On Friday, Wall Street again lacked ideas and the stock indices trended more or less sideways. The Dow Jones Industrial ended the week at 34'479.60 points (+0.04%) and recorded a minus of -0.8% for the week. The S&P 500 gained +0.19% to 4'247.44 points before the weekend, after briefly posting a new record high the previous day. On the Nasdaq technology exchange, the indices remained uninspired on Friday. In the weekly balance, however, resulted for the selection index Nasdaq 100 still a plus of +1.6%. In Asia, most equity indices trended friendly at the start of the week, although trading volumes were relatively thin in view of holidays in Australia, China, and Hong Kong.
In the bond market, government bond yields rose ahead of the Federal Reserve's interest rate decision on Wednesday. Ten-year Treasury yields climbed back to 1.46% after hitting a three-month low last Thursday and posting their sharpest weekly decline since December last week. In addition to the Federal Reserve's policy direction decision, this week's agenda also includes interest rate decisions by the Swiss National Bank (SNB) on Thursday and the Bank of Japan on Friday.
US President Joe Biden and the other G7 heads of state were demonstratively optimistic and satisfied with the talks at the three-day G7 summit in Cornwall, England. According to Biden, the meeting was “extraordinarily collaborative and productive”. In the fight against the Covid-19 pandemic, the G7 promised poorer and emerging countries at least one billion doses of vaccine. Wednesday's summit between Biden and Russian President Vladimir Putin in Geneva is now eagerly awaited. The Kremlin leader stressed in advance that the aim was to restore personal contacts and relations with the US government and to establish a direct dialogue. For his part, the American president wants to establish “a stable and predictable relationship” with Putin.
According to the latest survey results from the University of Michigan, consumer confidence in the United States brightened significantly in June. The sentiment barometer climbed from 82.9 to 86.4 points, stronger than the 84.2 points expected by analysts on average. Thanks to the easing of the corona restrictions, particularly the outlook of the private households surveyed improved.
The German economy is in the process of overcoming the corona crisis and economic output could return to pre-crisis levels as early as the summer, Bundesbank President Jens Weidmann said with conviction. The central bank now forecasts GDP growth of +3.7% for the current year. This is significantly higher than the +3.0% forecast at the end of last year. Private consumption and exports will make a positive contribution. The Bundesbank now also expects stronger growth for 2022: it now forecasts a fulminant plus of +5.2% (previous forecast +4.5%).
Against the backdrop of increasing inflationary pressure, Russia's central bank raised its key interest rate for the third time in a row on Friday. With a rate hike of 50 basis points, the key interest rate now stands at 5.5%. In view of the rising cost of living – the inflation rate is currently more than +6% – the central bank signaled further interest rate tightening.
|11:00||EZ||Industrial Production (April, y/y)||+10.9%|
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Source: LGT Bank (Switzerland) Ltd.
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