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The Federation of Indian Automobile Dealers Association (FADA): Passenger car retail sales in June increased by 4.84% year-on-year, and the country is cautiously optimistic about the short-term outlook. However, it is necessary to remain vigilant considering the shortage of rare earths, geopolitical tensions and the spillover effects of US tariffs.On July 7, the Reserve Bank of New Zealand may be temporarily suspending its one-year interest rate cut cycle. Most economists predict that the Reserve Bank of New Zealand will keep interest rates unchanged this week, while sending dovish signals to assess the effectiveness of economic recovery. The bank recently stated that interest rates have entered a neutral range, downplaying the urgency of further interest rate cuts and hinting that it may adopt a quarterly interest rate cut rhythm in the future, rather than adjusting at every policy meeting. It is worth noting that there were differences of opinion at the last interest rate meeting. Given that the current economic recovery momentum is still unstable, further interest rate cuts are still possible this year.Market News: Trump welcomed Netanyahu and expressed optimism about reaching an Israel-Hamas agreement "this week."On July 7, the 27th Senate election of the Japanese Diet was scheduled for voting on the 20th. The latest opinion poll conducted by Kyodo News from the 5th to the 6th showed that the opposition camp was more popular than the ruling coalition, and nearly half of the respondents hoped that the ruling coalition composed of the Liberal Democratic Party and the Komeito Party would not achieve the goal of more than half of the seats. The Japanese Senate is responsible for legislative review and government supervision. It has 248 seats. The term of office of members is six years, and half of them are re-elected every three years. This election will focus on 125 seats. In addition to 74 constituency seats and 50 proportional representation seats, there is also 1 by-election seat. According to Japanese media, the results of this Senate election will determine the fate of Shigeru Ishibas cabinet. If the ruling coalition wins less than 50 seats, Japanese Prime Minister Shigeru Ishiba may resign or reorganize the ruling coalition.On July 7, Goldman Sachs said it expects the eight OPEC+ members to increase their oil production quotas by 550,000 barrels per day in September, thereby completely canceling the voluntary production cuts of 2.2 million barrels per day. OPEC+ hopes to restore idle production capacity to normal as global oil demand shows resilience. Goldman Sachs said: "The decision to accelerate the pace of production increases announced on Saturday strengthens our confidence. We have pointed out since last summer that OPEC+ will shift to a more long-term balanced strategy, focusing on normalizing idle production capacity and market share, supporting internal cohesion, and strategically restricting US shale oil supply." Goldman Sachs expects that the crude oil production of the eight OPEC+ members will increase by 1.67 million barrels per day from March to September to 33.2 million barrels per day, of which Saudi Arabia accounts for more than 60% of the increase.

With an eye on ECB policies, the US Dollar Index defends its recovery from a two-week low of 107.00

Daniel Rogers

Jul 21, 2022 11:40

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After recovering from a two-week low the previous day, the US Dollar Index (DXY) hovers at 107.05. In doing so, the dollar index reflects market trepidation before to a major monetary policy meeting of the European Central Bank (ECB). The day before yesterday, the DXY had its first daily rise in four days.

 

Market concerns about a European recession and strong inflation data from the UK and Canada may be to blame for the DXY's increase. The demand for safe haven assets such as the US dollar increased as a result of Sino-American tensions and China's covid problems.

 

Vladimir Putin, the president of Russia, reportedly said that it is unclear in what shape the Nord Stream 1 machinery would be returned after maintenance. According to Reuters, Ursula von der Leyen, president of the European Commission, said on Wednesday that a total suspension of Russian gas was a viable possibility. It should be highlighted that concerns over gas prices may have caused the International Monetary Fund (IMF) to decrease its growth forecasts for Germany. Because of this, the IMF projected Germany's growth to be 1.2 percent in 2002 and 0.8 percent in 2023. In a previous forecast, the IMF predicted that the German economy would grow by 2% per year. Along with the IMF, the Asian Development Bank (ADB) has lowered its forecast for growth in developing Asia from 5.2 percent to 4.6 percent for 2022.

 

Political worries in Italy also foreshadowed further misery for the EU and the markets. Consequently, Prime Minister Mario Draghi received a vote of confidence; but, because the vote was boycotted by the three major cotillion parties, Mr. Draghi may resign and call for early elections.

 

Wall Street ended the day with smaller gains in line with the mood, as the US 10-year Treasury yield halted rising after a two-day rise at about 3.03 percent. As a result, as of the time of publication, intraday S&P 500 Futures were down 0.25 percent at 3,952.

 

Moving forward, DXY traders can find some fun in the US Weekly Jobless Claims and July Philadelphia Fed Manufacturing Survey. However, as markets expect a greater rate hike than the 0.25 percent increase proposed the day before, the ECB's decision will draw a lot of attention. Therefore, in order to prevent the US currency from continuing its current recovery, ECB officials must not only announce the 25 basis point rate increase but also take further steps to win back the confidence of Euro bulls.


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