analysis

Good Morning Treasury! - June 28, 2024

Markets, economy

The leading US stock indices closed Thursday with slight gains,  the Nasdaq being the best performer (+0.3%), while the S&P 500 and the Dow both rose 0.1%. Yesterday's US economic data indicated a loss of momentum, and the market also bided its time ahead of today's PCE inflation data. Treasury yields fell as expectations that the Fed will start cutting rates later this year strengthened. European equities fell as investors cautioned ahead of the first round of French elections, with the Eurostoxx 600 index down 0.4%. However, the BUX index has significantly outperformed, with OTP and Mol both doing well (+1.9% and +1.6% respectively), while among blue chips, only Richter closed in the red (-1.4%). Stock markets are trying to rise this morning, but there is little movement and the market remains on hold.

EURUSD

The EURUSD continues to hover around 1.0700, with today's US inflation data likely to provide fresh impetus to the market, but regardless of the data, the dollar is likely to be supported by risk averse global sentiment. Next week we will see labor market data from the US and the results of the first round of the French elections, which will be the drivers for the fx market in the short term.

EURHUF, USDHUF

The forint was able to recover its morning weakness against the euro yesterday afternoon, and this morning an unexpected forint rally seems to be unfolding. The forint is trading around 395 against the euro and around 369 against the dollar. This morning also, KSH published domestic unemployment data, with the unemployment rate standing at 4.3% in May, which continues to point to a tight labour market and wage inflationary pressures.

Commoditites

Crude oil futures rose just over 1% on Thursday on concerns over global crude supply disruptions as geopolitical pressure intensified in the Middle East and Europe. This was offset by a surprise rise in US crude oil and gasoline inventories.

Macro calendar

Today PCE inflation data is due from overseas. Last night's Trump vs Biden debate was declared a win for Trump, so bookmakers now think he has over 60% chance of taking back the White House.