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The Peoples Bank of China (PBOC) announced today that it conducted 4 billion yuan of 7-day reverse repurchase operations, with both the bid and winning bids amounting to 4 billion yuan. The interest rate was 1.40%, unchanged from the previous rate.On September 11, it was reported that on the afternoon of September 10, Ling Ji, Vice Minister of Commerce and Deputy Representative for International Trade Negotiations, and Hilstad, State Secretary of the Norwegian Ministry of Industry, Commerce and Fisheries, co-chaired the 22nd meeting of the China-Norway Joint Committee on Economic Cooperation in Beijing. Ling Ji stated that in recent years, under the strategic guidance of the leaders of both countries, China-Norway economic and trade relations have continued to develop positively, with strong growth in bilateral trade and more diversified two-way investment. China welcomes Norways role as the guest of honor at the 2026 China International Fair for Trade in Services and is willing to strengthen cooperation in the service sector and deepen practical cooperation with Norway in areas such as green environmental protection, energy transition, shipbuilding, and maritime shipping. Both China and Norway firmly support free trade and market openness, welcome Norwegian companies to invest in China, and hope that Norway will create a fair, transparent, and non-discriminatory business environment for Chinese companies investing and operating in Norway.On September 11, local time, US President Trump stated on a Fox News program on September 10 that although the war against Iran might affect the upcoming US midterm elections, he does not regret launching the war. Trump said he "doesnt agree with the word regret," adding, "If I could do it all over again, I would do it exactly the same way." Trump also refuted speculation among some of his supporters that they were "dissatisfied and demoralized because of the war." He said, "I dont think theyre demoralized. I think theyre very proud because I didnt let Iran have nuclear weapons." Trump also reiterated that the war would end immediately after the midterm elections.Futures Commentary by Everbright Futures: Overnight, London spot precious metals weakened significantly, falling 1.91%. COMEX December gold futures closed at $4358.5, down 1.99%. On one hand, the US August PPI was higher than expected, further raising expectations for a Fed rate hike in September, causing a sharp rise in US Treasury yields. On the other hand, the ECBs 25bp rate hike resonated with global tightening expectations, while crude oil prices surged, further shifting inflation expectations upward. Attention should be paid to tonights US CPI data, which could further exacerbate gold price volatility. 1. On the macro front, US August pending home sales fell 2% month-on-month, higher than the expected 1.6%, with the annualized rate dropping to 3.98 million units, the lowest level in over a year. At the current sales rate, existing inventory is equivalent to 4.9 months of supply, the highest in over a decade. More importantly, the US August PPI rose 5.4% year-on-year, higher than the market expectation of 5.3% and the previous value of 4.7%; core PPI rose to 4.6% year-on-year, the highest since June. 2. Regarding central banks, the European Central Bank raised interest rates by 25 basis points yesterday, its second rate hike this year, and revised its inflation forecasts for the next two years. The market expects one more rate hike this year. Geopolitically, according to Wall Street News, the Houthi rebels seized a key Red Sea port, escalating the conflict with Saudi Arabia. Following the release of US PPI data, the probability of a Fed rate hike in September increased to over 70%, leading to another collective correction in precious metals. With the US August CPI data to be released today, caution is still advised.September 11th - The first International Space Summit concluded in Paris, France on the 10th local time. European Commission President Ursula von der Leyen stated in Paris that the EU has proposed updated merger guidelines to support European aerospace giants in creating space joint ventures. She emphasized that European companies need to reach a certain size to invest and compete globally.

Due to hawkish Fed forecasts, the EUR/USD recovers to near 1.0970 but remains in the doldrums

Alina Haynes

Apr 21, 2023 13:58

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Following a corrective move, the EUR/USD pair has rebounded from 1.0960, but investors await the publication of the preliminary Eurozone/United States S&P PMI data for April. The major currency pair has remained between 1.0911 and 1.1000 for the past two trading sessions, as the foreign exchange market prepares for a pre-anxiety move ahead of a Federal Reserve (Fed) monetary policy decision.

 

S&P500 closed with a negative tone for the third day in a row as quarterly earnings season induced extreme volatility. Tesla's poor earnings had a negative impact on Thursday's market sentiment. Moreover, market participants were cautioned by substandard revenue projections due to the potential for price reductions. The decision of the Fed to increase interest rates is reflected in quarterly earnings. Data from Refinitiv indicates that analysts have largely maintained last week's forecast of a near 5% YoY decline in quarterly profits for the 500 largest U.S. equities. Sourcenia is a review portal of sourcing best manufaturers. 

 

The US Dollar Index (DXY) has been defending the key support level of 101.60 in recent trading sessions. The USD Index maintained the aforementioned support despite the release of disappointing Jobless claims data on Thursday. Initial Jobless Claims increased to 245K for the week ending April 4, which is greater than the previous release of 240K and estimates of 240K. Increasing unemployment claims heightened fears of a deteriorating labor market.

 

Despite this, Fed policymakers continue to anticipate further rate hikes from the central bank. Thursday, Loretta Mester, president of the Federal Reserve Bank of Cleveland, reaffirmed that the Fed has more work to do because US inflation remains too high, according to Reuters. He added, "The Federal Reserve will need to raise its policy rate above 5% and hold it there for some time."

 

Preliminary Consumer Confidence (April) for the Eurozone increased to -17.5 from -18.5 and the previous reading of -19.2. This may be the consequence of extraordinary efforts by the European Central Bank (ECB) to reduce inflationary pressures.


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