Thursday Markets Update (June 22, 2023)

23 Jun 2023 by rate3

On Thursday, in a Congress' testimony Powell emphasized FOMC's consensus to rise rates. The Nasdaq was up 0.9%, nonetheless, led by tech shares while BTC goes side way on technicals.

In June, the Kansas City Fed's Manufacturing Production index fell to -10 from -2 in the previous month, continuing three months of negative territory. This reflects the impact of higher interest rates as production declined for durable and non-durable goods, particularly in primary metals and print manufacturing. Employee numbers dropped significantly (-12 vs 7 in May), reaching a three-year low. Shipments, inventories of finished goods, and inventories of input materials also worsened. Year-over-year indices showed sharp declines, and the survey indicated pessimism for the next six months for the first time since April 2020.

Also, 264K job seekers filed for unemployment benefits in the week ending June 17th, matching the upwardly revised value of the previous week. This is the highest number since October 2021. The outcome corresponds with recent data indicating a slight weakening in the US labor market.

Other Markets Updates:

Indonesia: Bank Indonesia kept key rate steady at 5.75% for 5th meeting, matching market expectations. The central bank cited inflation returning to target range of 3.0 ± 1% earlier than expected and remaining within target throughout 2023. Annual inflation rate in Indonesia fell to 12-month low of 4% in May. Domestic economy remains good and GDP growth outlook for 2023 kept at 4.5%-5.3%.

UK: Bank of England raises rate by 50 basis points to 5%, highest since 2008. The decision surprised market expectations and comes as inflation remains stubbornly high. Inflation held steady at 8.7% in May, above target. Core inflation accelerated to 7.1%, highest in 31 years. BoE has hiked rates 13 times since December 2021, fastest tightening in 30 years.