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August 23 (Xinhua) -- Ukrainian President Volodymyr Zelenskyy said during a meeting with media representatives on the 23rd that Ukraine is not yet in a position to hold elections during wartime, and that holding elections under the current circumstances would pose a significant danger of national disintegration. According to media reports, former Defense Minister Andriy Fedorov, who was dismissed by Zelenskyy, recently released a video calling for wartime elections in Ukraine, stating that the country is facing a governance crisis. Zelenskyy responded that day, saying that during the ongoing conflict, various parties have been pressuring Ukraine to hold wartime elections, but the prerequisite for such elections is that partner countries can provide Ukraine with specific conditions to ensure their safe and legal conduct. This would allow frontline Ukrainian soldiers and millions of Ukrainian citizens fleeing the war to participate in the elections safely, without the threat of attack.August 23 - The bond market has recently sent a clear signal to Treasury Secretary Bessant: dont try to sweep $40 trillion in U.S. Treasury bonds under the rug and pretend everything is fine. Bessant announced plans to increase long-term Treasury repurchases this fall, pledged to use the Treasurys vast "toolbox" to support the market, and discussed upcoming measures to curb the ever-expanding U.S. debt burden. John Arnold, a former Enron energy trader, billionaire, and founder of the philanthropic venture capital firm Arnold, said the summers bond market turmoil may ultimately be just "another quickly subsided episode," but the bigger concern is that the lack of change in the U.S. fiscal situation will persist until it finally triggers a crisis. Tracy Chan, a global portfolio manager at Brandiwin, said she is very nervous because Bessant has failed to curb long-term Treasury yields. The bond markets performance suggests that bond vigilantes still dont trust him. Bessant needs to do more to convince investors that the Trump administration is serious about U.S. fiscal issues, but talking about increasing revenue through tax increases or austerity measures before the November midterm elections will be unpopular.On August 23, according to the Wall Street Journal, Russian military officers flew from St. Petersburg to the Kaliningrad exclave last month. Western intelligence officials said these officers oversaw mobilization preparations and procedures for the regions residents, including specific details on how to house, supply, and arm mobilization personnel. Intelligence officials stated that the planning exercises in Kaliningrad were just one of many nationwide drills designed to prepare for a "call to arms." Officials said the Kremlin has not yet decided whether to actually carry out such an operation, and a decision is likely to be made after the parliamentary elections at the end of September. However, despite the slow and costly progress, Putins determination to seize the entire Donbas region of eastern Ukraine may force him to take action. Kaliningrad, the location of last months mobilization test exercises, has recently received increasing attention. Western intelligence officials have warned that the exclave could play a role in Moscows military plans.August 23 – According to the Jerusalem Post and Al Mayadeen TV, a senior Iranian official stated that Iran has been invited to join the Mecca Mutual Defense Agreement established earlier this month by Saudi Arabia, Turkey, and Pakistan. The invitation has not yet been officially confirmed by the Iranian Foreign Ministry or any of the three parties to the agreement. Mehdi Rahimi, head of the Islamic Consultative Conference News Agency, stated that Iran has received an invitation to join the Mecca Agreement, and the matter is under review. Rahimi added that countries in the region are "moving in the direction of seeking a regional security umbrella," and called this a victory for Iran, as it has long been advocating for this.On August 23, Syrian Transitional Government Foreign Minister Shibani stated in an interview with Reuters on the 22nd that Syria expects to resume negotiations with Israel soon on a security agreement, hoping the agreement will facilitate Israels withdrawal from Syrian territory. Shibani said that negotiations between Syria and Israel on a security agreement have been stalled since the outbreak of the US-Israel-Iraq conflict this year, but he anticipates they will resume. The United States is pressuring Israel to return to dialogue. Shibani also stated that the Syrian Transitional Government "currently does not trust Israel," but the current priority is to stop Israeli attacks, therefore "confidence-building measures" are needed. Communication between Syria and Israel was severed after the attack on Syrias Abu Zukur airbase on August 18.

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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