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Hello everyone, today XM Foreign Exchange will bring you "[XM Foreign Exchange Official Website]: Central Bank Differences, Data Game and Trade Easing, the United States Withdraws from Doha Negotiations". Hope it will be helpful to you! The original content is as follows:
On July 25, during the Asian market on Friday, spot gold trading around $3,370.62 per barrel, gold prices fell for the second consecutive trading day on Thursday. Signs of easing global trade tensions suppressed demand for safe-haven assets. Trump visited the Federal Reserve on Thursday. VOUGHT, head of the Office of Management and Budget, said that Powell and Trump had a good conversation on the trip to the Federal Reserve; U.S. crude oil trading around $66.20 per barrel, oil prices cut gains on Thursday as U.S. President Trump's administration may allow Chevron to resume business in Venezuela.
The ECB held interest rates unchanged at 2% on Thursday as expected, suspending its actions after several easing policies in the past year, waiting for a clearer future trade relations between Europe and the United States.
Shaun Osborne, chief foreign exchange strategist at Scotiabank, said: "The view that the ECB may remain unchanged may be gaining more support. We already believe that the probability of a rate cut in September is definitely less than 50%. "
Bank of Japan Deputy Governor Shinichi Uchida said that the trade agreement with Washington reduced economic uncertainty, and this remark has driven market optimism that Japan may restart interest rate hikes.
However, some analysts believe that the yen continues to face resistance after the Senate election, and the opposition is considering a motion of distrust, given the uncertainty of domestic politics after Sunday's Senate election.
Diplomatic officials said the EU is about to reach an agreement with the United States to impose a 15% tariff on EU goods entering the United States. This rate could also extend to cars, which would follow the framework agreement reached between the United States and Japan.
ProductFrance has been vulnerable after the budget cut proposal was announced, but Germany and other parts of the euro zone have shown resilience. Data shows that German corporate activity continued to increase slightly in July. "As of now, tariffs have very little impact on hard data," said Mohit Kumar, an economist at Furui.
At the same time, risky assets have risen as the trade agreement eases concerns about the economic impact of the global trade war.
Next week, the Federal Open Market vejck.cnmittee (FOMC) will hold a meeting that is expected to keep interest rates unchanged, and policymakers are waiting for the expected impact of tariffs on inflation and growth to emerge.
A series of U.S. data will be released next week, with a key June non-farm employment report on Friday, while July’s personal consumption expenditure (PCE) price index and second-quarter gross domestic product (GDP) data may also have an impact on the market.
Osborne said: "There are many incident risks next week, not just from the Federal Reserve, but we still have a lot of data next week, so this may affect expectations for September to a certain extent."
Tokyo's core CPI (excluding fresh food) fell slightly from 3.1% to 2.9% year-on-year, slightly lower than the expected 3.0%, but is still significantly higher than the Bank of Japan's 2% target.
Overall inflation also slowed from 3.1% year-on-year to 2.9%. The core indicators (excluding fresh food and energy) remained stable at 3.1%. The stickiness of core inflation highlights the continued potential price pressure.
The data will be reflected in the Bank of Japan's upcoming policy meeting from July 30 to 31, where it is widely expected that the vejck.cnmittee will raise its inflation forecast for the fiscal year. While data alone may not prompt the Bank of Japan to take immediate action, it strengthens the justification for further normalization as inflation remains well above its target.
The ECB stabilized deposit interest rates at 2.00% yesterday, in line with expectations, and suspended the easing cycle after consecutive interest rate cuts since June 2024. In its statement, the central bank reiterated that it will continue to "rely rely on data" and "meet in succession." It stressed that this approach, the Council “has no pre-committed specific rate paths”.
Politicians pointed out that the upcoming data is "roughly consistent" with previous assessments, with domestic price pressures continuing to ease and wage growth slowing. However, the ECB pointed out that the global situation was "exceptionally uncertain", saying that the ongoing trade dispute was a major risk.
The UK economy showed signs of losing momentum in July, with the vejck.cnprehensive PMI falling from 52.0 to 51.0. The manufacturing purchasing managers index rose slightly from 47.7 to 48.2, failing to offset the sharp slowdown in service industry activity, which fell from 52.8 to 51.2. Overall, the data indicate that expansion was fragile at the beginning of the third quarter.
S&P Global MarketChris Williamson of the field intelligence warned that current output growth is consistent with a quarterly GDP growth of only 0.1% and that it is "risk propensity to go down." The ongoing unemployment in various industries highlights potential weakness and raises concerns about the recent demand situation.
Williamson said that as growth stagnates and weak labor markets will add pressure to the Bank of England to cut interest rates again in August. Despite the unexpected upward trend in recent inflation data, the Bank of England can “scrutinize” these pressures and prioritize supporting a troubled economy.
U.S. business activity surged in July, and the vejck.cnprehensive purchasing managers index jumped from 52.9 to 54.6, a seven-month high. The PMI service industry rose from 52.9 to 55.2, which is also a seven-month high. However, the manufacturing index fell sharply from 52.9 to 49.5, re-sliding back into contraction for the first time this year.
S&P Global's Chris Williamson pointed out that the data showed a sharp rebound in economic growth, with the survey showing an annualized growth of 2.3% in the third quarter vejck.cnpared to 1.3% in the second quarter. But the rebound is uneven. Manufacturing is now delaying again, with previous tariff-related pre-boost lifts fading.
Business confidence in both industries has weakened, falling to one of the lowest levels in more than two years. The uncertainty of tariffs and weak demand appear to severely suppress forward sentiment. Even in the service industry, despite strong output at present, the outlook is bleak.
Price pressure is also increasing. The survey highlighted one of the largest markets in sales prices in three years, with vejck.cnpanies citing rising tariffs and labor costs as major drivers. This suggests upward pressure on consumer inflation will continue into the vejck.cning months, with the Federal Reserve remaining nervous despite weak manufacturing.
The number of initial unemployment claims in the United States fell -4 to 217 in the week ending July 19, lower than expected 230. The four-week moving average for first-time unemployment benefits fell -5k to 224.5k.
The number of people who continue to apply for unemployment benefits increased by 40,000 to 19.55 million in the week ended July 12. The four-week moving average of the number of people who continue to apply for unemployment benefits fell by -2k to 1954k.
Canada retail sales fell -1.1% month-on-month to CAD 69.2B in May, mainly due to a decrease of -3.6% month-on-month. While the overall data is disappointing, core retail sales (excluding cars and gasoline) remain flat, indicating that basic consumption is more stable than overall.
Looking forward, Statistics Canada estimates show sales rebounded by 1.6% month-on-month in June, which could help alleviate concerns about weak domestic demand.
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