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On August 17th, Reuters claimed on the 15th to have obtained an "exclusive report," stating that according to a draft letter from the U.S. State Department and anonymous U.S. officials, the U.S. government plans to send letters to more than 30 countries that signed the Joint Statement on Partnership for Artificial Intelligence Opportunities in June, demanding that they "choose" sides in the U.S.-China artificial intelligence (AI) race. The U.S. also threatened that if these countries participate in the China-led AI framework, they will be excluded from the U.S.-led "AI alliance." Chinese experts stated that the U.S., by using the "Silicon Peace" initiative to woo more than 20 economies, is now forcing countries to choose sides, which smacks of technological bullying.On August 17, the Ministry of Ecology and Environment, together with the Ministry of Industry and Information Technology, the Ministry of Public Security, the Ministry of Natural Resources, the Ministry of Water Resources, the Ministry of Agriculture and Rural Affairs, the Supreme Peoples Court, and the Supreme Peoples Procuratorate, issued a "Notice on Further Strengthening the Prevention and Control of Wastewater Pollution Risks from Industry and Other Industries and Ensuring the Safety of Agricultural Irrigation Water." The notice requires the upgrading and transformation of centralized wastewater treatment facilities in industrial parks surrounding farmland, the investigation and rectification of water-related problems in industry and livestock farming, and the formulation and revision of local water pollutant emission standards for industrial enterprises whose characteristic pollutants may affect the safety of downstream agricultural irrigation water, strengthening emission control requirements.August 17th - Data released on Monday showed that Japans second-quarter real GDP grew by 0.3% quarter-on-quarter and 1.1% annualized quarter-on-quarter, compared to expectations of 0.5% and 2%, respectively. The lower-than-expected GDP growth complicates the process of further interest rate hikes by the Bank of Japan. Flat private consumption and a sharp contraction in capital spending in the second quarter indicate that the private sector remains cautious about spending, which could lead the Bank of Japan to adopt a more prudent stance at its next meeting, despite persistently high PPI and CPI continuing to pressure policymakers to take action. The yen may face renewed pressure due to the weak economic growth outlook, especially if the market lowers the probability of a September rate hike; meanwhile, government bond yields may decline as short-term tightening expectations weaken. While external demand partially offset this impact, it alone is unlikely to change the overall moderate economic trend.On August 17th, Futures News reported that the 7.7 magnitude earthquake on Flores Island, Indonesia, had a relatively small impact on the aluminum industry chain. In terms of production capacity distribution, bauxite, alumina, and the vast majority of electrolytic aluminum production capacity are concentrated in western Indonesia, generally more than 1400 kilometers from the epicenter. Even the nearest electrolytic aluminum plant—Huaqing Aluminum in Morowali, Sulawesi—is about 624 kilometers away, still outside the 300-kilometer damage radius. Coupled with the tsunami wave height of less than 0.4 meters, the actual supply impact was almost zero. In terms of prices, at most, there will be a short-term sentiment pulse of 0-1%, which is expected to be reversed within 1-3 days, without changing the medium-term trend.The Nikkei 225 index opened 115.75 points higher on Monday, August 17, a gain of 0.17%, to 68,829.55.

The EUR/GBP exchange rate recovers above 0.8000 in advance of Eurozone inflation and UK gross domestic product

Alina Haynes

Mar 30, 2023 16:05

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The EUR/GBP pair extended its recovery above 0.88 during the Asian trading session. Anticipating that the European Central Bank (ECB) will continue to raise interest rates to combat persistent inflation, the cross has depreciated progressively. Friday will see the publication of preliminary Eurozone Harmonized Index of Consumer Prices (HICP) and Gross Domestic Product (GDP) (Q4) figures. Prior to the publication of these figures, it is anticipated that the asset will exhibit explosive activity.

 

It is anticipated that the preliminary Eurozone HICP will decelerate significantly from 8.5% to 7.3%. While it is anticipated that the core HICP will rise to 5.7% from 5.6% in the previous release. Weak energy prices are anticipated to have a significant impact on Eurozone inflation. In light of Christine Lagarde's prediction that inflation will remain elevated for an extended period of time, the European Central Bank (ECB) is expected to continue tightening monetary policy.

 

In the interim, banking tensions are subsiding as the absence of information regarding additional collateral damage has a positive impact on the market. Chief Economist Philip Lane stated on Wednesday that ECB interest rates must rise if banking tension has no or a "relatively limited" impact.

 

Investors avidly anticipate the United Kingdom's Gross Domestic Product (GDP) data. According to the consensus, the United Kingdom's growth in the fourth quarter of CY2022 remained unchanged. It is anticipated that the annual GDP will remain unchanged at 0.4%. It is expected that the British economy will undergo a severe recession as a result of high inflation and sluggish growth.

 

The Bank of England (BoE) policymakers appear confident that inflation will moderate in the near future and that the unexpected rise in February's inflation was a one-time anomaly; however, the absence of evidence raises doubts. If inflation persists, BoE Governor Andrew Bailey stated that additional rate increases would be announced. In contrast, Bank of America (BoA) analysts anticipate that the Bank of England (BoE) will not increase rates and will maintain current levels until 2024.


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