Our Commentary and Expectations
External Background. The S&P 500 closed flat yesterday. The key development was the agreement between the U.S. and the EU, along with growing optimism about a potential extension of the tariff truce between the U.S. and China. Luthnik stated that the final decision on the truce would rest with Trump. Meanwhile, the U.S. prohibited the president of Taiwan from making a stopover in New York en route to Central America, following objections from Beijing—suggesting the U.S. does not want to escalate tensions further after the first day of trade talks. The European Union defended the deal despite criticism from German industry, which called it an “inadequate compromise” by the bloc. On Monday, the euro fell 1.3% amid concerns about the agreement’s economic impact on Europe. Trump announced that the EU agreed to purchase $750 billion worth of American energy and invest $600 billion in the U.S. under the deal. Investor attention is now shifting to macroeconomic data: an improvement in the Conference Board Consumer Confidence Index for July is expected, along with a drop in job openings by nearly 270,000 in June compared to May. Today marks the start of the Federal Reserve’s two-day rate meeting. In Europe, the Stoxx 600 dropped 0.2%, and the DAX declined by 1%. Chinese and Hong Kong markets are open today. Oil rose yesterday but was unable to break above the $70 per barrel level. Copper prices are falling as Chile and the U.S. negotiate an exemption from a planned 50% tariff. Oil traders expect OPEC+ to approve an increase in daily production by 548,000 barrels in September.
Bonds. The yield on 10-year U.S. Treasuries stood at 4.41% yesterday. Corporate bonds traded flat.
KASE Index. The KASE Index also closed flat, confirming our expectations of a local consolidation phase.
Index Stocks. Most stocks closed yesterday with little volatility. A notable exception was KazMunayGas shares, which dipped during the session, nearing the 19,000 KZT level. Kazatomprom stocks continued their slow upward trend, rising for the fifth consecutive session and hitting new all-time highs at today’s open. On the LSE, Halyk Bank GDRs rose but remained within a sideways trend. Kaspi rebounded by 1.1% on Nasdaq after two sessions of losses. As of this morning, KMG shares are up 0.55%, Kazatomprom +0.5%, and Air Astana +0.6%. We expect a moderately positive session on KASE.
Currency. The dollar is showing a slight rebound today after falling to 541.9 KZT yesterday. Notable movement is seen in the USDRUB pair— the ruble weakened to 82 per dollar following Trump’s statement that Russia has about 10–12 days left to reach a truce with Ukraine. Otherwise, it could face “secondary sanctions,” which shortens the window for compliance by around three weeks. The RUBKZT rate is also falling—the last deal on KASE was at 6.58 KZT, 3.9% lower than Friday’s close of 6.85.