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Hello everyone, today XM Foreign Exchange will bring you "[XM Foreign Exchange Market Analysis]: Five major events that will happen in the global market this week". Hope it will be helpful to you! The original content is as follows:
Will trade tensions worsen? The risk of deterioration remains ahead of the August 1 deadline, especially in negotiations between the United States (US) and the European Union (EU). The interest rate decisions and several economic data in the old mainland have also attracted much attention.
1. Trade negotiations have become the central topic
Measures and countermeasures. The US-European negotiations are not going well. U.S. President Donald Trump reportedly wants to impose a benchmark tariff of 15% or 20% on imported European goods, up from the current 10%. European negotiations initially hoped to reach a "zero-to-zero" agreement to eliminate trade barriers.
In addition, Germany originally wanted to reach a deal quickly and accept concessions, but is now tightening its stance and getting closer to France. Officially, the European vejck.cnmission is in charge of negotiations and has been cautious, saying it will work to reach an agreement.
Will the negotiations break down? If so, Trump could impose a 30% tariff on all imported EU goods, and the EU could impose industry-specific tariffs on the United States. In his recent letter to European vejck.cnmission President Ursula von der Leyen, Trump vowed to impose higher tariffs on the EU if retaliated.
Is it just the darkness before dawn? Trump is known for his “escalation for downgrade” tactics, and negotiations seem always on the verge of collapse, but may end up reaching an agreement.
I expect trade negotiations this week to play an increasingly important role in promoting the market.
2. Powell may inadvertently affect the market
Tuesday, 20:30 Beijing time. Fed Chairman Jerome Powell at the Central Bank's "Silence"Rare public appearances during the "Silence Period".
After his colleague, Fed Director Christopher Waller, publicly called for a rate cut at next week's meeting, Powell could theoretically break the central bank's self-silence on such issues and provide some relevant vejck.cnrmation.
Bond markets and investors expect the Fed to keep interest rates unchanged next week, but his opening remarks at Washington event may raise some attention. I think Powell will skip any mention of monetary policy, which could give the US dollar (USD) a brief boost.
3. The European Central Bank may boost the euro
On Thursday, a decision was made at 20:15 Beijing time, and a press conference was held at 20:45 Beijing time. The European Central Bank (ECB) Interest rates are expected to remain unchanged, as inflation not only drops to around 2% of the central bank’s target, but also remains stable at that level.
If the price rise remains stable, ECB President Christina Lagarde may be asked about the potential rate cuts at the September meeting. I expect she will avoid any promises, maybe even explicitly reject, and keep the euro (EUR) buying.
Uncertainty about U.S. tariffs and countermeasures against the EU remain high. Central banks usually wait for some clear signals before taking action. In September, the ECB will release new inflation and growth employee forecasts, which Lagarde may say is needed.
4. Can the U.S. labor market improve further?
Weekly 4: 20:30 Beijing time. The number of people who requested unemployment benefits in the United States has dropped to about 220,000, below the level of more than 240,000. This weekly barometer shows that despite the turmoil around tariffs, the labor market remains stable. Only a jump of more than 240,000 will raise concerns.
In addition to the main unemployment application data, investors will also focus on the number of applicants for continued unemployment benefits. The number of unemployment increased earlier this year and then stabilized. Any further increase will be worrying.
5. S&P Global’s PMI may reflect a growth in confidence
Thursday, 21:45 Beijing time. S&P Global’s Purchasing Managers Index (PMI) serves as a measure of the business’s feelings about the economy. Do they look like Stock markets are as optimistic? Maybe not that optimistic, but Trump’s avoidance of the heaviest tariffs may appear in these business confidence surveys.
Service industry PMI is more important because it represents a larger sector of the U.S. economy. Both manufacturing and services data were about 53 points in June, exceeding the 50-point dividing line between expansion and contraction.
In a few days, economic data and some Trump’s thoughts about Powell’s future dominated the market, and trade became the core of this week’s action. Headlines may appear at any time, shaking the market. Please stay tuned.
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