MacroNews Report: 

🇫🇷 Macron is delaying political discussions and new government formation until after the Olympics to give the French people a rest, with the games providing a respite from domestic political divisions. He dissolved the lower house of parliament last month, leaving France with a fragmented legislature and caretaker government. Macron is empowered to appoint a new PM but the largest party, New Popular Front, hasn’t agreed on a candidate yet.

🇬🇧 The Bank of England is set to deliver a reality check to the UK Labour party next week regarding their economic growth plans:The Chancellor has already been warned by the BOE that large public pay increases could risk derailing any planned interest rate cuts. In its Aug 1 monetary policy report, the BOE is expected to say UK long-term growth potential is less than 2%. This prediction would leave Labour’s GDP growth target of 2.5% per annum short of its target. Achieving strong growth while fixing public services and meeting spending pledges will be challenging within the BOE’s expected growth outlook.

🇭🇰 Hong Kong: The sky-high price tag for The Center is rapidly turning into a burden as its Chinese developer owners compete to cut losses amid a collapsed market and wider property crisis in China. The record $5.2 billion sale of Hong Kong’s The Center skyscraper in 2017 has turned sour for its mainly Chinese developer owners as the property market has collapsed. Some floors are now offered at almost 50% below purchase prices, with oweners like Kaisa Group selling its floor to a lender after using it as collateral for a loan. Over a quarter of the building’s office space is now vacant, double the Central district rate, as new supply increases competition.

🇷🇺 Analysts unanimously expect Russia’s central bank to deliver a sizable rate increase to rein in high inflation running well above target and cool domestic demand pressures. Inflation forecasts for the year, currently 4.3-4.8%, may be revised up given recent readings over 9% gradually slowing to 7%. The central bank argues tight policy will bring inflation back to its 4% target, but critics say it risks stifling the defense-led economic growth. Governor Elvira Nabiullina has signaled the focus will be on the size, not need, for a rate hike at the upcoming meeting. Rate hikes could be between 100 and 200 basis points.

🇺🇦 Ukraine has reached a preliminary deal with creditors to restructure $20 billion of its international bonds in an effort to avoid defaulting on its debt: The deal would see bondholders take a 37% nominal haircut, saving Ukraine $11.4 billion in debt payments through 2027. Under the proposal, new bonds issued would start paying coupon rates of 1.75-7.75% between 2023-2034. The IMF welcomed the agreement, saying it would help bring Ukraine’s debt burdens to sustainable levels. The restructuring is aimed at freeing up resources for urgent needs like defense and recovery from the war with Russia. Once finalized, the deal would pave the way for Ukraine to access capital markets again to fund postwar reconstruction.

📊 Market Situation:

The bullish rebound in the SP500 and Nasdaq 100 has come to a halt. the Russell 2000 index resumes its upward momentum, clearly indicating that capital is flowing into other sectors. the stock markets continue to advance.

The dollar also seems to be recovering, and in today’s session it is advancing with the DXY approaching 104.50 points. The EURUSD is down -0.30%. EURUSD is down -0.30% to the 1.0860 level at the moment.

European markets, on the other hand, are trying again, and are turning performers, with the Dax 40 currently above the 18,600 level and facing important resistance at the following levels.

🌎 Geopolitics:

🇺🇦 Ukraine retaliates for Slovakia and Hungary’s refusal to continue sending funds to its country. Ukraine has activated sanctions against Lukoil, blocking energy supplies from Hungary and Slovakia. Both countries have asked the European Commission to intervene. Hungary receives 2 million metric tons of oil annually from Lukoil, around a third of its total oil imports. Both countries have initiated an EU consultation procedure and said they could take the issue to court if it does not yield results.

🇹🇷 Erdoğan made the comments while visiting northern Cyprus to mark 50 years since Turkey’s invasion and occupation. He accused Greece of seeking to establish its own naval base in Cyprus and said Turkey could construct facilities in the north. Turkey has maintained a military presence in northern Cyprus since installing its breakaway administration in 1983. Erdoğan rejected the federal model backed by the UN, saying Turkey and Turkish Cypriots must be equals in any negotiations. His remarks underscore ongoing tensions with Greece over maritime borders and energy resources in the Eastern Mediterranean.

🇷🇺 Russia’s Defence Ministry said its warplanes prevented two US B-52H strategic bombers from violating Russia’s state border over the Barents Sea on Sunday. Two russian MiGs figther jets identified the planes as two US B-52H strategic bombers and warned them to change course away from the Russian border. In March 2023, the US released video it said showed a Russian jet clipping a US spy drone over the Black Sea, despite Russia’s denial.