Inflation data released in Japan this morning - 23.6.2023

Now the US dollar index is growing for the 2nd day in a row. In general, following his 2-day speech (Testimony), US Federal Reserve Chair Jerome Powell supported further rate hikes. Yesterday Bank of England (up +5%), Swiss National Bank (up +1.75%) and Norges Bank (up +3.75%) raised rates. Investors believe that the Fed will also raise its rate (+5.25% now). According to the CME FedWatch Tool, the probability of a +0.25% Fed rate hike on July 26 returned to 76.9%. Yesterday, an additional positive for the dollar was a good increase in United States Existing Home Sales in May (4.3 million), as well as a smaller-than-expected United States Current Account deficit in the 1st quarter.

Japan Consumer Price Index (CPI) for May was published this morning. It unexpectedly fell to +3.2% y/y from +3.5% y/y in April. This reduced the possibility of tightening monetary policy of the Bank of Japan (BoJ) and weakened the yen. USDJPY this morning hit a new high since last November and is around 143. In the UK this morning Retail Sales for May was released. They were better than expected. The British pound is now continuing to strengthen.

Bitcoin quotes have stabilized near the psychological level of $30,000. Players await further information regarding the legal proceedings between U.S. Securities Exchange Commission and crypto exchanges Coinbase and Binance. In addition, the crypto market could be supported by the official registration of new crypto funds that want to create such large companies as BlackRock and others.

On Thursday, the US stock market was not a single trend. The Dow is down, while the S&P 500 and Nasdaq are up. Generally, a possible rate increase is a negative factor for the stock market. Yesterday's rise in Nasdaq was driven by strong demand for individual stocks such as Amazon.com (+4.3%), Microsoft Corp (+1.8%) and Apple Inc (+1.6%). Aircraft parts maker Spirit AeroSystems plunged 9.4% on a planned strike by its workers. Boeing shares fell 3%. Against the backdrop of cheaper oil, the sectoral stock index Dow Jones Oil & Gas yesterday fell by 1.3%. The S&P Global United States Manufacturing Purchasing Managers Index will be released today (outlook is negative), and speeches by the Fed's regional directors are also expected.

This morning, oil quotes continue to decline for the 2nd day in a row. U.S. Quotes West Texas Intermediate (WTI) dropped to $68 per barrel. Investors did not react at all to the U.S. Energy Information Administration (EIA) on the reduction of oil reserves in the US for the week 3.83 million barrels. They fear that a massive rate hike by almost all the world's major central banks could trigger a global recession in the future and reduce oil consumption. So far, none of this has been observed. The EIA reported that US gasoline consumption last week was the highest since December. Weekly US oil exports are up 40% from the previous week.

Natural gas prices in Europe fell to $360 per 1,000 cubic meters on ICE Dutch TTF. US gas quotes on Henry Hub dropped to $2,645 mmBtu.