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International oil prices rose for the third consecutive trading day. A chart provides a quick overview of the pre-market conversion of domestic and international crude oil prices.Spot gold and silver traded in a volatile range. A chart provides a quick overview of the pre-market prices of precious metals, converted between domestic and international prices.As of 8:30 AM Beijing time, spot platinum rose 0.43% and spot palladium rose 0.37%.The yield on Japans 5-year government bonds fell 3 basis points to 1.92%.On July 15th, CICC Research Report stated that the seasonally adjusted CPI in the United States fell by 0.4% month-on-month in June, and the year-on-year increase fell back to 3.5%; the core CPI showed zero month-on-month growth and rose by 2.6% year-on-year, both lower than market expectations. The decline in energy prices is the main reason for the cooling of inflation. Looking ahead, the situation between the United States and Iran has escalated again, and the outlook for energy inflation is subject to fluctuations. At the same time, the AI inflation effect is gradually emerging. The mismatch between supply and demand of upstream hardware, the price increase of software and peripheral products, and the boost to aggregate demand from AI capital expenditure may all make core inflation more sticky. In terms of policy, the cooling of inflation in June supports the Federal Reserve to keep interest rates unchanged at the July meeting, but Wallers recent statements show [1] that the Federal Reserve is reassessing the possibility of "precautionary rate hikes". We maintain our baseline judgment of no rate hikes this year, but suggest that the threshold for rate hikes has already decreased. Once one or two overheated inflation data appear, it may prompt the Federal Reserve to further discuss the option of raising interest rates.

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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