KN Market View 2024-06-16

#KNMarketView

Last week European markets traded under pressure led by France, CAC 40 ended -6.23% lower, “The shockwave from President Emmanuel Macron's dissolution of the National Assembly and call for snap elections continued to ravage markets, amid fears of an extremist victory in the upcoming elections” link.

Regarding currencies, Colombian Peso closed at its highest level since October with concerns regarding fiscal deficit and an increase in debt ceiling link. On the other hand, South African Rand recovered as talks to try to form a government of national unity continued link.

Regarding economic data, “US inflation fell to 3.3% in May, raising expectations of early interest rate cuts and delivering a boost to the stock market and President Joe Biden.” link. US’s 10Y closed at its lowest level since March 4.22%, S&P 500 Index recorded a new all-time high of 5,445.

According to The Economist on US elections, “Mr Biden’s presidency has been defined by high inflation, big industrial-policy bills, and turmoil abroad. Mr Trump’s supporters tried to overturn his election loss in 2020; he faces federal charges over his alleged participation in that scheme and has been convicted of a felony relating to his 2016 presidential campaign. The election will be less a popularity contest than a referendum on which man Americans think is the least bad option. Our election forecast shows the chances each man has of winning a second term in office”. You can find an interesting summary and key dates that will kick-off on June 27th with the first presidential debate, link.

The University of Michigan consumer sentiment for the US fell for a third straight month to 65.6 in June, the lowest since November.

In Europe, UK and Italy industrial production came below market consensus -0.9% vs -0.1% and -1% vs 0.3%, respectively.

This week, the focus will be on European and Japan inflation rates, the US building permits and industrial production. Retail sales will be released for major economies. Australia, Brazil, Indonesia and UK rate decisions will be released with no changes expected.