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On August 24, the Financial Times reported that Alex Norström, co-president and chief business officer of Spotify (SPOT.N), a US streaming music group, said that customer subscription fees may rise further in the future as the company increases investment in new features and strives to reach 1 billion users. After years of maintaining fixed prices, "price increases are now part of our toolkit." However, the executive added that these price increases will be accompanied by new services and features planned for the platform. Spotify did not begin raising prices until two years ago. This move was welcomed by investors, who hoped that the company would begin to focus on profitability after years of focusing on expanding its subscriber base. Price increases and cost-cutting measures will help it achieve its first annual profit in 2024.On August 24th, Hong Kong Financial Secretary Paul Chan Mo-po published a blog post titled "From the Saudi Super Cup" stating that the number of visitors to Hong Kong from Gulf countries increased by 70% year-on-year last year, and increased by more than half again in the first seven months of this year. Bilateral trade between Hong Kong and the Gulf region reached HK$150 billion last year, with an average annual growth of approximately 11% over the past five years. Hong Kong is the UAEs seventh-largest trading partner. In addition to an economic and trade office in Dubai, UAE, and InvestHK advisory offices in Cairo, Egypt, and Izmir, Turkey, Hong Kong is accelerating the establishment of an economic and trade office in Riyadh, Saudi Arabia.On August 24th, Novak, a professor of international relations at the Wisla School of Finance and Business in Poland, stated that he believes the United States will be the biggest loser from the tariffs. In the current trade system, countries will eventually restructure the global trade landscape through various means, placing the United States at a significant disadvantage. Other countries will not maintain this high-tariff trade system with the United States, which will inevitably lead to a restructuring of the global trade landscape. A review of Trumps first presidency shows that tariffs did not lead to job growth. Therefore, he believes that American consumers will pay the price for these tariffs, and the United States will inevitably be the loser.On August 24, local time on August 23, US President Trump plans to deploy troops in Chicago. Military officials said that a plan is being drafted that may deploy thousands of National Guard members. The issue of mobilizing active-duty troops has also been discussed. Officials familiar with the matter said that the US Department of Defense has been planning to deploy troops to Chicago for weeks as Trump is trying to crack down on crime, homelessness and undocumented immigrants. It is understood that this model may be extended to other major cities later. This previously undisclosed plan includes a variety of options, including the deployment of at least thousands of National Guard members to Chicago as early as September. Two officials said that plans to deploy thousands of active-duty soldiers to Chicago have also been discussed, but this possibility is currently considered small.1. Russias Northern Fleet conducted special support exercises. 2. NATO officials stated they would continue to provide military aid to Ukraine. 3. South Africas president called for maintaining momentum to end the Russia-Ukraine conflict. 4. Zelenskyy met with the NATO Secretary-General and demanded "genuine and effective" security guarantees. 5. Russias Ministry of Defense announced it had taken control of the towns of Krebanbek and Sredny in eastern Ukraine. 6. Russian Defense Ministry: Russian forces launched cluster strikes against Ukrainian troops temporary bases in the Donetsk Peoples Republic. 7. A fire broke out in a transformer group outside the Kursk Nuclear Power Plant in Russia; the plant stated it posed no security threat. 8. Zelenskyy stated he was willing to discuss territorial issues under specific conditions, but would not cede territory. He stated that Russia was prepared to take steps to achieve peace and would be cautious about Russian signals.

EUR / USD Investors Challenge 1.0600 As Mixed US Data Tests Fed Conservatives, US NFP, and ECB's Lagarde

Daniel Rogers

Mar 10, 2023 11:31

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EUR / USD gains bids to extend the midweek rebound from a two-month low, rising 0.16 percent intraday near 1.0600 on Friday morning. In doing so, the Euro-Dollar pair celebrates the broad weakness in the US Dollar ahead of the important US employment report for February and Christine Lagarde's speech as president of the European Central Bank (ECB).

 

The major currency pair reversed a two-day losing trend due to mixed US data and a decline in US Treasury bond yields the day before. Hawkish ECB remarks and the market's positioning for today's crucial US data bolstered the run-up. However, inflation worries and geopolitical tension present challenges for EUR / USD buyers.

 

Despite this, US Initial Jobless Claims increased to 211K for the week ending March 3, compared to the predicted 195K and the previous week's 190K. In addition, there was a decline in Challenger Job Cancellations and an increase in Continuing Jobless Claims. Consequently, early indications for Friday's Nonfarm Payrolls (NFP) appear mixed and challenge the market's push for a 0.50 percentage point Fed rate hike in March, which is supported by Federal Reserve Chairman Jerome Powell's most recent signals.

 

Despite contradictory data, inflation worries continue to favor Fed conservatives, especially after Chairman Jerome Powell defends the stricter monetary policy, which restrains Euro prices. It should be noted that the most recent report from the New York Fed noted that recent upward revisions to inflation data and higher-than-anticipated levels of inflation had altered what had previously appeared to be a decline in price pressures.

 

Francois Villeroy de Galhau, an ECB policymaker, stated on Thursday that they will return inflation to 2% by the end of 2024 or 2025.

 

In addition to the aforementioned catalysts, geopolitical concerns emanating from US President Joseph Biden's proposed budget for 2024 and the US's partnership with the UK and Australia for nuclear submarines should challenge EUR / USD buyers.

 

In this context, US 10-year and 2-year Treasury bond yields extend yesterday's losses to 3.88% as of press time, dragging on the US Dollar Index (DXY), which is presently down 0.10 percent to 105.12. Despite this, Wall Street benchmarks closed with daily losses exceeding 1.5%, causing S&P 500 Futures to post modest losses as of press time.

 

According to market predictions, the employment report for February in the United States is expected to reveal a general softening. The same contrasts with the Fed's hawkish inclination to emphasize the likelihood of a significant market move in favor of the US Dollar in the event of a positive surprise. However, Lagarde of the ECB must confirm this.

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