The American economy is adjusting to high rates - 28.6.2023

On Tuesday, the US dollar index continued to correct downwards for the 2nd day in a row. There was no particular negative for him yesterday. However, EURUSD rose. The euro was supported by yesterday's comment by European Central Bank (ECB) President Christine Lagarde on further tightening of monetary policy. Recall that in May inflation in the EU amounted to 6.1% y/y and was above the ECB rate of 4%. This morning the US dollar index is rising in anticipation of the Federal Reserve System (Fed) Chair Powell Speech at the ECB forum. Investors do not rule out that he will once again confirm the theoretical possibility of raising the rate at a meeting on July 26. The euro is weaker this morning on the back of GfK Germany Consumer Climate for July (-25.4). It turned out worse than expected.

Bitcoin quotes have stabilized in a very narrow range of $30,000 - 31,000. Players are waiting for new information about the trial between U.S. Securities Exchange Commission and crypto exchanges Coinbase and Binance, as well as the official registration of new crypto funds. A positive factor was the announcement of the Bitfinex crypto exchange about the launch of a peer-to-peer (P2P) trading platform in Venezuela, Argentina and Colombia. Against this background, there is a rise in quotes of individual altcoins. For example, Bitcoin Cash (BCHUSD) has risen in price by almost 80% in 7 days. Earlier, we already wrote that it will be traded on the new EDX crypto exchange along with other liquid cryptocurrencies.

Yesterday, US stock quotes rose due to good economic data. The Conference Board United States Consumer Confidence Index rose to its highest since February 2022 at 109.7 in June. In addition, United States Durable Goods Orders and New Home Sales performed better than expected. Among sectoral indices, the growth leader was the S&P 500 Consumer Discretionary (+2.1%). Shares of Meta Platforms Inc rose 3.1% after raising their target price from Citigroup. Snowflake (+4.2%) announced a joint project with Nvidia (+3.1%) to create new artificial intelligence systems. Tesla (+3.8%) increased sales of electric vehicles in China in the 2nd quarter by 13% QoQ to 155,000 units. The United States Goods Trade Balance and Wholesale Inventories for May will be released today in the US.

On Tuesday, oil quotes fell within the neutral range. Since the beginning of May, U.S. West Texas Intermediate (WTI) is trading within $66-74.5 per barrel. This morning, the fall in oil prices stopped thanks to the publication of the American Petroleum Institute on the reduction of oil inventories in the US for the week by 2.41 million barrels. Investors are now awaiting official U.S. stock data. Energy Information Administration for the week, which will be released tonight. Oil may be supported by yesterday's data on the increase in United States New Home Sales by almost 20% y/y. This may be a sign of increasing US consumer activity. The main negative for oil is the risk of reduced global demand against the background of higher rates of world central banks, as well as the activity of environmentalists demanding a reduction in the number of fossil fuel cars.

Natural gas quotes in Europe on ICE Dutch TTF are about $380 per 1000 cubic meters. American gas quotes on Henry Hub rose to $2,825 mmBtu. American gas has risen in price in anticipation of an increase in exports of LNG (liquefied natural gas).