As the second quarter comes to a close, investors are looking ahead to the third quarter, with the biggest oil supply shock on record having little impact on financial markets. Despite demand cuts in China and alternative shipping routes, oil prices have fallen back to pre-U.S.-Israeli-Iran conflict levels.
The bond market is also showing signs of stability, with traders expecting modest U.S. rate hikes due to strong U.S. growth rather than runaway inflation. The U.S. Supreme Court’s decision not to allow President Donald Trump to fire Fed governor Lisa Cook has had little impact on the bond market.
The AI rally has continued, with South Korea’s KOSPI index and Japan’s Nikkei seeing significant gains. However, some investors are now looking to Europe and Asia for more stable returns, with the STOXX index up around 9% for the quarter and China’s mainland blue chips up 10%.
The yen has reached a 40-year low against the dollar, with traders warning of potential intervention. German, French, and Italian inflation readings are due, which could show annual rates dropping and reinforce the idea that interest rates can remain on hold in Europe for some time.
Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.
