Last week, the international market was volatile, with US President Biden withdrawing from the 2024 presidential election and star stock financial reports frequently showing negative news.
In terms of the market, the US stock market continues to diverge, with the Dow Jones Industrial Average rising 0.75%, the Nasdaq falling 2.08%, and the S&P 500 index falling 0.83%. The three major European stock indexes saw mixed performance, with the FTSE 100 index in the UK rising 1.59%, the DAX 30 index in Germany rising 1.35%, and the CAC 40 index in France falling 0.22%.
There are many highlights next week (July 29th August 2nd), as the Federal Reserve, Bank of Japan, and Bank of England will hold interest rate meetings to monitor the direction of future policy paths. The latest economic data from the Eurozone may have an impact on the September decision of the European Central Bank. The United States will release June non farm payroll, ISM manufacturing index and other indicators to reflect the latest economic situation. The financial reporting season has entered a critical period, and star tech stocks such as Apple, Amazon, and Microsoft will release their results.
The Bank of Japan has previously stated that it will make a decision to reduce bond purchases at this meeting. According to sources, the current monthly purchase of 6 trillion yen may be halved in the coming years. However, there is a certain degree of uncertainty in raising interest rates, and the interest rate market shows that the probability of raising interest rates by 10 basis points is about 70%.
The Federal Reserve's decision is coming
The Federal Reserve will welcome its July interest rate meeting this week. After the second quarter gross domestic product (GDP) data was significantly stronger than expected, the possibility of a rate cut this month has been ruled out.
Multiple recently released data indicate that the US economy is showing signs of a moderate slowdown, and the labor market is no exception. In this context, it is difficult for Federal Reserve officials to determine whether inflation is continuing to move towards 2%. However, recent statements suggest that policy statements may adjust their wording on inflation to reflect a shift in direction.
The labor market has become a key factor in policy considerations. Institutions predict that 185000 non farm jobs will be added in July, down from 206000 in June. The unemployment rate remains at 4.1%, and the average hourly income growth rate may slow down to 3.7%.
Before the non farm payroll report, the outside world will also evaluate the job market situation based on June JOLTS job vacancies, ADP employment report, initial jobless claims, and other indicators. Other noteworthy data include the Consultative Conference's July Consumer Confidence Index, Chicago PMI, and ISM Manufacturing PMI.
The financial reporting season is gradually improving, with tech giants Apple, Amazon, and Meta releasing their results this week. Other noteworthy companies include Microsoft, Qualcomm, ARM, AMD, Starbucks, Berkshire Hathaway, ExxonMobil, Chevron, and others.
Crude oil and gold
International oil prices have fallen for the third consecutive week, and expectations of the Gaza ceasefire agreement will ease global supply concerns. Economic weakness means a slowdown in energy demand. WTI crude oil fell 1.88% to $77.16 per barrel in the near month contract week, while Brent crude oil fell 1.82% to $81.13 per barrel in the near month contract week.
Colin Cieszynski, Chief Market Strategist at SIA Wealth Management, believes that global economic uncertainty has also increased, and the impact of weak consumption on resource demand continues to put overall pressure on commodities. The accelerated sell-off indicates broader concerns.
Gold futures fell for the second consecutive week, dragged down by a significant drop in risk assets. COMEX gold futures for August delivery on the New York Mercantile Exchange closed at $2381.00 per ounce, down 0.76% for the week.
At present, the price of gold has fallen more than $100 from its historical high. Alex Kupcsikevich, Senior Market Analyst at FxPro, stated that gold is facing pressure in the short term, but the bulls have not been completely defeated. The latest data shows that the year-on-year growth rate of personal consumption expenditure (PCE) in the United States in June fell from 2.6% to 2.5%, further approaching the Fed's mid-term target of 2%.
Peter Spina, founder and president of GoldSeek, an information platform that focuses on the trends of gold and precious metals, expects that the upcoming Federal Open Market Committee meeting of the Federal Reserve will help set the direction for gold. At the same time, India announced a significant reduction in import tariffs on gold and silver, which may stimulate more physical demand and help support gold and silver prices.
The suspense of the Bank of England's decision still exists
After a brief recovery in the second quarter, the economic recovery of the eurozone seems to have encountered obstacles. For the European Central Bank, the latest Purchasing Managers' Index (PMI) survey, which further deteriorated in July, may give priority to dovish sentiment, paving the way for further interest rate cuts in September.
Therefore, the upcoming latest Consumer Price Index (CPI) forecast will be more important for investors. There may be more good news in July, as institutions predict that the year-on-year increase in CPI will peak again and fall back to 2.3%, once again approaching the European Central Bank's target of 2%.
The Bank of England is set to hold an interest rate meeting, and after several twists and turns, the UK's inflation rate has significantly decreased this year, reaching the bank's 2% target in the past two months. However, policymakers at the Bank of England remain concerned about high service sector inflation and slow decline in wage growth.
Although the uncertainty of the UK election has been eliminated, recent official comments indicate that there is no consensus within the Monetary Policy Committee on whether to cut interest rates in August, but there is a tendency to believe that it is not necessary to maintain restrictive policies at the current high of 5.25%.
The market needs to closely monitor the latest quarterly forecasts, which have important reference significance for future policy paths. Most economists expect the Bank of England to cut interest rates by 25 basis points to 5% next week. Due to inflation expectations hovering around the target, the Bank of England will embark on a slow and stable path of interest rate cuts, and will cut rates again this year.
This week's highlights
转播
