Our Comments and Expectations
External Background. The S&P 500 closed unchanged yesterday. The Federal Reserve kept interest rates unchanged, and Powell did not hint at future cuts, stating that the decision to ease monetary policy in September has not been made yet. However, governors Waller and Bowman voted against this decision — the first time two committee members have disagreed since 1993. After-market trading saw META shares rise by 11.5% after the company presented a stronger-than-expected revenue forecast for Q3. Microsoft gained 8.3% following data on higher growth rates in its cloud business. Preliminary inflation-adjusted GDP data showed a 3% year-on-year growth. The ADP employment report stated that U.S. companies created 104,000 jobs in July, compared to a forecast of 75,000. Today, official U.S. employment data and non-farm payrolls numbers are expected. In Europe, all major indices closed neutral. This morning, Chinese and Hong Kong markets dropped by 1.4–1.5%, while Japan's Nikkei 225 rose on the back of a positive industrial production report. Conversely, China's manufacturing activity unexpectedly decreased in July, reaching a three-month low. It was reported that Trump signed a trade agreement with South Korea, which includes a 15% tariff rate and $350 billion in U.S. investments. An unexpected development occurred in the copper market — prices fell by 21% after Trump removed copper cathodes from import duties. Oil prices are slightly down this morning, trading at $72.3 per barrel.
Bonds. The uncertainty surrounding the Fed’s future rate decisions led to a rise in the 10-year bond yield to 4.37%.
KASE Index. Another neutral session for the KASE index, which has been consolidating for the fourth consecutive session. Stock volatility remained low, and trading volumes decreased to levels seen on April 28.
Index Stocks. The biggest gain was seen in Kazakhtelecom shares, which rose by 1.6%, though this did not change the overall stock dynamics — the quotes remain in a stable sideways trend since June 10. KMG shares grew by 0.6%, and like the broader market, started consolidating. GDR and ADS volatility was higher: Kaspi on Nasdaq dropped by 4.6%, erasing all gains since July 15, as the quotes returned to initial levels. Kazatomprom declined another 1.6%, but its GDRs are still holding within the sideways trend.
Currency. A strong reversal of USDKZT occurred during yesterday’s session. The dollar started rising without any accompanying news, reaching 549.6 tenge. We found this illogical, and apparently, so did the National Bank — the regulator officially announced currency interventions. As a result, the USDKZT currency pair returned to a sideways trend, which seems appropriate after the recent sharp volatility spike. At the time of writing this review, the last trade occurred at 542.15 tenge per dollar.