28 June 2024
US equities edged higher on Thursday, as investors digested a batch of mixed economic data releases while awaiting the first US presidential debate and PCE inflation data. The S&P 500 was up 0.1%.
US Treasuries rose (yields fell) amid mixed macro data, including a downward revision to Q1 personal consumption, a solid 7-year Treasury debt auction result, and quarter-/month-end portfolio rebalancing flows. 10-year yields slid 4bp to 4.29%.
European stock markets were mixed but mostly down on Thursday. The Euro Stoxx 50 fell 0.3%. The German DAX rose 0.3% whereas the French CAC dropped 1.0%. In the UK, the FTSE-100 ended down 0.6%.
European government bonds traded sideways ahead of key US inflation data and the first round of French lower house elections on Sunday. 10-year German yields were unchanged at 2.45%. 10-year French yields rose 4bp to 3.27%, with the spread over German peers refreshing the widest level over a decade. In the UK, 10-year gilt yields ended flat at 4.13%.
Asian stock markets mostly fell on Thursday before the US presidential debate and the US PCE inflation print. Chinese equities declined on weak industrial profit data. Hong Kong’s Hang Seng dropped 2.1%, with China’s Shanghai Composite losing 0.9%. Japan’s Nikkei 225 shed 0.8% amid lingering concerns over further yen weakness. Elsewhere, India’s Sensex bucked the regional trend, closing 0.7% higher.
Crude oil prices extended gains on Thursday on worries about global crude supply due to geopolitical risks in Middle East and Europe. WTI crude for August delivery settled 1.0% higher at USD81.7 a barrel.
The Swedish central bank, Riksbank, left its policy rate unchanged at 3.75% but signaled 2 to 3 rate cuts in H2 2024 provided that the recent favourable trend in inflation continues.
In the US, Q1 GDP was revised higher 0.1% to a 1.4% qoq annualised rate, in line with market expectations. Pending home sales fell 2.1% mom in May, from a downwardly revised 7.7% mom decline in April, below market consensus and pointing to a further decline in new home sales in the near-term. Durable goods orders increased 0.1% mom in May after a downwardly-revised 0.2% mom rise in April, hinting at softer equipment investment in Q2 2024.
In Japan, Tokyo CPI excluding fresh food and energy edged up to 1.8% yoy in June from 1.7% yoy in May, slightly above the market consensus of 1.7% yoy.
US core PCE inflation, the Fed’s favoured inflation gauge, is expected to decline to 2.6% yoy in May from 2.8% yoy in April.
US University of Michigan consumer confidence index is forecast to be revised up to 66.0 from a preliminary estimate of 65.6.
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