[Market Commentary] European stock prices hold steady and inflation indicators
Written on Wednesday, June 2, 2021⇒ This article expires at 13:00 on June 3.
■ The biggest concern in financial markets is inflation in the West and tapering in various countries
■ The biggest concern in the cryptocurrency industry is regulation in China and tax & regulation in the United States
European markets regained some light. The gains were under 1%, but in a genuine bull market, prices typically rise gradually. The UK FTSE 100 was up 0.82% from the previous day, Germany's DAX up 0.95%, and France's CAC 40 up 0.66%, showing steady momentum. The DAX hit new highs. The CAC 40 targets the 2000 high of 6944.77. Inflation indicators are drawing attention. Monday saw Germany's May CPI up 2.4% year over year, the highest since October 2018, while the eurozone CPI for May rose 2% year over year, signaling a solid result.
The U.S. market was almost unchanged from the previous business day (Monday was a holiday, hence the prior week), and the U.S. 10-year Treasury yield rose slightly into the 1.61% area. May ISM Manufacturing PMI rose to 61.2, indicating a bit stronger manufacturing activity, but stocks did not reflect this. The currency market saw a decline in the pound, but on a daily basis the impact seemed limited. The euro-yen pair rose modestly with no standout movement, continuing an upward trend and remains a stock to watch.
Gold retraced from the high 1,910s to just below 1,900. NY crude rose to as high as 68 dollars as OPEC+—comprising OPEC and its allied nation Russia—agreed to curb supply increases. Grains showed a rebound phase on charts, with corn showing a notable recovery. India's NIFTY 50 index touched a new high on Monday but retraced slightly.
[Source] Trading View Corn daily chart
The cryptocurrency market has been oscillating in fine increments and is gradually losing momentum on an intraday basis. It has not dropped enough to trigger a warning, but on a 24-hour basis is down around 3–4%. The Bitcoin dominance rate has fallen back to 42%.
There are two patterns for the decline in the dominance rate: one is a rotation into altcoins in a bull market, the other is funds returning to relatively stable Bitcoin during a correction. It seems that the latter pattern—funds returning to relatively stable Bitcoin—is more likely at present. Overall crypto market capitalization has fallen to around $1.5–1.6 trillion, roughly the same as Amazon or Google’s market cap.
The next event in traditional financial markets is America's employment statistics.
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