Head of the US Federal Reserve System to give a speech today - 21.6.2023

Currently, the US dollar index has been rising for the fourth consecutive day in anticipation of the Federal Reserve Chairman's testimony in the US Congress regarding future monetary policy. It is important to note that he will be speaking today and tomorrow. Investors expect the Fed Chairman to express support for tightening monetary policy. Yesterday's data on the United States Building Permits and Housing Starts for May turned out to be significantly better than forecasted, which supported the US dollar. United States Housing Starts (1.63 million) reached their highest level since April of last year.

This morning, inflation data for May was published in the UK. It remained at the same level as April, at +8.7% YoY, which exceeded expectations (+8.4% YoY). The British pound strengthened as investors anticipate tomorrow's meeting of the Bank of England and a possible interest rate hike (4.5%).

Bitcoin prices are showing excellent growth and are now approaching the $29,000 mark. The main positive factor was the announcement that several major financial companies, including Fidelity Digital Assets, Citadel Securities, and Charles Schwab Corp, have supported the new cryptocurrency exchange EDX Markets. It is worth noting that investment companies Invesco and BlackRock previously announced plans to create their own cryptocurrency funds: a Bitcoin ETF and a Bitcoin trust, respectively.

On Tuesday, US stock indices continued to decline. Investors do not rule out the possibility that Federal Reserve Chairman Jerome Powell will announce plans for further tightening of monetary policy during his 2-day testimony in Congress. High interest rates theoretically support the currency exchange rate but have a negative impact on the stock market. Correction in the oil market led to a decline in the stocks of American oil companies such as Halliburton Company (-3.4%), Exxon Mobil Corp (-2.3%), and Chevron Corp (-2.2%). Shares of electric vehicle manufacturers Rivian Automotive and Tesla rose by almost 5.5% after Rivian announced its intention to use Tesla's charging devices and infrastructure. Shares of sportswear and footwear manufacturer Nike fell by 3.6% following a downgrade of its financial outlook by Morgan Stanley. Intel's shares plummeted by almost 4% after the company announced plans to invest €30 billion in constructing a new factory in Germany. Today, no significant economic indicators are expected to be published in the US.

Yesterday, oil prices experienced a slight decrease. The European Central Bank (ECB) presented its inflation forecast: +5.4% in 2023, +3% in 2024, and +2.2% in 2025. It is worth noting that European inflation stood at +6.1% YoY in May. According to some investors, such plans may require further interest rate hikes (currently at 4%) and indicate risks of a European economic recession. This could potentially reduce oil demand in the European Union. However, this morning, oil prices are slightly increasing in anticipation of the release of US oil inventory data for the week by the independent American Petroleum Institute. The data will be released in the evening.

Natural gas prices in Europe on ICE Dutch TTF have stabilized at around $425 per thousand cubic meters. American gas prices at Henry Hub have corrected downward to $2.56 per mmBtu.