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Samsung Electronics: System LSI business revenue hit a record high in the first half of the year.Samsung Electronics: Profits are expected to continue to grow in the second half of the year.On July 30th, Huatai Macro Research Report stated that the FOMCs decision to hold rates steady in July somewhat eroded the Feds credibility, leading to rising inflation expectations and higher long-term interest rates. We believe the probability of a Fed rate hike in September remains high. The unexpectedly hawkish FOMC meeting in June resulted in tighter financial conditions, lower inflation expectations, and increased Fed credibility. However, with energy prices rising again, the market may have begun pricing in Warshs claim of zero tolerance for inflation as mere rhetoric. The subsequent rise in inflation expectations and long-term yields suggests that the Feds credibility may have been somewhat eroded. We reiterate our baseline forecast of a high probability of a September rate hike, 1-2 rate hikes this year, and 2 rate hikes before mid-next year. The risks remain: ① Warsh may have been merely bluffing; ② The AI boom may abruptly end, leading to tighter financial conditions and making a rate hike unnecessary. Pay attention to the July-August employment/inflation data and Warshs Jackson Hole speech on August 27th.Samsung Electronics reported a net profit of 71.3 trillion won for the second quarter, compared to market expectations of 68.5 trillion won. The chip divisions operating profit for the second quarter was 89.2 trillion won.On July 30th, according to foreign media reports, international oil prices rose nearly 7% on Wednesday. As large-scale airstrikes reignited in the Middle East, market hopes for an impending end to the conflict between the US, Israel, and Iran were dashed; meanwhile, US government data showed domestic crude oil inventories had fallen to multi-year lows, exacerbating concerns about supply reductions. UBS analyst Giovanni Staúnovo stated that the renewed military strikes in the Middle East and Iranian officials reiterating their intention to control shipping activity in the Strait of Hormuz (despite a significant reduction in oil flow through the strait) further pushed up oil prices. On Wednesday, the US and Saudi Arabia launched strikes against Iranian-backed groups in Iraq, accusing them of drone attacks on Saudi oil facilities. Hours earlier, the US military announced it had successfully thwarted an Iranian raid targeting US forces in the region. Iran, in turn, stated it fired on ships in the Strait of Hormuz and US bases in Jordan.

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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