Global Market Overview
Markets worldwide responded to a combination of central bank policy updates, inflation data, and escalating geopolitical tensions.
U.S. Markets: Fed Signals a Slower Pace of Easing
The Federal Reserve concluded its June meeting with no change to interest rates, aligning with market expectations. However, the central bank’s updated forecasts pointed to a more measured approach to rate cuts, citing inflation risks and economic uncertainty, including upcoming U.S. tariffs.
Key Developments:
- The Fed still anticipates two rate cuts in 2024, but now projects fewer cuts in 2026 and 2027.
- Treasury yields rose, with the 10-year yield hitting 4.39%, reflecting market reassessment.
- Despite softer May core inflation and declining jobless claims, economic data suggests cooling momentum in housing and employment.
European and Asian Markets: Inflation and Geopolitical Worries Weigh on Sentiment
Investors in European and Asian markets responded to inflation data and renewed tensions in the Middle East.
- European markets closed broadly lower, dragged down by underwhelming inflation data and global tensions. The Eurozone’s annual inflation stood at 1.9% in May, slightly below expectations.
- In Asia, markets were mixed. Hong Kong and Japan led declines amid fears of a potential U.S. military strike on Iran, further unsettling investor sentiment. Weak Australian employment data left the ASX 200 largely unchanged.
Currency and Commodities Update
Currency and commodity markets fluctuated as geopolitical risks and policy signals reshaped investor expectations.
Currency Movements
The U.S. dollar strengthened further as safe-haven demand rose in response to geopolitical fears and hawkish Fed commentary.
- Dollar Index climbed above 99.
- The euro fell to 1.1463 against the greenback, pressured by policy divergence and global uncertainty.
Oil Market Volatility
Crude prices fluctuated due to renewed Middle East tensions and a stronger U.S. dollar. While oil briefly spiked on reports of a U.S. strike, gains were limited by economic slowdown concerns.
Equities in Focus
A number of individual stocks moved on company-specific news and sector developments.
Key Stock Movements
- Texas Instruments announced a $60 billion investment in U.S. chip manufacturing across Texas and Utah, the largest domestic semiconductor push to date.
- Santander & Barclays Reportedly considering bids for TSB Bank, as Banco Sabadell weighs asset sales to fend off a BBVA takeover.
- Waymo (Alphabet) applied for an autonomous vehicle permit in New York City, a step toward entering one of the U.S.’s largest ride-hailing markets.
- Tesla is facing pressure from Texas lawmakers to delay its robotaxi rollout in Austin until new regulations take effect in September.
- AbbVie revealed positive results for its migraine treatment Qulipta, outperforming topiramate in a clinical trial.
- Rio Tinto settled a class-action lawsuit for $138.75 million over misstatements related to a Mongolian mine expansion.
- Pernod Ricard Will restructure its operations to reduce costs by €1 billion by 2029, addressing slowing demand and tariff headwinds.
- Roblox Oppenheimer raised its price target to $125, citing strong engagement and monetisation improvements.
- Nike Needham revised its price target down to $66, warning of margin pressures and brand momentum challenges.
- L’Oréal BofA reiterated a Buy rating, projecting €44.6 billion revenue in 2025 and a bullish outlook for growth and margins.
Market Outlook
With U.S. markets closed for the Juneteenth holiday, investor attention turns to the Bank of England’s upcoming policy meeting. Markets are expected to remain volatile as they digest geopolitical updates, economic indicators, and central bank signals. Read the latest market update on Moneybase.com
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