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July 11th - According to the official WeChat account of Hangzhou Metro, due to the impact of Typhoon Bavi (No. 9), Hangzhou City has activated a Level I typhoon emergency response. Starting at 6:00 AM on July 12th, the entire metro network will be suspended, with the resumption time to be announced separately.On July 11, Claudio Descalzi, CEO of Eni, the Italian state-owned holding group, stated that if the Middle East conflict continues, the global oil market will break through the current range of approximately $80 to $100 per barrel by the first quarter of 2027 at the latest, pushing up inflation and reducing energy demand. In an interview published Saturday in Il Sole 24 Ore, Descalzi said that the release of strategic reserves has so far helped keep crude oil prices roughly within this range, but this strategy is facing increasing risks because global reserves are finite. “The long-term solution is to enhance energy security through the diversification of supply sources and routes,” he said. Descalzi noted that global oil inventories have fallen by an average of 3.8 million barrels per day due to disruptions related to the war with Iran that began at the end of February, accelerating to an average of 4.6 million barrels per day in May. He stated that countries should focus on producers in North Africa and sub-Saharan Africa, Latin America, and Southeast Asia, while reducing reliance on controlled maritime routes.July 11th - Industry insiders stated that historically, during periods of high demand in the memory chip industry, manufacturers tend to simultaneously expand production capacity, leading to a concentrated release of new capacity, a price crash, and industry-wide losses. Subsequently, manufacturers collectively reduce capital expenditures, and when demand recovers, another boom occurs – this cycle constitutes the industrys unique cyclical pattern. Since reaching its peak in late June, US memory chip stocks have experienced a collective correction due to concerns about overcapacity, triggered by news such as Metas sale of computing power. Data shows that industry leaders such as SanDisk, Micron Technology, Seagate Technology, and Western Digital have all seen their stock prices fall by more than 20% in the past few weeks. Analysts point out that the underlying logic supporting current demand for memory chips is facing a reassessment, with the core variable being whether the technological gap between various AI large-scale models will continue to narrow. Analysts also pointed out that the memory chip industry is undergoing a profound change in its business model: in the past, memory was more like a commodity, with prices fluctuating with the market, and contracts were mostly on a quarterly or annual basis; now, cloud vendors and AI data centers are increasingly signing long-term supply agreements with original equipment manufacturers for three to five years, with price ranges, minimum purchase quantities, and customer deposits, in order to ensure critical supply.July 11 - Due to the impact of Typhoon Bavi, the ninth typhoon of this year, the Hangzhou Bay Bridge will be closed in both directions starting at 19:30 today, prohibiting all vehicles from passing through.The CEO of Italian oil company Eni said that if the Middle East conflict continues, the oil market may break out of its current range in early 2027.

As risk appetite grows and interest rates reach 3.30 percent, the US Dollar Index is likely to fall below 104.70

Daniel Rogers

Jun 16, 2022 11:37

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The US dollar index (DXY) has had a significant dip from opening flat and is expected to extend its losses after going below Wednesday's low of 104.66. As a result of the Federal Reserve's (Fed) announcement of a 75 basis point rate hike, the DXY became very volatile (bps). Although the long-term assumption was 50 basis points, last week's announcement of a stronger US inflation data of 8.6% boosted the chances of a big rate hike. Sharply declining US Treasury rates imposed intense selling pressure on the asset. On Wednesday, yields on 10-year US Treasuries plummeted 5.50 percent. The benchmark yield at the time of writing is 3.29 percent. After nearly 28 years, the Fed has issued a 75-basis-point rate increase.

 

Powell's press conference following the announcement of monetary policy It was noticed that Fed chair Jerome Powell was thankful of the solid and well-positioned economic development, which has enabled the Fed to mandate a huge rate increase. In addition, persistent employment growth in the US economy has prompted the Fed to take a firm position on interest rates. The excessive policy tightening of an economy affects growth predictions. The Federal Reserve considers it a success if inflation rates fall to roughly 2 percent and the unemployment rate remains at 4.1%.

 

Wednesday's publication of US Retail Sales data was eclipsed by the Fed's interest rate announcement. The monthly Retail Sales were negative, coming in at -0.3 percent, which was much lower than both estimates and the prior reading of 0.2% and 0.7%, respectively. In contrast, the Retail Sales Control group was recorded at 0%, which was below both expectations and the prior reading of 0.5%.

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