© Reuters 5 big things in financial markets today: U.S. stocks poised to rebound, Russian ruble hits four-year high
Investing.com – Here are 5 big things to know about the financial markets on Friday, May 20:
1.China cuts interest rates!
On Friday, the People’s Bank of China eased monetary policy, announcing that it would keep the one-year loan market quoted rate (LPR) rate unchanged but cut the five-year LPR by 0.15%.
Fears of a U.S. recession have grown in recent weeks, making markets highly sensitive to any positives. After the rate cut, it closed up 2.5% today and was 0.8% stronger.
However, some analysts believe that the interest rate quoted in the one-year loan market is more important, and it has a more direct and extensive impact on China’s credit market, and the purpose of lowering the five-year interest rate may be in the medium and long-term lending market, such as the real estate market.
The Soochow Macro Research Report pointed out that the five-year LPR interest rate reduction was superimposed on a 20bp lower interest rate limit. This month, the first set of commercial personal housing loan interest rates were reduced by 35bp. The real estate industry stabilized.
European luxury stocks, on the other hand, underperformed after Richemont (SIX: ) Chairman Johann Rupert warned that the impact of the outbreak could last longer than people thought. At present, about 40% of Richemont Group’s stores in China are temporarily closed.
2.U.S. passed400Billion dollar Ukraine aid bill; Russian ruble hits four-year high
According to CCTV, on the 19th local time, the U.S. Senate passed a bill to provide about $40 billion in military and humanitarian assistance to Ukraine, and the next step will be to submit the bill to President Biden for signature.
It is reported that the bill will provide Ukraine with a total of 20.1 billion US dollars in military aid, which is expected to be used to purchase weapons systems such as anti-aircraft missiles and long-range artillery. The bill also includes more than $8 billion in general economic support for Ukraine, nearly $5 billion in food aid, and more.
In addition, the General Staff of the Ukrainian Armed Forces stated that as of 18:00 on the 19th, the main force of the Russian army was concentrated in the direction of Donetsk, and the use of aircraft and artillery to attack. The General Staff of the Ukrainian Armed Forces also stated that in order to improve the tactical situation in certain areas, the Russian army has stepped up its offensive and assault operations in the direction of Donetsk.
At the same time, it reached a new high since 2018, mainly due to the expanding current account surplus, but some analysts said that the surplus expansion was due to Russia’s inability to import consumer and industrial products. On Thursday, Russia’s central bank eased restrictions on converting rubles into foreign currencies, but kept restrictions on converting rubles into dollars and euros.
At the time of writing, the dollar/ruble exchange rate was at 58.7173, while the Russian-Ukrainian war reached the level of 150 at the beginning of the war, and it was as high as 80 before the war.
3.U.S. stock futures rose
U.S. stock futures rose and China’s rate cut boosted global market sentiment, though caution remains that the market is only rebounding in the short term given the lack of a major change in fundamentals.
According to the U.S. stock market quotation of Investing.com, as of 19:54 Beijing time (07:54 a.m. EST), blue-chip stocks, mainly blue-chip stocks, rose 300 points, or 0.96%, and rose 47.9 points, or about 1.23%, to Tech-heavy stocks rose 195.5 points, or 1.65 percent.
However, the weekly S&P 500 could still close below 4,000 for the first time since March 2021. Earlier, two Fed officials, Esther George and Neel Kashkari, both suggested on Thursday that stock market volatility would not affect the Fed’s tightening policy.
Among individual stocks, Palo Alto Networks Inc (NASDAQ: ) jumped 12% in premarket trading after the company reported strong earnings that partly soothed the pessimism sparked by retail stocks earlier this week.
Still, pre-market earnings from Footy Rock (NYSE: ) and Booz Allen & Co (NYSE: ) remained lacklustre.
4. European economic data getting weaker
The economic data released by Europe is getting worse day by day.
According to GFK data, UK consumer confidence is at a record low, below the height of the 2008/2009 financial crisis and recession and the early days of the pandemic in 2020.
Meanwhile, UK retail sales unexpectedly rose month-on-month, but were still on a downward trend year-on-year. However, with the UK unemployment rate at its lowest level in 50 years, it is not certain that consumption will remain so subdued.
The data also showed that German inflation showed no signs of easing. Germany’s producer price index (PPI) rose to a record high of 33.5% on a yearly basis in April, but the monthly rate slowed to 2.8% from 4.9%.
European Central Bank Chief Economist Philip Lane will speak today, investors can pay attention to his views on these economic data to assess the future policy trends of the European Central Bank.
5. Oil prices move sideways, focus on U.S. drilling,CFTCPosition data
On Friday, oil prices traded sideways and may end the week flat. On the one hand, Shanghai is improving and U.S. gasoline inventories are at a 14-year low. Commercial earnings showed weak consumption.
As of 19:54 Beijing time (07:54 a.m. EST), Investing.com’s commodity market showed: up 42 cents or 0.38% to $110.31 per barrel; up 68 cents or 0.61%, At $112.72 a barrel.
In addition, investors will need to pay attention to the US active oil rigs data and the US Commodity Futures Commission net speculative positioning data due later in the day.
[This article is from Yingwei Caiqing Investing.com, to read more, please log on to cn.investing.com or download Yingwei Caiqing App]
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Compilation: Liu Chuan