July 19, 2019
Financial Markets latest publications
This week, markets turned increasingly optimistic about the potential for more aggressive pre-emptive easing by major central banks. U.S. - China trade talks seem to be stalling once again, while both U.S. economic data and company earnings released this week were mixed, and European data came in softer.
The slow progress in the initial trade demands of U.S and China is raising doubts as to whether they will be able to overcome their much deeper differences. Bloomberg reported that the ECB is considering modifying its inflation target to adapt it to the post-crisis era.
The International Monetary Fund has released its annual External Sector Report and it focuses on the need to avoid policies that distort trade. Sovereign treasury yields slipped after Fed officials reinforced expectations that they would cut interest rates this month.
U.S. retail sales rose 0.4% MoM in June, the fourth consecutive month of rises and a sign of economic robustness, according to data released by the Department of Commerce. The Fed is unlikely to cut interest rates by more than 25 basis points in July.
China’s National Bureau of Statistics reported on Monday that the GDP of China increased 6.2% in the second quarter of 2019. This growth of the economy is in line with what analysts predicted and represents the slowest rate of expansion since 1992Q1. However, its quarter on quarter reading of 1.6% was ahead of forecasts.
This week, financial markets continued to reassess Fed’s interest rate cut expectations in the wake of recently released strong payrolls data, a resumption of US-China trade talks and yesterday’s firmer CPI inflation figures.
Today it was published that U.S. underlying consumer prices increased by the most in nearly 18 months in June. Excluding the volatile food and energy prices, core inflation rose 0.3% m/m in June.
July 10, 2019
Market Comment | Fed Chairman Jerome Powell reinforces the thesis of an upcoming rate cut
Today, the chairman of the US Federal Reserve, Jerome Powell, delivering the Fed's semi-annual monetary report to Congress, reinforced the thesis of an upcoming rate cut by the Fed given the potential impact on US growth of the global economic slowdown, as well as the uncertainty related to the trade war and the Brexit.