At Monday’s close, the Dow Jones Industrial Average (US30) added 0.18%, while the S&P 500 Index (US500) was up 0.26%. The Nasdaq Technology Index (US100) closed positive 0.35%. Overall, positive first-quarter earnings results supported stocks despite the rising dollar. First-quarter earnings are expected to be approximately 7.1% YoY, well above the pre-reporting season prognosis of 3.8%.Bitcoin prices fell below the $68,000 mark, further retreating from record levels, as digital assets came under pressure following the release of outflows in major Bitcoin ETFs, including Grayscale Bitcoin Trust (-$39.5 million), Invesco Galaxy Bitcoin ETF (-$20.5 million), Valkyrie Bitcoin Fund (-$15.8 million), and Fidelity Wise Origin Bitcoin Fund (-$3 million). As a result, net outflows from all Bitcoin ETFs totaled $64.9 million, the first negative outflow since May 10.Equity markets in Europe were mostly down on Monday. Germany’s DAX (DE40) fell by 0.34%, France’s CAC 40 (FR40) closed down 1.35%, Spain’s IBEX 35 (ES35) lost 0.42%, and the UK’s FTSE 100 (UK100) closed negative 0.20%.ECB President Lagarde said yesterday that last week’s ECB interest rate cut does not mean that interest rates are on a linear path of decline and that there may be periods when we hold interest rates. ECB Governing Council representative Kazimir said that ECB policymakers have not yet defeated the “inflationary beast” and ruled out the possibility of another rate cut in July and said that September would be a crucial month when new estimates will be published. It will be the right time to reassess the stance and decide whether to cut rates or not. Nagel, a representative of the ECB’s governing council and president of the Bundesbank, added that the ECB may not cut interest rates for a while longer as it watches how quickly inflation falls to the 2% target.Political uncertainty rose in Europe as the far-right made gains in the European Parliament elections, prompting French President Macron to call a surprise snap vote for the legislature.The number of people in employment in the United Kingdom fell by 139,000 in the three months to April 2024, less than the 177,000 decline in the previous period but more than prognoses of a 100,000 decline. This marked the fourth consecutive period of job losses, mainly due to a decline in full-time employees.WTI crude oil prices are holding near $78 a barrel on Tuesday after a nearly 3% jump in the previous session, helped by expectations of higher demand for the fuel this summer. The US government may also replenish the Strategic Petroleum Reserve at a faster pace as it intends to buy back oil at around $79 per barrel.Asian markets traded without any dynamics yesterday. Japan’s Nikkei 225 (JP225) gained 0.92% yesterday, China’s FTSE China A50 (CHA50) declined 0.94%, Hong Kong’s Hang Seng (HK50) fell 0.59% and Australia’s ASX 200 (AU200) was positive 0.49%.More than half of Bank of Japan watchers surveyed predict the Central Bank will decide to reduce government bond purchases at its meeting on Friday, with a growing number also expecting a rate hike in July. Some economists believe the purchases will be cut by 1 trillion yen, while others see a smaller reduction at the outset. Some believe BOJ will simply present a plan to reduce bond purchases in the coming months. With the BOJ shutting down its yield curve control mechanism and ending its commitment to increase the monetary base, it has become more difficult for market participants to predict the trajectory of the bond market.The NAB Australia Business Confidence Index fell to 3 in May 2024 from an upwardly revised 2 in April, coming in at its lowest level in six months and turning negative for the first time since last November. The latest result suggests that weak economic activity in the first quarter continued into the second quarter as sentiment in manufacturing, transportation, and construction deteriorated.
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