At the end of the day yesterday, the Dow Jones Index (US30) gained 0.15%, and the S&P 500 Index (US500) gained 0.25%. The NASDAQ Technology Index (US100) closed positive 0.17%. Volatility on the indices was extremely low due to the bank holiday weekend in the US.

The Canadian dollar traded near 1.37 per US dollar, rebounding from a five-week low of 1.376 recorded on June 7, amid a weaker US dollar and increased foreign exchange inflows. The Canadian currency is also under pressure from rising debt levels and recent comments from Bank of Canada Governor Tiff Macklem about the possibility of further rate cuts, which could put further pressure on the loonie.

Equity markets in Europe were mostly down yesterday. The German DAX (DE40) decreased by 0.35%, the French CAC 40 (FR40) closed down 0.77%, the Spanish IBEX 35 (ES35) lost 0.10%, the British FTSE 100 (UK100) closed positive 0.17%.

In the Eurozone, market participants actively follow France's political situation. Legislative elections are scheduled for June 30 and July 7, and the far-right Rassemblement National, which proposes measures such as cutting sales taxes and lowering the retirement age, is leading in the polls. As a result, France's risk premium and bond yields rose sharply as investors began to worry about possible increases in government spending that could worsen France's financial health. Meanwhile, Le Pen told Le Figaro that she is "respectful" of institutions and, if she wins, will not try to oust Macron in an attempt to appeal to moderates and investors.

Oil prices held near seven-week highs as geopolitical issues in the Middle East heightened supply concerns. Investors are cautiously awaiting today's US oil inventories report from the Energy Information Administration, which has been postponed a day due to a national holiday.

Asian markets traded without a single dynamic yesterday. Japan's Nikkei 225 (JP225) gained 0.23%, China's FTSE China A50 (CHA50) declined 0.09%, Hong Kong's Hang Seng (HK50) gained 2.87%, and Australia's ASX 200 (AU200) was negative 0.11%.

The New Zealand dollar rose against the US dollar thanks to stronger-than-expected first-quarter GDP data. New Zealand's economy grew by 0.2% in the first quarter compared to 0% in the previous quarter, beating expectations. On an annualized basis, GDP increased by 0.3% in the first quarter, compared to a contraction of 0.2% in the previous quarter. The strengthening GDP growth suggests that New Zealand is out of recession. In addition, the weakening US dollar has also helped the kiwi strengthen as the recent weak US retail sales report has increased the likelihood that the Federal Reserve (Fed) will cut interest rates in the coming months.

The offshore yuan fell to 7.28 per dollar, hitting its lowest level in more than seven months, following the central bank's decision to set a much weaker official discount rate. The People's Bank of China set the average rate at 7.1192 per dollar, the weakest since November 2023 and the biggest one-day move since April 16. Meanwhile, earlier on Thursday, the People's Bank of China (PBoC) left key lending rates unchanged at the June fixing, matching market expectations. The 1-year prime rate (LPR) was left at 3.45% and the 5-year LPR at 3.95% after a record 25 basis points cut in February. Both rates are at historic lows, reflecting the fragile economic recovery and reinforcing calls for additional support measures from Beijing.

• S&P 500 (US500) 5,496.80 +1.13 (+0.02%)
• Dow Jones (US30) 38,818.90 -55.0 (-0.14%)
• DAX (DE40) 18,067.91 −64.06 (−0.35%)
• FTSE 100 (UK100) 8,205.11 +13.82 (+0.17%)
• USD Index 105.24 −0.02 (−0.02%)

Important events today:

• – New Zealand QDP (q/q) at 01:45 (GMT+3);
• – China PBoC Loan Prime Rate (m/m) at 04:15 (GMT+3);
• – German Producer Price Index (m/m) at 09:00 (GMT+3);
• – Switzerland Trade Balance (m/m) at 09:00 (GMT+3);
• – Switzerland SNB Interest Rate Decision at 10:30 (GMT+3);
• – Switzerland SNB Monetary Policy Assessment at 10:30 (GMT+3);
• – Switzerland SNB Press Conference at 11:00 (GMT+3);
• – Norway NB Interest Rate Decision at 11:00 (GMT+3);
• – UK BoE Interest Rate Decision at 14:00 (GMT+3);
• – UK BoE MPC Meeting Minutes at 14:30 (GMT+3);
• – US Initial Jobless Claims (w/w) at 15:30 (GMT+3);
• – US Philadelphia Fed Manufacturing Index (m/m) at 15:30 (GMT+3);
• – US Crude Oil Reserves (w/w) at 18:00 (GMT+3).

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