Euro weakens after EU elections shock

The euro

The EUR is weaker in the wake of European Union (EU) elections, as far-right parties are the main winners in several countries. Emmanuel Macron calls for parliamentary elections after Marine Le Pen's Rassemblement National came on top in France. In Germany, Alternativ für Deutschland came in second.

Japanese economy

Japan's economy contracted less than initially reported in the first quarter, by 1.8% on an annual basis, one notch up on the prior estimate. Capital expenditure fell less than originally expected, down by 0.4% quarter-over-quarter (QoQ). This was the last set of data in the archipelago before the BOJ rate decision on Friday. The Bank of Japan (BOJ) is expected to keep its short-term interest rate at 0.1%.

The Bank of Japan

Before the Bank of Japan (BOJ) decision, all eyes will be on the Federal Reserve. FOMC's two-day meeting will start tomorrow. No change is expected this time. Fed funds rates should remain in the current range of 5.25% to 5.5%. The market will be looking for any indication of when the Fed will start cutting rates. According to the CME FedWatch tool, there is only a 10% probability of a cut at the July 31 meeting. It goes up to a 47% chance of a cut at the September 18 meeting and 61% in November.

US inflation

We'll know more about US inflation a few hours before the conclusion of the Fed meeting. The May consumer price index is expected to rise by 0.2% MoM and 3.4% yeat-on-year (YoY). Core CPI expectations: 0.3% month-on-month (MoM), 3.5% YoY. On Thursday, the US producer price index is anticipated to rise by 0.2% in May MoM, down from 0.5% the previous month.

Oracle

Tomorrow evening, Oracle is due to report its earnings for the fourth quarter. The street anticipates earnings of $1.65 per share on revenue of $14.6 billion. So far this year, the stock has gained about 14%, outperforming the 11% gains of the S&P 500, as it has been doing for the last three years. Analysts await Broadcom Q2 earnings on Wednesday. Expectations are for earnings per share of $10.85. Revenue should reach $12.05 billion.

Like many of its peers, Broadcom benefits from the exponential development of AI. Two divisions to watch: analysts expect semiconductor revenue to come in at $7.12 billion, sequentially down but up from the $6.81 billion recorded the same quarter a year ago. Networking revenue is expected to be $4.93 billion, up from $1.93 billion a year ago. On Thursday, Adobe. For the second quarter, earnings are forecast at $4.39 per share and revenue at $5.29 billion.