Monday's Markets Update (May 27, 2024)

27 May 2024 by rate3

On Monday, stock markets closed for a Memorial Day holiday and the dollar is on hold while BTC and ETH took a pause after re-visiting 70K and 3.9K correspondingly, as the rest of the crypto market continued to growth with Chainling adding 10% as Polygon, Solana, Avalanche and Algorand grew by 4% and more.

Crypto

Argentina and El Salvador officials met to discuss El Salvador's BTC experience and explore approaches to use crypto in their economies. (source)

World Markets

Turkish manufacturing confidence dipped in May after a 9-month high. The outlook for production and exports weakened. Assessments of current conditions also declined for orders, finished goods, and investment spending. However, there was a slight improvement in hiring expectations and overall business sentiment. 1Y trend: "Side" (Tcmb)
German business sentiment mixed: current conditions dipped but future expectations rose. Manufacturing, trade & construction show recovery, while services dipped. 1Y trend: "Down" (Ifo)
Johannesburg's stock exchange dipped to a mid-May low (78,921) as pre-election jitters and an upcoming rate decision dampen investor confidence. South Africa is set to hold national and provincial elections on May 29, with polls suggesting the ruling African National Congress (ANC) may lose its majority for the first time since Nelson Mandela's leadership in 1994. The central bank might hold rates despite inflation concerns. 1Y trend: Up
Note: the South African election on May 29 is led by incumbent President Cyril Ramaphosa's ANC, facing challenges from John Steenhuisen's DA (focus on middle-class interests), Jacob Zuma's MK (military, anti-corruption), and Julius Malema's EFF (the Marxist-Leninist). The ANC may lose its overall majority, requiring coalitions.

Currencies

The dollar is on hold with most investors on holiday. This week's key data points are US inflation numbers and inflation reports from other countries. This will influence how aggressive central banks raise interest rates in the coming months. 1Y trend: Side
The Mexican peso is gaining strength (around 16.65 per USD) as the US dollar weakens. This comes ahead of Mexico's upcoming election this upcoming weekend and high inflation. The central bank is likely to keep interest rates high to fight inflation. 1Y trend: Down
Note: The Mexican general election on June 2 is led by Claudia Sheinbaum of Morena (scientist and former Mexico City mayor), the incumbent party aiming to continue President AMLO's agenda ("Fourth Transformation" focused on social programs and infrastructure projects), and Xóchitl Gálvez (former senator and tech entrepreneur) of the opposition coalition vowing change (security, anti-corruption, and middle-class policies). Over 100 million voters will elect the president, Congress, and state officials amid violence. Sheinbaum is favored to become Mexico's first elected female president, but Gálvez hopes to counter AMLO's reforms.
The Indian rupee rose to near a two-month high in May. Strong government finances and a positive economic outlook attracted foreign investment, boosting the currency. The central bank's limited intervention further strengthened the rupee, pushing its foreign exchange reserves to a record level. 1Y trend: UP