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September 2nd - European Central Bank (ECB) Governing Council member and Bundesbank President Jean-Claude Nagel stated that the ECB will raise interest rates next week, but he remains cautious about whether further rate hikes will occur. In an interview published Wednesday, Nagel said, "The market currently expects a greater than 95% probability of a rate hike at our September meeting, and I think the market has a fairly accurate assessment of our potential response at this stage." However, Nagel did not commit to any subsequent actions. He stated, "I am cautiously refraining from providing any specific guidance on the policy direction after the September meeting. Oil and gas prices continue to fluctuate, financial markets are highly volatile, and uncertainty is very high. This is a troubling situation – from a monetary policy perspective as well. Inflation is still far from our medium-term target. According to our June forecast, only with higher interest rates can inflation fall back to 2% in the medium term."According to RIA Novosti, a Russian presidential aide said that Putin had no prior plans to hold talks with CIA Director Ratcliffe during his visit to Moscow.On September 2nd, the Iranian Army issued a statement saying that starting in the early hours of the day, as part of the 30th phase of Operation Lightning, the Iranian military deployed dozens of attack drones to strike radar systems and US military bases at the Al Dhafra and Minhad air bases in the United Arab Emirates. The Iranian military also stated that its Arash attack drones launched another large-scale attack on radar facilities and US personnel concentration areas at the Sheikh Issa air base in Bahrain. The Iranian military stated that this operation was a response to US attacks on "innocent civilians" and accused the US of committing "obvious war crimes" by attacking residential areas and wedding scenes. The Iranian military emphasized that the response to these actions would be "continuous, widespread, and large-scale."Euro Stoxx 50 futures fell 0.36%, German DAX futures fell 0.46%, and UK FTSE 100 futures fell 0.37%.Israel Defense Forces: Israeli soldiers will continue operations in the region and will not allow terrorists in the area to advance and launch attacks against Israeli soldiers.

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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