US Federal Reserve System meeting to be held today - 14.6.2023

On Tuesday, the U.S dollar index declined. Inflation in the U.S. decreased more than expected in May, reaching +4% YoY, the lowest level since March 2021. In April of this year, inflation was higher at +4.9% YoY. Typically, low inflation is a positive indicator for the economy. However, in the current situation, it reduces the likelihood of further tightening of the Federal Reserve's monetary policy and negatively affected the U.S. dollar exchange rate. Today, the Federal Reserve (Fed) will hold its regular meeting. Market participants expect the interest rate to remain unchanged at the current level of 5.25%. Additionally, the United States Producer Price Index for May will be released with a neutral forecast.

This morning, favorable economic data was published in the UK. The UK Trade Balance in April, while still in deficit as usual, performed better than expected. The UK GDP growth (+0.5% YoY) in April exceeded forecasts. The New Zealand dollar is strengthening for the second consecutive day, supported by positive data on New Zealand's Current Account for the first quarter.

Bitcoin prices are currently trading in a very narrow range. They are slightly below $26,000. Market participants are closely following the legal proceedings between the U.S. Securities and Exchange Commission and the cryptocurrency exchanges Binance and Coinbase. There are no expectations of asset freezes in the U.S. at the moment.

Yesterday, American stock indices continued to rise, with the Dow increasing for the 6th consecutive day. Inflation in the U.S. decreased in May for the 11th consecutive month. This had a positive impact on the stock market. Intel Corp's stock gained 2.5% following the announcement that it would become one of the anchor investors in the initial public offering (IPO) of Arm (a subsidiary of SoftBank Group). Agricultural holding company Bunge also saw a 2.5% increase in its stock price after news of its merger with Viterra. The emerging growth in global metal prices contributed to the rise in quotes for Freeport-McMoran Copper & Gold Inc (+5.3%) and Steel Dynamics Inc (+6%). The increase in global oil and gas prices led to a rise in the stock prices of Baker Hughes (+1.3%), APA Corporation (+2%), and Halliburton Company (+3.1%). Like JPMorgan, Bank of America also raised its recommendations for the stocks of tourism companies Norwegian Cruise Line (+5.8%), Carnival Corporation (+4.2%), and Royal Caribbean Cruises (+2.4%).

Today, oil prices are rising for the second consecutive day as investors hope for increased demand in China. The People's Bank of China has lowered its short-term lending rate for the first time in 10 months, which could be a sign of economic stabilization. The Organization of Petroleum Exporting Countries (OPEC) has maintained its forecast of a +2.3 million barrels per day year-on-year increase in global oil demand for 2023. It's worth noting that market participants ignored the report from the independent American Petroleum Institute about a 1.024 million-barrel increase in U.S. oil inventories for the week. Brent is currently trading above $75 per barrel, while WTI is above $70.

In Europe, natural gas prices on ICE Dutch TTF have significantly increased, rising by approximately 55% over the past two weeks. Yesterday, it reached a two-month high of $400 per 1,000 cubic meters. U.S. gas prices at Henry Hub have risen to $2.35 per million metric British thermal units (mmBtu).