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Teslas US website shows that the price of the Model Y Performance All-Wheel Drive version in the US has been increased from $57,490 to $57,990.Teslas US website shows that the price of the Model Y Long Range Rear-Wheel Drive version in the US has been increased from $44,990 to $45,990.Teslas US website shows that the price of the Model Y Long Range All-Wheel Drive version in the US has been increased from $48,990 to $49,990.On May 16th, European Central Bank (ECB) Governing Council member Stournaras stated that a small interest rate hike by the ECB could curb inflation without causing economic damage. Even if the inflation rate is significantly above the target level for a period of time, as long as it is temporary, future tightening of monetary policy should be more moderate. This would both curb further inflation and avoid excessive shock to economic activity. The duration and intensity of the energy crisis, and its transmission mechanism to the real economy, will also determine the ECBs response. The ECB will continue to closely assess all available data and is prepared to set policy rates at a level consistent with maintaining price stability in the medium term. This typically dovish official emphasized that there is currently no strong evidence of a second round of inflation, but he also warned of rising uncertainty, as damage to energy infrastructure in the Gulf region could prolong inflationary pressures in the medium term. Extended delivery times and rising input costs indicate that supply chains are facing increasing pressure.May 16th - Despite geopolitical tensions and a flood of synthetic diamonds, Zimbabwes main state-owned diamond miner plans to produce 5 million carats of diamonds this year, up from 3.8 million carats in 2025. Douglas Zambangor, CEO of United Diamonds Zimbabwe, told lawmakers in the eastern town of Mutare that the countrys diamond industry has experienced a more severe downturn than the international market due to a series of local problems. While international rough diamond prices have fallen by 26% to 35%, Zimbabwean diamonds have plummeted from a peak of $79 per carat to $22 per carat due to product mix issues, geopolitical tensions, synthetic diamonds, market collusion, and an unfavorable sales framework. The international diamond market remains sluggish, especially for unique rough diamonds, with prices projected to range between $22 and $34 per carat by 2026. In contrast, other producers are averaging $100 per carat for high-quality rough diamonds.

EUR / USD Investors Challenge 1.0600 As Mixed US Data Tests Fed Conservatives, US NFP, and ECB's Lagarde

Daniel Rogers

Mar 10, 2023 11:31

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EUR / USD gains bids to extend the midweek rebound from a two-month low, rising 0.16 percent intraday near 1.0600 on Friday morning. In doing so, the Euro-Dollar pair celebrates the broad weakness in the US Dollar ahead of the important US employment report for February and Christine Lagarde's speech as president of the European Central Bank (ECB).

 

The major currency pair reversed a two-day losing trend due to mixed US data and a decline in US Treasury bond yields the day before. Hawkish ECB remarks and the market's positioning for today's crucial US data bolstered the run-up. However, inflation worries and geopolitical tension present challenges for EUR / USD buyers.

 

Despite this, US Initial Jobless Claims increased to 211K for the week ending March 3, compared to the predicted 195K and the previous week's 190K. In addition, there was a decline in Challenger Job Cancellations and an increase in Continuing Jobless Claims. Consequently, early indications for Friday's Nonfarm Payrolls (NFP) appear mixed and challenge the market's push for a 0.50 percentage point Fed rate hike in March, which is supported by Federal Reserve Chairman Jerome Powell's most recent signals.

 

Despite contradictory data, inflation worries continue to favor Fed conservatives, especially after Chairman Jerome Powell defends the stricter monetary policy, which restrains Euro prices. It should be noted that the most recent report from the New York Fed noted that recent upward revisions to inflation data and higher-than-anticipated levels of inflation had altered what had previously appeared to be a decline in price pressures.

 

Francois Villeroy de Galhau, an ECB policymaker, stated on Thursday that they will return inflation to 2% by the end of 2024 or 2025.

 

In addition to the aforementioned catalysts, geopolitical concerns emanating from US President Joseph Biden's proposed budget for 2024 and the US's partnership with the UK and Australia for nuclear submarines should challenge EUR / USD buyers.

 

In this context, US 10-year and 2-year Treasury bond yields extend yesterday's losses to 3.88% as of press time, dragging on the US Dollar Index (DXY), which is presently down 0.10 percent to 105.12. Despite this, Wall Street benchmarks closed with daily losses exceeding 1.5%, causing S&P 500 Futures to post modest losses as of press time.

 

According to market predictions, the employment report for February in the United States is expected to reveal a general softening. The same contrasts with the Fed's hawkish inclination to emphasize the likelihood of a significant market move in favor of the US Dollar in the event of a positive surprise. However, Lagarde of the ECB must confirm this.

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