Our Comments and Expectations
External Background. Market sentiment in the U.S. unexpectedly improved after Donald Trump stated he does not plan to fire Jerome Powell despite his disappointment with the Federal Reserve’s interest rate policy. There was also one-sided progress in trade negotiations: the White House Press Secretary said that talks with China are going well, while Trump stated that Chinese tariffs would be "substantially" reduced and that he would "behave himself." It was also reported that the White House is close to reaching agreements with Japan and India, while simultaneously negotiating with the United Kingdom. Adriana Kugler from the Fed noted that tariffs are likely to exert upward pressure on prices and have a stronger economic impact than previously expected. Elon Musk announced he would significantly scale back his involvement in the Department of Government Efficiency (DOGE) in May following a warning from a Wedbush analyst. In Europe, stock indices showed moderate growth, but futures currently indicate stronger momentum: Stoxx 600 is up 1.4%, DAX up 2.35%. The IMF lowered its global growth forecast for the current and next years, warning that prospects could deteriorate further; China's growth projection was cut to 4% for 2025 and 2026. In Asia, indices are rising: Hang Seng is up 2.3%, Nikkei 225 up 1.9%. Futures for the S&P 500 index are jumping by 1.7%. Oil this morning is trading at its highest level since April 4, at $68.5 per barrel.
According to API data, U.S. crude oil inventories fell by 4.57 million barrels last week — the largest decline since November.
Bonds. The yield on 10-year Treasuries remained unchanged yesterday but is falling to 4.36% today. A major event today will be the $70 billion auction of 5-year Treasury notes.
KASE Index. The KASE index closed down 0.5% yesterday. Today, amid a positive external backdrop, prices are recovering and growing by 0.6%.
Index Stocks. Yesterday, Bank CenterCredit shares showed the strongest growth, continuing their upward trend. There is now a series of nine consecutive sessions of growth. The underperformer was Kazatomprom shares — previously, we noted their correlation with the DXY dollar index, which rose yesterday. At today's opening, KZAP shares added 3.1%, although it remains unclear whether they can maintain this gain by the end of the trading day. The company announced a dividend recommendation of 1,264.12 tenge, with the AGM set for May 27 — this is below our forecast. ADS of Kaspi.kz rose by 3.5% yesterday, recovering their previous decline. GDRs of Halyk Bank gained 1.6%, helping the local market session to show a 0.95% rise today.
Currency. After four consecutive sessions of tenge weakening, the currency is showing a slight recovery against the U.S. dollar today. Currently, USDKZT is trading at 518.2. The Russian ruble is weakening against the dollar to 82.5, allowing the tenge to strengthen slightly against the ruble to 6.37.