External Background:
The S&P 500 rose by 0.27% yesterday, but the bond market suffered. The central theme in the market now is the election race between Trump and Biden, with investors increasingly trying to assess the impact of the potential return of the former president. The U.S. Supreme Court ruled that Donald Trump has some immunity from criminal charges related to his attempts to overturn the 2020 election results, which provided the former president with a significant legal and political victory and almost guarantees that the trial regarding his obstruction will not take place before the November elections. The Democrats are set to officially nominate Joe Biden by mid-July. Neither candidate has proposed a policy to combat the country's budget deficit so far. Among the economic news, it's worth noting that manufacturing activity in the U.S. declined for the third consecutive month in June, with the manufacturing index (ISM) remaining virtually unchanged at 48.5. In Europe, a modest increase in indices was observed, similar to the results of the S&P 500, which did not bring about any changes in their charts. According to Christine Lagarde, the ECB currently lacks sufficient evidence that the threat of inflation has passed and needs time to gather additional data. Inflation in Germany slowed in June after two months of acceleration, with consumer prices rising by 2.5% year-on-year, down from 2.8% in May, which met expectations. In Asia, growth was observed this morning, particularly in the Japanese Nikkei 225, which is now at its highest since April 1. The Hong Kong Hang Seng is up 0.5% after the weekend. Oil has risen and is trading at $86.9 this morning. Reports indicate that Hurricane Beatrice has reached Category 4 storm levels and is expected to move westward towards Mexico and Belize by Friday.
Bonds:
The yield on 10-year Treasuries experienced a significant jump yesterday, approaching 4.5%. Corporate bonds responded with a decline, hitting June and May's lows.
KASE Index:
Just yesterday, we noted that the rise of the KASE index after breaking out of the sideways trend was slow, but the quotes quickly showed acceleration. The market rose by 0.5%, which is a decent result, as KASE does not exhibit sharp jumps when rallying but rather grows in small steps of 0.3-0.7%.
Index Stocks:
The highest growth was seen in Kcell, although the shares remain in a sideways trend. The National Bank also showed a good increase, but again without support from its GDRs, which remain under pressure from their 50-day moving average. Kazatomprom shares rose by 2%, which we expected. However, the result on the LSE was neutral, while uranium fell by 0.2%. The minimal gain was seen in Kazakhtelecom shares, indicating a slowdown in growth momentum.
Currency:
The USD/KZT touched 476 yesterday and reversed downwards. Today, the dollar's exchange rate has decreased to 470.8, and a clear downward divergence has formed on the daily chart. This strengthening of the tenge may be a result of testing the resistance level (476) and an increase in the planned currency sales volume from the National Fund.