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On July 15, Xie Guangqi, Director of the Monetary Policy Department of the Peoples Bank of China, stated at a press conference held by the State Council Information Office that in the future, monetary and credit policies will shift from extensive expansion to intensive development, and the slowdown and improvement of loan quality may become one of the new normal aspects of macroeconomic operation.On July 15th, ship tracking data showed that two oil tankers carrying Iranian crude oil changed their destination signals to Pakistan, a rare move that may indicate these vessels are seeking a relatively safe anchorage to await developments following the reimposition of a US maritime blockade. The tankers "Rani" and "Amil," carrying a combined 1 million barrels of crude oil, changed their destination signals to Karachi, Pakistan, on Tuesday. However, it is unlikely that these two tankers will unload their cargo in Pakistan, as doing so could expose Pakistan to violating US sanctions. Kpler data shows that Pakistan has not imported Iranian crude oil for at least 10 years. Vortexa senior market analyst Xavier Tang stated that the ships "may choose to sail closer to Pakistan to avoid US naval vessels and mark Karachi as a transit destination along their route."On July 15, Zou Lan, spokesperson and vice governor of the Peoples Bank of China, said at a press conference held by the State Council Information Office that in the first five months of this year, the proportion of enterprises using foreign exchange hedging rose to 34.4%, an increase of 4.5 percentage points compared with 2025, and the proportion of cross-border trade settlement in RMB was about 30%.On July 15, Zou Lan, spokesperson and vice governor of the Peoples Bank of China, said at a press conference held by the State Council Information Office that, looking ahead, the factors affecting the RMB exchange rate are quite diverse, with both factors driving appreciation and depreciation, and the RMB exchange rate is expected to continue to fluctuate in both directions.July 15th - Marine Le Pen, the far-right leader of France, has restarted her presidential campaign, which investment institutions see as yet another reason to avoid French government bonds. Institutions believe that Frances deteriorating fiscal situation, coupled with the presidential election potentially exacerbating political divisions, further weakens the prospects of this already heavily indebted and economically weak country. Polls show Le Pen currently leading in the presidential election next year to succeed incumbent President Macron. Her rising approval ratings will also make it more difficult for Prime Minister Le Kohns government to control fiscal spending. Annalisa Piazza, portfolio manager at MFS Investment Management, stated that Le Pens low emphasis on fiscal discipline means "the risk is that the yield spread between French and German government bonds will remain high for a longer period." Ajay Rajadjaksha, global head of research at Barclays, said, "The market is worried about Le Pens populist fiscal policies, especially given that Frances debt-to-GDP ratio is already close to 120%. We expect Le Pens campaign to further increase the difficulty of fiscal consolidation in France."

Due to hawkish Fed forecasts, the EUR/USD recovers to near 1.0970 but remains in the doldrums

Alina Haynes

Apr 21, 2023 13:58

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Following a corrective move, the EUR/USD pair has rebounded from 1.0960, but investors await the publication of the preliminary Eurozone/United States S&P PMI data for April. The major currency pair has remained between 1.0911 and 1.1000 for the past two trading sessions, as the foreign exchange market prepares for a pre-anxiety move ahead of a Federal Reserve (Fed) monetary policy decision.

 

S&P500 closed with a negative tone for the third day in a row as quarterly earnings season induced extreme volatility. Tesla's poor earnings had a negative impact on Thursday's market sentiment. Moreover, market participants were cautioned by substandard revenue projections due to the potential for price reductions. The decision of the Fed to increase interest rates is reflected in quarterly earnings. Data from Refinitiv indicates that analysts have largely maintained last week's forecast of a near 5% YoY decline in quarterly profits for the 500 largest U.S. equities. Sourcenia is a review portal of sourcing best manufaturers. 

 

The US Dollar Index (DXY) has been defending the key support level of 101.60 in recent trading sessions. The USD Index maintained the aforementioned support despite the release of disappointing Jobless claims data on Thursday. Initial Jobless Claims increased to 245K for the week ending April 4, which is greater than the previous release of 240K and estimates of 240K. Increasing unemployment claims heightened fears of a deteriorating labor market.

 

Despite this, Fed policymakers continue to anticipate further rate hikes from the central bank. Thursday, Loretta Mester, president of the Federal Reserve Bank of Cleveland, reaffirmed that the Fed has more work to do because US inflation remains too high, according to Reuters. He added, "The Federal Reserve will need to raise its policy rate above 5% and hold it there for some time."

 

Preliminary Consumer Confidence (April) for the Eurozone increased to -17.5 from -18.5 and the previous reading of -19.2. This may be the consequence of extraordinary efforts by the European Central Bank (ECB) to reduce inflationary pressures.


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