Our comments and expectations
External background. The S&P 500 rose for the first time after 4 consecutive sessions of decline. Quotes were actively growing at the beginning of the session after data on the slowdown in the US services sector: the PMI in the sector fell to 50.6 from 52.7. This value turned out to be below market expectations of 52.6. However, then the market was confused by the labor market report. The number of jobs in the United States exceeded forecasts in December, which caused a further decrease in expectations that the Fed will cut rates in March. The number of jobs in the non-agricultural sector increased by 216,000, while the unemployment rate remained unchanged at 3.7%. Swap traders now see a 50/50 chance of a rate cut in March. The Canadian labor market did not meet expectations for an increase in the number of jobs, confirming a noticeable slowdown in the economy at the end of last year. In Europe, the Stoxx 600 index fell 0.3%. Britain's FTSE 100 lost 0.4%. Inflation in the eurozone rose to 2.9% in December as the government stopped supporting large energy bills. The base rate fell for the fifth month to 3.4%. In Asian markets, Hong Kong's Hang Seng has been noticeably declining by 2.1% since morning. China has launched an anti-dumping investigation into alcoholic beverages from the EU, increasing pressure after the bloc launched an investigation into Chinese subsidies for electric vehicles. Oil rose by 1.5% on Friday, and is losing 1.3% this morning. Libya declared force majeure at the Sharara field after its closure, which led to a drop in supplies to 981,000 barrels per day on Friday. According to StanChart, global oil demand will grow by 1.54 million barrels per day this year and by 1.41 million in 2025, which is above historical levels.
Bonds. The yield on 10-year US government bonds finally broke through the downward trend line on Friday. The quotes have passed the round mark of 4%.
The KASE index. On Friday, trading ended at new historical heights for the KASE index. The number of continuous growth sessions has grown to 6.
Index shares. The largest growth was again in BCC shares. The quotes have recovered about half of what they have lost since December 7. Further, a slowdown or even a slight correction after growth is possible. However, the characteristic of the dynamics of the BCC in recent years suggests that, most likely, they will be able to return to 1180 or even overcome them. Kazakhtelecom's quotes decreased by 1.3%. It is noticeable on the chart that the turnover has begun to decrease, which hints at a decrease in the growth momentum. Kaspi is growing well on the LSE, showing a second session growth of more than 2%. As we noted earlier, the quotes may well return to the $102 mark. Kazatomprom, meanwhile, is showing a local sideways trend.
Currency. The dollar remains under pressure from the tenge. This morning, the USDKZT quotes on forex are trading at 453.2, and remain slightly below the long-term upward trend line (for the dollar). We cannot yet mark its full-fledged breakdown.
Key market news
(=) KMGZ: KazMunayGas plans to increase annual gas production to 6.7 billion cubic meters by 2030