๐Ÿ“ˆ Macro-News round-up

๐Ÿ‡ช๐Ÿ‡บ Europe: The services PMI data has shown a slight improvement, with all Eurozone countries except France above 50. However, European markets are still nervous ahead of tomorrow’s interest rate decision from the ECB. As highlighted in previous reports, the higher-than-expected inflation in both Germany and the Eurozone increases the chances that the expected rate cut will be postponed.

๐Ÿ‡บ๐Ÿ‡ธ US: Yesterday’s US data release, including JOLTS Job Openings and ADP non-farm employment change, showed a weakening labor market. If this trend is confirmed by Friday’s NFP and unemployment rate data, it could lead to strong optimism in the stock market, as the possibility of the Fed implementing rate cuts this year would increase.

๐Ÿช™ Bitcoin: According to Bloomberg, Michael Novogratz, a Goldman Sachs alumnus and current CEO of Digital Galaxy, a digital asset and crypto bank since 2018, believes Bitcoin will reach $100,000 by the end of the year. He believes the US will make a radical shift in its implementation and acceptance of cryptocurrencies. He points to US presidential candidates showing support for crypto, with Donald Trump and independent candidate Robert Kennedy Jr. being open to Bitcoin. Kennedy has even suggested issuing US debt in Bitcoin. This comes on top of the SEC’s impending approval of Ether ETFs. Bitcoin currently sits above $71,250, showing a strong bullish tone.

๐Ÿ›ข๏ธ Commodities: Oil continues to fall. In a previous report, we highlighted that the International Energy Agency has predicted a drop in global oil demand. OPEC has maintained its production cut policy, but Bloomberg reported today that CTAs (Commodity Trading Advisors) are taking a net short position in crude oil. The short position for Brent is 36%, while the net short position for West Texas Intermediate (WTI) is 54%.

๐Ÿ“ˆ Markets: US 2-year bonds have reached a return of 4.75%, a support zone in a decline from last week’s 5%. This indicates a relaxation of tensions over high interest rates and optimism about potential rate cuts.

๐Ÿ‡ฉ๐Ÿ‡ชย The German 2-year bond, which we highlighted in previous reports for being above 3%, creating doubts about a possible ECB rate cut tomorrow, has also decreased and is currently below 3%. This could indicate that the ECB rate cut may indeed happen.

๐Ÿ“ˆย The S&P 500 is currently regaining its bullish tone and is above 5,330 points. The Nasdaq 100 is rising strongly, trading above 18,900 points and approaching a new high of 19,000 points.

๐Ÿ‡ช๐Ÿ‡บย European markets are trading sideways, with the DAX 40 hovering around 18,550 points, down from the near 19,000 points it reached at the end of May.