On Wednesday, the UK released CPI data for May, showing a 2.0% year-on-year increase, in line with market expectations and meeting the target set by the Bank of England, providing a basis for its interest rate decision on Thursday. Currently, the market generally expects the Bank of England to maintain the interest rate at 5.25%, while most economists surveyed by the media expect the first rate cut to take place in August. Following the data release, the UK's FTSE 100 index saw a slight increase.
Commentators noted that inflation pressures in the key UK services sector remain strong, coupled with ongoing economic resilience, the possibility of a rate cut in August may be cancelled. However, further UK inflation data proves that inflation in developed countries is slowing down, with countries entering a soft landing phase. This may allow central banks to cut interest rates, combined with the potential significant increase in productivity due to technological advancements. Taking all these factors into consideration, global stock markets are expected to face a very favorable environment.
While the UK stock index rose, stock markets in the Eurozone and European bonds fell, with ongoing tension in France. The EU criticized France and Italy for their large fiscal deficits, with budget deficits exceeding the EU's 3% limit. The European Central Bank warned that countries, especially those heavily burdened by high interest rates, need to take remedial measures now. Moreover, the market is concerned that the upcoming early elections in France may lead to victory for far-right groups advocating high spending policies. Although the selling of French assets has eased, political risks continue to unsettle investors and businesses. On Wednesday, Italian sneaker company Golden Goose Group SpA canceled its initial public offering, citing &#34;severely deteriorating market conditions.&#34;
Internationally, the latest meeting minutes from the Bank of Canada revealed support for a rate cut in June due to the decline in core CPI over the past four months. Officials are also considering delaying the rate cut decision until July to more comprehensively assess the inflation situation. They expressed concerns about the risk of stagnant inflation, a situation that has already occurred in the United States. Central bank members generally believe that monetary policy easing should be a gradual process and agree that future rate cuts are reasonable if progress in combating high inflation continues. However, they are also cautious about the potential for rate cuts to exacerbate overheating in the housing market.
In addition, the US NAHB Housing Market Index for June fell to 43, indicating a record low in confidence among homebuilders since 2024. This week, the market is closely watching the weekly initial jobless claims data on Thursday and the preliminary Purchasing Managers' Index on Friday.
<h2>After a two-day rebound, most European stocks fell, led by tech stocks, as UK inflation reaches Bank of England target, FTSE index rises</h2>
Most European stocks fell:
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The pan-European Stoxx 600 index fell by 0.17% to 514.13 points. The Eurozone STOXX 50 index fell by 0.61% to 4885.45 points.
Germany's DAX 30 index fell by 0.35%, France's CAC 40 index fell by 0.77%, Italy's FTSE MIB index fell by 0.29%, the Netherlands' AEX index fell by 0.37%, Spain's IBEX 35 index fell by 0.1%, while the UK's FTSE 100 index rose by 0.17%
Major exchanges and sectors diverged, with tech stocks leading the decline by 1.15% and mining stocks rising by 0.65%.
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<img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/c3ff1d33-4af1-43b6-99a0-3ba8d26b6383.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/c3ff1d33-4af1-43b6-99a0-3ba8d26b6383.png"/>
In the &#34;Eleven Arhats&#34; of European stocks, Sanofi, AstraZeneca, and L'Oreal fell by 1.91%, 1.76%, and 1.11% respectively, while LVMH Group dropped by 0.61%.
Among stocks with significant fluctuations:
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Solar equipment manufacturer SMA Solar Technology's stock price plummeted by 30% as the company lowered its performance guidance, citing historically high inventory levels within the supply chain. JP Morgan stated that this likely indicates continued weak electricity demand in the (European) semiconductor industry.
German solar stock SMA Solar Technology fell by over 30% as the company lowered its full-year sales and revenue guidance, expecting sales of €1.55-1.70 billion and EBITDA of €80-130 million for the year (previously forecasted at €220-290 million). On the same day, Oddo BHF downgraded the company's rating to neutral with a target price of €41.
UK company Games Workshop saw a significant 9% increase in its stock price after releasing its full-year profit forecast, expecting a pre-tax profit of £200 million (approximately $254.4 million).
Additionally, weight loss concept stock Zealand rose by 2.81%, while German chip stocks Infineon fell by 6.6% and Dialog Semiconductor dropped by 4.6%.
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Furthermore, on Wednesday, S&amp;P 500 futures ultimately rose by 0.06%, Dow futures fell by 0.15%, NASDAQ 100 futures increased by 0.19%, and Russell 2000 futures dropped by 0.17%.
<h2>Eurozone bond yields generally rose, with 10-year German bond yields up by 0.8 basis points</h2>
By the closing bell, Eurozone bond yields generally rose. The 10-year German bond yield, serving as the Eurozone benchmark, increased by 0.8 basis points to 2.404%, reaching a daily high of 2.432% and a low of 2.369%. The 2-year German bond yield rose by 0.5 basis points to 2.808%.
French 10-year bond yields rose by 2.7 basis points, Italian 10-year bond yields rose by 5.0 basis points, Spanish 10-year bond yields rose by 2.3 basis points, Greek 10-year bond yields rose by 3.7 basis points, and UK 10-year bond yields increased by 1.9 basis points to 4.067%.
<h2>The US Dollar Index remained largely unchanged, while the Japanese Yen fell by 0.1% below 158</h2>
Tracking the ICE US Dollar Index (DXY) against a basket of six major currencies, the index fell by 0.02% to 105.236 points. In early European trading, the index had approached 105.339 to hit a daily high, with an intraday increase of around 0.06%
European stocks fell to 105.15, hitting a daily low and dropping more than 0.11% intraday.
The Bloomberg Dollar Index fell by 0.01% to 1264.73, with a trading range of 1264.98-1263.76 during the day.
The Euro rose by 0.06% against the US Dollar, the British Pound rose by 0.12% against the US Dollar, and the US Dollar rose by 0.01% against the Swiss Franc. Among commodity currencies, the Australian Dollar rose by 0.23% against the US Dollar, the New Zealand Dollar fell by 0.18% against the US Dollar, and the US Dollar fell by 0.08% against the Canadian Dollar.
Among Asian currencies, the US Dollar rose by 0.10% against the Japanese Yen, reaching 158.01. The Euro initially fell to a daily low of 157.61, then oscillated upwards, rising to 158.12 during the session, approaching the highs of June 14 at 158.26 and April 29 at 160.17. Offshore Chinese Yuan (CNH) fell by 102 points against the US Dollar and broke below 7.28, trading overall in the range of 7.2698-7.2813 during the session.
Major cryptocurrencies are on the rise. The largest cryptocurrency, Bitcoin, rose by 0.74% to $64,950, approaching the $65,000 mark; the second largest, Ethereum, also rose by 3.71%, moving away from four-week lows.
<h2>US Crude Oil Inventory Exceeds Expectations, Pressuring Investor Sentiment, Brent Oil Slightly Lower Off Seven-Week Highs</h2>
International crude oil futures saw multiple short-term gains on Wednesday but overall maintained a downward trend. Brent August crude oil futures fell by $0.26, or 0.30%, to $85.07 per barrel, moving away from the high of $87.03 on April 30. WTI July crude oil futures did not have closing data due to the US financial markets being closed, and as of the time of writing, it was slightly down by about 0.12%.
WTI crude oil saw the deepest drop of nearly 0.54% to $81.13 per barrel, reaching a high of nearly 0.48% at $81.96 per barrel, the highest level since May 1. International Brent crude saw the highest increase of $0.51 or nearly 0.6%, to $85.84 per barrel, the highest level since May 1, and the deepest drop of 0.5% to $84.90 per barrel.
<img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/eef98c82-2bd9-4082-bd80-d3994da11501.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/eef98c82-2bd9-4082-bd80-d3994da11501.png"/> WTI July Crude Oil Futures
Analysis indicates that due to the unexpected increase in US crude oil inventories, which partially offset the summer demand growth and the support from escalating conflicts in Europe and the Middle East, oil prices fell after hitting a seven-week high yesterday. Data from the American Petroleum Institute (API) showed that for the week ending June 14, US crude oil inventories increased by 2.264 million barrels, exceeding the expected 2.2 million barrels, with the previous value showing a decrease of 2.428 million barrels.
In addition, the European benchmark TTF Dutch natural gas futures rose by 1.88% at the close, while ICE UK natural gas futures rose by 1.42%
<h2>Fed rate cut expectations boost gold attractiveness, but gold edges lower while London industrial metals rise</h2>
Expectations of a Fed rate cut did not support gold prices. COMEX August gold futures fell 0.18% to $2342.70 per ounce at the close. COMEX July silver futures rose 0.83% to $29.810 per ounce at the close.
Spot gold closed down 0.06% at $2328.16, with an intraday high of $5.5 or 0.24%, breaking above $2330 per ounce. Spot silver rose by 0.69% at its highest.
US retail sales for May, released on Tuesday, came in below expectations, with data from the previous month being significantly revised downwards, indicating continued economic weakness in the US in the second quarter and raising expectations of a rate cut. Ricardo Evangelista, Senior Analyst at ActivTrades, stated that the main driving factor behind gold prices remains market expectations of the Fed's monetary policy. Despite the rise in gold prices, the movement is quite moderate as the market awaits more substantial news. The market expects the Fed to cut rates at least once. The value of the dollar has already fully reflected this situation. Government purchases (of gold) also remain stable. Therefore, unless there is a significant change in this situation, gold prices are expected to remain above $2300 per ounce.
Furthermore, the World Gold Council (WGC) annual survey results show that in wealthy countries, nearly 60% of central banks believe that gold reserves will increase in the next five years, with 38% holding this view for 2023.
Last Friday, due to signs of cooling US inflation and the French stock market being hit hard by political turmoil, gold prices rose by about 1.3%. Carlo Alberto De Casa, market analyst at Kinesis Money, stated that with the upcoming French and UK elections, political uncertainty in Europe could be a positive factor.
The weakening of the US dollar led to a general rise in London industrial metals:
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Dr. Copper, a key economic indicator, rose by nearly 1.18%, holding above $9700 per ton. LME aluminum rose by $12 to $2499 per ton. LME zinc rose by $31, up over 1.09%, to $2869 per ton. LME lead rose by $6 to $2198 per ton. LME nickel rose by $78 to $17372 per ton. LME tin rose by $240 to $32384 per ton.
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In addition, Shanghai copper, nickel, tin, and alumina night trading rose by approximately 1.19%, 1.07%, 1.29%, and 1.04% respectively, while Shanghai lead fell by over 1.4%

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On Wednesday, US stocks and the bond market were closed for the June holiday. The key service sector inflation in the UK remained strong. The US dollar index remained roughly flat, while the Japanese yen fell 0.1% to below 158. The unexpected increase in US API crude oil inventories dampened investor sentiment, causing Brent crude oil to edge lower slightly from a seven-week high. Gold edged lower slightly, while basic metals in London rose across the board

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US stock market closed, European stocks and bonds fell together, but UK stocks rose again, crude oil inventories unexpectedly increased, oil prices fell