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On June 15th, Ben May and Bridget Payne of Oxford Economics stated in a report that while future setbacks are possible, the US-Iran agreement has reduced the risk of a continued decline in oil inventories, ultimately triggering a surge in global energy prices and leading to an economic recession. However, they noted that this does not automatically mean that the amount of oil flowing through the Strait of Hormuz will increase faster than previously expected. "We had assumed that shipping through the Strait of Hormuz would resume by the end of July. Nevertheless, our current short-term oil price forecasts still look overly optimistic," they added. They further reinforced their view that the Federal Reserve and the Bank of England will not raise interest rates, and other central banks that have already raised rates are unlikely to do so again, as the reopening of the Strait of Hormuz is likely to help lower inflation but has a limited impact on economic growth.The Dow Jones Industrial Average opened 634.80 points higher, or 1.24%, at 51,837.06 on Monday, June 15; the S&P 500 opened 104.15 points higher, or 1.40%, at 7,535.61; and the Nasdaq Composite opened 597.62 points higher, or 2.31%, at 26,486.47.Bahrains Foreign Ministry welcomes the memorandum of understanding reached between the US and Iran on negotiations and a ceasefire.On June 15, Iranian Foreign Ministry spokesman Baghae announced at a press conference that the memorandum of understanding on a ceasefire between Iran and the United States had been finalized. Iran plans to release the full text of the document and a summary of its explanation on the day the agreement is formally signed. After approximately 60 days of negotiations, the comprehensive agreement must be registered and confirmed by a legally binding and enforceable resolution of the UN Security Council.European Commission President Ursula von der Leyen: The EU and France will sign a €15 billion defense loan through a security program.

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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