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.

TASI

12,198

-0.1% (YTD: +1.9%)

MSCI Tadawul 30

1,528

-0.1% (YTD: -1.4%)

NomuC

27,062

+2.2% (YTD: +10.3%)

USD : SAR(SAMA)

3.75 Sell

3.75 Buy

Interest rates

6% repo

5.5% reverse repo

EGX30

27,315

+4.5% (YTD: +9.7%)

ADX

9,041

+0.00% (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: TADAWUL-

The TASI fell 0.1% yesterday on turnover of SAR 4.4 bn. The index is up 1.9% YTD.

In the green: L’Azurde (+10.0%), Mesc (+10.0%) and Aldrees (+6.8%).

In the red: Oasis (-10.0%), MCDC (-8.0%) and Jazadco (-7.3%)

THE CLOSING BELL: NOMU-

The NomuC rose 2.2% yesterday on turnover of SAR 25.1 mn. The index is up 10.3% YTD.

In the green: Future Care (+27.4%), Leen Alkhair (+8.8%) and Molan (+5.0%).

In the red: Nofoth(-4.8%), Tibbiyah (-4.4%) and Mulkia (-4.0%)

CORPORATE ACTIONS-

#1- The board of Dr Sulaiman Al Habib Medical Services Group approved a dividend of SAR 409.5 mn at SAR 1.17 a share for 1Q 2024, it said in a disclosure to Tadawul. Dividends will be distributed to eligible shareholders on Monday, 10 June.

#2- The board of healthcare group Al Hammadi Holding has approved a dividend of SAR 56 mn at SAR 0.35 apiece for 1Q 2024, it said in a disclosure to Tadawul. Eligible shareholders can cash out on Wednesday, 5 June.

Tags: