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July 17th - Eurozone inflation cooled slightly in June, remaining unchanged from the preliminary reading. Overall inflation was -0.1% month-on-month, primarily driven by a decline in energy price inflation (-1.8%). Looking at the breakdown, further cooling of energy prices led to a continued decline in overall year-on-year inflation, with the energy price inflation rate falling from 10.8% in May to 8.5% in June. Meanwhile, food and service price inflation also slowed further. The food price inflation rate fell from 1.9% in May to 1.5% in June, while the service price inflation rate fell from 3.5% to 3.2%. Overall, this pushed core inflation further lower. In summary, the inflation situation did not worsen in June, allowing the European Central Bank greater policy flexibility during the summer and more time to observe before deciding on its next monetary policy move. The current risk lies in the possibility that renewed tensions in the Middle East could trigger a new round of increases in oil and gas prices, further pushing up price pressures during the summer. In the longer term, this also increases the risk of a potential "second-round effect."On July 17th, at the 2026 World Artificial Intelligence Conference and High-Level Meeting on Global Governance of Artificial Intelligence held in Shanghai, the "Global Artificial Intelligence Innovation Index Report 2026" was released. Regarding global AI development trends, the report shows that AI infrastructure continues to expand, with energy supply becoming a new variable for future development; the focus of large-scale model industrialization is shifting from general-purpose to vertical, from training to inference, and from single-point technology applications to the reshaping of the entire business process, with enterprises exhibiting significant heavy asset investment; global AI governance faces urgent needs, and China is promoting global governance and inclusive cooperation from multiple dimensions.On July 17th, JD.com announced that it will invest over 10 billion yuan annually to pay for the five social insurances and one housing fund for its full-time delivery riders and couriers. It is understood that JD.com has already provided 28,000 housing units for its frontline employees through various means, and will invest another 22 billion yuan over the next five years to supply 150,000 new "Service Workers Homes." Currently, JD.coms "Service Workers Homes" have been established in Beijing, Wuhan, Chengdu, and other cities.On July 17, the Cyberspace Administration of China, together with relevant parties, proposed the "Global Cooperation Initiative on Mutual Trust, Interconnection, and Interoperability of Intelligent Agents" at the main forum of the 2026 World Artificial Intelligence Conference and the High-Level Meeting on Global Governance of Artificial Intelligence. This initiative aims to build consensus among all parties and collaborate with global partners to create an open, trustworthy, secure, and inclusive intelligent agent ecosystem. We support the development of open, non-discriminatory, and transparent international standards for intelligent agent interoperability, based on the broad participation of all countries, and promote compatibility and mutual recognition of interfaces, interconnection protocols, semantics, and process layers. We also support the establishment of an open standard verification and iteration mechanism to avoid technical barriers and ecosystem fragmentation, and to facilitate seamless access for different intelligent agents to the global collaborative network.The final reading of the Eurozones core CPI annual rate for June was 2.1%, compared to 2.2% previously.

With the Fed in the Spotlight, EUR/USD steadily climbs above 1.0600 prior to European Retail Data

Alina Haynes

Mar 06, 2023 14:46

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As negative sentiment and conflicting concerns about the Federal Reserve's (Fed) and European Central Bank's (ECB) next move combine, EUR/USD falls to 1.0630, posting minor losses after a notable weekly gain. In light of the crucial week's sluggish start, it is essential to observe that a light schedule in Asia also tests pair traders.

 

However, the robust inflation figures for the Eurozone back hawkish ECB comments. The US data, however, falls short of its European equivalent and casts doubt on the aggressive Federal Reserve (Fed) worries.

 

Botjan Vasle, a member of the Governing Council of the European Central Bank (ECB), stated on Friday, "My personal opinion is that the increase we intend for our March meeting—that is, 0.5 percentage points—will not be the last." In a similar vein, ECB Governing Council member Madis Muller stated on Friday that "it is probably not the ultimate increase in March." However, ECB Vice President Luis de Guindos stated, "Data-dependent interest rate trajectory after March."

 

Raphael Bostic, president of the Federal Reserve Bank of Atlanta, rekindled concerns about the Fed's policy reversal when he stated, "The central bank may be able to suspend the current tightening cycle by mid- to late summer."

 

On the other hand, Mary Daly, president of the Federal Reserve Bank of San Francisco, told Reuters over the weekend that if inflation and labor market data continue to come in hotter than expected, interest rates will need to rise and remain there longer than Fed policymakers anticipated in December.

 

In its semi-annual Monetary Policy Report, the US Federal Reserve stated unequivocally that "continuous increases in the Fed funds rate target are essential." According to the article, the Fed is unwaveringly committed to returning inflation to 2%.

 

In terms of the data, resilient February readings for the Producer Price Index and the Harmonized Index of Consumer Prices (HICP) for the Eurozone validated the hawkish posture of ECB officials, allowing the EUR / USD to maintain its firmer position. Despite the first US Treasury bond rates, the US data disappoints the US Dollar, which weakens the USD/EUR exchange rate. Despite this, the US ISM Services PMI for February was 55.1, compared to market estimates of 54.5 and predictions of 55.2. Prior to that week, the Conference Board's (CB) Consumer Sentiment survey and January's US Durable Goods Purchases both indicated weakening trends.

 

Aside from EU-US catalysts, news from China's annual session of the National People's Congress (NPC) appears significant and has recently impacted the risk profile and EUR/USD exchange rate. According to the most recent report, the dragon nation anticipates a modest growth rate of 5.0% this year, compared to market expectations of 6.0%. In addition, concerns regarding China and Russia have a negative effect on sentiment and the EUR/USD exchange rate.

 

The EUR/USD pair's ability to move rapidly is hampered by the cautious environment that has developed ahead of Federal Reserve (Fed) Chairman Jerome Powell's semi-annual testimony, the US employment report for February, and today's Eurozone Retail Sales for February. If the bloc's data come in at 1.9% YoY, as opposed to the optimistic forecasts of -2.8%, the price may recover the most recent losses.

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