Our Comments and Expectations
External Background. The S&P 500 fluctuated during yesterday’s session. Ahead of the Fed meeting, investors were digesting news about escalating tensions between India and Pakistan, as well as China’s attempts to support its economy ahead of trade negotiations. The People’s Bank of China cut its key rate — the seven-day reverse repo — to 1.4%. As expected, the Fed left interest rates unchanged at its meeting. At the press conference, Jerome Powell warned of rising risks of higher inflation and slower growth but assured investors that the economy remains healthy and the Fed will not take hasty action due to Donald Trump's trade war. In the swap options market, traders continued to bet on at least three Fed rate cuts for the remainder of 2025. In Europe, the Stoxx 600 and DAX indices declined for a second consecutive session following a prolonged rally. According to informed sources, President Donald Trump is expected to announce a trade agreement with the United Kingdom at a press conference Thursday morning in Washington. Futures currently indicate that European indices are up by 0.4–0.6%. This morning, Hong Kong’s Hang Seng index is rising by 0.6% for the fifth consecutive session. The Nikkei 225 and Kospi are gaining between 0.2% and 0.4%. Brent crude oil is trading at $61.2 per barrel. According to the EIA, U.S. crude inventories fell by 2.03 million barrels last week, exceeding the average estimate. S&P 500 futures are up 0.56%.
Bonds. The yield on 10-year U.S. Treasuries declined following Powell’s relatively dovish tone. Over two sessions, emerging market bonds rose 0.8%, according to the EMB ETF chart.
KASE Index. The KASE index saw a “cool-down” session the day before yesterday. Stocks partially corrected after Monday’s growth. One reason for the 0.6% decline may have been resistance around the 5700 level. As of this morning, quotes are up 0.45%, giving the market another opportunity to test that level.
Index Stocks. On Tuesday, the largest declines were seen in Kaspi, Kazatomprom, KMG, and BCC. As of this morning’s opening, three of these four stocks are on the rise. Kazatomprom is up 1.45%, possibly reflecting the 2.4% gain in its GDRs over two sessions on the LSE. The stock is still testing the 50-day moving average, though a clear breakout has yet to occur. Kaspi and BCC shares are also recovering. Over the weekend, Halyk Bank and Air Astana shares fell about 1% on the LSE. The recent top gainer — Kazakhtelecom — is down 4.72% today. Considering the long anticipation and the large size of the announced dividends, it’s notable that the rally lasted only two sessions. On the other hand, we previously noted that the dividend factor, while powerful, tends to have a short-term, one-off effect.
Currency. The dollar is trading at 515.7 tenge today, which is little changed from previous sessions. The DXY dollar index has risen to 100.12 points.