Our Commentary and Expectations
External Background. Oil, which had been rising early yesterday morning, fell to neutral levels by midday amid the lack of any significant retaliatory action by Iran in response to the U.S. strike (aside from a symbolic attack on a U.S. base in Qatar). As the U.S. trading session began, Brent crude futures moved into negative territory following former President Trump's statement that Israel and Iran had agreed to a ceasefire. Tehran later reported that no such agreement had been reached but said it would halt hostilities if Israel did the same. Reports also emerged that Iran had reactivated its air defense systems. The S&P 500 index immediately climbed 1% on Trump’s comments. According to Morgan Stanley strategists, sell-offs triggered by geopolitical events are usually short-lived. U.S. manufacturing showed steady growth in June: the S&P Global manufacturing PMI came in at 52, and two inflation indicators accelerated to their highest levels since July 2022. Investors are now awaiting Fed Chair Jerome Powell’s testimony before the U.S. government, scheduled for this evening and Wednesday. Fed’s Michelle Bowman stated that she would support a rate cut as early as July. Today, Brent crude is losing another 2.4%, falling to $68.6 per barrel. Asian markets are showing positive sentiment this morning: Hang Seng is up 1.7%, and Nikkei 225 is up 1.2%. S&P 500 futures are gaining nearly 0.8%, pushing the U.S. market toward new highs.
Bonds. The yield on 10-year U.S. Treasuries fell by 0.6%. Corporate bonds saw an uptick.
KASE Index. Yesterday, the KASE index rose by 0.6%, once again reaching a new all-time high — a solid result considering oil traded flat during Kazakhstan’s open session and then dropped 7.2% after the market closed. Over the last three trading days, the index moved within a 5990–6030 range, suggesting signs of a local consolidation — a better scenario than a correction following a strong upward wave.
Index Stocks. Despite both stock markets and oil being neutral during local market hours, KazMunayGas shares jumped by 3.4%, as if oil had rallied. Given the subsequent decline in oil during the evening, this may negatively affect those who bought KMG shares yesterday. The drop in the KASE index today, driven by oil, aligns with the current market consolidation.
Despite U.S. market growth, Kaspi ADS declined by 1.8% yesterday — possibly as part of a correction wave following an unsuccessful test of the downward trend line on June 13. The shares are currently near a support level and may rebound soon.
People’s Bank GDRs posted a 2.5% gain, though the technical picture remains unchanged — the price continues to form a triangle pattern. Growth in CenterCredit Bank shares has slowed. No divergence has formed yet on the daily chart, but it may appear in upcoming sessions.
Currency. USDKZT reached 524 yesterday but is retreating to 519 today despite falling oil prices. The driver may be the decline in the U.S. dollar index (DXY).