US Stocks Closed, Euro Stocks & Bonds Fall, UK Stocks Rise, Oil Prices Drop on Unexpected Inventory Growth

On Wednesday, the UK released its May CPI data, which rose by 2.0% year-on-year, in line with market expectations and reaching the target set by the Bank of England, providing a basis for its interest rate decision on Thursday. The market generally expects the Bank of England to keep the interest rate unchanged at 5.25%, while the majority of economists surveyed by the media predict that the first rate cut will occur in August. After the data release, the UK's FTSE 100 index edged up slightly.

Commentators say that the UK's key service sector inflationary pressures remain robust, and with economic activity continuing to show resilience, the possibility of a rate cut in August could also be canceled. However, the UK's inflation data further prove that inflation in developed countries is slowing down, and countries are in a soft landing phase, which may allow central banks to cut interest rates. Coupled with the significant increase in productivity that technological advancements may trigger, considering all these factors, the global stock market will face a very favorable environment.

Although the British stock index rose, stock markets in the Eurozone and European bonds generally fell, with tensions in France continuing. 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 high-debt countries, especially those struggling with high interest rates, need to take remedial measures now. Moreover, the market is concerned that the upcoming early elections in France could lead to the victory of far-right groups advocating for high-spending policies. Although the sell-off of French assets has eased, political risks still make investors and businesses uneasy. On Wednesday, Italian sportswear company Golden Goose Group SpA canceled its initial public offering, citing "severe market conditions."

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Internationally, the latest minutes from the Bank of Canada's meeting revealed that the core CPI decline over the past four months supported a rate cut in June. At the same time, officials are also considering postponing the rate cut decision to July to more comprehensively assess the inflation situation. They expressed concerns about the risk of inflation stagnation, a situation that has precedents in the United States. Central bank members generally believe that monetary policy easing should be a gradual process and agreed that expectations for future rate cuts are reasonable if progress continues in fighting high inflation. However, they are also wary that rate cuts could exacerbate overheating in the housing market.

In addition, the US June NAHB Housing Market Index fell to 43, indicating that homebuilder confidence has reached a new low since 2024. This week, the market is more focused on Thursday's US weekly jobless claims data and Friday's flash purchasing managers' index.

After two days of rebound, most European stocks fell back, with technology stocks leading the decline, and the FTSE index rose after UK inflation reached the Bank of England's target.

Most European stocks fell:

The pan-European Stoxx 600 index closed down 0.17% at 514.13 points. The Eurozone STOXX 50 index closed down 0.61% at 4885.45 points.

The German DAX 30 index closed down 0.35%, the French CAC 40 index closed down 0.77%, the Italian FTSE MIB index closed down 0.29%, the Dutch AEX index closed down 0.37%, the Spanish IBEX 35 index closed down 0.1%, while the UK's FTSE 100 index closed up 0.17%.

Major exchanges and sector trends diverged, with technology stocks leading the decline, down 1.15%, and mining stocks up 0.65%.In the European stock market's "Eleven Thieves," Sanofi, ASML, and L'Oréal respectively closed down by 1.91%, 1.76%, and 1.11%, while the LVMH Group closed down by 0.61%.

Among the more volatile stocks:

- Photovoltaic equipment manufacturer SMA (SMA Solar Technology) saw its stock price plummet by 30% after the company downgraded its performance guidance, citing historically high inventory levels within the supply chain. J.P. Morgan indicated that this could mean that electricity demand in the European semiconductor industry will remain weak.

- German photovoltaic stock SMA Solar Technology closed down by over 30%. On June 19th, the company downgraded its full-year sales and revenue guidance, projecting full-year sales of €1.55 billion to €1.7 billion and full-year EBITDA of €80 million to €130 million (the company had originally expected €220 million to €290 million). On the same day, Oddo BHF downgraded its rating for the company to neutral, with a target price of €41.

- UK-based company Games Workshop's stock price surged by 9% after it released its full-year performance forecast, expecting pre-tax profits to reach £200 million (approximately $254.4 million).

- Additionally, the weight loss drug concept stock Zealand closed up by 2.81%. German chip stock Siltronic closed down by 6.6%, while Infineon dropped by 4.6%.

Furthermore, on Wednesday, S&P 500 futures ultimately rose by 0.06%, Dow futures fell by 0.15%, and Nasdaq 100 futures increased by 0.19%. Russell 2000 futures fell by 0.17%.

European bond yields generally increased, with the 10-year German bond yield rising by 0.8 basis points.

At the end of the day, European bond yields generally increased. The 10-year German bond yield, serving as the benchmark for the eurozone, rose by 0.8 basis points to 2.404%, with an intraday high of 2.432% and a low of 2.369%. The two-year German bond yield increased by 0.5 basis points to 2.808%.

The French 10-year government bond yield rose by 2.7 basis points, the Italian 10-year government bond yield increased by 5.0 basis points, the Spanish 10-year government bond yield rose by 2.3 basis points, and the Greek 10-year government bond yield increased by 3.7 basis points. The UK's 10-year government bond yield rose by 1.9 basis points, reaching 4.067%.The US Dollar Index remains largely unchanged, with the Japanese yen falling 0.1% and losing 158

The ICE US Dollar Index (DXY), which tracks the basket of exchange rates of the US dollar against the euro and five other major currencies, fell by 0.02% to 105.236 points. During the early European stock market session, it approached 105.339 to set a daily high, up about 0.06% for the day. During the European stock market session, it fell to 105.15 to set a daily low, down more than 0.11% for the day.

The Bloomberg US Dollar Index fell by 0.01%, reporting 1264.73 points, with a trading range for the day of 1264.98-1263.76 points.

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, reporting 158.01. It fell to a daily low of 157.61 during the early European stock market session, then fluctuated upwards, rising to 158.12 during the session, approaching the June 14th top of 158.26 and the April 29th top of 160.17. The offshore Chinese yuan (CNH) fell by 102 points against the US dollar and lost 7.28 yuan, with overall trading during the session ranging from 7.2698 to 7.2813 yuan.

Mainstream cryptocurrencies rose. The largest market capitalization leader, Bitcoin, rose by 0.74%, reporting $64,950. It is close to the $65,000 threshold; the second-largest, Ethereum, also rose by 3.71%, bidding farewell to a four-week low.

US crude oil inventory exceeds expectations, suppressing investor sentiment, and Brent crude oil closes slightly lower, detaching from a seven-week high

Although international crude oil futures fluctuated several times on Wednesday, the overall trend remained downward. Brent crude oil futures for August closed down by $0.26, a decrease of 0.30%, reporting $85.07 per barrel, bidding farewell to the April 30th top of $87.03. WTI crude oil futures for July did not have closing data due to a holiday in the US financial market. As of press time, it is currently down by about 0.12%.

WTI crude oil fell by nearly 0.54% during the session, reporting $81.13 per barrel, and rose by nearly 0.48%, reporting $81.96 per barrel, the highest level since May 1st. International Brent crude oil rose by $0.51 or nearly 0.6%, reporting $85.84 per barrel, the highest level since May 1st, and fell by 0.5%, reporting $84.90 per barrel.

Analysis points out that due to the unexpected increase in US crude oil inventory, it partially offset the support for oil prices from the growth in summer demand and the escalation of conflicts in Europe and the Middle East. After reaching a seven-week high yesterday, the oil price fell. Data from the American Petroleum Institute (API) shows that for the week ending June 14th, US crude oil inventory increased by 2.264 million barrels, exceeding the expected 2.2 million barrels, with the previous value being a decrease of 2.428 million barrels.Additionally, the European benchmark TTF Dutch natural gas futures closed up 1.88%, while ICE UK natural gas futures rose by 1.42%.

The expectation of a Federal Reserve rate cut enhances the appeal of gold, yet gold prices edged lower, with a general increase in London's industrial base metals.

The expectation of a Federal Reserve rate cut did not support a rise in gold prices. COMEX August gold futures closed down 0.18% at $2,342.70 per ounce. COMEX July silver futures closed up 0.83% at $29.810 per ounce.

Spot gold closed down 0.06%, reporting at $2,328.16, with the highest intraday increase of $5.5 or 0.24%, breaking through $2,330 per ounce. Spot silver saw a maximum increase of 0.69%.

On Tuesday, U.S. retail sales for May were below expectations, and last month's data were significantly revised downward, indicating that economic activity in the United States remains sluggish in the second quarter, with expectations for a rate cut heating up. Ricardo Evangelista, a senior analyst at ActivTrades, stated that the main factor driving gold prices is still the market's expectations for the Federal Reserve's monetary policy. Despite the rise in gold prices, the trend is quite moderate as the market is waiting for more substantive news. The market expects the Federal Reserve to cut rates at least once. The value of the dollar has already fully reflected this situation. Government purchases (of gold) have also remained stable. Therefore, unless there is a significant change in this situation, gold prices are expected to remain above $2,300 per ounce.

Furthermore, the annual survey results from the World Gold Council (WCC) show that in wealthy countries, nearly 60% of central banks believe that gold reserves will grow over the next five years, with 38% holding such a view in 2023.

Last Friday, due to signs of cooling U.S. inflation and the French stock market being severely impacted by political turmoil, gold prices rose by about 1.3%. Carlo Alberto De Casa, a market analyst at Kinesis Money, stated that with the approaching elections in France and the UK, European political uncertainty could be a positive factor.

The weakening dollar led to a general increase in London's industrial base metals:

The economic barometer "Dr. Copper" rose by nearly 1.18%,站稳ing above $9,700 per ton. London aluminum closed up $12, reporting at $2,499 per ton. London zinc closed up $31, increasing by more than 1.09%, reporting at $2,869 per ton. London lead closed up $6, reporting at $2,198 per ton. London nickel closed up $78, reporting at $17,372 per ton. London tin closed up $240, reporting at $32,384 per ton.

Additionally, Shanghai copper, Shanghai nickel, Shanghai tin, and alumina night sessions closed up by approximately 1.19%, 1.07%, 1.29%, and 1.04%, respectively, while Shanghai lead fell by more than 1.4%.