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The commander of U.S. Central Command stated that he is not concerned about the shortage of ammunition to counter Iranian missile and drone attacks.September 14th - According to foreign media reports, Trump announced on Sunday that the United States will remove tariffs on Irish whiskey. He made the announcement while participating in a golf tournament at his own golf course in western Ireland. Trump stated that Irish Prime Minister Michal Martin and Irish Open champion Shane Lowry had urged him to remove the tariffs during his visit. "On behalf of the United States of America, I will remove these tariffs," Trump said at the tournaments awards ceremony, which was met with cheers from the crowd.On September 14th, according to foreign media reports, Trump defended his remarks calling for Irish reunification, calling them "fairly routine comments" and sticking to his previous statements. These remarks have sparked controversy in Northern Ireland. Speaking to reporters at the Irish Open in Dornberg, Ireland on Sunday, Trump said, "Ive always liked the Irish people. It seems to me that since theres Northern Ireland and Ireland, uniting them seems like one of the most logical things that has ever happened." "Thats just my personal opinion. By the way, a lot of people agree with that," Trump said. "I made what I consider a fairly routine comment, and I got a lot of support." Trumps remarks on Sunday came in response to a question about whether British Prime Minister Andy Burnham should hold a referendum on Irish reunification, although the US president avoided the specific question.On September 14th, U.S. Energy Secretary Chris Wright warned oil traders not to expect a quick breakthrough on the Strait of Hormuz issue. Iran is planning to propose a shipping agreement to other Gulf states. In an interview on Sunday, Wright stated, "Expecting to reach a consensus agreement with Iran today is clearly not a good option." He said the market still needs to rely on alternative shipping routes. He estimated that these alternative routes can currently still supply about 10 million barrels of crude oil and petroleum products per day. Wright said, "Therefore, the current global oil market supply is indeed tighter than we would like, but not excessively so." Wright also said that Irans nuclear program will end "in some way," adding, "We prefer a negotiated solution. If negotiations fail, they can continue with a secret, hidden, covered-up, and denied nuclear weapons program, but after that, Iran will face the U.S. military, and the U.S. military will ensure they cannot develop nuclear weapons."U.S. Energy Secretary Wright stated that the U.S. will terminate Irans nuclear program "no matter what"; the U.S. expressed concern over the suspension of inspections of Irans nuclear program. Hoping to reach a Hormuz-related agreement with Iran is not a prudent option.

EUR/USD recovers from low US inflation, EU energy plans, and trade talks

Daniel Rogers

Sep 14, 2022 11:44

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EUR/USD bids jumped to 0.9980 during Wednesday's Asian session due to US inflation-driven losses near the weekly low. In doing so, the main currency pair consolidates the greatest daily loss in the past two years prior to diplomatic efforts by the European Union (EU).

 

The US inflation data released on Tuesday revived concerns about the Federal Reserve's rapid rate hike and compounded recession fears. China and Russia-related geopolitical concerns are also acting as bearish factors for the EUR/USD. Despite this, the US Consumer Price Index (CPI) rose 8.3% year-over-year in August, above market estimates by 0.1%. In contrast, the monthly data increased to 0.1%, surpassing the -0.1% projected and the 0.0% seen in previous reports. The core CPI, or CPI excluding food and energy, also surpassed the 6.1% consensus and 5.9% prior to printing at 6.3% for the relevant month.

 

In contrast, Eurozone ZEW Economic Sentiment fell to -60.7 in September, compared to the expected -52 and the prior reading of -54.9. The sentiment indicator for Germany declined to -61.9, compared to market expectations of -60 and previous readings of 55.3. Following the announcement of the statistics on Tuesday, German Economy Minister Robert Habeck warned, "We face the potential of a recession next year." Similarly, the German economic outlook for the second half of the year has deteriorated dramatically, and second-half output may stagnate or decline.

 

Notable is the increase in hawkish Fed bets, with next week's 75 basis point (bps) rate hike looking increasingly plausible. At its meeting on September 21, there is a 25% chance that the US Federal Reserve (Fed) will announce a full 1% increase in the benchmark Fed rate.

 

After US inflation data, the inversion between short-term and long-term US Treasury bond yields deteriorated and exacerbated recession fears, which impacted on the EUR/USD due to the pair's reputation as a risk-barometer. However, following the announcement of the data, the yields on 10-year US Treasury notes increased to 3.412% and those on 2-year bonds increased to 3.76%, up from approximately 3.411% and 3.745%, respectively. In addition, following the release of the US CPI, US stocks saw their worst daily loss in over two years, which affected the pair.

 

Additionally, Sino-American tensions are exacerbated by US Vice President Joe Biden's efforts to highlight China's problems and the drive for better relations with China. In addition, market sentiment and the EUR/USD exchange rate were impacted by concerns that Russia could retaliate brutally after withdrawing from certain regions of Ukraine.

 

Recently, US President Joe Biden declared, "I am unconcerned by today's inflation figure," adding that the stock market is not always a reliable predictor of the strength of the economy. The cause may be tied to the greatest drop in US stocks in two years following the publication of US inflation data.

 

Ursula von der Leyen's plans for energy price capping and US Trade Representative Katherine Tai's visit to the European Union (EU) to see European Commission Vice President Valdis Dombrovskis will be vital to track for future developments. Prior to Thursday's US Retail Sales for the month of August and Friday's preliminary September Michigan Consumer Sentiment Index reading, the US Producer Price Index (PPI) will also be crucial.


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