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Japans 20-year government bond yield fell 2.0 basis points to 2.490%.South Koreas central bank decided the interest rate at 2.5% on July 10, in line with expectations of 2.50% and the previous value of 2.50%.On July 10, an important panel in the U.S. Senate debated proposed digital asset regulation, with Republicans calling for a moderate approach and Democrats warning of potential loopholes and conflicts of interest. "Our job is to set clear, loose guardrails to protect investors, stop fraud, and allow responsible innovation to flourish," said Tim Scott, chairman of the Senate Banking Committee. He noted that legislation should clearly define which tokens are securities and ensure appropriate protection from illegal financing. Republican Senator Hagerty and others released market structure principles last month, calling for a clear definition of the legal status and regulatory agencies of digital assets. The plan is largely in line with the CLARITY Act proposed by the House Committee in June. Hagerty said he was not worried about losing bipartisan support for market structure legislation and predicted that Democrats who support stablecoin legislation would begin to act.Foreign investors bought Japanese government bonds worth -164.6 billion yen in the week ending July 4, with the previous value revised from 105.26 billion yen to 105.91 billion yen.Japan bought 512.7 billion yen of foreign stocks in the week ending July 4, compared with 190.6 billion yen in the previous period.

With an eye on ECB policies, the US Dollar Index defends its recovery from a two-week low of 107.00

Daniel Rogers

Jul 21, 2022 11:40

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After recovering from a two-week low the previous day, the US Dollar Index (DXY) hovers at 107.05. In doing so, the dollar index reflects market trepidation before to a major monetary policy meeting of the European Central Bank (ECB). The day before yesterday, the DXY had its first daily rise in four days.

 

Market concerns about a European recession and strong inflation data from the UK and Canada may be to blame for the DXY's increase. The demand for safe haven assets such as the US dollar increased as a result of Sino-American tensions and China's covid problems.

 

Vladimir Putin, the president of Russia, reportedly said that it is unclear in what shape the Nord Stream 1 machinery would be returned after maintenance. According to Reuters, Ursula von der Leyen, president of the European Commission, said on Wednesday that a total suspension of Russian gas was a viable possibility. It should be highlighted that concerns over gas prices may have caused the International Monetary Fund (IMF) to decrease its growth forecasts for Germany. Because of this, the IMF projected Germany's growth to be 1.2 percent in 2002 and 0.8 percent in 2023. In a previous forecast, the IMF predicted that the German economy would grow by 2% per year. Along with the IMF, the Asian Development Bank (ADB) has lowered its forecast for growth in developing Asia from 5.2 percent to 4.6 percent for 2022.

 

Political worries in Italy also foreshadowed further misery for the EU and the markets. Consequently, Prime Minister Mario Draghi received a vote of confidence; but, because the vote was boycotted by the three major cotillion parties, Mr. Draghi may resign and call for early elections.

 

Wall Street ended the day with smaller gains in line with the mood, as the US 10-year Treasury yield halted rising after a two-day rise at about 3.03 percent. As a result, as of the time of publication, intraday S&P 500 Futures were down 0.25 percent at 3,952.

 

Moving forward, DXY traders can find some fun in the US Weekly Jobless Claims and July Philadelphia Fed Manufacturing Survey. However, as markets expect a greater rate hike than the 0.25 percent increase proposed the day before, the ECB's decision will draw a lot of attention. Therefore, in order to prevent the US currency from continuing its current recovery, ECB officials must not only announce the 25 basis point rate increase but also take further steps to win back the confidence of Euro bulls.


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