Our Comments and Expectations
External background. The S&P 500 rose by 0.55% and closed at its highest level since February this year. Yesterday, U.S. Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng held the second day of trade negotiations in London. Howard Lutnick stated that the talks between Washington and Beijing went “really, very well.” Both countries eased trade tensions by agreeing on a preliminary deal to implement the consensus previously reached in Geneva. The plan now requires approval from Xi Jinping and Donald Trump. Notably, a U.S. federal appeals court simultaneously allowed Trump to continue applying his global tariffs. The market’s attention now shifts to today’s consumer price index (CPI) report, due before the U.S. market opens. The core CPI for May is expected to accelerate to 0.3% month-over-month from 0.2% in April. In Europe, the DAX fell by 0.8%, showing signs of a local correction wave. In Asia this morning, the Hang Seng (+0.9%) and Nikkei 225 (+0.55%) are up. South Korea’s Kospi index hit its highest levels since January 2022, gaining 26% from its April low. Futures for the S&P 500, Stoxx 600, and DAX are down about 0.3%. Brent crude oil is trading at $66.7 per barrel.
Bonds. The yield on 10-year U.S. Treasuries remained nearly unchanged yesterday, but emerging market bonds posted solid gains. BNP Paribas warned that investors betting on long-term U.S. bonds are likely to earn higher returns than those holding shorter-term securities. Pimco favors global bonds with durations of 5–10 years and cautions against risks associated with private credit.
KASE Index. Yesterday, the KASE index tested local resistance levels. Judging by the upper wick on the daily candle, prices briefly reached 5,736 points, but breaking through resistance proved difficult.
Index stocks. The market was dragged down yesterday by shares of Bank CenterCredit and Kazakhtelecom. As we noted earlier, there were signs of a weakening upward momentum in KZTK shares. The decline in BCC did not change the technical picture, and today the stock is up 1.5% at the open. The reversal in the index’s daily candle was largely due to the dynamics of Kazatomprom stock: prices rose to 21,370 tenge but reversed during the session and are down another 1.7% today. The entire uranium sector corrected yesterday after a strong rise the day before. In other news, the UK approved a £14.2 billion investment in the construction of the Sizewell C nuclear power plant.
Currency. The dollar is attempting to fall to 506 tenge today, but buying interest remains strong, and a decisive breakout has not yet occurred. The DXY dollar index has remained stable since the beginning of the month. The ruble is trading at 78.4 per dollar.