The U.S. Dollar is trading in weaker ranges as positivity is out beating the recent downwardly revised outlooks for the global economy.
Overview
At the moment, market expectations are better than the recessionary fears that dominated the narrative once July started. Good news all around has given a boost to equities with reports that Chinese officials plan to subsidize developers to aid a struggling housing and real estate environment.
With central banks continuing to add to borrowing costs in an effort to eliminate the record pace of inflation, participants are welcoming any signs of revival out of China following weeks of headlines focused on the negative effects of their “Zero-COVID” policies.This week will be defined by its biggest risk event taking place on Wednesday as the Federal Reserve announces its decision and discusses its line of thinking at 2 PM. There will also be major earnings from giants Apple and Alphabet (Google) that will give some insight into how things went in Q2 despite the rough and tumble of the economy. Furthermore, exact Gross Domestic Product figures will be out on Thursday.
What to Watch Today…
- No major economic events are scheduled for today
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EUR
The Euro has remained buoyant despite negative items downplaying the momentum for economic recovery in the region. The energy crisis has given evidence in the form of very disappointing Purchasing Managers Index numbers last Friday, but the shared currency has not taken a hit.
Additionally, the political situation in Italy is developing with some wondering how far to the right the government could become after the collapse of what Mario Draghi has brought together with the Five Star Movement. The country needs reforms in banking and other items that are keeping the debt-to-GDP ratio dangerously high. Elections are being geared up for September.
GBP
The Pound is also rising despite the doubt over what a new government will look like with a different Conservative as Prime Minister. Currently, ex-Chancellor Rishi Sunak is coming in second in polling Foreign Secretary Liz Truss among the Tories.
Regardless of inflation being a primary concern for businesses and consumers, Sunak is losing his prestige as he is blamed for much of the economic woes the country is experiencing and is seen as no real change. Truss has her critics as well but has managed to gather more support than previously predicted. We expect to see a new Prime Minister in September.
