Currency traders began to struggle for the level of 500 tenge per dollar

Our Comments and Expectations

External background. The S&P 500 closed flat yesterday, failing to break the highs of November 28. The market focused on unexpectedly weak labor market data — according to ADP Research, private-sector employment declined by 32,000 jobs. The median forecast of economists expected an increase of 10,000 jobs. This significant miss once again strengthened market expectations for a rate cut at the upcoming Federal Reserve meeting. Options traders are now pricing in more than a 90% probability of a 25 basis-point rate cut next week, compared to about 25% less than two weeks ago.

Jensen Huang expressed uncertainty about whether China would accept H200 chips even if the U.S. eases restrictions. At the same time, Microsoft reduced its losses after denying reports about cuts to AI product sales quotas.

In Europe, indices also showed neutral dynamics and were mostly unchanged. However, before today’s openings, DAX and Stoxx 600 futures are up by 0.5%. S&P 500 futures remain flat. Christine Lagarde told European lawmakers that eurozone inflation is likely to stay close to 2% in the coming months.

In Asia, the Nikkei 225 is showing strong gains today, while other indices are mostly unchanged. Oil is trading around $63 per barrel. According to the delayed EIA report, U.S. crude oil inventories increased by 574,000 barrels last week, marking the fourth increase over the past five weeks.

Bonds. U.S. 10-year Treasury yields declined after the weak U.S. labor market data. Corporate bonds were mostly unchanged.

KASE Index. The KASE trading picture remains unchanged, staying in local consolidation. Trading volumes have been slowly declining since the surge on November 21. In the FX market, the tenge is attempting to move below the psychological level of 500 per dollar.

Index stocks. On the local market, trading was low-volatility yesterday, with Kcell showing the strongest growth, reaching its highest levels since October 17. Kazatomprom continued to rise, and the picture on the LSE was even stronger — its GDRs broke above a local downward trendline and are retesting their previous highs. Kaspi showed a slight increase, but it was enough for the stock to begin consolidating after breaking a local resistance level. KazTransOil posted its sixth consecutive session of gains and is approaching resistance levels. Today’s market opening is moderate, with shares of Halyk Bank and Kazatomprom moving higher.

Currency. Today, a battle has begun around the key psychological level of 500 tenge per dollar. On one side are tenge “bulls,” likely made up of foreign carry traders, and on the other are dollar buyers who consider current levels attractive. This morning, the tenge strengthened to 498–499 per dollar in the forex market, but we tend to believe the level will be defended today. However, the session has just started, and the picture may change during the day.