NAGA Weekly Recap June 10 - 2024 – June 14 - 2024

This week saw crucial events shaping 2024 unfold. One was the Federal Reserve's decision to maintain the key rate at 5.5%. However, markets received signals of just one rate cut by year-end, prompting immediate reactions. Other significant events included Tesla's sharp stock surge, movements in gold prices, and forecasts concerning the US dollar.

For more details, read our weekly overview.

Fed holds interest rates steady at 23-year high

The Federal Reserve decided to hold its benchmark interest rate steady on Wednesday, continuing its aggressive stance against inflation despite new data showing a slight reduction in price increases.

Over the past year, the Fed has maintained its rate at approximately 5.5% across seven consecutive meetings, aiming to curb elevated inflation and support a robust economy.

While high interest rates are theoretically expected to slow economic activity and reduce consumer demand, the resilient economy and persistent inflation have defied these expectations.

In a surprising twist, US stocks surged to record highs on Thursday, buoyed by another cooler-than-expected inflation report.

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Tesla stock jumps after Musk says shareholders backed pay package

Tesla Inc. ($TSLA) shares jumped after Elon Musk announced that shareholders voted "by wide margins" to reapprove his compensation package and move the company's state of incorporation to Texas.

The CEO posted the voting results on X, the social media platform he owns, hours before the shareholder voting ended and ahead of Tesla’s annual meeting in Austin on Thursday. Musk shared two charts indicating the proposals' approval.

Following the announcement, Tesla shares surged as much as 7.8% on Thursday but later settled, trading up 3.9% shortly.

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Gold price struggles to attract buyers amid Fed's hawkish stance

Gold prices ($XAUUSD) are struggling to attract buyers, managing to stay above $2,300 but facing challenges due to the Federal Reserve's hawkish stance on interest rates.

Despite easing inflation and hopes for a rate cut in September, gold remains under pressure. A positive risk tone and a modest rise in the US Dollar, boosted by selling in the Japanese Yen, are also capping gains for the precious metal.

Geopolitical tensions in the Middle East and political uncertainty in Europe suggest caution before making any aggressive bets on gold, especially after its recent peak of $2,450 in May.

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EUR/USD holds steady below 1.0750

$EURUSD remains flat near 1.0735 amid a stronger US Dollar and political uncertainty in France.

Early Friday in the Asian session, the $EURUSD pair trades flat around 1.0735. The firmer US Dollar and political uncertainty in Europe, coupled with the European Central Bank's (ECB) recent rate cuts, are weighing on the Euro.

The US Federal Reserve signaled only one 25 bps interest rate cut this year, adding to the Euro's challenges. Investors are looking for more direction from upcoming events, including ECB President Christine Lagarde's speech and the preliminary US Michigan Consumer Sentiment report for June.

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This concludes our weekly recap. Have a great weekend and see you next week! 👋