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According to the Iranian news agency IRNA, Irans ambassador to the United Nations stated that the so-called "economic pressure campaign" by the United States could have serious consequences. We call on all countries to reject and condemn the transnational unilateral coercive measures implemented by the US regime, which aim to force member states to comply with US policies, disregarding their sovereignty and legitimate policies.August 26 – According to the Wall Street Journal, a U.S. government official stated that Trump has submitted a landmark Saudi civilian nuclear agreement to Congress for consideration, but has not abandoned his last-minute demand that Saudi Arabia normalize relations with Israel. This move is expected to spark months of heated debate among lawmakers on how to promote the development of the U.S. nuclear industry while curbing the proliferation of weapons of mass destruction in the Middle East. Last month, when announcing the 30-year agreement, Trump administration officials stated that it would allow U.S. companies to play a central role in Saudi Arabias nuclear infrastructure development while excluding foreign competition. However, the agreement has been controversial because it could open the door to uranium enrichment activities on Saudi Arabian soil.A Reuters poll on August 26th showed that most economists believe the Bank of Japan (BOJ) will act sooner than previously expected, raising interest rates again in September, and the final rate level may be even higher. The survey found that 57% of economists expect the BOJ to raise rates next month, a significant increase from just 5% in July. A smaller minority (10 out of 58) expect the central bank to raise rates again in October or December, bringing the rate to 1.5%. Ayako Fujita, chief economist for Japan at JPMorgan Chase, said, "Since the market has largely priced in a September rate hike, delaying it would likely cause market turmoil, making an earlier policy adjustment inevitable." Looking beyond this year, nearly two-thirds of analysts (35 out of 54) expect the policy rate to reach at least 1.5% by the end of March next year, three months earlier than predicted in the July survey. About 60% of analysts expect the rate to reach at least 1.75% by the end of the third quarter of 2027. Furthermore, regarding the recent rare joint foreign exchange intervention by the US and Japan, more than two-thirds of the respondents (18 out of 26) said that the measures were "not very effective" or "completely ineffective." Many people believe that these measures only delayed the problem rather than truly solving the fundamental issue.US officials: US President Trump still believes that the nuclear agreement with Saudi Arabia can only move forward if Saudi Arabia joins the Abraham Accords and recognizes Israel.August 26th - Minutes from the Federal Reserves discount rate meeting released Wednesday morning showed that four of the 12 regional Federal Reserve boards voted in favor of raising the interest rate charged on emergency loans to commercial banks days before the Feds July meeting. The Feds FOMC decided to keep the policy rate unchanged by a 9-3 vote at its July 28-29 meeting, and these recommendations further highlight the internal controversy surrounding this decision. The boards of the Dallas, Cleveland, and Minneapolis Federal Reserve Banks, as well as the Kansas City Federal Reserve Bank, voted to raise the primary lending rate by 25 basis points. The presidents of the first three regional Fed banks all voted against keeping rates unchanged at the July policy meeting, while Kansas City Fed President Schmid has no voting rights this year. Regional Fed directors are not monetary policy decision-makers and do not determine the Feds interest rates, but they meet regularly with their respective regional Fed presidents. Regional Fed presidents stated that the directors views help shape their own economic and policy outlook. The regional Federal Reserve boards vote on the discount rate at their regular meetings, but the rate is ultimately set by the Federal Reserve Board of Governors to align with the upper limit of the target range for the policy rate. Since December of last year, the target range for the Federal Reserve policy rate has remained between 3.5% and 3.75%.

EUR/USD Expects Fourth Weekly Gains Above 1.0900 Despite The US Dollar's Rebound Advance Ahead Of US NFP

Daniel Rogers

Apr 07, 2023 11:42

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Despite a recent retreat, the EUR/USD bulls maintain control around 1.0920. This reflects the typical Good Friday inactivity and apprehension ahead of the US Nonfarm Payrolls (NFP) report released early in the day. The major currency pair was volatile on Thursday as a result of the US Dollar's initial rebound on fears of a recession, but ended the day unchanged as disappointing US data contrasted with stronger Eurozone data.

 

Fears of a recession in the world's largest economy were prompted by consecutive lackluster US data and falling US Treasury bond yields, giving USD bears a reprieve on Thursday morning. As traders prepared for the all-important NFP, the dollar's subsequent gains were reversed by another disappointing US employment report.

 

Despite this, US Initial Jobless Claims for the week ending March 31 rose to 228K from 200K anticipated and an upwardly revised 246K the prior week. Notable is the increase in Challenger Job Cuts from 77,77K to 89,703K in the given month.

 

Notably, Reuters fanned fears of a recession by citing the most recent decline in the preferred bond market indicator of Federal Reserve (Fed) Chairman Jerome Powell. The most reliable bond market indicator of an imminent economic contraction, according to Federal Reserve research, is the "near-term forward spread" between the forward rate on Treasury bills 18 months from now and the current yield on three-month Treasury bills.

 

According to Reuters, International Monetary Fund (IMF) Managing Director Kristalina Georgieva stated in prepared remarks on Thursday that the global economy is projected to expand by less than 3% in 2023, a decrease from 3.4% in 2022.

 

In other news, Germany's Industrial Production (IP) increased 0.6% year-over-year in February, versus market predictions of -2.7% and previous readings of -1.7%. Additionally, the monthly figures exceeded expectations by 0.1%, coming in at 2.0% compared to 3.7% previously. On Wednesday, Germany Factory Orders for February improved to -5.7% YoY from -12.0% previously revised down and -10.5% market expectations, while MoM growth came in at 4.8% compared to 0.3% expected and 0.5% previous readings.

 

Wall Street and US Treasury bond yields have both reduced weekly losses as a result of these strategies, but investors remain skeptical.

 

In the context of less liquidity surrounding the March US employment report, sporadic activity on the major markets can keep the EUR/USD inactive and prone to abrupt price swings. Notable is the fact that recent dovish Fed forecasts and disappointing US data generate expectations for a positive surprise and enormous price volatility thereafter.


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