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market analysis
Trump shortens the ultimatum period against Russia. Is the US index's counterattack now?
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Hello everyone, today XM Foreign Exchange will bring you "[XM Foreign Exchange Market Analysis]: Trump shortens the ultimatum period against Russia, is the counterattack of the US index starting now?" Hope it will be helpful to you! The original content is as follows:
On July 30, during the trading session in Asia on Wednesday, spot gold trading was around $3,327.60 per barrel, gold prices rose on Tuesday, investors were waiting for the results of trade negotiations and the Federal Reserve's policy meeting, U.S. crude oil trading was around $69.22 per barrel, and oil prices rose more than 3% on Tuesday, as U.S. President Trump put greater pressure on Russia on the Ukrainian war and optimistic that the trade war between the United States and its major trading partners is weakening.
U.S. President Trump reached its largest trade deal to date with the EU on Sunday, imposing a 15% import tariff on most EU goods and including the EU's $600 billion investment in the United States. The deal is higher than the $550 billion agreement signed with Japan last week that contained 15% reciprocal tariffs. Officials from China and the United States ended their two-day talks in Stockholm on Tuesday.
Marc Chandler, chief market strategist at Bannockburn GlobalForex in New York, said that the dollar began to rebound in July after a sharp decline in the first half of this year, and I think this is mainly short cover. The question is whether this is a trend change or a technical correction that should have occurred long ago. "The market was relieved that tariffs, at least with the plans announced by Japan and the EU, and plans to extend the potential 90-day period with Asian powers, will help eliminate the tail risks of the downside," Chandler said. "
Several EU leaders criticized the trade deal with the United States. German Chancellor Mertz said Germany would suffer significant losses due to agreed tariffs. The French Prime Minister on Monday called the deal a "dark day" for Europe.
The market expects the Federal Reserve to keep interest rates unchanged at the end of Wednesday's two-day monetary policy meeting. The benchmark U.S. 10-year Treasury yield fell 8.6 basis points to 4.334%.
Asian market
Inflation pressure in Australia continued to ease in the second quarter, strengthening expectations for the RBA to further relax its policies.
The overall CPI rose 0.7% month-on-month, lower than 0.9% in the first quarter and lower than the consensus of 0.8% month-on-month. On a year-on-year basis, CPI slowed to 2.1% from 2.4% year-on-year, the lowest level since the beginning of 2021, lower than expected 2.2%.
The RBA's preferred indicator - cutting average inflation rate also slowed from 0.7% month-on-month to 0.6%. The annual rate fell from 2.9% to 2.7% year-on-year, in line with expectations, the lowest level since the fourth quarter of 2021.
Potential deflation is also expanding. The annual service inflation rate fell from 3.7% year-on-year to 3.3%, the lowest level since the second quarter of 2022. www.xmserving.commodity inflation fell back to 1.1% year-on-year after a brief increase from 0.8% in the fourth quarter to 1.3% in the first quarter.
The monthly CPI in June fell from 2.1% year-on-year to 1.9%, which was also lower than the expected 2.1% year-on-year and below the RBA's target range of 2-3%.
New Zealand's ANZ Business Confidence Index rose slightly in July, rising from 46.3 to 47.8. The outlook for own activities has dropped slightly from 40.9 to 40.6. The proportion of www.xmserving.companies that raise prices in the next three months is expected to drop to 43.5%, the lowest level since December 2024. Inflation expectations also fell from 2.71% to 2.68%.
ANZ described the inflation signal as “benevolent” and pointed out that both cost and pricing expectations have declined. The bank said the New Zealand Fed could soon shift from concerns about high inflation to concerns about low inflation, meaning deeper monetary easing is more likely than the market currently reflects or the Fed itself marks.
European Market
European Market
European consumers are lowering their inflation expectations according to the European Central Bank's latest June consumer expectations survey. The median inflation expectation for one year fell from 2.8% to 2.6%, www.xmserving.completely reversing the uptrend in March and April. Long-term expectations remained anchored, with the three- and five-year outlooks steady at 2.4% and 2.1%, respectively, which remained flat for seven consecutive months.
The family spending sentiment has also weakened. Nominal spending growth was expected to drop from 3.5% in May and 3.7% in April to 3.2% in June. The continued decline indicates an increase in consumer caution, which may be driven by lingering geopolitical uncertainty, uneven wage growth and a decline in future price pressures.
In terms of growth, expectations have decreased slightly. Median expectations for economic growth in the next 12 months improved from -1.1% in May and -1.9% in April-1.0%. Nevertheless, households generally expect the economy to contract, reflecting the vulnerability of the eurozone recovery and ongoing concerns about trade, manufacturing and domestic demand.
US Market
The World Federation of Large Enterprises Consumer Confidence Index rose from 93.0 to 97.2 in July, exceeding the expected 95.9. The expected index climbed 4.5 points to 74.4, indicating a slight improvement in sentiment towards future conditions, but remains below the critical 80 threshold, which is usually associated with imminent recession risk. Meanwhile, the status quo index fell -1.5 points to 131.5, indicating that consumers' perceptions of the current situation remained roughly stable.
Stephanie Guichard of the World Federation of Large Enterprises noted that while overall confidence has rebounded from earlier weakness, it is “still below the exciting levels last year.” Improved expectations for employment, income and business conditions helped drive the gains in July, she added.
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