Our Commentary and Expectations
External Background.
The S&P 500 closed flat, despite showing gains at the start of the session. Concerns persist over possible U.S. involvement in the Middle East regional conflict. According to Bloomberg, senior U.S. officials are preparing for a potential strike on Iran in the coming days, likely over the weekend. Meanwhile, the Federal Reserve’s meeting brought no relief: Jerome Powell's speech included warnings about persistently high prices. The Chairman noted that economic uncertainty driven by tariffs and inflationary risks continues to complicate the Fed's efforts to meaningfully ease monetary policy. There is a split among policymakers regarding the outlook for interest rates and inflation—some officials don’t expect rate cuts even in 2025, while investors continue to price in a high probability of cuts starting in September. In Europe, indices deepened their correction: the Stoxx 600 fell to its lowest level since May 12, while the DAX dropped to its lowest since May 8, down a total of 2.4% to 4.2% from recent highs. Sentiment remains negative across Asian markets: Hong Kong’s Hang Seng is down 2.2%, hitting new monthly lows, while the Nikkei 225 is down 1%. This morning, oil is up 1.3%, trading at $77 per barrel. However, the chart suggests local consolidation rather than sustained growth. Gold has returned to its weekly lows. Futures for the S&P 500 are down 0.37%, Stoxx 600 futures are down 0.85%, and pre-market losses are already reaching 1%. The U.S. market is closed today.
Bonds.
The yield on U.S. 10-year Treasuries rose slightly yesterday. Corporate bonds showed neutral performance.
KASE Index.
The KASE index posted another positive session, updating its historical highs once again. A landmark event occurred—the index crossed the 6000-point level for the first time. Investors are reacting positively to commodity market strength, ignoring recent signals from the National Bank regarding rates and inflation risks.
Index Stocks.
KazMunayGas led the gains, even though the oil rally has begun to stall. As of yesterday’s close, KMGZ shares still have about 8.6% upside potential compared to our last valuation dated June 4, before the sharp jump in oil prices.
Air Astana shares have seen a strong rebound, rising from 750 to 786 tenge over three sessions. If the 800 tenge resistance level is broken, we will recommend the stock for local and mid-term purchases.
Halyk Bank shares rose by 2.2%, marking a breakout from a triangle formation. We believe this could lead to a test of historical highs. Meanwhile, on the Nasdaq, Kaspi ADS fell by 2.4%, worsening their technical setup.
Currency.
On the USDKZT chart, the dollar has started testing—and slowly breaking above—the downward trendline connecting the January and April highs. If the breakout is confirmed, we expect further appreciation of the U.S. dollar.