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On July 26, Australian Prime Minister Barnes stated that he would raise the issue of tariffs with US President Trump. This comes after Washington imposed new tariffs on trading partners, including Australia. The Labor government, led by Barnes, has called the tariffs unreasonable and expressed its desire for their removal. When asked if he would discuss the issue with Trump, Barnes replied, "Of course." "We will raise this issue at all levels of the Australia-US relationship, and in fact, we have already done so."July 26 – According to Politico, as the US-Iran conflict continues, Arab countries suffering retaliatory attacks from Tehran are attempting to unite and find a path to peace. However, long-standing contradictions are hindering this process. In recent weeks, senior officials from the UAE and Saudi Arabia have publicly posed for photos together, demonstrating a thaw in relations; Jordan and six members of the Gulf Cooperation Council (GCC) have also held talks at the US State Department and Capitol Hill; and the GCC has issued several joint statements condemning Irans attacks. However, several Arab diplomats, current and former US officials, and people familiar with the regional situation say that while these countries all want to ensure the Strait of Hormuz remains open, their differing priorities in how to achieve this goal are hindering substantial progress. These differences include a series of conflicting interests, such as which countries possess alternative shipping lanes, which countries have the deepest infrastructure ties with Iran, and which countrys economy will suffer the greatest losses in the current crisis. An Iraqi official stated, "They are working together to visit the U.S. Congress and the State Department to coordinate their messaging. But they are not on the same page." The Gulf Cooperation Council (GCC), comprised of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the UAE, already had numerous internal divisions before the current conflict, and the war with Iran is further amplifying these contradictions. "They have many issues to resolve, and this war has exacerbated the existing divisions in the Gulf region," said David Schenker, former U.S. State Department director for Middle East affairs.July 26 - Queensland, Australia, confirmed a case of highly pathogenic H5N1 avian influenza on July 25. This is the fourth state in the country to confirm a case of H5N1 avian influenza since June.July 26 - Japanese media reported on the 25th that the temperature in Mie Prefecture in central Japan reached 40.2 degrees Celsius that afternoon. This marks the fifth consecutive day that Japan has experienced temperatures above 40 degrees Celsius, setting a new record for the longest such streak since records began in 2010.The Korea Automobile and Mobility Industry Association (KAMA) predicts that domestic car sales in South Korea will increase by 2.7% year-on-year in the second half of the year, reaching 865,000 vehicles, with total sales for the year reaching 1.71 million vehicles.

EUR/GBP Establishes a Cushion Near 0.8830 Prior to UK Employment and Eurozone GDP Data

Daniel Rogers

Feb 14, 2023 14:48

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The EUR/GBP pair is amassing an intermediate cushion around 0.8830 during the Tokyo session. As investors await the January employment report for the United Kingdom, it is probable that the asset's price may change in the near future. Despite the European Commission's (EC) new GDP estimate and inflation estimates for the Eurozone, the cross' volatility decreased on Monday.

 

In its quarterly report, the EC upped its economic growth forecast for 2023 from 0.3% to 0.9% and expects growth to remain stable at 1.5% for CY2024. While the inflation forecast for 2023 was reduced from 6.1% to 5.6% on an annualized basis. Inflation is anticipated to be 2.5% in 2024, a decrease from the previous forecast of 2.6%.

 

As a result of dropping energy prices and easing supply-chain limitations, inflation projections for the Eurozone have been lowered. However, additional interest rate increases by the European Central Bank are probable, as the inflation rate is significantly above the 2% target. ECB Vice-President Luis de Guindos's statement on Monday that "rate hikes beyond March will depend on data" indicates that ECB President Christine Lagarde will almost probably boost interest rates by 50 basis points (bps).

 

On the economic front, it is projected that the Eurozone's preliminary quarterly and annual Gross Domestic Product (GDP) estimates would remain steady at 0.1% and 1.9%, respectively. This indicates that the Eurozone did not have a recession in CY2022.

 

The bulls of the British pound will be on edge until the United Kingdom's employment numbers are released. The unemployment rate is expected to remain unchanged at 3.7%. Investors will closely monitor the Average Earnings data excluding bonuses, which is projected to increase by 6.5%. This may present new challenges for the Bank of England (BoE), which is struggling to gain the upper hand in its battle against inflation.

 

In terms of long-term recommendations for the British Pound, economists at Rabobank anticipate that the British Pound will remain under pressure in the coming months. "The United Kingdom is the only G7 economy that has not yet recovered to pre-pandemic levels. In addition to slow growth, its fundamentals include high inflation, low productivity, sluggish investment growth, Brexit-related trade frictions, and a current account deficit."

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