Draghi appreciated the euro

The euro has appreciated, and US bonds have fallen, as ECB chief Mario Draghi has hinted that inflationary deterrents are temporary. This was accepted by market participants as a serious hint of the forthcoming normalization of the ECB's interest rate policy.
Interest rates on 10-year bonds rose by 3.7 percentage points to 2.175 percent. Bonds on two-year bonds added 2.4 basis points to 1.377%, while 30-year-olds rose by 3.3 basis points to 2.731%.
Draghi said a series of factors delayed the inflationary process, but they are generally temporary and should not cause inflation to deviate from the medium-term.
Market participants, however, read in Draghi's comment a signal for normalizing interest and monetary policy. Monetary incentives in the euro area are scheduled to end in December. It is entirely possible that they will not be prolonged beyond that period.
Interest rates on European government bonds also increased. 10-year German bonds rose by 6.4 basis points to 0.311 percent, while 10-year French bonds rose by 7.7 basis points to 0.684 percent.

Japanese stocks close to a two-year peak

Japanese stocks headed for a two-year high on the second day of the week after exporting companies benefited from the dollar's appreciation against the yen. The Japanese Nikkei added 0.3% to 20 213.62 points.
An increase in the index above 20,318 points would take it to a new highest value for the indicator since August 2015.
To a large extent, the rise of the index was the appreciation of the dollar against the yen. Green money was traded at levels of about 111.90 after instantly reaching the highest value of 112,075.
Meanwhile, the US indexes ended mixed yesterday after trading for much of the day for a far greater plus.
Technological Nasdaq ended in a minus dragged by companies like Amazon, whose shares lost nearly 1% of their value.
Oil reported yesterday its fourth consecutive daily appreciation, with US crude oil traded at more than $43 a barrel.
After registering two consecutive historical records, the Korean KOSPI declined by at least 0.1%. The Australian Main Index also reported a loss of 0.3%.

Chances to raise interest rates in Canada is decreasing

The Canadian dollar declined on Friday against the US dollar after weaker than expected inflation figures in Canada. This reduces, according to market participants, the chances of raising interest rates next month.
Inflation climbed to 1.3% in May, which was below analysts' average expectations of 1.5% and far below the target of the Canadian central bank of 2%.
Food and fuel prices have been the main source of slowdown in consumer price growth in Canada.
According to market observers, the Canadian central bank will find it very difficult to raise interest rates next month, given the data.
Chances to raise interest rates in July declined to just 20%, compared with 33% before the data was published.
According to statements by Canadian central bank's officials this week, the moderate monetary policy of the Canadian central bank has played its role, and the bank is expected to assess whether interest rates should remain at their current record lows.
Interest on two-year Canadian bonds fell by 3 basis points below US ones, or the spread between the two instruments was -43.8 basis points. On Thursday of last week, this spread fell to its lowest value in four months - at -40.8 basis points.

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Traders do not trust the Fed

The Fed raised the interest rate this month by continuing to claim to raise it once more during the year. It seems, however, that traders do not really believe the Fed, at least judged by one graphics.
Interest rates on two-year bonds are traditionally those that respond quickly to the Fed's decisions and expectations of future interest rates.
Although the Fed signaled a further rise in interest rates this year, interest on 2-year bonds did not make any changes. That means, that investors do not believe that we will see any such action from the reserve.
Here is what happens on the graphics provided by Societe General:

Or as we see - absolutely nothing.

"50 Cent" again with a mass market bet for market volatility

The trader, nicknamed 50 Cent, again made a serious market volatility bet in the next two months.
He has spent $3.8 million to hedge against potential sales on the market.
The stake is, of course, the volatility index VIX, with options based on it.
This time, the deal includes 74,300 call options of VIX with a strike of 21 and with a pay date in August, with the options being bought at a price of 51 cents.
The stake is very similar to that earlier this month month when 75,000 call options were bought, with a strike of $18 and a pay date in July.
It is already clear where the trader's nickname comes from - namely, by traditionally buying call options based on VIX, with a price of about 50 cents each.
The trader has gained popularity in recent months, in an environment where the volatility index is traded at a record low.
Market observers comment that the trader's new bet is largely related to the expiration of the June options that were part of his portfolio.

FANG companies will continue to dominate the market

Companies in the FANG group dominate the markets at the moment. However, according to some analysts, investors are unlikely to expect that they are soon will start losing momentum, although they are becoming more and more expensive.
According to the Canaccord Genuity, although technology companies look expensive, compared to three years ago, they are still fairly valued in terms of historical standards, especially compared to the "technology bubble."
However, companies in the FANG group are difficult to be avoided by investors. Among the 21 major technology companies, with an expected sales growth of over 15% this year, four are the companies of that group.
The next year's elite group is expected to decline to just 12 companies, with the four companies re-entering it in terms of potential sales growth of 15%.
The four companies are expected to continue to benefit from four key areas of growth - digital regulation, digital video, e-commerce and cloud services, experts say.

New records for US indices

US indices reached new record highs yesterday. The Dow Jones Industrial Average added 144.71 points, or by 0.68% to 21 528.99 points. This was its highest value, both in the day and in history. Since the beginning of the year, the indicator has added 8.9% to its value.
The broad S&P 500 rose by 20.31 points, or 0.8%, to a level of 2 453.46 points. Since the beginning of the year, the increase in the indicator is 9.6%.
The Nasdaq Composite Index rose by 1.4% to 6 239.01, with its daily increase being highest since November 7. The tech index is only 80 points from its historic record of June 8.
Among the companies with the most significant growth, Apple has boosted its market capitalization by 2.9%, its biggest gain since February.
The technology sector will most likely continue to be the focus of investor interest. Experts predict that it will most likely continue to weigh over the overall market, given the expectations of rising interest rates and not very good macroeconomic data lately.

The dollar rises after Dudley's comments

The dollar has appreciated against other major currencies, following comments by New York head of state, William Dudley, in support of the future policy of the reserve, on raising interest rates.
Green money rose by about 0.4 percent after Dudley said he was convinced of the economic recovery and strong performance in the labor market, which would eventually trigger inflation. Prior to the expert's statement, trading on the foreign exchange markets was relatively weak.
The statements of the official representatives of the reserve can continue to be at the heart of the investor's interest, as well as that of Stanley Fischer, in Amsterdam.
Dudley's comments come less than a week after the Fed's interest rate hike, when it hinted at another increase by the end of the year.
Meanwhile, some analysts start talking about two more Fed interest rises by the end of the year.
The dollar appreciated against all major currencies, with the highest appreciation against the African rand. To this, the US dollar rose by 1.9%.
The Canadian dollar proved to be the most stable currency against the dollar, to which the US currency appreciated by only 0.1% despite the continuing decline in oil prices.
The election victory of Emmanuel Makron's party has failed to support the euro seriously. The single currency fell to levels of 1.1143 against the dollar.

Macron with full domination in France

President Emanuel Makron's party won a majority in parliamentary elections in the country, according to official data.
The Republican Party has won 341 seats in the country's 577-seat parliament, which will be enough for self-government.
Macron is expected to be able to carry out the planned pro-business reforms, which is good for the business and the French economy.
The victory of the new Macron's Party is another proof of the complete collapse of the "old political system" in the country.
By securing a majority in parliament, Macron, who is the youngest leader of France since Napoleon, has secured almost complete control over the political system.
The rise of Macron was largely predetermined by the inability of the ruling parties so far to create new jobs and accelerate the growth of the second largest European economy.
The ruling Socialist Party undoubtedly registers one of its biggest defeats in history, political observers are commenting.