The aftermath of promising inflation data continues: US inflation fell to 3.4% in April after months of higher than expected readings, prompting investors to rethink their forecasts on the Federal Reserve’s upcoming move, writes the Financial Times.

No more hikes: “The inflation data this week meant another rate hike is off the table… now it’s just a matter of time until they start cutting,” Bank of America’s head of G10 foreign exchange strategy told the paper. Traders now expect the Fed to deliver two quarter-point rate cuts in 2024.

The USD reacts: Reignited optimism for a cut has sent the USD rally into reverse, with the greenback expected to record its first down month of 2024.

US stocks are at an all time high: The weakening USD has helped drive up US stock markets, with Wall Street’s benchmark indexes — the S&P 500, Nasdaq and Dow — all hitting record highs last week.

Don’t celebrate yet: “We are at a turning point but we are going to faff around here for some indeterminate period of time, ”a foreign exchange strategist at Société Générale told the FT. Fed chair Jay Powell has said time and time again that the central bank will not cut rates before it ensures that the country is on a sustainable path to 2% inflation — its core target.

MARKETS THIS MORNING-

Asian markets are solidly in the green this morning, tracking last week’s gains on Wall Street, and both US and European equities futures ticked slightly higher overnight.

EGX30

27,316

+4.5% (YTD: +9.7%)

USD (CBE)

Buy 46.79

Sell 46.92

USD (CIB)

Buy 46.80

Sell 46.90

Interest rates (CBE)

27.25% deposit

28.25% lending

Tadawul

12,198

0.0% (YTD: +1.9%)

ADX

9,042

0.0% (YTD: -5.6%)

DFM

4,068

-0.4% (YTD: +0.2%)

S&P 500

5,303

+0.1% (YTD: +11.2%)

FTSE 100

8,420

-0.2% (YTD: +8.9%)

Euro Stoxx 50

5,064

-0.2% (YTD: +12.0%)

Brent crude

USD 83.98

+0.9%

Natural gas (Nymex)

USD 2.63

+5.3%

Gold

USD 2,417

+1.3%

BTC

USD 66,211

-1.1% (YTD: +56.5%)

THE CLOSING BELL-

The EGX30 rose 4.5% at yesterday’s close on turnover of EGP 6.0 bn (25.3% above the 90-day average). Regional investors were net sellers. The index is up 9.7% YTD.

In the green: Elsewedy Electric (+20.0%), AMOC (+19.9%), and Mopco (+17.8%).

In the red: Telecom Egypt (-4.9%) and Edita (-0.3%).

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