Our Comments and Expectations
External Background. After a short pause, the S&P 500 resumed its growth and updated its all-time highs. New data on trade agreements is emerging — Trump announced that a favorable agreement with Vietnam has been reached. Under this deal, Vietnam will impose a 20% tariff on exports to the U.S., while imports from the U.S. will be duty-free. Additionally, a 40% tariff will be introduced on any goods considered to be transiting through the U.S., although insiders note that enforcing such a tariff would be quite challenging. Meanwhile, Japan stated it cannot sacrifice national interests for the sake of a quick deal with the U.S.
Today, the U.S. labor market report is in focus, which may show hiring slowdowns. Economists forecast an increase of 106,000 non-farm payroll jobs, with the unemployment rate rising to 4.3%, the highest since 2021. A weak employment report may prompt the Fed to resume rate cuts this month. Traders now estimate a 25% probability of a rate cut in July. Reports on trade deficit, factory orders, and the ISM services index are also expected.
Interesting developments have surfaced around Powell — the head of the Federal Housing Finance Agency urged Congress to investigate the Fed Chair, claiming his recent Senate testimony was “misleading.” Meanwhile, Trump has once again called on Powell to resign.
In continental Europe, indices rose by 0.2–0.5%. Today, S&P 500 futures are up 0.12%, DAX futures are up 0.36%, and Stoxx 600 futures are up 0.3%. In Asia, markets are mixed — the Hong Kong exchange is declining, while Korea and mainland China's CSI 300 are growing. Oil rose to $69.10 yesterday after Iran’s president signed a law suspending cooperation with the IAEA.
Bonds. The yield on U.S. 10-year Treasuries rose for the second consecutive session, reaching 4.28%.
KASE Index. Yesterday, the KASE index rose by 0.3%, marking four consecutive sessions of gains. Today, with the opening of the session, prices have climbed another 0.4%. The index reaching new historical highs suggests continued growth, though the risk of forming bearish signals remains.
Index Constituents. Previously, the rally was led by exporters like KMG and Kazatomprom, but later bank stocks — BCC and Halyk Bank — took the lead. However, with oil prices rising yesterday, KMG is once again attempting to reach the 17,500 tenge level. Kcell also shows technical signals suggesting a potential rise to 3,500 tenge. On the London Stock Exchange, AIRA led gains, recovering from a previous drop to new lows. Despite the ongoing growth of the index, we are somewhat concerned about a potential bearish wedge pattern forming.
Currency. This morning, the USD is trading at 519.5 tenge. A rectangular triangle pattern is becoming more evident on the USDKZT chart, with the lower boundary slightly below 518 tenge.