Recent Federal Reserve Report Highlights Economic Conditions

The Beige Book report released by the Fed yesterday indicates a slight deterioration in the overall economic outlook, while noting that conditions vary by sector and region.

The report states, “Reports of increasing uncertainty and downside risks have contributed to a more pessimistic general outlook.” It also mentions that prices are rising at a moderate pace, with expectations for this trend to continue in the near term.

Analysts suggest that today’s release of Gross Domestic Product (GDP) data in the U.S. could provide signals regarding the Fed’s upcoming actions, while core personal consumption expenditure data may also influence market direction.

In light of these developments, demand for U.S. treasury auctions has weakened, leading the yield on the 10-year U.S. Treasury note to rise by approximately 7 basis points, finishing the day at 4.62% and currently settling slightly lower at 4.61%.

The dollar index, which rose 0.4% to close at 105.1 yesterday, is showing a flat trajectory today, while the price of gold is down 0.2%, selling at $2,334 per ounce.

Copper prices have fallen by nearly 2% today, trading at $4.68 after a 1.9% drop yesterday. Silver, which has risen about 32% since the start of the year, has seen a loss of 2.1%, now priced at $31.3 per ounce, amid profit-taking from recent 11-year highs.

As OPEC+ prepares for a meeting on Sunday, the price per barrel of Brent crude has decreased by 0.2%, trading at $83.2. The OPEC+ group had previously decided to cut voluntary production by 2.2 million barrels per day.

Yesterday, the U.S. Treasury Department released its first-ever Risk Assessment report on Non-Fungible Tokens (NFTs), investigating how vulnerabilities related to NFTs and NFT platforms could be exploited by illegal actors.

The report highlights that NFTs can be highly susceptible to fraud and theft, revealing that illegal actors could use NFTs along with other methods to launder money derived from criminal activities.

Additionally, reports indicate that BHP Group has decided against making a concrete offer for Anglo American, while Google announced a $2 billion investment to establish a data center in Malaysia.

On the New York Stock Exchange, the Nasdaq index fell by 0.58%, the S&P 500 decreased by 0.74%, and the Dow Jones declined by 1.06%. Index futures in the U.S. also opened the new day on a negative note.

European markets exhibited a negative trend yesterday, with Germany’s 10-year bond yield rising to 2.67%, its highest level since November 2023.

According to data released in Germany yesterday, the leading inflation rate for May was 0.1% month-on-month and 2.4% year-on-year.

In other news, Austria-based Raiffeisenbank announced it will cease dollar-denominated money transfer operations from Russia.

Yesterday, the FTSE 100 index in the UK fell by 0.86%, France’s CAC 40 index decreased by 1.52%, Germany’s DAX 40 index dropped by 1.10%, and Italy’s MIB 30 index fell by 1.47%. In Europe, index futures also began the new day on a downward trend.

In Asian stock markets, a selling trend prevailed, although expectations of additional measures from the Chinese government to revitalize the real estate market helped mitigate losses in the country’s stock markets.

Analysts noted that a busy data agenda will be followed in the region tomorrow, particularly the Tokyo Consumer Price Index (CPI) in Japan and the Purchasing Managers’ Index (PMI) in China, which could significantly affect market direction.

As the market approached closing, the Nikkei 225 index in Japan fell by 1.3%, South Korea’s Kospi index declined by 1.2%, Hong Kong’s Hang Seng index dropped by 1%, and China’s Shanghai Composite Index was down by 0.2%.


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