📈 Macro-News round-up

MarketNews

📊 On Monday, US stocks increased. While the NASDAQ gained 0.82%, the S&P 500 increased by 0.63%. Particularly interesting was the movement of the dollar, which rebounded sharply, with the DXY index rising to over 104 points at the moment. In response, the EURUSD fell below 1.0850.

🌍 Europe: ZEW economic sentiment indicators are positive for Germany and the Eurozone today. According to comments on monetary policy this morning. ECB’s Governing Council member Pablo de Cos said: “In June we could start cutting rates but it’s conditional on data.” Again, ambiguity, leaving the door open to a cut in June, or not at all.

🇯🇵 Japan: In a historic decision, the BOJ concludes its huge stimulus programme, which has lasted for ten years, by eliminating negative interest rates. In part, by providing 0.1% interest on deposits held at the central bank, the bank opted to steer it within the range of 0-0.1%.

💱 “We reverted to a normal monetary policy targeting short-term interest rates, as with other central banks,” at a news conference, BOJ Governor Kazuo Ueda stated. “If trend inflation heightens a bit more, that may lead to an increase in short-term rates,” Ueda said

📉 However, the BOJ emphasised that it is focused on averting any detrimental surge in borrowing rates by stating that it will continue purchasing “broadly the same amount” of government bonds as previously and increase purchases in the event if yields rise quickly. Additionally, the BOJ stated that it anticipates “accommodative financial conditions to be maintained for the time being.”

💼 High expectations would have been created by this change. Especially after the announcements of wage increases by groups such as Toyota last week. The biggest in 33 years. But it seems that the markets are somewhat disappointed. The USDJPY has rallied strongly above 150.50, showing the weakness of the Yen. In addition, the Japanese 10-year bond experienced the opposite reaction, with its yield falling by almost 4%, demonstrating the disappointment of the measures, also for the bond market.

📉 Independently of the above. Japan’s industrial production fell by -6.7%. Bad compared to the previous period, 1.2%, but better than market expectations, -7.5%.

🇨🇳 China: Chinese equities increased as well. The Hang Seng gained 0.1% and the CSI 300 gained 0.94%. Now, the CSI 300 is up 5% so far this year.

🌐 Geopolitics: Bipolarity is on the rise in the world. On Monday, China, India, and North Korea celebrated the veteran leader Vladimir Putin on extending his power for an additional six years, while Western nations united to denounce his reelection as unjust and undemocratic. At the beginning of a conference, German Foreign Minister Annalena Baerbock declared, “Russia’s election was an election without choice.” Let us recall at this point that according to polls published by Visual Capitalist a few weeks ago, 76% of Germans disapprove of Germany’s chancellor.

⚖️ For the first time in history, EU foreign ministers agreed on Monday to impose penalties against Israeli settlers for harming Palestinians in the West Bank and to further censure members of Hamas, the Palestinian Islamist organisation, following weeks of disputes.

🔒 But before punishing the Israeli settlements, it would impose further penalties on Hamas, according to diplomats, who also noted that the order of events was crucial for EU nations near Israel who wished to prevent the impression that they were comparing the two organisations.

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