InvestMacro

By JustForex

The US stock market rose Wednesday after the release of inflation data for July, which showed that price pressures eased. The overall Consumer Price Index for July was 8.5%, down from the 8.7% expected by economists. Investors now see a 50 basis point rate hike as the most likely scenario for the Federal Reserve’s September meeting. Stock indices jumped sharply on the news, while the dollar index saw its biggest one-day drop in 5 months. As the stock market closed yesterday, the Dow Jones Index (US30) increased by 1.63%, while the S&P 500 Index (US500) added 2.13%. The NASDAQ Technology Index (US100) jumped by 2.89%.

Most of the decline in inflation in July was due to the drop in gasoline prices, which fell by 7.7% for the month. Other categories also saw significant declines, including prices of airline tickets, used cars and trucks, and clothing. On the other hand, some analysts are inclined to think that markets have overreacted positively to the slowdown in inflation because the Fed is still in a cycle of raising rates and will begin cutting the balance sheet next month. Also, according to a new Bloomberg Economics model, inflation in the US now consists of four factors: supply, demand, energy prices, and monetary policy. This model showed that lower energy costs and a tougher Fed stance were the main factors behind the slowdown to 8.5% last month. At the same time, rising demand combined with supply constraints continued to put upward pressure on inflation.

Equity markets in Europe were also up yesterday. Germany’s DAX (DE30) gained 1.23%, France’s CAC 40 (FR40) added 0.52%, Spain’s IBEX 35 (ES35) added 0.49%, and Britain’s FTSE 100 (UK100) closed up by 0.25%.

The US Energy Information Administration reported a second straight week of five million barrels increase in crude oil inventories. But the agency also mentioned that gasoline inventories fell by about five million barrels, which helped offset the bearish sentiment hanging over the market. A lower dollar on the back of slowing inflation led to a rise in oil prices. But there is a vicious circle here that many do not notice. Inflation in the US has slowed due to falling oil and gasoline prices. This caused the dollar index to fall, causing oil prices to rise again. Thus, if the dollar index continues to decline, oil prices will continue to rise, which will have the opposite effect and cause a new acceleration of inflation in the US.

Gold hit a 5-week high on declining US inflation. Gold has an inverse correlation to the dollar index and government bond yields, which fell sharply yesterday after the CPI data. But it should be noted that usually, in a cycle of monetary tightening through higher interest rates, the national currency and government bond yields rise.

Asian markets traded lower yesterday. Japan’s Nikkei 225 (JP225) decreased by 0.65%, Hong Kong’s Hang Seng (HK50) fell by 1.96%, and Australia’s S&P/ASX 200 (AU200) ended the day down by 0.53%.

The Reserve Bank of New Zealand will likely raise its rate by another 50 basis points in August. Nevertheless, the deteriorating economic picture and rapidly falling home prices suggest that investors may see a downward revision to the interest rate trajectory forecast. As the RBNZ is increasingly seen as a test case for other central banks, global markets will be watching closely for any dovish bias from the bank.

S&P 500 (F) (US500) 4,210.23 +87.76 (+2.13%)

Dow Jones (US30) 33,309.84 +535.43 (+1.63%)

DAX (DE40) 13,700.93 +165.96 (+1.23%)

FTSE 100 (UK100) 7,507.11 +18.96 (+0.25%)

USD Index 106.21 −1.16 (−1.09%)

• – US Producer Price Index (m/m) at 15:30 (GMT+3);
• – US Initial Jobless Claims (w/w) at 15:30 (GMT+3);
• – US Natural Gas Storage (w/w) at 17:30 (GMT+3).

By JustForex

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

By JustForex

The US stock indices were trading lower yesterday ahead of the inflation data, indicating that investors were probably closing their positions before the important report. At the close of the stock market yesterday, the Dow Jones Index (US30) decreased by 0.18%, and the S&P 500 Index (US500) was down 0.42%. The NASDAQ Technology Index (US100) fell by 1.19%.

The Fed’s balance sheet reduction plan, known as quantitative tightening (QT), will begin in full force in September. The Fed will begin reducing the balance sheet with $95 billion monthly cuts ($60 billion in Treasuries and $35 billion in mortgage-backed securities). But analysts believe the US Central Bank will have to wind down some of its aggressive monetary tightenings as early as next year as it begins cutting rates to fight the economic downturn. Bank of America estimates that if the Fed pauses QT in September 2023, the Treasury will probably have $630 billion less debt for the public in the fiscal year 2024. Fed Chairman Jerome Powell said last month that the Central Bank’s model “Suggests that it could take two to two and a half years” for the balance sheet to come to a “New equilibrium.” The balance sheet more than doubled during the pandemic, to $9 trillion earlier this year, as the Fed again used quantitative easing as a crisis-fighting tool. But there is an alternative view. Some analysts believe the US Fed will have to raise rates to 5% in 2023 and stay at that level because of tight inflation to get room to lower interest rates in 2024 and again resort to increasing the balance sheet by turning on the printing machine.

Micron Technology (MU) projected negative free cash flow in the second quarter due to falling revenue as lower PC and video game sales are expected to impact chip demand. The company’s stock is down more than 4%. Norwegian Cruise Line (NCLH) reported second-quarter results that fell short of Wall Street expectations and provided gloomy forecasts, predicting that occupancy levels won’t return to pre-pandemic levels until next year. Rival Royal Caribbean Cruises (RCL) and Carnival (CCL) are down more than 5%.

Tesla CEO Elon Musk sold $6.9 billion of Tesla stock, citing the high likelihood of a forced deal with Twitter. Musk broke off an April 25 agreement to buy Twitter for $44 billion in early July. Twitter sued Musk to force him to complete the transaction, dismissing his claim that he had been misled about the number of spam accounts on the social media platform. Both parties will appear in court on October 17.

Stock markets in Europe traded flat on Tuesday. Yesterday German DAX (DE30) fell by 1.12%, French CAC 40 (FR40) lost 0.53%, Spanish IBEX 35 (ES35) gained 0.48%, British FTSE 100 (UK100) closed on the plus side by 0.07%.

A famous German aluminum factory is preparing to shut down due to the growing gas crisis in Europe. Costs have doubled this year, causing the plant to idle one week a month to save gas. The price of gas contracts for Europe has nearly tripled since the beginning of the year due to Russia’s invasion of Ukraine, sanctions against Russia, a slowdown in Russian gas supplies through Nord Stream 1, and global market tensions. Germany’s energy regulator is urging companies, the government, and consumers to reduce gas consumption and has asked major firms to submit contingency plans to reduce consumption during the winter further.

Gold prices are strengthening ahead of a key inflation report. Gold is getting support as a safe-haven asset as stock indices decline along with the Dollar Index. Investors expect a decline in the rate of inflation in today’s report. But if the data is worse than expected, the dollar index could get a boost, negatively affecting the prices of precious metals.

Oil prices fell on Tuesday as market participants compared last week’s potential stockpiling in the US with news that exports of some oil via the “Druzhba” pipeline from Russia to Europe, which runs through Ukraine, have been halted. Russian pipeline monopoly Transneft said Ukraine had suspended crude through the pipeline because Western sanctions prevented Moscow from paying transit fees. The news, however, was offset by reports of new progress in nuclear talks with Iran, which could bring 500,000 to one million barrels a day to the market if Tehran frees itself from sanctions imposed on its oil over its suspected nuclear weapons development.

Asian markets traded flat yesterday. Japan’s Nikkei 225 (JP225) fell by 0.88%, Hong Kong’s Hang Seng (HK50) lost 0.21%, and Australia’s S&P/ASX 200 (AU200) was up by 0.13% by the end of the day.

China’s annual Consumer Price Index was slightly lower than expected at 2.7% instead of 2.5%. Meanwhile, the Producer Price Index, which shows the factory inflation rate, fell sharply from 6.1% to 4.2%. The easing of price pressures in China may reflect the sluggish performance of the domestic economy due to continued Covid-19 lockdowns in major commercial centers hampering activity.

S&P 500 (F) (US500) 4,122.47 −17.59 (−0.42%)

Dow Jones (US30) 32,774.41 −58.13 (−0.18%)

DAX (DE40) 13,534.97 −152.72 (−1.12%)

FTSE 100 (UK100) 7,488.15 +5.78 (+0.077%)

USD Index 106.32 −0.12 (−0.11%)

• – Japan Producer Price Index (m/m) at 02:50 (GMT+3);
• – China Consumer Price Index (m/m) at 04:30 (GMT+3);
• – China Producer Price Index (m/m) at 04:30 (GMT+3);
• – US Consumer Price Index (m/m) at 15:30 (GMT+3);
• – US Crude Oil Reserves (w/w) at 17:30 (GMT+3).

By JustForex

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

By JustForex

The US stock indices traded mixed on Monday. By the close of trading, the Dow Jones index (US30) increased by 0.09%, while the S&P 500 (US500) decreased by 0.12%. The NASDAQ Technology Index (US100) lost 0.10% yesterday.

Tesla (TSLA) added 1%, driving consumer stocks higher as sentiment about electric vehicles was boosted by a new climate bill passed by the US Senate over the weekend. It includes nearly $400 billion over a 10-year period to fund energy-related programs and expand and improve existing tax credits for electric vehicles.

Nvidia Corporation (NVDA) fell more than 8% after the chip maker reported second-quarter revenue of $6.7 billion, well below its estimate of $8.1 billion, with the company lowering its revenue forecast for the third quarter.

In the US, consumer confidence in the housing market fell to its lowest level since 2011 as both prospective buyers and sellers became more pessimistic. According to Fannie Mae’s monthly survey, only 17% of those surveyed in July said it was a good time to buy a home, down from 20% in June.

Stock markets in Europe mostly rose on Monday. Germany’s DAX (DE30) gained 0.84%, France’s CAC 40 (FR40) added 0.80%, Spain’s IBEX 35 (ES35) jumped by 1.28%, and the British FTSE 100 (UK100) closed higher by 0.57% yesterday.

Britain’s largest electricity distributor said that the damages of 280 million pounds sterling from the bankruptcy of energy companies would be shifted to consumers.

Yesterday, the German government spokesman said that Germany faces difficult months, but the country supports Ukraine and sanctions against Russia.

Goldman Sachs analysts said they believe the case for higher oil prices remains strong as the market faces larger shortages than they expected in recent months.

Gold prices maintained their recent gains as volatility in stock markets ahead of this week’s US inflation data boosted demand for the yellow metal. Gold and silver prices are inversely correlated with the dollar index and US government bond yields. Therefore, a decline in the dollar is usually accompanied by a rise in gold prices and vice versa. The focus now is on US consumer price data for July, which will be published on Wednesday. Analysts expect inflation to likely remain at a 40-year high in the coming months, necessitating further monetary tightening by the Fed. An unexpected rise in CPI could push up the dollar index and yields, negatively impacting gold and silver prices.

Asian markets traded flat yesterday. Japan’s Nikkei 225 (JP225) gained 1.26%, Hong Kong’s Hang Seng (HK50) was down by 0.77%, and Australia’s S&P/ASX 200 (AU200) added 0.07%.

Tensions between China and Taiwan eased slightly after China announced the end of military exercises around the island. At the same time, Taiwan’s defense ministry said Chinese planes and ships never entered Taiwan’s territorial waters.

The NAB Australia Business Confidence Index showed that inflationary pressures continue to rise, indicating that inflation has not yet peaked. But business activity remains strong despite global and domestic economic headwinds. Analysts believe the strong economic data will allow the RBA to raise interest rates another 0.5% at its next meeting on September 6.

S&P 500 (F) (US500) 4,140.06 −5.13 (−0.12%)

Dow Jones (US30) 32,832.54 +29.07 (+0.089%)

DAX (DE40) 13,687.69 +113.76 (+0.84%)

FTSE 100 (UK100) 7,482.37 +42.63 (+0.57%)

USD Index 106.41 −0.21 (−0.20%)

• – Australia NAB Business Confidence (m/m) at 04:30 (GMT+3).

By JustForex

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

By ForexTime

Article by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

By JustForex

A strong non-farm payrolls report on Friday dashed hopes that the Federal Reserve might tone down its aggressive campaign to rein in the highest inflation in decades. As long as the labor market remains strong, the Fed will seek to raise rates as much as possible so that it can have room to lower them when unemployment starts to rise, and the economy falls into recession. The likelihood of a 75 basis point Fed rate hike at the September meeting has increased even more. Signs that inflation still hasn’t peaked could affect expectations that the central bank could stop raising rates early next year, leading to a stock decline.

The US stock indices traded mixed on Friday. The Dow Jones Index (US30) increased by 0.23% (+0.15% for the week), and the S&P 500 (US500) decreased by 0.16% (+0.80% for the week). The NASDAQ Technology Index (US100) lost 0.50% (+2.76% for the week).

Chicago Fed President Charles Evans, Minneapolis Fed President Neel Kashkari, and San Francisco Fed President Mary Daly are due to speak this week. Investors should closely watch their comments for what sentiment prevails within the US Federal System. Fed Governor Michel Bowman said Saturday that the Fed should consider a 75-bp rate hike to bring inflation back in line with the central bank’s target, echoing recent comments from other Fed officials.

The US stock market is about halfway through its second-quarter reporting period, and so far, US companies have reported mostly upbeat reports and forecasts. These surprising investors had been preparing for a weaker reading. According to Reuters, about 78% of earnings reports beat Wall Street expectations, above the long-term average.

Stock markets in Europe were mostly down on Friday. Germany’s DAX (DE30) decreased by 0.65% (+0.76% for the week), France’s CAC 40 (FR40) lost 0.63% (+0.39% for the week), Spain’s IBEX 35 index (ES35) added 0.08% (+0.05% for the week) the British FTSE 100 (UK100) closed down by 0.11% (-0.16% for the week).

European stocks fell on Friday after a stronger-than-expected US jobs report boosted bets for another 75 basis point rate hike by the Federal Reserve next month. At the same time, worries about worsening growth prospects in the Eurozone prompted investors to close their equity positions. Analysts predict that the situation in Europe will only worsen, and the European Central Bank will raise interest rates more aggressively.

UN Secretary-General António Guterres called Monday for international inspectors to be granted access to the Zaporizhzhia nuclear power plant after Russia shelled Europe’s largest nuclear power plant over the weekend. Ukrainian President Vladimir Zelensky accused Russia of waging “nuclear terror,” which calls for new international sanctions, this time against Moscow’s nuclear industry.

Staff at German airline Lufthansa and management reached a wage agreement, preventing further strikes during the busy summer tourist season.

Despite supply chain problems, industrial production in Germany showed an unexpected but modest increase in June, official data showed.

Brent crude oil fell 1.4% on Friday to $92.81 a barrel. It dropped below $93 a barrel for the first time since February 21. WTI crude fell by 1.5% to $87 a barrel. Oil prices continued to decline on Monday as recession fears weighed on demand prospects and data on crude imports into China pointed to a slow recovery.

Asian markets traded higher last week. Japan’s Nikkei 225 (JP225) gained 1.30%, Hong Kong’s Hang Seng (HK50) gained 0.88%, and Australia’s S&P/ASX 200 (AU200) was up by 1.01%.

China’s export growth unexpectedly accelerated in July, providing an encouraging boost to the economy. Still, weakening global demand could slow supplies in coming months. Exports rose 18.0% in July from a year earlier, the fastest pace this year.

In the commodities market, orange juice (+6.05%), platinum (+4.73%), and sugar (+2.34%) futures showed the biggest gains by the end of the week. Futures on WTI oil (-10.23%), lumber (-9.87%), Brent oil (-9.76%), gasoline (-8.95%), wheat (-3.87%), coffee (-3.78%), and natural gas (-2.72%) showed the biggest drop.

S&P 500 (F) (US500) 4,145.19 −6.75 (−0.16%)

Dow Jones (US30) 32,803.47 +76.65 (+0.23%)

DAX (DE40) 13,573.93 −88.75 (−0.65%)

FTSE 100 (UK100) 7,439.74 −8.32 (−0.11%)

USD Index 106.58 +0.88 (+0.84%)

• – New Zealand Inflation Expectations (q/q) at 06:00 (GMT+3);
• – Switzerland Unemployment Rate (m/m) at 08:45 (GMT+3).

By JustForex

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

By JustForex

The US stock indices traded without a single trend. At the close of trading yesterday, the Dow Jones Index (US30) decreased by 0.26%, while the S&P 500 Index (US500) lost 0.08%. The NASDAQ Technology Index (US100) added 0.41%.

The US Labor Department reported yesterday that about 260,000 people filed unemployment claims during the previous week, 6,000 more than the previous week. The Nonfarm Payrolls report today will also serve as an overview of the Federal Reserve’s likely path for monetary policy, as the Central Bank emphasized labor market strength as evidence that the economy remains resilient and capable of resisting further rate hikes.

Fed spokeswoman Loretta Mester said yesterday that she would like to see the rate rise to just above 4% at the end of the interest rate cycle. However, analysts predict that the Fed will stop at 3.5-3.75%. Mester added that the Fed could raise rates by 75 bps in September, but it could well be 50 bps, with the Committee guided by inflation and labor market data.

Coinbase stock jumped more than 40% yesterday. The cryptocurrency exchange announced a partnership agreement with BlackRock (BLK) to provide institutional clients access to cryptocurrency trading and storage services.

Stock markets in Europe were mostly up on Thursday. German DAX (DE30) gained 0.55%, French CAC 40 (FR40) jumped by 0.64%, Spanish IBEX 35 (ES35) added 0.23%, British FTSE 100 (UK100) closed on the rise by 0.03%.

The Bank of England raised its interest rate by 0.5% as expected. The rate is now at 1.75%, higher than the ECB (0.5%) but lower than the US Federal Reserve (2.5%), the Canadian Central Bank (2.5%), and the Reserve Bank of New Zealand (2.5%). Having made its most significant rate hike in nearly 30 years, the Bank of England suggested that it may be less decisive in raising rates in the coming months. The report also indicates that under the weight of skyrocketing inflation, the UK will be in recession for more than a year.

Russia is beginning to drag out the process of launching the Nord Stream 1 pipeline. Moscow is demanding additional documents confirming that the equipment used in the repairs is not subject to sanctions. Thus, the energy problems in Europe are exacerbated.

On Thursday, US crude oil prices fell below $90 a barrel for the first time since Russia invaded Ukraine. The drop to its lowest level since February was driven by lingering fears that global growth slow would hurt oil demand. Fears of a recession intensified after the Bank of England warned of a prolonged recession and expectations of a one-year recession.

Saudi Arabia and the UAE are ready to provide a “significant increase” in oil production only if winter’s global supply crisis worsens.

Gold prices reached their highest level a month after rising more than 1.5% yesterday. A weaker dollar helped support gold even as US Treasury yields rose.

Asian markets traded higher yesterday. Japan’s Nikkei 225 (JP225) gained 0.69%, Hong Kong’s Hang Seng (HK50) jumped by 2.06%, and Australia’s S&P/ASX 200 (AU200) was down by 0.01%. Asian stock indices rebounded strongly after several declines, as strong earnings reports in the US boosted optimism about the corporate outlook. Investors in the region are preparing for a slew of earnings reports next week from Chinese, Japanese, and South Korean companies.

The Monetary Policy report from the RBA showed that Australia’s economy would slow down sharply soon due to a sharp rise in inflation. A full percentage point cut economic growth forecasts for this year to 3.25%, and for 2023 and 2024 by about a quarter point to 1.75%. The inflation forecast has also increased from 5.9% to 7.75%, requiring further interest rate increases.

S&P 500 (F) (US500) 4,152.02 −3.15 (−0.076%)

Dow Jones (US30) 32,727.19 −85.31 (−0.26%)

DAX (DE40) 13,662.68 +75.12 (+0.55%)

FTSE 100 (UK100) 7,448.06 +2.38 (+0.032%)

USD Index 105.69 −0.81 (−0.76%)

• – Australia RBA Monetary Policy Statement (m/m) at 04:30 (GMT+3);
• – German Industrial Production (m/m) at 09:00 (GMT+3);
• – US Nonfarm Payrolls (m/m) at 15:30 (GMT+3);
• – US Unemployment Rate (m/m) at 15:30 (GMT+3);
• – Canada Unemployment Rate (m/m) at 15:30 (GMT+3);
• – Canada Ivey PMI (m/m) at 17:00 (GMT+3).

By JustForex

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

By Erica D. Walker, Brown University 

Curious Kids is a series for children of all ages. If you have a question you’d like an expert to answer, send it to [email protected].

If all of the vehicles in the world were to convert to electric, would it be quieter? – Joseph, age 10, Chatham, New Jersey

If everyone everywhere received a free electric vehicle at the same time – and owners were required to travel at really slow speeds across well-maintained roads – the world would sound different.

But that doesn’t mean it would be quieter.

People can have different feelings about the same sound. As the founder of Community Noise Lab at Brown University’s School of Public Health, I am particularly interested in how we, as humans, decide what is a sound and what is a noise – which is what we call unwanted sounds. We perceive the sounds that we experience in our daily lives in many ways, from quiet to loud. And they can make us feel happy, angry or many things in between.

These feelings can affect our health by relaxing or stressing us. Studies also show that chronic exposure to noise can affect your sleep and hearing and contribute to health problems like heart disease.

How loud are cars?

We know that gasoline-powered cars make a lot of noise, especially on highways where they can travel at high speeds. In 1981, the U.S. Environmental Protection Agency estimated that nearly 100 million people nationwide were exposed to traffic noise every year that was loud enough to be harmful to their health. At the time, this was about 50% of the U.S. population.

Many factors influence how loud a car is on the road, including its design, how fast it travels and physical road conditions. On average, cars moving at around 30 mph on local roads will produce sound levels ranging from 33 to 69 decibels. That’s the range between a quiet library and a loud dishwasher.

For cars traveling at typical speeds on the interstate, which is around 70 mph, sound levels range up to 89 decibels. That’s equivalent to two people shouting their conversation at each other.

Electric and hybrid gas/electric cars emit very low sounds at low speeds because they don’t have internal combustion engines producing noise and vibrations. To ensure that pedestrians will hear electric and hybrid vehicles coming, the National Highway Traffic Safety Administration requires these vehicles to emit sounds ranging from 43 to 64 decibels when they are moving at less than 18.6 mph. Each manufacturer uses its own warning sounds.

At high speeds, there may not be much difference between gas-powered cars and EVs or hybrids. That’s because other factors like tire and wind noise become louder as cars move faster.

Quieter streets for everyone

Infrastructure also contributes to street noise. Cracks, depressions and holes in roads can increase sound levels as cars travel across them.

Lower-income communities tend to have poorer-quality streets and highways. So failing to fix roads could drown out any improvements in a community’s soundscape from EVs, quite literally.

Another way to reduce traffic noise would be to build more bike lanes and paths in less-wealthy communities, which often lack them, and encourage people to substitute this cheaper, healthier, cleaner and quieter mode of transportation when they can.

Electric vehicles are still out of reach for many people because most models cost more than gas-powered cars. So in reality, the benefits of switching to electric-powered vehicles – such as lower fuel costs, cleaner air and somewhat quieter streets – are going now mainly to people who live in wealthier communities and can afford EVs.

That inequitable distribution of benefits is what the EPA calls an environmental injustice: a situation in which everyone doesn’t have the same degree of protection from environmental and health hazards. To share those benefits more equally, electric vehicles will have to become as affordable as gas-powered versions.

Many people think of noise as a nuisance that’s less urgent than other, more pressing environmental issues like air and water pollution. As a result, governments fail to plan for noise, measure it, mitigate it or regulate it in any meaningful way.

In fact, noise is a significant environmental stressor that negatively affects everyone’s health and well-being, especially those who are most vulnerable. At Community Noise Lab, we aim to shed light on the public health implications of noise, argue for more holistic measurements of sound, and study noise together with other environmental pollutants like water and air pollution, working alongside vulnerable communities across the United States.

Hello, curious kids! Do you have a question you’d like an expert to answer? Ask an adult to send your question to [email protected]. Please tell us your name, age and the city where you live.

And since curiosity has no age limit – adults, let us know what you’re wondering, too. We won’t be able to answer every question, but we will do our best.

About the Author:

Erica D. Walker, Assistant Professor of Epidemiology, Brown University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

By JustForex

Fed officials reiterated Wednesday their determination to curb high inflation. One official noted that a half-percent hike in the Central Bank’s key interest rate next month may be enough to achieve that goal.

In July, the US services sector unexpectedly rebounded due to a strong increase in orders, while supply bottlenecks and price pressures eased. This confirmed the view of the Fed representatives that the economy is not in recession, despite the reduction in production in the first half of the year.

As the stock market closed yesterday, the Dow Jones Index (US30) increased by 1.29%, and the S&P 500 Index (US500) added 1.56%. The NASDAQ Technology Index (US100) jumped by 2.59%.

PayPal (PYPL) was one of the day’s leaders, rising more than 9% after reporting better-than-expected results and announcing a $15 billion share buyback program. The fintech giant also said Elliott Investment Management had invested $2 billion in the company as the activist shareholder hopes to encourage PayPal to explore plans to return capital to shareholders. Moderna (MRNA) shares rose nearly 16% after a report showed better-than-expected second-quarter results thanks to higher sales of the Covid-19 vaccine. Online travel agency Booking Holdings Inc (BKNG) reported an increase in quarterly revenue Wednesday as a surge in bookings amid strong demand for summer travel led to a faster-than-expected recovery.

Alibaba (BABA), Toyota Motor (TM), Amgen (AMGN), ConocoPhillips (COP), Vertex (VRTX), and others report today.

Stock markets in Europe were mostly up on Wednesday. German DAX (DE30) gained 1.03%, French CAC 40 (FR40) jumped by 0.97%, Spanish IBEX 35 (ES35) added 0.56%, British FTSE 100 (UK100) gained 0.13%.

According to Eurostat, Eurozone producer inflation rose another 1.1% in June 2022. Eurozone retail sales showed a decline of 1.2%, with a forecast of rising of 0.4%. This is negative data for the euro. On the other hand, the PMI of business activity in the service sector in Europe has noticeably increased. Still, analysts attribute the growth of the index to the increase in demand for services during the summer season.

Crude oil inventories unexpectedly rose by 4.5 million barrels last week, compared to analysts’ forecast of 600,000 barrels. The OPEC+ group said it would raise its oil production target by just 100,000 BPD. Oil prices decreased by 3% amid the data yesterday.

Asian markets traded flat yesterday. Japan’s Nikkei 225 (JP225) gained 0.53%, Hong Kong’s Hang Seng (HK50) added 0.40%, and Australia’s S&P/ASX 200 (AU200) was down by 0.32%.

China launched an unprecedented live-fire military exercise in six areas around Taiwan on Thursday, a day after US House Speaker Nancy Pelosi visited the island. Taiwanese officials said the exercises violate United Nations rules, invade Taiwan’s territorial space, and pose a direct challenge to free air and sea navigation. China is conducting the drills in the busiest international waterways and air routes. A Taiwanese cabinet spokesman, expressing strong condemnation of the exercises, also said the websites of the defense ministry, foreign ministry, and presidential office had been attacked by hackers.

S&P 500 (F) (US500) 4,155.17 +63.98 (+1.56%)

Dow Jones (US30) 32,812.50 +416.33 (+1.29%)

DAX (DE40) 13,587.56 +138.36 (+1.03%)

FTSE 100 (UK100) 7,445.68 +36.57 (+0.49%)

USD Index 106.38 +0.14 (+0.13%)

• – UK Construction PMI (m/m) at 11:30 (GMT+3);
• – UK BoE Inflation Report (m/m) at 14:00 (GMT+3);
• – UK BoE Interest Rate Decision (m/m) at 14:00 (GMT+3);
• – UK BoE Monetary Policy Statement (m/m) at 14:00 (GMT+3);
• – UK BoE Gov Bailey Speaks at 14:30 (GMT+3);
• – US Initial Jobless Claims (w/w) at 15:30 (GMT+3);
• – GUS Natural Gas Storage (w/w) at 17:30 (GMT+3);
• – US FOMC Member Mester Speaks (m/m) at 19:00 (GMT+3).

By JustForex

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

By ForexTime

When is it due?

• The Bank of England’s (BOE) policy statement is due to be released today (Thursday, August 4th) at 11:00 AM GMT
• Half an hour later, BOE Governor Andrew Bailey is due to hold a press conference at 11:30 AM GMT

The BOE is widely expected to raise the UK bank rate by 50 basis points (bps) today.

A 50bps hike today would mark the BOE’s largest hike since 1995.

Markets are currently forecasting an 80% chance that the BOE will trigger a larger-than-usual hike, given that a 50bps move would be double the size of its previous four hikes.

The BOE has been hiking its benchmark rates since the end of last year:

• December: 15bps
• February: 25bps
• March: 25bps
• May: 25bps
• June: 25bps
• August: 50bps?

TOTAL: 165bps? (to be determined after today’s decision)

Why is the BOE in a rush to raise interest rates?

One word: inflation.

The UK consumer price index (CPI), which measures changes in the prices of a basket of goods and services, has risen by 9.4% in June 2022 compared to June 2021.

That’s the highest year-on-year advance for the headline CPI since February 1982!

Given that a central bank’s primary method for cooling inflationary pressures is by raising interest rates, no surprise then that the BOE has sent its bank rate to 1.25% (as of last month), which could go up to 1.75% after today’s decision.

What happens next?

As things stand, markets are forecasting that the BOE can only send its benchmark rate higher by another 125bps to 3% after today’s decision (assuming today’s hike is indeed 50bps), before having to reverse course and lower rates in Q2 2023.

Thus, it appears that the BOE is already more than halfway done in this ongoing rate hike cycle.

The reason for this about-turn is because the BOE may be concerned about sending the UK economy deep into a recession. Already back in May earlier this year, the central bank warned of the prospects of a UK recession in 2023.

And with inflation set to reach double-digits in Q4 this year (well above the BOE’s 2% target), along with rates moving higher, such a combo could break the UK economy (i.e. a recession).

How would this impact the Pound?

So far this year, the Pound has already weakened by 10% against the US dollar (remember the good ol days of GBPUSD being above 1.30?).

More recently, GBPUSD a.k.a. “cable” hasn’t been able to keep its head above its 50-day simple moving average (SMA).

• If the BOE triggers a smaller-than-expected 25bps hike today, that could result further declines for GBPUSD.
• If the BOE triggers a massive 75bps hike today, that could shock GBPUSD northwards.
• If Governor Bailey can convince markets (and that’s the key part: markets need to believe the BOE’s message) that the UK economy can indeed withstand interest rates rising past 3% by Q1 2023, that could also translate into further strength for Sterling.
• If Governor Bailey suggests that the BOE will have to slow down its intended rate hikes, for fear of sending the UK economy into a recession, that could see the Pound move lower.

Expect a combination of the above-listed scenarios.

Key support and resistance levels for GBPUSD

The BOE’s latest policy signals are set to determine whether GBPUSD will be kept above its 50-day SMA, or sent below that key technical indicator.

• Immediate resistance above 50-day SMA at recent cycle peak of 1.22934
• Stronger resistance can be seen around 1.24 (end-April lows/mid-June high)

• Support: 1.200 (psychologically-important level) / 1.19335 mid-June trough
• Stronger support set to arrive at 1.1760 – lowest since the onset of the pandemic

Overall, I expect that GBPUSD may do no better than 1.24 for the immediate term, barring a shockingly-hawkish tone out of the BOE today, and assuming markets can buy into such an aggressive messaging.

In other words, GBPUSD is likely to remain confined to its downtrend (series of lower highs and lower lows) that has persisted since June 2021, given the dark clouds swirling about the UK economic outlook which have lent themselves to a downward bias for “cable”.

Other points to look out for today:

1. Details on “Quantitative Tightening”

   Today, the BOE is also expected to unveil how it plans to reduce the 895 billion in “easy money” it has pumped out (by selling gilts) into the UK economy since the 2008 global financial crisis.

   Such details may impact gilt yields, which have a large influence over Sterling’s moves.

2. BOE’s economic and inflation forecasts

   Markets will be eager to find out how high the BOE thinks UK inflation will go, and the central bank’s forecasts on the likelihood of a UK recession.

   The Pound will be ready to offer an immediate reaction to such economic projections, as they should inform market expectations for how the BOE is able to respond (i.e. how much higher UK rates can go).

Article by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

By JustForex

According to analysts at JPMorgan, the US stock market is ready for further growth, likely starting as early as the second half of this year. Easing inflation expectations and falling bond yields indicate that the peak of the hawkish sentiment has probably already passed, and for this reason, analysts at JPMorgan believe that the US economy will avoid recession, despite the negative GDP growth for two consecutive quarters. JPMorgan’s year-end target for the S&P 500 is 4,800 points, which represents a growth potential of 17% from current levels.

Cleveland Fed President Loretta Mester said yesterday that it would take some time to get inflation back to the 2% level and brushed aside concerns about a slowing economy, stressing that a slowdown is necessary. The comments came just hours after San Francisco Fed President Mary Daly said the Fed’s work on lowering inflation is far from over and that raising interest rates another 0.75% at the September meeting is also under active consideration by the Committee.

As the stock market closed yesterday, the Dow Jones Index (US30) decreased by 1.22%, and the S&P 500 Index (US500) lost 0.66%. The NASDAQ Technology Index (US100) fell by 0.10%.

An American special flight carrying US House Speaker Nancy Pelosi landed in Taipei, the administrative capital of Taiwan. According to preliminary information, Taiwanese fighters escorting Nancy Pelosi’s plane opened warning fire on Chinese fighters that had entered the air defense zone of Taiwan. The Chinese Foreign Ministry summoned the US ambassador and protested about Nancy Pelosi’s visit to Taiwan. “China’s response will be powerful and strong,” the Chinese ambassador to the US said. The US military installations in the Indo-Pacific region are on high alert.

Geopolitical tensions rose higher during the day after Chinese battery giant CATL said it would suspend plans to invest billions of dollars in a new battery plant in the United States because of House Speaker Nancy Pelosi’s trip to Taiwan.

Uber Technologies (Uber) reported its first positive cash flow and earnings that beat expectations. The company’s stock jumped by 17% on the report. Pinterest (PINS) jumped more than 12% despite quarterly results missing the Wall Street estimates. Caterpillar (CAT) showed a drop in earnings as a business exit from Russia, higher costs, and a stronger dollar impacted performance. The company’s stock is down more than 4%.

Booking (BKNG), Moderna (MRNA), Regeneron Pharma (REGN), Nintendo ADR (NTDOY), MetLife (MET), eBay (EBAY), and others report today.

Stock markets in Europe were mostly down on Tuesday. German DAX (DE30) fell by 0.23%, French CAC 40 (FR40) lost 0.42%, Spanish IBEX 35 (ES35) gained 0.15%, British FTSE 100 (UK100) closed down by 0.06%.

Challenging summer conditions, including extreme heat and drought, led to new highs in European energy prices. Rivers are too warm to cool nuclear plants in France, and water levels are too low to deliver coal to power plants, limiting Europe’s electricity supply. This means countries rely even more on gas to meet additional electricity demand. Further cuts in Russian supplies to the continent will further exacerbate the situation. Analysts believe that electricity prices in Europe will rise even higher.

Energy stocks, meanwhile, remained flat amid uncertainty over whether major oil producers will decide to raise production at Wednesday’s meeting. Commerzbank said the outcome of the OPEC+ meeting is impossible to predict for now, but there is speculation that the current output will remain unchanged.

Asian markets traded flat yesterday. Japan’s Nikkei 225 (JP225) decreased by 1.42%, Hong Kong’s Hang Seng (HK50) ended down by 2.36%, and Australia’s S&P/ASX 200 (AU200) was up by 0.07%.

S&P 500 (F) (US500) 4,091.35 −27.28 (−0.66%)

Dow Jones (US30) 32,396.76 −401.64 (−1.22%)

DAX (DE40) 13,449.20 −30.43 (−0.23%)

FTSE 100 (UK100) 7,409.11 −4.31 (−0.058%)

USD Index 106.25 +0.80 (+0.76%)

• – US FOMC Member Bullard Speaks (m/m) at 01:45 (GMT+3);
• – New Zealand Unemployment Rate at 01:45 (GMT+3);
• – Japan Services PMI (m/m) at 03:30 (GMT+3);
• – Australia Retail Sales (m/m) at 04:30 (GMT+3);
• – China Caixin Services PMI (m/m) at 04:45 (GMT+3);
• – Switzerland Consumer Price Index (m/m) at 09:30 (GMT+3);
• – German Services PMI (m/m) at 10:55 (GMT+3);
• – Eurozone Services PMI (m/m) at 11:00 (GMT+3);
• – UK Services PMI (m/m) at 11:30 (GMT+3);
• – Eurozone Retail Sales (m/m) at 12:00 (GMT+3);
• – US ISM Services PMI (m/m) at 17:00 (GMT+3);
• – US Crude Oil Reserves (w/w) at 17:30 (GMT+3).

By JustForex

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.