Our Comments and Expectations
External background. The S&P 500 added a modest 0.3% but managed to renew historical highs. Revised labor market data showed that U.S. job growth for the year through March was much weaker than previously reported: payroll employment was revised down by a record 911,000 jobs. The revision also indicated that the average monthly employment gain was about half of the previously recorded 149k, reflecting a slowdown in labor market growth in recent months. Trump told European officials of his intention to introduce large-scale tariffs against India and China to increase pressure on Vladimir Putin, but only if the EU follows suit. According to Financial Times, he urged the EU to consider tariffs of up to 100%. Meanwhile, Trump’s previously imposed tariffs, now under Supreme Court review, are scheduled for hearings on their legality in early November. Among macroeconomic updates, a slight increase in optimism among U.S. small business owners is worth noting. This week, investors await key inflation data. Notably, a court temporarily barred Trump from dismissing Lisa Cook over mortgage fraud allegations, which will likely allow her to participate in next week’s Fed meeting. In Europe, indices closed near neutral levels, with the DAX down 0.4%. In commodities, oil rose to $66.9 after reports that Israel struck senior Hamas leaders in Doha, escalating tensions with Arab countries. At the same time, the EIA forecasts that by early next year oil inventories could rise by more than 2 million barrels per day, signaling an earlier-than-expected oversupply. In Asia this morning, Hong Kong and Korean markets are showing strong gains. S&P 500 futures are up 0.3%, while European markets opened 0.5% higher.
Bonds. The yield on 10-year U.S. Treasuries edged higher after five straight sessions of decline.
KASE Index. The KASE failed to build on its success after updating historical highs due to a lack of support from local stocks: neither BCC nor Kazatomprom, previously the main drivers, showed growth.
Index components. BCC lost 2.1% yesterday, but is adding 1% at today’s open. Halyk Bank is correcting after an unsuccessful attempt to break through resistance around 380 tenge. In addition, its GDRs on the LSE fell 1.9% yesterday, also failing to consolidate above the local level of around $27.2. Kazatomprom showed no further growth, remaining at $48.9. At today’s open, the KASE index is demonstrating a neutral dynamic, which may indicate the start of a new local consolidation, although overall the market maintains its upward trend.
Currency. The dollar has been regaining ground against the tenge for a second session and is again approaching the upper boundary of the current trading channel on the USDKZT chart.