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Warsh’s first minutes to set market tone

This week, markets will focus on Wednesday’s Federal Open Market Committee (FOMC) meeting minutes, which cover Kevin Warsh’s first scheduled meeting as Fed Chair and may offer early insight into his views and influence on the policy debate. The US releases services and composite Purchasing Managers’ Indices (PMI) as well as the ISM Non-Manufacturing PMI for June on Monday, after US markets were closed on Friday for a public holiday. In Europe, the Bank of England publishes its meeting minutes and Financial Stability Report on Tuesday, while the ECB releases its account of the latest monetary policy meeting on Thursday. Inflation data are due from China on Thursday, with Consumer and Producer Price Indices for June, followed by German and French Consumer Price Indices on Friday. Switzerland’s SECO Consumer Climate and Canadian labour market data, both for June, are also released on Friday.

  • Date
  • Auteur Shane Strowmatt, Senior Investment Writer
  • Temps de lecture 5 minutes

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Asian equity markets were mixed on Monday, as profit-taking in semiconductor shares dragged Japan and South Korea lower while lower oil prices and easing geopolitical tensions supported sentiment elsewhere in the region. Japan’s Nikkei 225 fell 0.2% and South Korea’s KOSPI dropped 0.6% on Monday as investors took profits in semiconductor shares after last week’s rebound. Australia’s S&P/ASX 200 was also 0.2% lower. Regional sentiment was cushioned by lower oil prices and easing geopolitical tensions after last month’s ceasefire in the Middle East, helping Hong Kong’s Hang Seng rise 0.5%.

Oil slips after OPEC+ output rise

Oil prices edged lower on Monday after OPEC+ agreed on Sunday to raise its August output target by 188,000 barrels per day, adding to similar increases in June and July. Brent crude oil futures fell below USD 72 per barrel and West Texas Intermediate (WTI) futures were trading below USD 69 per barrel. The move also reflected improving flows from key Gulf producers through the Strait of Hormuz after disruption during the US-Israeli conflict with Iran.

European stocks extend record run

European shares rose further on Friday, with the EuroStoxx 50 gaining 0.8% to 6412.68 points after a 3.1% weekly advance, while Spain’s Ibex 35 (+0.9%) and Switzerland’s SMI (+0.5%) also reached fresh records. Trading volumes remained light because of the holiday period and the closure of US markets for Independence Day. Utilities led the gains as concerns about higher US interest rates eased after weak US June labour-market data released on Thursday, while carmakers also recovered.

Euro-area business activity steadies in June

The euro-area Composite PMI Output Index rose to 50.0 in June from 48.5 in May, according to data released on Friday, indicating that private-sector activity stabilised at the end of the second quarter after shrinking in the previous two months. The Services Business Activity Index also improved to 49.4 from 47.7, although it remained in contraction territory, while manufacturing growth helped offset a softer decline in services. Demand continued to weaken, with new orders falling for a fourth straight month, but the downturn eased in Germany and France and activity picked up further in Italy, Spain and Ireland. Cooling energy-related price pressures linked to the Middle East conflict helped lift business confidence to a four-month high and slowed input cost growth to its weakest pace since February, potentially reducing pressure for further ECB rate increases.

Corporate and economic calendar

Corporate news in focus: There is no major corporate news scheduled today.

Economic data in focus: Swiss unemployment rate (09:00), Sentix investor confidence for the eurozone (10:30), EU Producer Price Index (11:00), EU retail sales (11:00), US Purchasing Managers’ Index (16:00).

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Editor: Alessandro Fezzi
Source: LGT Bank (Switzerland) Ltd.