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On September 17th, several major US tech companies announced they would invest over $40 billion to expand the UKs AI infrastructure, a significant boon for the country, coinciding with a state visit from President Trump. Microsoft (MSFT.O) said on Tuesday it would invest $30 billion in UK AI infrastructure and existing operations by 2028, its largest financial commitment yet in the country. Google (GOOG.O) said it would invest approximately $6.8 billion in AI, R&D, and related engineering in the UK over the next two years. Meanwhile, Nvidia (NVDA.O), OpenAI, and British company Nscale are collaborating to build AI infrastructure in the UK to meet OpenAIs computing needs. The project, called "Stargate UK," is expected to be located in northeast England and utilize tens of thousands of Nvidias Grace Blackwell Ultra graphics processing units. Among other investments, AI cloud computing company CoreWeave plans to invest approximately $2.04 billion in AI data center capacity and operations in the UK. Salesforce announced it would invest a further $2 billion in its UK operations by 2030, while BlackRock will pour £500 million into data centers across the UK.On September 17th, local time, it was learned on the 16th that Israels Intelligence and Secret Service (Mossad) deployed 100 foreign agents in Iran at the start of the Israel-Iran conflict in June of this year. Israels Channel 13 reported that day that, according to information disclosed publicly for the first time by the Israeli Mossad, the agency established a "small army" of 100 foreign agents in Iran at the beginning of the Israel-Iran conflict in June of this year. Their mission was to destroy Irans numerous missile launchers and air defense systems at the outset of the conflict. The report said that these agents were well-trained and capable of operating missile systems weighing hundreds of kilograms. These missile systems were smuggled into Iran and used to attack Iranian ballistic missile launchers and air defense missile systems. This was reportedly the largest operation by the Israeli Mossad to date.Nvidia (NVDA.O) will work with the UK to build a national artificial intelligence infrastructure and ecosystem to drive innovation, economic growth and jobs.UK Government: Salesforce announced it will increase investment in its UK operations by $2 billion by 2030.UK Government: Coreweave announces £1.5 billion investment to drive UK AI innovation and growth through sustainable computing.

We Are Raising Rates, Recession or Not, Gold Daily Analysis

Daniel Rogers

Jun 30, 2022 15:57

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Today, while speaking at the annual meeting of the European Central Bank in Sintra, Portugal, Chairman Powell made it clear that the Federal Reserve is dedicated to decreasing inflation, even if it necessitates hiking interest rates to levels that threaten economic development. His remarks reaffirmed that the Federal Reserve will "do whatever it takes" to return inflation to the 2 percent objective with sustained rate rises.

 

The chairman admitted that "there is a danger" that the Federal Reserve's new monetary policy may lead to an economic contraction and recession, but he stated, "I would not agree that this is the greater risk. The worse error would consist in failing to restore price stability."

 

You should only trade with capital that you can afford to lose while trading derivatives. The trading of derivatives may not be suitable for all investors; thus, you should ensure that you fully comprehend the risks involved and, if required, seek independent counsel. Before entering into a transaction with us, a Product Disclosure Statement (PDS) can be received through this website or upon request from our offices and should be reviewed. Raw Spread accounts provide spreads beginning at 0 pips and commissions of $3.50 every 100k transacted. Spreads on standard accounts begin at 1 pip with no additional commission fees. CFD index spreads begin at 0.4 points. This information is not intended for inhabitants of any nation or jurisdiction where distribution or use would violate local law or regulation.

 

Since current predictions indicate that tomorrow's Personal Consumption Expenditures price index (PCE) data will reflect that inflation continues to exceed the Fed's 2 percent inflation target for May by more than thrice. If these projections are accurate, the chance that the Federal Reserve will raise interest rates by 75 basis points at the July 26-27 FOMC meeting will grow. Recently, the Federal Reserve amended its "dot plot" to represent about twice the previous inflation target for the end of the year of 1 12 to 1 34 percent to a minimum of 3.4 percent.

 

Although the chairman downplayed worries of a recession by stating that the economy is in "very good form" and would be able to withstand tighter lending conditions while avoiding a recession or even a big rise in the unemployment rate, he added a crucial caveat. The longer high inflation persists, the route to a "soft landing" would become "considerably more difficult," according to him.

 

According to recent statistics, inflationary pressures will stay quite high. Additionally, the BEA announced today that "Real gross domestic product (GDP) declined by 1.6% annually in the first quarter of 2022, following a 6.9% gain in the fourth quarter of 2021. The drop was revised downward by 0.1 percentage point from the May "second estimate."

Why Is The Dollar Appreciating?

The combination of Chairman Powell's words and expectations implies that inflation, as measured by tomorrow's PCE price index data, has resulted in a very strong dollar in anticipation of rate hikes. The dollar's rise resulted from market players focusing on interest rate hikes rather than present inflationary pressures.


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