The US debt market does not believe in sustained inflation growth, so investors are expecting the maintenance of a soft stimulus

This Wednesday, the Federal Reserve will report on the interest rate and will tell about further plans for monetary policy. With inflation slowing on a monthly basis, analysts are confident that the Fed will not change anything and will keep monetary policy soft until at least August. On Friday, the rise in stock indices also confirmed these expectations. The S&P 500 increased by 0.19%, the NASDAQ jumped by 0.35%, and the Dow Jones remained at the same level. The companies from the technology, consumer services, and consumer discretionary sectors became the growth leaders.

The European stock indexes closed with growth last week. On Friday, the German DAX increased by 0.78%, the British FTSE 100 added 0.65%, and the French CAC 40 jumped by 0.83%. The investment climate of Europe is also improving. The inflation, unemployment, and retail sales data will be released in Great Britain next week. Positive data will strengthen the British currency and the FTSE 100 index.

Gold prices fell sharply on Friday. One reason for the drop is that the rise in inflation really turned out to be temporary, so gold, as a protective asset against inflation, is no longer attractive to investors. But as long as Treasury bonds' yield is still at its price minimum, and the experts forecast a further decrease, up to 1%, the prices for precious metals will stay high. Silver is in a more confident position now.

Oil prices continue to rise. The summer season is gaining momentum, the demand for fuel is increasing, so do not expect prices to fall, but analysts still expect a slight correction because there have been no significant corrective movements from $61 to $71.

Asian stock market follows the US market. At the opening on Monday, Japan's Nikkei index had already increased by 0.74%, while Australia's ASX 200 added 0.13%. China's "blue-chip" index CSI 300 is declining. On Wednesday, China will release data on industrial production and retail sales which will allow investors to assess future economic prospects of the country. At the same time, Thailand is experiencing a coronavirus outbreak at factories, including seaports. Thereby the export sector could be severely affected.

Main market quotes:

S&P 500 (F) 4,247.44 +8.26 (+0.19%)

Dow Jones 34,479.60 +13.36 (+0.04%)

DAX 15,693.27 +122.05 (+0.78%)

FTSE 100 7,134.06 +45.88 (+0.65%)

USD Index 90.51 +0.44 (+0.48%)

• – UK BOE Governor Andrew Bailey Speaks at 16:00 (GMT+3).

by JustMarkets, 2021.06.14

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.