US core PCE prices (excluding food and fuel costs) rose 0.3% in May, as expected, but the year-on-year level was relatively low at 4.6%, compared with 4.7% in the previous month and expectations. The PCE price index fell from 4.3% to 3.8%. This is the first time since early 2021 that it has fallen below 4%. Private consumption (adjusted for inflation) was flat after last month’s 0.2%. Personal income increased by 0.4% (up 0.3% in the previous month). Adjusted for inflation, spending was flat in May.
Since then, University of Michigan consumer sentiment has risen to 64.4, above the preliminary reading of 63.9. The increase was significantly higher than the previous month’s 59.2. Full-year inflation expectations remained unchanged at 3.3% from 4.2% last month, the report said. Five-year inflation expectations also held steady at 3.0% (the same as the preliminary estimate), down slightly from 3.1% the previous month.
The US dollar fell as traders focused on expectations of further lower inflation ahead. The US dollar ended the day as the weakest currency among major currencies. New Zealand dollar is the strongest.
From the strongest to the weakest of the major currencies
It’s the end of the month, but if you look at major currencies versus the US dollar this month, the US dollar is mostly down. The exception was against the yen, where the US dollar gained 3.58% against the yen.
Below are the percentage changes in the US dollar against each currency in June.
- Euro: -2.06%
- Yen: +3.58%
- Pound, -2.07%
- Swiss franc, -1.71%
- Canadian Dollar -2.38%
- AUD: -2.45%
- New Zealand Dollar: -1.96%
In the first half of 2023, the U.S. dollar has seen a significant gain of more than 10% against the yen. The dollar also rose against the Australian dollar and New Zealand dollar, but fell against the euro, British pound, Swiss franc and Australian dollar. Dollar Weakest Against Pound (down 5%):
- Euro: -1.96%
- yen” +10.07%
- Pound: -5.03%
- Swiss franc: -3.16%
- Canadian Dollar: -2.16%
- AUD: +2.27%
- New Zealand Dollar: +3.33%
Take a look at other markets today:
- WTI crude futures rose $0.61, or 0.4%, to $70.45. Over the month, the price rose 3.47% (up $2.34).
- Gold rose $11.95 (0.63%) to 1919.36. The price fell -2.21% this month (down $43.41)
- Silver rose $0.19, or 0.84%, to $22.74 today. Monthly price he rose 3.45% (up $2.36)
- Bitcoin had a volatile day, rising to $31,268 before falling to lows of $29,508. It is trading at $30,339.Bitcoin rose 12% or $3178 in the same month
Looking at the US stock market today, all the major indices ended trading strongly higher. The rise was led by the Nasdaq index, which hit a 40-year high in the first half of the year.
- Dow Jones Industrial Average gains 285.18 points (0.4%)
- The S&P index was 53.92 or 1.23%.
- Nasdaq Index rose 196.60 points (1.45%)
For trading months:
- Dow Jones Industrial Average gains 4.56%
- S&P index gains 6.47%
- Nasdaq Index Gains 6.59%
The 2023 rally was led by large-cap tech stocks.
Companies that rose significantly in the first half included:
- Nvidia rises 189.46%
- Meta up 1.38.47%
- Tesla rising 112.51
- Microsoft is up 42%
- Apple rose 49.15%
- Amazon rose 50.13%
- Alphabet is up 35.67%
- Broadcom rose 55.14%
- Chipotle climbs 54.16%
Next week begins with US holiday trading accompanying Tuesday’s Independence Day. Stock and bond markets close early.
The week ends with the all-important US jobs report, with nonfarm payrolls expected to rise by 222,000 (up 339,000 last month). The unemployment rate is expected to drop to 3.6% from 3.7% last month, while average hourly wages are expected to rise by 0.3%.
Canada, which also releases its jobs report on Friday, is expected to fluctuate by only 22,000 (-17,300 last month).
In the meantime, other significant events include:
- The Reserve Bank of Australia will release its latest interest rate decision in Australia on Wednesday.Market participants vacillate between a hold or a 25 basis point hike
- ISM data will be released in Europe and the US on Monday.
- FOMC minutes to be released Wednesday at 2pm
- US services PMI will be released on Thursday.
Thanks for your cooperation. Have a nice weekend.
