[True Burn Finance] June 25 Market Morning Report: Federal Reserve Warns of Need for Cautious Inflation Control; Chairman Emphasizes Strengthening Technological Innovation Efforts
"Xinhua News Agency: President urges accelerated efforts to achieve high-level self-reliance in science and technology, anchoring the strategic goal of building China into a sci-tech powerhouse by 2035."
Overnight Highlights
• The Dow Jones Industrial Average rose to a one-month high on Monday, while the Nasdaq fell more than 1% as investors rotated out of AI-related stocks and into underperforming sectors, betting on Fed rate cuts this year. Gold prices rose amid a weaker dollar, with investors awaiting U.S. inflation data later this week that could influence the Fed's policy path. USD/JPY retreated from an eight-week high as traders grew wary of potential Japanese intervention. Oil prices rose about 1% on strong summer driving demand and supply concerns fueled by Middle East tensions and drone attacks on Russian refineries. $Hang Seng Index(00HSI.HK)
International News
• San Francisco Fed President warned the U.S. labor market is nearing a tipping point with rising unemployment risks. This year's volatile inflation data hasn't boosted the Fed's confidence in taming prices. Chicago Fed President welcomed cooling inflation but cautioned against overly tight policy.
• Bloomberg: The Fed reportedly proposed a relaxed version of bank capital reforms to other U.S. regulators, potentially significantly reducing burdens for Wall Street giants.
• Canada announced proposed measures to restrict Chinese EV imports, aligning closer with U.S. trade policies.
• Japanese officials' verbal warnings of potential 24/7 FX intervention failed to reverse the yen's weakness. USD/JPY remained under pressure Monday, with options positioning suggesting further downside.
• Ifop poll shows France's far-right party led by Marine Le Pen gained support to 36%, while Macron's camp fell to 20.5%.
• $NVIDIA(NVDA.US) lost about $430 billion in market value over three days, entering correction territory and dragging down chip stocks.
Greater China News
• U.S. Treasury Secretary Janet Yellen said final rules on China investment restrictions may be set by year-end, but no clear timeline exists.
• China's NDRC called for studying visa-free transit expansions to boost tourism and encouraged cities with car purchase restrictions to relax policies.
• Xinhua: President Xi urged faster progress in achieving sci-tech self-reliance, targeting China's transformation into a tech powerhouse by 2035.
• Reuters: The EU invited Chinese officials for technical talks this week on planned EV tariffs. Bloomberg: China reportedly hinted at lowering import tariffs for large-engine cars if Germany convinces the EU to drop planned EV tariffs, benefiting German luxury automakers.
• CCTV: Heavy rains and floods in Jiangxi since June 22 caused direct economic losses of 69.323 million yuan.
• National Business Daily: Multiple Chinese cities recently encouraged rural residents to relinquish homestead rights and purchase urban homes.
• Bloomberg: Cross-border fast-fashion giant Shein secretly filed for a potential London IPO that could be the city's largest in over a decade.
• Independent research shows Tencent's (0700.HK) mobile game "Dungeon & Fighter" achieved over double the first-month sales of "Honor of Kings," potentially marking a new hit. Niko Partners raised its 2024 revenue forecast for the game to 15-18 billion yuan.
• Shenzhen Exchange announcement: China Vanke (000002.SZ) secured a 10-year, 1.5 billion yuan loan from Bank of Communications.
• UBS (UBSG.US) selected Beijing State-Owned Capital over Citadel Securities as the buyer for Credit Suisse's China investment banking unit, retaining 15% post-deal.
• Fosun International (0656.HK) proposed acquiring all outstanding shares of Henlius Biotech (02696.HK) in a deal valuing the Hong Kong-listed pharma firm at 13.37 billion HKD ($1.71 billion).
Commodities & FX
• The U.S. dollar index posted its biggest daily drop since mid-May due to quarter-end flows, falling Treasury yields, and emerging market currency strength.
• Crude futures rose on Russian tensions and dollar weakness. The EU sanctioned 17 vessels transporting Russian oil.
• LME copper dipped slightly on weak China demand. Gold gained after Bank of America and Citi projected long-term targets of $3,000/oz.
Earnings & Data Watch
• Canada May CPI MoM (Prev: 0.50%, Est: 0.30%)
• U.S. April FHFA House Price Index MoM (Prev: 0.10%, Est: 0.30%)
• U.S. April S&P/Case-Shiller 20-City Composite YoY (Prev: 7.38%, Est: 6.90%)
• U.S. June Conference Board Consumer Confidence (Prev: 102, Est: 100)
• U.S. June Richmond Fed Manufacturing Index (Prev: 0, Est: -3)
Text Source: Goldhorse Capital Extramile
Author: Terry Chow
The copyright of this article belongs to the original author/organization.
The views expressed herein are solely those of the author and do not reflect the stance of the platform. The content is intended for investment reference purposes only and shall not be considered as investment advice. Please contact us if you have any questions or suggestions regarding the content services provided by the platform.
