Fed Chair Powell noted progress on inflation control, lifting European markets, while crude oil prices rose on a larger-than-expected U.S. inventory drop. Meanwhile, political events in France and the UK, along with reports of China developing attack drones for Russia, are drawing global attention.
European markets gained momentum after Fed Chair Jerome Powell noted advancements in controlling inflation, fueling optimism about a potential shift to a more dovish stance by the U.S. central bank.
Speaking at an event hosted by the ECB in Portugal, Powell emphasized the "significant progress" made by the Fed in reducing the rate of price increases toward the 2% target. ECB officials Christine Lagarde and Philip Lane are expected to speak later at the same event, though the ECB may hold off on further rate cuts after lowering rates last month.
Crude Oil Market Update
Crude oil prices jumped following industry reports indicating a sharper decline in U.S. crude inventories than anticipated.
WTI rose 0.5%, with Brent also climbing by 0.5%.
Both key benchmarks have slightly retreated from their recent highs reached in late April, as concerns about potential disruptions from Hurricane Beryl in the Gulf of Mexico have eased.
Political Focus in France and the UK
Political developments in France and the UK are in the spotlight for investors. France is set for a critical legislative run-off election on Sunday.
The far-right National Rally recently secured the popular vote, though its path to governance remains uncertain, as its rivals may engage in negotiations over the coming days.
In the UK, the upcoming Thursday election has raised expectations of a substantial victory for the opposition Labour Party.
U.S. Allies Report China’s Drone Development for Russia
Chinese and Russian companies are reportedly working on an attack drone inspired by an Iranian model used in Ukraine.
Discussions between these companies in 2023 aimed at replicating Iran's Shahed drone have led to the development and testing of a new version, potentially slated for delivery to Russia.
Supplying Russia with such drones would signify a stronger alignment between Beijing and Moscow, despite repeated cautions from the U.S. and its allies.
Liu Pengyu, spokesperson for China’s embassy in the U.S., maintains that China does not supply weapons to parties in the Ukraine conflict and closely monitors dual-use exports. However, U.S. officials are concerned that China could produce a drone similar to the Shahed at a much faster rate than Iran or Russia.
Disclaimer: All information provided is intended solely for general informational purposes. Seven Insights does not take into account individual financial goals or situations and does not provide personalized investment advice. Seven Insights is not a licensed securities dealer, broker, U.S. investment adviser, or investment bank.
