Summary:
- US100 hits record high, led by FAANG gains
- DE30 also firmly higher with Volkswagen a big riser
- Bitcoin hits 2-month high above 8000
- TRY plunges as CBRT stand pat
- USD: what to expect next?
Stock markets have enjoyed a good day of gains by the European cash close, receiving a dual boost in sentiment from a proposed Chinese fiscal stimulus and a better than expected set of results from Google parent company Alphabet after last night’s closing bell. The US100 has moved up to its highest ever level today, with Google being one of the largest weighted components on the benchmark.
The DE30 has also moved higher, with the index rising thanks to some gains in automakers. A management revamp at Volkswagen (VOW.DE) continues. The German carmaker announced today that the BMW purchasing chief, Markus Duesmann, will join the company. The stock has clearly seen this as good news and rallied over 3% on the day.
Over the past 24 hours major cryptocurrencies surged. The capitalization of the whole market stands above $290 billion while the capitalization of altcoins sits subtly above $155 billion. The Bank of England has announced recently that an upgraded payments system will be compatible with blockchain. On the other hand, one of Chinese cities is creating a new blockchain fund. Bitcoin has been the standout performer and in moving back above the 8000 level has hit a new 2-month high.
In defiance of expectations the Turkish central bank decided to keep all interest rates untouched sending the lira much lower. The local currency plunged over 3% immediately after the release, and taking into account the latest developments one may suppose that it could keep bleeding.
The US dollar index gained almost 7% since mid-April to the end of May when the price struck a 95 handle which has become a glass ceiling since then. The price has been trying to break it out many times, but it has failed to do so as of yet. The latest remarks from Donald Trump regarding the exchange rate make this breakout more unlikely. In today’s analysis we focus on the US dollar index (USDIDX on xStation5) in search for a possible reversal.