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September 10th - The European Central Bank (ECB) is expected to raise interest rates for the second time since the energy price surge caused by the Iran war, as inflation continues to exceed its target while the regions economy remains surprisingly strong. In a survey, all but one analyst expected the deposit rate to rise 25 basis points to 2.5% on Thursday. New quarterly forecasts will reinforce the case for a rate hike, pointing to rising inflationary pressures and faster economic growth in the eurozone. Policymakers are dealing with consumer price increases that surpassed 3% last month, a level near a three-year high, and unlikely to fall significantly in the coming months. Unlike the Federal Reserve and the Bank of England, the ECB raised rates in June and there is little disagreement about taking action again this week.Market news: The U.S. Department of Justice is investigating whether the $20 billion licensing deal between Nvidia (NVDA.O) and AI chip startup Groq was deliberately designed to circumvent antitrust scrutiny.September 10th - According to reports, TSMCs (TSM.N) Phase II expansion of its 1.4nm fab in the Central Taiwan Science Park is accelerating, with the first (P1) fab expected to begin trial operations in April next year. Mass production is anticipated to begin in the second half of 2027, earlier than the originally planned 2028. The report, citing unnamed sources, states that TSMC is building two temporary offices at the site, expected to be completed simultaneously in April next year. Initially, over 5,400 operations and outsourced personnel will be stationed there.On September 10th, the Copernicus Climate Change Service, the EUs climate monitoring agency, released a statement saying that August 2026 will be the hottest month since records began in 1940. Data shows that the global average surface temperature in August this year was approximately 16.96 degrees Celsius, slightly higher than the record of approximately 16.95 degrees Celsius set in July 2023, making it the hottest month globally. The global average surface temperature in August was 0.85 degrees Celsius higher than the average for the same period from 1991 to 2020, and 1.65 degrees Celsius higher than the pre-industrial average (1850 to 1900). This marks the first time since November 2025 that the global monthly average temperature has exceeded pre-industrial levels by more than 1.5 degrees Celsius.Fitch sovereign analyst: Fitch will review Japan’s budget for the next fiscal year to determine whether it strikes a balance between growth spending and fiscal constraints.

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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