ForexMart's Forex News

**KostiaForexMart** · 07-07-2022, 10:08 PM

July 7. What will affect the markets today: July 7, 2022

Last night, the minutes of the US Federal Reserve meeting for June were published. According to the document, another increase in the interest rate by 0.75 percentage points is expected.

The protocol also showed that officials are in favor of a transition to a «restrictive policy» in case of continued increased inflationary pressure. The Fed has already acknowledged the likelihood of a recession in the US economy, but the regulator wants to achieve a «soft landing», which means lower inflation without job cuts. After the publication of the protocol, the shares of technology companies rose, stabilizing the market as a whole.

What other events will be able to influence the dynamics of the market today, July 7?

Applications for unemployment benefits

First, it is worth paying attention to the data on the number of applications for unemployment benefits in the United States. The monthly Non-Farm Payrolls report will be published tomorrow (it is expected that 268 thousand jobs will be created in the economy, which is lower than the May figure of 390 thousand). But first, the States will provide statistics on weekly applications for unemployment benefits. According to the forecast, this number will remain at the level of 230 thousand compared to a week earlier. The number of open vacancies will amount to 11.25 million vacancies, which exceeds the expected 11 million.

Crude oil reserves

The main event of this week was the fall in crude oil prices below the level of $ 100 per barrel. A report from the US Department of Energy on crude oil reserves in the country will be published today. Analysts expect a decline to the level of 1.04 million barrels.

Levi Strauss Earnings

Levi Strauss & Co, a well-known clothing and footwear manufacturer in the United States, is expected to report earnings of 23 cents per share on revenue of $1.4 billion. In addition, bank reporting will begin next week, and Wall Street's attention will be drawn to the business conditions for large lenders (as it assesses the long-term damage from sustained price increases).

**KostiaForexMart** · 07-10-2022, 01:50 PM

July 8. Germany faces new energy risks

The energy crisis in Europe continues to develop, reaching unprecedented proportions. First, Russia's military operation in Ukraine dealt a blow to the country's energy and economy, which led to severe disruptions in the supply of raw materials and hydrocarbons to Europe.

An additional risk for the German energy sector is the current shallowing of the Rhine River in Germany. As it’s known, the river supplies coal for thermal power plants and other needs.

The fact that now the water level in the main transport artery is extremely low suggests that barges will not be able to load thermal coal in full. And this will be a strong blow to the utilities of Germany, as they are already facing a shortage of ships.

Experts note that periodically the Rhine shallows, which restricts navigation along the river and forces to reduce the amount of cargo transported. For example, a barge with a capacity of 2500 tons has the ability to take on board only 1600 tons.

The country's energy companies are gradually starting to prepare for winter, but the prolonged drought observed in Germany in recent weeks may lead to delays in the supply of resources.

**KostiaForexMart** · 07-11-2022, 08:40 PM

July 11. Brent fell to $103.70 per barrel

Oil prices were actively declining during Monday's trading, reaching a local low at $103.70 per barrel. The pressure on the asset was exerted by news about the increase in the incidence of coronavirus in China. During the day, Brent managed to recover to $106.80 per barrel.

According to official data, 352 new cases of Covid-19 were detected in China on Sunday. As a result, the authorities of several large cities have re-introduced strict restrictive measures in order to prevent the further spread of infection. And this, according to analysts, may lead to a reduction in fuel demand in the world's largest oil importer.

In addition, the focus of the markets this week is the visit of US President Joe Biden to Saudi Arabia. Biden intends to meet with the Crown Prince of the country, as well as with the leaders of other Arab countries, including Egypt, Jordan, Iraq and the United Arab Emirates.

The meeting will address the issue of increasing oil production in the region. However, even if the participants decide to increase production, this will have an extremely insignificant impact on the dynamics of the market, since the reserve capacities of the OPEC states are limited.

**KostiaForexMart** · 07-12-2022, 07:55 PM

July 12. The Fed's monetary policy may drop Bitcoin to $15 thousand

Experts suggest that if the Fed continues to keep interest rates at high levels for a long time, most risky assets will be under strong pressure. As a result, the rate of the most popular cryptocurrency, bitcoin, may fall to $15 thousand.

There is an opinion among analysts that the Fed will keep interest rates at high levels for a long time due to fears of a repeat of the situation of the 1970-s, when the fight against inflation was curtailed too early and further price growth got out of control. That is why now the regulator must make sure of the victory over inflation, and only then proceed to change the strategy.

It is also worth noting that the US dollar, being a safe haven currency, still feels confident, despite the fact that the need for its purchases should have disappeared. The reason for this was serious problems in other economies, in particular the eurozone: an increasing number of analysts and market players are confident that a recession is coming – and it is expected that GDP will decline even if Russian gas supplies remain.

If we consider only the cryptocurrency market, then from time to time you can observe rebounds from local lows, but there is no talk of a full-fledged recovery rally yet. The current bitcoin quote is $20,186.

**KostiaForexMart** · 07-13-2022, 06:24 PM

July 13. The Central Bank of South Korea raised the rate by 50 bp at once

For the first time in history, the Bank of Korea decided to raise the key rate by 50 basis points at once to combat high inflation. Now the rate is now 2.25% per annum. After the announcement of the regulator's decision, the exchange rate of the South Korean won rose against the US dollar by 0.6%. However, the currency still remains near the lowest in 13 years.

The rate has been increased for the sixth time since August 2021 and the pace of its rise has become the highest since the adoption of the key rates policy by the regulator in 1999. Analysts are confident that the central bank will continue to tighten policy in the coming months.

The chairman of the central bank of the country, Chanyon Ri, said that the non-standard decision on the rate was made unanimously, however, if the inflation curve follows the projected trajectory, further rate increases will be the usual 25 bps.

Inflation in South Korea in June was 6% in annual terms, which was the highest since November 1998. This year, inflation is expected to exceed the previous forecast of 4.5%. At the same time, the regulator presented a worsened forecast for GDP in 2022: it is expected that the rise will be weaker than 2.7%, which were predicted earlier.

**KostiaForexMart** · 07-19-2022, 10:59 PM

July 19. Bitcoin reached a month-high

The bitcoin exchange rate has risen to a monthly maximum, and the Coinbase cryptocurrency exchange is suspending its partner program in the United States – these and other news from the world of digital currencies are in our review.

The rate of the most popular cryptocurrency rose to a maximum in a month. The current bitcoin quote is $22,844. On some exchanges, the currency even reached $22,990.

Despite the local growth, analysts believe that the «bearish» cycle observed today may last for about 4 more months. These assumptions are based on a comparison of the current market situation with previous cycles in the history of cryptocurrencies.

Cryptocurrency exchange Coinbase is temporarily closing a program to attract new users in the United States in order to reduce operating costs amid the ongoing crypto winter.

The participants of the affiliate program have received notifications that the program is being closed, and compensation for their costs and commission will no longer be paid.

One of the potential critical hubs of the UAE, against the background of the global growth of Web3 (the decentralized Internet of the future), is launching a project for the development of the metaverse, primarily aimed at artificial intelligence. The aim of the project is to transform the Emirate of Dubai into one of the 10 leading economies of the metaverse in the world.

July 18. Inflation in the eurozone in June reached a record 8.6%

According to the final data of the Statistical Office of the European Union Eurostat, consumer prices in the eurozone increased by 8.6% in annual terms in June. This indicator has become the maximum since the beginning of the data calculation. In May, the indicator was fixed at 8.1%.

The final data coincided with the preliminary ones. Analysts also did not expect a revision of the preliminary estimate.

On a monthly basis, consumer prices increased by 0.8% (as in May).

In particular, the cost of energy resources jumped in price by 42% compared to June last year. Food, alcohol and tobacco rose by 3.7%, industrial goods – by 4.3%, services – by 3.4%. Excluding food and energy, inflation rose by 3.7% y/y and 3.8% m/m last month.

In all EU countries, inflation accelerated to 9.6% y/y in June from 8.8% in May. The lowest inflation in the EU was recorded in Malta (6.1%), France (6.5%) and Finland (8.1%), the highest in Estonia (22%), Lithuania (20.5%) and Latvia (19.2%).

Experts note that inflation exceeds the target of the European Central Bank (2%) by more than four times. The next ECB meeting will be held this Thursday, and it is likely that key interest rates will be raised immediately by 50 basis points, and not by 25 bps, as previously expected.

**KostiaForexMart** · 07-20-2022, 09:55 PM

July 20. Oil is moderately cheaper in the middle of the week

Oil quotes are moderately declining on Wednesday after yesterday's growth to the highest since the beginning of July.

On July 18 Brent was trading near $99.65 per barrel, then on the 20th the asset sharply strengthened to $107.60. The current quote is $105.57 per barrel.

North American WTI oil shows similar dynamics: a decline to $98.94 per barrel after rising to a maximum of $100.55. The current WTI quote is $99.10 per barrel.

Fears that the actions of the US administration to combat climate change will negatively affect oil production in the country contributed to the growth of both assets. Yesterday, US President Joe Biden promised to take decisive measures on the part of the executive branch in order to combat climate change and support renewable energy. However, the president did not specify the details, which caused a wave of concerns among market participants.

Previously, the environmental measures of the authorities included reducing the area of territories adapted for oil and gas production.

Today, yesterday's data from the American Petroleum Institute put pressure on Brent and WTI. The report showed that the growth of crude oil reserves in the United States last week amounted to 1.5 million barrels, which was higher than the projected 400 thousand barrels. Today, we should pay attention to similar statistics from the US Department of Energy – if official data confirm the growth of hydrocarbon reserves, oil quotes will continue to decline.

**KostiaForexMart** · 07-21-2022, 08:38 PM

July 21. The ECB raised the rate by 50 bps at once for the first time in 11 years

During today's meeting of the European Central Bank, a historic decision was made – for the first time in 11 years, the regulator raised the base interest rate by 50 basis points at once: from 0% to 0.5%. The deposit rate was increased to zero (from minus 0.5%), the rate on short-term loans was increased to 0.75%.

Thus, the regulator intends to fight record inflation, the level of which was 8.6% in June.

A further increase in the ECB's key rate is expected in September. Here you can see the European central bank following the global trend: the Bank of England, for example, has already raised its interest rate 6 times over the past six months. And the key rate of the US Federal Reserve System may reach 3.5% by the end of the year.

At the same time, the ECB understands that a change in the course of monetary policy is associated with the risk of recession against the background of the war in Ukraine.

Additional pressure on the European economy is exerted by the government crisis in Italy: the resignation of Mario Draghi, who previously headed the ECB, led to a drop in the main index of the Milan Stock Exchange. Moreover, due to political uncertainty, the cost of servicing Italy's national debt will increase.

**anduongglobal122** · 07-23-2022, 06:18 AM

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**KostiaForexMart** · 07-26-2022, 03:06 PM

July 26. Gas prices in Europe jumped above $1,900

According to the London ICE exchange, gas prices in Europe are rising moderately on Tuesday and are holding above $1,900 per thousand cubic meters.

The cost of «blue fuel» jumped sharply yesterday after Gazprom announced plans to reduce supplies via the key Nord Stream gas pipeline from Russia to Europe. According to the plan, from June 27, the pipeline will pass no more than 33 million cubic meters per day, which is only 20% of the nominal capacity of the main line.

Analysts believe that exchange prices for gas in Europe may exceed $2,000 per thousand cubic meters for the first time in four months. The last time the cost of gas exceeded this mark was in early March – then gas quotes approached the $4,000 mark due to fears of a ban on Russian energy resources.

The estimated gas price on the European stock exchange in July averages $1,742 per thousand cubic meters. This is several times higher than in the same period last year. Experts note that there have not been such consistently high prices in the entire history of the operation of gas hubs in Europe – since 1996.

July 25. Brent fell below $98 per barrel

World oil prices continue the decline, which began at the end of last week. The current Brent quote is $97.66 per barrel.

Pressure on the commodity asset is exerted by traders' concerns about the prospects for economic growth and demand for energy resources in the world in conditions of high economic uncertainty. The fact is that the world's central banks are aimed at curbing the acceleration of inflation, which can lead to a recession.

The focus of the markets in the last trading week of July is the meeting of the US Federal Reserve System, which is likely to be another reminder of the economic difficulties in the country and in the world. The results of the meeting will be published on Wednesday, and most analysts expect another rate hike by 75 basis points, to 2.25-2.5%.

As for demand, analysts believe that oil demand may exceed expectations even in the event of a weakening of the US economy. The fact is that consumption growth in recent years has lagged behind the average level for 40 years due to coronavirus restrictions and should return to normal levels.

In general, despite the local decline, the oil market is likely to continue to grow in the coming weeks, given the beginning of the hurricane season, which may limit production in the Gulf of Mexico. And this traditionally pushes oil prices up.