A look at the day ahead in European and global markets from Ankur Banerjee:
Markets are increasingly looking for the Federal Reserve to pause rate hikes next week, and, amid a blackout on Fed speakers, will be focusing heavily on economic data in the days ahead.
Throwing markets a slight curveball on Tuesday, Australia’s central bank raised rates, dashing expectations that they’d stand pat and sending the Aussie dollar higher.
For the U.S. rates outlook, CME FedWatch tool shows that the probability of the Fed standing pat at the June 13-14 meeting is now at 82%. Just a week earlier it was at 36%.
There was no such drama for the ECB, with President Christine Lagarde on Monday cementing expectations of more rate hikes by reaffirming that it was too early to call a peak in core inflation despite “signs of moderation”. The ECB is also due to meet next week.
Elsewhere in Asia, Hong Kong-listed China property stocks surged on hopes that Beijing would roll out supportive measures soon to bolster the embattled sector. That provided a lift to the MSCI Asia ex-Japan index in an otherwise uneventful session.
The dollar remained on the backfoot after U.S. service sector activity unexpectedly softened, setting the stage for a mixed European open.
Meanwhile, U.S. regulators sued Binance and its CEO Changpeng Zhao on Monday for allegedly operating a “web of deception,” piling further pressure on the world’s biggest cryptocurrency exchange and sending bitcoin to a three-month low.
Bitcoin lost 5% on Monday and was hanging above 25,000 in Asian hours.
Apple shares might make a dash for another record high after the company unveiled an augmented-reality headset called the Vision Pro, setting up a battle against Meta Platform that dominates the market.
“It’s the first Apple product you look through, not at,” Apple CEO Tim Cook said.
In Hollywood, the actors union voted to authorize a strike if contract talks break down, turning up the heat on major film and television studios already grappling with a work stoppage by writers.
Key developments that could influence markets on Tuesday:
Economic events: Netherlands inflation report, Germany Industrial orders for April , UK all-sector PMI, Eurozone retail sales
(Reporting by Ankur Banerjee in Singapore; Editing by Sam Holmes)
