's and last Friday's 7% gain after Aletheia Capital Limited initiated coverage on the stock with a "buy" recommendation and a $240 price target. Airbnb (ABNB) shares are up over 2% after Wedbush upgraded their rating to "Outperform" from "Neutral" with a $165 price target.

Equity markets in Europe were mostly down yesterday. Germany's DAX (DE40) fell by 0.52%, France's CAC 40 (FR40) closed down 0.92%, Spain's IBEX 35 (ES35) lost 0.44%, and the UK's FTSE 100 (UK100) closed negative 0.76%.

ECB Governing Council spokesman Holzmann said he would support an ECB interest rate cut next week but would not automatically support moves after the June rate cut. ECB Governing Council spokesman Knot said the ECB is increasingly confident that consumer price growth will return to 2% next year and may gradually ease its "historically tight" monetary policy.

WTI crude oil prices held above $80 a barrel on Wednesday, near their highest levels in four weeks, amid expectations that OPEC+ countries will extend voluntary production cuts of around 2.2 million barrels daily for the third quarter at a meeting this weekend. Geopolitical concerns in the Middle East also continued to support oil prices as fighting in the Gaza Strip intensified and another ship was attacked in the Red Sea.

Asian markets were mostly up on Monday. Japan's Nikkei 225 (JP225) was down 0.11% for the day, China's FTSE China A50 (CHA50) decreased by 0.45%, Hong Kong's Hang Seng (HK50) was down 0.03% and Australia's ASX 200 (AU200) was negative 0.28%.

The yuan fell to 7.2487 per dollar as the People's Bank of China (PBoC) gradually cut its daily discount rate for the managed currency to levels not seen in four months. The PBoC is constantly struggling to find the optimal rate of yuan depreciation to help the economy grow without causing market panic and capital outflows. The Central Bank has held the currency steady for most of the year, but pressure has been building due to rising capital outflows and weak domestic growth.

The Australian dollar stabilized near $0.665 as investors digested stronger-than-expected inflation data. The data showed that Australia's monthly inflation rate accelerated to 3.6% year-on-year in April from 3.5% in March. This also defeated market expectations of a slowdown to 3.4% and was the highest reading since November. Markets are now betting that the Reserve Bank of Australia (RBA) will keep rates on hold for longer, with a rate cut not fully anticipated until May next year. The latest RBA meeting minutes showed that the board considered raising rates in May but ultimately decided to keep policy steady.

Vietnam's annual inflation rate rose to 4.44% in May 2024 from 4.4% in the previous month. This is the highest inflation rate since January 2023 as prices rose for food and beverages (4.47% vs. 4.32% in April), transportation (4.58% vs. 4.24%), and culture, entertainment, and tourism (2.01% vs. 1.94%).

S&P 500 (US500) 5,306.04 +1.32 (+0.03%)

Dow Jones (US30) 38,852.86 −216.73 (−0.55%)

DAX (DE40) 18,677.87 −96.84 (−0.52%)

FTSE 100 (UK100) 8,254.18 −63.41 (−0.76%)

USD Index 104.60 0 (0%)

Important events today:

• – Australia Consumer Price Index (m/m) at 04:30 (GMT+3);
• – German GfK Consumer Climate (m/m) at 09:00 (GMT+3);
• – German Consumer Price Index (m/m) at 15:00 (GMT+3);
• – US FOMC Member Williams Speaks at 20:45 (GMT+3).

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