InvestMacro

By JustForex

At the close of the US stock market yesterday, the Dow Jones index (US30) added 0.46%. The S&P 500 Index (US500) increased by 0.30%. The NASDAQ Technology Index (US100) lost 0.26%

The ISM Manufacturing Index was 52.8 in August, unchanged from July and beating the consensus forecast of 51.9. Expectations for a third straight 75 basis point rate hike in the US at the Fed’s September 20-21 meeting are rising on solid economic data, with Fed funds futures indicating a 77.1% chance of such an increase. Market attention now turns to the August US Nonfarm Payrolls report, which will be one of the key reports ahead of the Fed meeting. Although the US economy contracted in the first half of the year, the robust labor market defies talk of a recession and encourages the Federal Reserve to keep raising rates.

According to Swiss investment bank UBS, the likelihood of a recession in the US economy over the next year has risen to 60%. Earlier the probability of recession was 40%. Such a forecast was given by the bank based on 3 recession indicators monitored: macroeconomic data, the U.S. Treasury bond yield curve, and credit data.

European stock indices started September weak, falling to a seven-week low amid growing concerns over slowing economic growth, aggressive interest rate hikes, and record-high inflation. German DAX (DE30) fell yesterday by 1.60%, French CAC 40 (FR40) was down by 1.48%, Spanish IBEX 35 (ES35) lost 1.02%, British FTSE 100 (UK100) closed 1.05% lower. Manufacturing activity in the Eurozone declined slightly over the last month, but the decline was mainly due to a sharp drop in activity in Italy. In Germany, France, and Spain manufacturing activity rose in August, but figures are near the median level of 50. German retail sales rose unexpectedly in July, up 1.9% from the previous month, as online retailing and the food sector showed a recovery. Markets are estimating a roughly 80% chance of a 75 basis point rate hike by the European Central Bank next week, up from just over a 50% chance a day earlier.

New lockdowns in China, triggered by COVID-19 concerns, extended the sell-off in oil for a third straight day, increasing the probability that US crude may fall below $85 a barrel for the first time since late January. OPEC+ countries will meet on September 5. If OPEC+ does not announce any cuts at that time, oil prices could continue to fall due to concerns about seasonally weak demand in the fall. Adding to the uncertainty is the resurgence of the US-Iran nuclear deal, which Iran is very much seeking, and Israel strongly opposes. At stake is the potential lifting of US sanctions on Iranian oil, which could add up to a million barrels per day to the global crude oil export market.

Asian markets traded lower yesterday. Japan’s Nikkei 225 (JP225) was down by 1.53%, Hong Kong’s Hang Seng (HK50) ended the day down by 1.79%, and Australia’s S&P/ASX 200 (AU200) closed at 2.02%.

South China’s Shenzhen technology center tightened restrictions against COVID-19, as the number of cases continues to rise. Large events and indoor entertainment have been suspended for three days. Manufacturing activity in Asia plummeted in August, as China’s COVID-19 restrictions and cost pressures continue to hurt business.

S&P 500 (F) (US500) 3,966.85 −31.16 (−0.30%)

Dow Jones (US30) 31,656.42 +145.99 (−0.46%)

DAX (DE40) 12,630.23 -204.73 (−1.60%)

FTSE 100 (UK100) 7,148.50 −135.65 (−1.86%)

USD Index 109.63 +0.93 (+0.86%)

• – Switzerland Unemployment Rate (m/m) at 09:30 (GMT+3);
• – Eurozone Producer Price Index (m/m) at 12:00 (GMT+3);
• – US Nonfarm Payrolls (m/m) at 15:30 (GMT+3);
• – US Unemployment Rate (m/m) at 15:30 (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

At the close of the US stock exchange yesterday, the Dow Jones Index (US30) fell by 0.88% (monthly result-3.93%). S&P 500 Index (US500) lost 0.78%(-3.97% for the month). The NASDAQ Technology Index (US100) was down by 0.12% (monthly result-0.15%). Cleveland Federal Reserve President Loretta Mester said Wednesday that the Fed would need to raise the federal funds rate to just above 4% by early next year and hold it at that level for a while.

The jobs data from the Labor Department will be released on Friday. It is expected to show that the nonfarm payrolls report will show an increase of 300,000 as July saw an increase of 528,000. Another strong report is likely to further reinforce expectations that the Fed will continue its excessive rate hikes after three consecutive 75 basis point hikes.

Canadian GDP for the second quarter showed that the economy grew by 3.3% annually versus an expected 4.4%. The inflation component was also 3.3% versus expected 3.1%.

European stocks were mostly down on Wednesday. German DAX (DE30) fell yesterday by 0.97% (monthly result – 4.78%), French CAC 40 (FR40) lost 1.37% (monthly result- 4.84%), Spanish IBEX 35 (ES35) lost 1.17% (monthly result -2.46%), British FTSE 100 (UK100) closed the day with negative 1.05% (monthly result -1.74%).

Inflation in the Eurozone reached  9.1% annually (the forecast was9.0%, the previous month -8.9%). In Italy, inflation hit a 37-year high of 8.4%. Consumer prices continue to rise due to a surge in energy prices. In contrast to the US, Europe has not yet been able to cope with this problem. As a result, ECB policymakers have started talking about a possible ECB rate hike of 0.75% at the September 8 meeting. Nevertheless, after August’s inflation data came as no surprise, the ECB may opt for another 50 basis point increase

According to Fitch Ratings, global inflation continued to rise in the second quarter of 2022, even though the quarter began at already significantly higher interest rates. The monthly data shows that the pressure continues to intensify in the third quarter of 2022.

In the second quarter of 2022, France’s GDP grew by 0.5% QoQ after negative 0.2% in the first quarter of 2022.

Britons are preparing for a recession, and consumers are doing everything they can to save money. With rising inflationary pressures, businesses will undoubtedly also tightly control spending and profit margins where possible., Thus,a wave of layoffs and rising unemployment may also join the energy crisis. But there is one positive factor – the cost-of-living crisis and the rising cost of credit have put the brakes on British house prices as the demand has fallen sharply.

“I don’t remember 1943 German tourists traveling, for example to Britain or other countries of the world for leisure purposes,” Polish Prime Minister Mateusz Morawiecki said yesterday. The EU countries are actively discussing the closure of tourist visas for Russians.

Also, yesterday the EU decided not to recognize Russian passports issued in the seized Ukrainian territories.

Oil prices continued to fall on Wednesday amid investor fears that the global economy may slow down further due to renewed restrictions in China. There are fears that demand will collapse as interest rates rise and inflation fears engulf global economies. The Joint Technical Committee of the Organization of the Petroleum Exporting Countries (OPEC) and allies, collectively called OPEC+, said it now sees a surplus of 900,000 BPD of oil this year, 100,000 BPD more than predicted a month earlier. Some OPEC+ members are calling for production cuts to stop oil prices from falling. The group’s next meeting is on September 5.

Asian markets traded flat yesterday. Japan’s Nikkei 225 (JP225) was down by 0.34% (-0.65% for the month), Hong Kong’s Hang Seng (HK50) was up 0.03% (-1.05% for the month), and Australia’s S&P/ASX 200 (AU200) closed at 0.16% (-1.97% for the month).

S&P 500 (F) (US500) 3,955.00 −31.16 (−0.78%)

Dow Jones (US30) 31,510.43 −280.44 (−0.88%)

DAX (DE40) 12,834.96 +126.18 (+0.97%)

FTSE 100 (UK100) 7,284.15−77.48 (−1.05%)

USD Index 108.69 −0.09 (−0.08%)

• – Japan Manufacturing PMI (m/m) at 03:30 (GMT+3);
• – China Caixin Manufacturing PMI (m/m) at 04:45 (GMT+3);
• – German Retail Sales (m/m) at 09:00 (GMT+3);
• – Switzerland Retail Sales (m/m) at 09:30 (GMT+3);
• – Switzerland Consumer Price Index (m/m) at 09:30 (GMT+3);
• – Spanish Manufacturing PMI (m/m) at 10:15 (GMT+3);
• – Italian Manufacturing PMI (m/m) at 10:45 (GMT+3);
• – French Manufacturing PMI (m/m) at 10:50 (GMT+3);
• – German Manufacturing PMI (m/m) at 10:55 (GMT+3);
• – Eurozone Manufacturing PMI (m/m) at 11:30 (GMT+3);
• – UK Manufacturing PMI (m/m) at 11:30 (GMT+3);
• – Eurozone Unemployment Rate (m/m) at 12:00 (GMT+3);
• – Canada Building Permits (m/m) at  5:30 (GMT+3);
• – Canada Manufacturing PMI (m/m) at 16:45 (GMT+3);
• – US ISM Manufacturing PMI (m/m) at 17:00 (GMT+3);
• – US ISM Manufacturing PMI (m/m) at 17:00 (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.