[US market conditions]Stock price rise, yield curve flattened-dollar is in the low 129 yen range-Bloomberg

The US stock market rose on the 17th. Risk motivation improved, supported by strong economic indicators. At one point, it was sluggish in light of the statement by the chairman of the Federal Reserve Board (FRB), Jerome Powell, regarding the outlook for rising interest rates.

The S & P 500 Index ended at 4088.85, up 2% from the previous day. It was the highest price in about a week. The Dow Jones Industrial Average is up $ 431.17 (1.3%) to $ 32654.59. Nasdaq Composite Index rose 2.8%. The Nasdaq 100 index rose 2.6%. Apple, Tesla and Nvidia have picked up significantly from the previous day.

In the US Treasury market, yields have risen, centered on short-term bonds that are sensitive to monetary policy, reflecting a series of expectations for interest rate hikes. The yield curve has flattened. As of 4:31 pm New York time, the 10-year bond yield rose 11 basis points (bp, 1bp = 0.01%) to 2.99%. Two-year bond yields rose 14bp to 2.71%.

Powell said he wouldn’t hesitate to raise rates above neutral levels, if necessary.

FRB Chair Powell: “Continue to work” until inflation declines (1)

Lauren Goodwin, economist and portfolio strategist at New York Life Investments, said, “The market is just a big comparison over the outlook for monetary policy and what the financial situation will be like to keep inflation under control. We are in the process of digesting rapid changes. ” “Therefore, there is already considerable tightening in the financial situation in the market,” he said.

US retail sales in April showed solid growth. It suggested that demand for commodities was still firm despite high inflation. According to the US industrial production statistics in April, the production index of the manufacturing industry has increased strongly for the third consecutive month.

US retail sales increased 0.9% month-on-month in April-suggesting strong personal consumption (2)

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“Retail sales were much stronger than expected, including the upward revision last month,” said Dennis Debcher, founder of 22V Research. “Consumer momentum continues to be much stronger than everyone thought,” he said.

In the foreign exchange market, the dollar has fallen against all 10 major currencies except the yen. Buying for escape has weakened. However, in response to Chairman Powell’s remarks, the dollar was reluctant to fall. He also said that a clear and convincing reduction in inflation was needed.

The Bloomberg Dollar Spot Index, which shows the movement of the dollar against the 10 major currencies, fell 0.7%. As of 4:32 pm New York time, the dollar is up 0.2% against the yen to 1 dollar = 129.38 yen. The euro is up 1.1% against the dollar at 1 euro = 1.0544 dollars.

The New York crude oil futures market fell back for the first time in five business days. Biden’s administration has revealed that it is going to allow oil giant Chevron to negotiate with Venezuela’s state-owned oil company for a license to operate in Venezuela, and sales have become dominant.

U.S. officials told reporters today that the Biden administration plans to ease some sanctions on Venezuela to facilitate dialogue with Venezuela. The US Treasury will allow Chevron to negotiate with state-owned Venezuelan Oil (PDVSA). Investors believe that this move will eventually lead to the return of Venezuelan crude oil to the global market.

The June contract for West Texas Intermediate (WTI) futures on the New York Mercantile Exchange (NYMEX) ends at $ 112.40 a barrel, down $ 1.8 (1.6%) from the previous day. The North Sea Brent July contract for the London ICE is down $ 2.31 to $ 111.93.