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On August 10, according to a news release on the Ukrainian presidential website on the 9th, Zelenskyy delivered a video speech that evening, saying he had received reports of talks between the United States and European representatives. He said: "All the messages we wanted to convey have been conveyed, our views have been heard, and all risks have been taken into consideration. Ukraines path to peace must and can only be determined jointly with Ukraine. This is the most basic thing."On August 10th, S&P Global announced that Julys US CPI data will be a key economic indicator for the upcoming week. Markets are eagerly awaiting the report amid expectations that tariffs will drive inflation higher. While recent tariff developments (including the higher tariffs imposed on August 7th and the newly threatened 100% tariff on chips) appear to indicate rising inflation, overall US consumer price inflation remained below 3.0% in the second quarter. Notably, S&P Globals US Purchasing Managers Index (PMI), a leading indicator of CPI trends, has already hinted at a potential rise in inflation in the second half of 2025. Therefore, the upcoming CPI data will confirm whether price increases began to accelerate in July. This is crucial for the Federal Reserves monetary policy, which is currently adopting a wait-and-see approach given the potential volatility in prices.A U.S. White House official said: Trump is open to holding a trilateral summit between the U.S., Russia and Ukraine in Alaska, but the White House is still preparing for bilateral talks (between the U.S. and Russia) as requested by Putin.On August 10th, Ledao Auto stated in its latest Q&A session that the Ledao L90 comes standard with an 85-degree battery, and there will be no version with a 60-degree battery available. "However, we have recently received a number of requests from users for leasing 60-degree batteries. Technically, this is completely feasible and in line with the companys rechargeable, replaceable, and upgradeable energy replenishment concept. We are currently actively researching this solution internally and will share any information as soon as we have it."On August 10th, the Japan Meteorological Agency reported that Shinmoe-dake, located on the border of Kagoshima and Miyazaki prefectures, erupted at approximately 5:23 a.m. local time on the 10th, sending a column of ash as high as 3,000 meters. The Japan Meteorological Agency has issued a Level 3 alert for Shinmoe-dake, prohibiting people from entering the mountain. Shinmoe-dake is an active volcano located in the central Kirishima Mountains in southern Kyushu, Japan. In June 2018, Shinmoe-dake experienced a large-scale explosive eruption.

EUR/USD falls to 1.0850 as German/US Data escalates the ECB-Fed Conflict

Alina Haynes

Feb 01, 2023 15:32

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Mid-1.0800s intraday support is reestablished for EUR/USD on Wednesday morning, reversing Tuesday's rebound gains. This demonstrates the market's uneasiness ahead of the Federal Open Market Committee (FOMC) meeting. German economic risks to the EU, as well as mixed data from the United States and fears that Fed Chairman Jerome Powell will yet support hawks, might potentially weigh on the currency.

 

The Eurozone's Gross Domestic Product (GDP) for the fourth quarter (Q4) climbed 0.1% quarter-over-quarter (QoQ) on Tuesday, compared to 0.0% expected and 0.3% earlier. The year-over-year statistics were also good for the bloc, topping the market consensus of 1.8% to achieve 1.9%, compared to 2.3% previously. Nevertheless, German Retail Sales decreased 5.3% month-over-month in December, which was substantially worse than expected. Earlier in the week, the German GDP likewise disappointed EUR/USD pair speculators.

 

In contrast, the US Employment Cost Index (ECI) for the fourth quarter declined to 1.0% compared to market estimates of 1.1% and previous readings of 1.2%. In addition, the Conference Board (CB) Consumer Confidence index dropped from 108.3 to 107.10 in January. The US Chicago Purchasing Managers' Index (PMI) for January, which rose to 44.3 vs 41 expected and 44.9 previous readings, does not merit substantial attention.

 

Aside from the United States, higher profit reports from industry leaders including General Motors, Exxon, and McDonald's alleviated the economic downturn and lifted Wall Street indices. Nevertheless, the Dow Jones Industrial Average (DJIA), the S&P 500, and the Nasdaq all reported daily gains of greater than 1.0% on the previous trading day. In contrast, the yields on 10-year US Treasury notes reversed a three-day rise and returned to 3.51 percent, while their two-year equivalents plummeted to 4.20 percent.

 

It should be noted that JP Morgan's annual survey uncovered a reduction in inflation fears and a rise in recession fears, which tests the risk profile in the middle of pre-Fed anxiety. In spite of this, the world's largest rating agency, Fitch, forecasts that the US Consumer Price Index (CPI) would moderate to the mid-3.0% band in 2023 and the high-2.0% range in 2024, putting pressure on EUR/USD bears.

 

As a result of these variables, S&P 500 Futures see minor losses, while US Treasury bond rates remain sluggish and halt their slide from the previous day. This allows the EUR/USD pair to prepare for the Federal Reserve's dovish rate hike of 0.25 percentage points.

 

While the 0.25 basis point Fed rate hike is virtually expected and has been priced in, EUR/USD traders will also pay close attention to January activity data and Jerome Powell's ability to defend aggressive rate hikes.


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