31.07.23 - 04.08.23
Results of the previous week
| VIX+15.12% | AMZN +4.68% | HO+2.25% |
HG -4.11% | NQ -2.82% | PA -1.56% |
For the first time in 12 years, Fitch Agency has lowered the US's credit rating from AAA to AA+, meaning a slight increase in the risk of the country experiencing a default. The agency justified its decision by pointing to the growing US national debt, the Fed's monetary policy tightening and the risk of a recession. But the news hasn't sparked a panic in markets. However, US stock indices faced short-term pressure, declining from previous highs.
The US Treasury bonds' yield growth has strengthened the dollar, showing positive dynamics against the euro, pound and commodity currencies. Fed Chairman Jerome Powell's confidence that the US isn't in danger of a recession provided additional support to the dollar. This signals that the monetary policy will remain fairly hawkish.
Brent oil prices (BRN) remain around $85 per barrel. Saudi Arabia's decision to extend its reduction in oil production of an additional 1 million barrels per day that it initiated in July into September is a key supporting factor. At the same time, it was noted that production may be reduced for a longer period of time or that the volume of reduction may be increased. Such actions may lead to the emergence of oil shortages.
Key events of the current week
Germany. Inflation rate | DATE 08.08 | GMT | FORECAST | PREV. | IMPORTANCE |
Price pressure in Germany remains quite high, leaving the economy hoping for better times as the country's GDP declines. Germany is already in a technical recession. It's worth noting that the European central bank changed its stance at its last meeting. Christine Lagarde hinted that the bank is close to pausing its rate hike. If inflation in the eurozone's largest economy continues to decline, it'll reinforce expectations that the European central bank won't raise rates at its next meeting. That's bad news for the euro, resulting in EUR/USD moving toward 1.0840. . | |||||
The US. Inflation rate | DATE 10.08 | GMT | FORECAST | PREV. | IMPORTANCE |
The US Federal Reserve has raised its key interest rate 12 times in a row. And it finally yielded some results. The country's inflation rate is declining. While the indicator hasn't reached the regulator's target level, price pressure has decreased three-fold from the highs of July 2022 (9.1%). Inflation is expected to continue to gradually drop. This means that the Fed has every reason to pause its rate hike cycle. At the last meeting, the Fed Chairman said they're not expecting any serious economic downturn. Hopes for a pause in monetary policy tightening and positive evaluations of the national economy are good news for the US stock market.If the report meets the forecast, the Nasdaq (NQ) may resume its move toward 15,880. | |||||
The UK. GDP growth rate | DATE 11.08 | GMT | FORECAST | PREV. | IMPORTANCE |
The UK's economy is facing some serious challenges. The country's inflation rate is one of the highest among G7 countries. This is forcing the Bank of England to keep tightening its monetary policy. What's more, wages continue to rise at a high rate, which is not helping to curb inflation and is pushing the British regulator to keep restrictions in place. The hawkish monetary policy is hurting the economy. The UK's GDP is expected to decline by 0.1% year-over-year, which is not good for the pound. If the inflation report meets expectations, GBP/USD could resume a decline to 1.2600. | |||||
