Macro-News round-up
#MarketNews
📈 President Lagarde left yesterday the interest rate unchanged. She reiterated the outcome of the next meeting in September is still “wide open” and will depend on incoming data.Some ECB policymakers are becoming less confident that two more rate cuts this year are realistic given lingering inflation pressures.While two cuts can’t be ruled out, policymakers meeting this week didn’t specifically address September and uncertainty remains.
🇪🇺 Related Markets:
Despite leaving interest rates unchanged and not committing to further cuts in September, the euro has weakened in the last few hours against the dollar. The reason is more likely to be on the side of the dollar, which has recovered some ground and is back above 104 points on its DXY index.
The EURUSD which 2 days ago rose sharply to almost 1.0950 is now back below 1.09.
European equities are falling again after recovering some of the territory lost after the French elections. Dax 40 which had managed to rise to around 18,800 points is now back to 18,225 points, threatening to break what could be a neck line of a bearish figure that would produce an even greater downward movement.
🇺🇸 Biden is facing increasing pressure from top Democrats to exit the presidential race as his support deteriorates. Reports indicate Obama, Pelosi and other allies believe Biden’s path to victory is greatly diminished and he should consider stepping aside. Biden’s COVID diagnosis has sidelined him as pressure builds, hampering efforts to regain momentum against Trump. Senior Democrats are betting rising pressure will convince Biden to drop out as soon as this weekend. Top Democrats like Schumer and Jeffries have not publicly endorsed Biden’s candidacy.
🇺🇸 In his first speech after the attempted assassination attempt, and after being officially nominated as the Republican candidate, Trump reiterated that he will bring back US factory jobs, get tougher on China and promised to ‘end all international crises’ created by the Biden administration, including the ‘horrible war’ in Ukraine and the conflict in the Middle East.
🇭🇰 Related Market:
The Hong Kong stock market is in trouble again. The HSI index falls sharply after a fleeting recovery, accumulating a fall of more than 5% since the previous Friday. If it loses 17,500 points, it could definitely have much steeper falls in the coming days. At the moment it stands at 17,430 points.
🇺🇸 We close a week in which, as we warned in previous reports, US equities seem to be redistributing themselves. If we highlight the existing gap between the indices with a technological sector and the purely industrial indices, this gap present during the last few weeks is disappearing. The week closes with falls in the technological sector but with good rises in other more strategic and conservative sectors. However, for more commercial banks such as Bank of America, the cut in interest rates could reduce their profit margins, which are highly dependent on net interest income.
🇺🇸 Netflix reported results yesterday. it added 8.05 million subscribers globally in Q2, beating analyst estimates of 4.87 million. Netflix’s lower-priced ad-supported plan attracted almost half of new subscribers in markets where available. Management sees the ad plan as a large opportunity but needs to improve monetizing growing ad inventory. Management remains confident in the large untapped market of 500 million non-paying smart TV homes. Netflix stock was little changed after the report but has regained ground toward its late 2021 highs. However, the charts indicate that it faces historical resistance at $700 which will not be easy to overcome. Elon Musk shared a tweet criticising Netflix content and the woke movement.
🇬🇧 United Kingdom launches an initiative to pursue and end the Russian shadow tanker fleet. Over 40 nations have agreed to jointly track Russia’s alleged shadow fleet, which the UK says helps finance Moscow’s invasion, ahead of Zelenskyy strengthening UK support for Ukraine. Some vessels are also thought to function as Russian spy ships while others may carry weapons to Russia. Zelenskyy will address the UK Cabinet, the first foreign leader to do so in decades, to discuss deepening UK backing for Ukraine. A new UK-Ukraine defense treaty could boost both countries’ military industries and weapons production.
