FreshForex News

[FreshForex]

THE CALM BEFORE THE SWARM?

Dear traders!

Oil prices fell in Asian trading on Monday as investors are cautious ahead of fresh economic data from top consumers in the United States and China this week, although an expected drop in crude supplies from Saudi Arabia and Russia capped losses.

Brent crude futures fell 55 cents, or 0.7%, to $77.92 a barrel by 0630 GMT, while U.S. West Texas Intermediate was at $73.31 a barrel, also down 55 cents, or 0.7%.

Factory prices in China fell in June at the fastest pace in seven years, government data showed on Monday, as the pace of economic recovery in the world's second-largest economy slowed.

Oil prices rose more than 4% last week to their highest levels since May, climbing for a second straight week after the world's biggest oil exporters, Saudi Arabia and Russia, pledged to deepen supply cuts in August.

Experts believe market volatility is fueled by the ongoing tug-of-war between concerns about demand controls by Western economies and OPEC's supply control strategies, affecting the delicate balance of the oil market.

Non-OPEC+ supply is keeping pace with global demand, JPMorgan analysts said in a note, adding that OPEC+ needs to deepen production cuts by another 700,000 bpd in the second half of the year on top of the announced cuts and extend them to 2024.

THE СASTLING OF NASDAQ 100

Dear clients,

Shares of Apple, Microsoft and other heavyweights fell on Monday after Nasdaq Inc said it intends to rebalance the Nasdaq 100 index to eliminate "over-concentration."

Apple's market capitalization fell 1.1% to $2.967 trillion, after surpassing the $3 trillion threshold for the first time on June 30. Shares of Alphabet and Amazon fell more than 2%, while Microsoft and Tesla fell more than 1%.

Wall Street's most expensive stocks declined after Nasdaq said late Friday that it would conduct a "special rebalancing" of the index to "eliminate excessive concentration in the index by reallocating weightings."

The adjustment will be based on shares outstanding as of July 3, and the changes will be announced July 14 and take effect before the market opens July 24.

[FreshForex]

WHAT'S IN THE NEWS? TIPS FOR A SUCCESSFUL NEWS TRADING

Dear clients,

News are fundamental element of trading and should be treated accordingly. This time, we'll be looking for the best approach in news trading.

Join us on July 12 at 12:00 GMT.

During webinars, FreshForex analyst will answer your questions regarding the market situation and comment on the latest news.

If you missed the previous webinars, you can always find them here.

TRADING SIGNALS: JUNE INFLATION IN THE U.S.

Dear clients,

A closely watched US inflation report may help address one of the most pressing questions among traders: whether the market has correctly identified the short-term trajectory of interest rates. Belief in lower rates has driven bond yields lower, supporting giant tech and growth stocks that have exposure to broad stock indexes.

What to expect this month, our expert explain:

The market is expecting US inflation to fall 0.9 pp to 3.1%, but the final figure could be above consensus forecast on the back of a strong labor market, as job and wage growth has always kept inflation high in the past. On Wednesday, consider buying USDTRY, USDZAR and selling #NQ100, AUDUSD.

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[FreshForex]

DEEP DIVE. THE DOLLAR'S BIGGEST DROP IN A YEAR

Dear clients,

The dollar fell to its lowest level in more than a year on Wednesday after data showed U.S. consumer price growth slowed in June, indicating the Federal Reserve may raise interest rates only one more time this year.

The dollar index fell to 100.54, the lowest since April 2022, and was last down 1% to 100.55, the biggest daily decline since early February.

Following the inflation report, the dollar also hit its lowest against the Swiss franc since early 2015. It was last down 1.3% to 0.8675 francs, having previously fallen to a session low of 0.8660, the lowest since the Swiss National Bank de-pegged the Swiss currency in January 2015.

Data showed that U.S. core consumer prices rose just 0.2% in June, compared with forecasts for a 0.3% rise. The monthly increase in core prices was the smallest since August 2021. On an annualized basis, the core U.S. CPI rose 4.8%, below market expectations for a 5% increase. It was the lowest annualized gain in more than two years.

U.S. rate futures continue to show traders overwhelmingly expect a quarter-point increase in the discount rate, to the 5.25%-5.5% range, at the Fed's July 25-26 meeting, but the probability of another rate hike before the end of the year is now around 25%, down from around 35% before the report.

CHALLENGE ACCEPTED. A TECH STARTUP FROM ELON MUSK

Dear clients,

Billionaire entrepreneur Elon Musk launched his long-sought artificial intelligence startup xAI on Wednesday, unveiling a team made up of engineers from the very large U.S. tech companies he hopes to challenge in his quest to create an alternative to ChatGPT.

The startup will be led by Musk himself, who has repeatedly stated that the development of artificial intelligence should be put on hold and that the sector needs to be regulated. Musk has repeatedly voiced concerns that AI could lead to "civilizational destruction."

On Wednesday night on Twitter Spaces, Musk outlined his plan to create safer AI. Instead of explicitly programming morality into its AI, he said, xAI will seek to create an AI that is "as curious as possible."

"If it tries to understand the true nature of the universe, that will be the best I can come up with in terms of AI safety," Musk said. "I think he will be in favor of humanity from the standpoint that humanity is much more interesting than non-humanity."

Musk's new company is separate from X Corp but will work closely with Twitter, Tesla and other companies, according to its official website.

[FreshForex]

CHARGING AHEAD: TESLA'S NEW SUCCESSES

Dear clients,

Tesla's strategy of boosting sales by lowering prices probably led to its strongest revenue growth in five quarters, while profitability fell to a three-year low in the April-June quarter.

Since late last year, the Elon Musk-led electric car maker has launched a price war to stimulate demand and stifle competition from older automakers such as Ford Motor and Chinese rivals including BYD.

Tesla is expected to report on Wednesday that gross margins fell to 18.9% in the second quarter, according to 19 analysts surveyed by Visible Alpha. That's down from 20.2% in the previous quarter and 25.9% a year earlier.

With electric car sales slowing, Tesla has been aggressively trying to capture a bigger share of the U.S. charger market in an effort to diversify its revenue streams. It has entered into agreements with companies such as Ford Motor and General Motors to use its North American Charging Standard (NACS), allowing its market value to more than double to $880 billion this year. Following these partnerships, several charging companies have announced their intention to adopt Tesla's standard.

While this will not contribute much to second-quarter revenue, which is expected to grow 45.2% to $24.59 billion, analysts predict it will significantly boost the company's earnings going forward.

"IT'S NOT SO BAD": GOLDMAN SACHS ON POSSIBLE US RECESSION

Dear clients,

Goldman Sachs chief economist Jan Hatzius said on Monday that the bank is lowering the probability of a US recession starting in the next 12 months to 20%, down from its previous forecast of 25%.

"The main reason for our downgrade is that recent data have reinforced our confidence that a decline in inflation to an acceptable level will not require a recession," the bank said in a research note.

Market expectations for a so-called "hard landing" - a scenario in which interest rate hikes by the U.S. Federal Reserve drive the economy into recession - were recently challenged by data showing consumer and manufacturing price inflation slowed in June. Slowing inflation is likely to lead to looser monetary policy in the future. Meanwhile, economic activity remains resilient despite the significant increase in borrowing costs since the Fed's rate hike campaign began in early 2022.

As for the current inversion of the Treasury yield curve, which is generally seen as a harbinger of an impending recession, Hatzius said it reflects and simultaneously confirms "overly pessimistic" economic forecasts.

An inverted yield curve usually signals that the Fed will cut rates to stimulate the economy. However, according to a Goldman Sachs economist, there is a "plausible path" for the Fed to cut interest rates just because of lower inflation.

[FreshForex]

CHANGE IN CASHBACK PROGRAM CONDITIONS

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CRYPTO TOP UP BONUSES CONTINUE!

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LINING UP: NEW CRYPTOCURRENCY ETFS UNDER REVIEW

Dear clients,

The US Securities and Exchange Commission (SEC) has accepted for review spot bitcoin fund applications from six companies, including BlackRock, marking the first step in the process of deciding whether to approve or disapprove the latest batch of proposals.

The SEC also formally recognised applications by Bitwise, VanEck, WisdomTree, Fidelity and Invesco to create similar spot bitcoin fund ETFs, with those proposals published in the Federal Register on Tuesday and Wednesday.

The SEC had previously rejected dozens of applications to create spot bitcoin ETFs, saying the proposals did not meet fraud and investor protection standards. But Nasdaq, on which BlackRock proposed to list its ETF, said earlier this month that it was going to address those concerns by partnering with Coinbase, the largest U.S. cryptocurrency exchange, to control trading on the underlying bitcoin market.

The first bitcoin futures ETF was approved in October 2021, helping the volatile bitcoin hit an all-time high of $69 000 in November 2021.

[FreshForex]

MORE EFFICIENT TRADING WITH DRAWDOWN BONUS

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Good news! The drawdown bonus is also extended until 31 October. Use the extra funds to support your account during drawdown or to increase your trading turnover.

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COMING SOON? US RECESSION DATA

Dear clients,

An index designed to track turns in the US business cycle declined for the 15th consecutive month in June, led by weakening consumer sentiment and rising jobless claims, marking the longest decline since the 2007-2009 recession.

The Conference Board said Thursday that its index of leading economic indicators, a gauge that helps forecast future economic activity, fell 0.7% to 106.1 in June after a revised 0.6% decline in May.

"Taken together, the data for June suggest that economic activity will continue to slow in the coming months", the organisation's analysts said. The Conference Board reiterated its forecast that the US economy is likely to be in recession from the current third quarter to the first quarter of 2024.

The Conference Board also noted that the decline in the LEI index is accelerating, with it falling 4.2% in the past six months, down from 3.8% between June and December 2022.

[FreshForex]

ANALYST EX MACHINA: A CONTEST FROM FRESHFOREX

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The development of artificial intelligence is moving by leaps and bounds; from drawing to weather forecasting, it seems that there is practically no limit to AI capabilities.

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A ROUND THE WORLD. CRYPTOCURRENCY FROM THE CREATOR OF CHATGPT

Dear clients,

On Monday, the Worldcoin cryptocurrency project, founded by OpenAI CEO Sam Altman, will launch. The company creating Worldcoin is Tools for Humanity, based in San Francisco and Berlin.

The core offering of the project is the World ID, an account that only real people can get. To get a World ID, a customer registers and personally undergoes an iris scan with a Worldcoin "orb" — a silver ball about the size of a bowling ball. Once the iris scan confirms that the person is real, a World ID is created.

The project has 2 million users during its beta testing period, and with Monday's launch, Worldcoin is expanding its "orbing operations" to 35 cities in 20 countries. As an incentive, those who sign up in certain countries will receive a Worldcoin WLD cryptocurrency token.

The cryptocurrency aspect of World IDs is important because cryptocurrency blockchains allow World IDs to be stored in such a way that privacy is preserved and they cannot be controlled or disabled by any entity.

According to the authors of the project, World IDs will be necessary in the era of generative chatbots with artificial intelligence, such as ChatGPT, which create remarkably similar speech to human speech. World IDs will be able to be used to distinguish real people from AI bots on the Internet.

Major cryptocurrency exchange Binance said it will list Worldcoin, with a tentative opening of trading expected at 09:00 GMT on Monday.

[FreshForex]

TRADING SIGNALS: US FED MEETING

Dear clients,

On July 26, a meeting of the US Federal Reserve System, the body that performs the functions of the Central Bank of America, will take place. The decision on the interest rate will determine the further movement of the market, which draw attention of traders.

How the interest rate situation will develop now, our expert explain:

The US Fed may raise the rate by 0.25 p.p. to 5.5% and will signal to the market that the current cycle of rate hikes is coming to an end. Since inflation is falling in the US, we will see the Fed's real interest rate rise, which has always had a favourable impact on the value of the dollar in the past. On Wednesday consider buying USDTRY, USDZAR and selling XAUUSD, XAGUSD.

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WEEKLY OUTLOOK: BTCUSD, ETHUSD, XRPUSD

Dear clients,

Ripple effect has jumpstarted the cryptomarket for the altcoin and even lend a shoulder to bitcoin itself. This time, we'll be looking at the cryptocurrencies, their positions and further movements.

Join us on July 26 at 12:00 GMT.

During webinars, FreshForex analyst will answer your questions regarding the market situation and comment on the latest news.

If you missed the previous webinars, you can always find them on our site.

THE ECONOMIC PENDULUM IS IN MOTION

Dear clients,

Global stocks rose on Tuesday thanks to a rally in Asia, where the yuan jumped after China pledged to step up support for its gasping economy, while evidence of slowing growth in Europe weighed on the euro.

On Monday, China's top leaders pledged to step up aid to an economy struggling to recover from the crisis and signalled more measures to boost the property industry were on the way.

The MSCI All-World Index rose 0.2% on the back of gains in China's stock market, with the mainland index (.SSEC) up 1.9% and Hong Kong shares (.HSI) up 3% thanks to gains in property stocks, which have been falling due to debt repayment problems.

However, the positive momentum did not carry over to Europe, where stocks and the euro struggled to stay in positive territory as recession fears resurfaced after regional surveys the previous day showed business activity contracted much more sharply than expected in July.

Purchasing managers' indices published on Monday came in below expectations both in the eurozone as a whole and in key countries such as France and Germany, prompting traders to rethink what the European Central Bank might signal about the prospects for a rate hike at its meeting on Thursday.

Macroeconomic data released on Tuesday showed business confidence in Germany deteriorated this month and eurozone loan demand hit a record low in the second quarter as interest rate hikes took their toll, according to an ECB survey.

The US Federal Reserve will announce its monetary policy decision on Wednesday.

Markets are expecting a 25 basis point rate hike from both the Fed and the European Central Bank this week, but after that, pricing diverges from the rhetoric of policymakers, so the focus will be on their tone and outlook.

[FreshForex]

"THE DOORS ARE OPEN". FED ON FUTURE RATES

Dear clients,

The US Federal Reserve raised interest rates by a quarter of a percentage point on Wednesday, with Fed Chairman Jerome Powell saying the economy still needs to slow and the labour market to weaken for inflation to return "credibly" to the 2% target set by the US central bank.

The rate hike, the Fed's 11th in the past 12 meetings, set the benchmark overnight interest rate at a range of 5.25% to 5.50%, a level last seen before the housing market crash in 2007 and which hasn't been exceeded in about 22 years.

"The Federal Open Market Committee will continue to assess additional information and its implications for monetary policy," the Fed said in a statement that differs little from the June 14 statement and leaves open the central bank's policy options in search of a stopping point for the current tightening cycle.

In addition, central bank officials are no longer forecasting a recession in the US. "So the staff's forecast now includes a marked slowdown in growth starting later this year, but given the recent resilience of the economy, they are no longer forecasting a recession," the Fed chairman said.

Powell made no promises either way: the September meeting, eight weeks away, is considered "live" for another rate hike, although a continued slowdown in inflation and weaker economic data could also prompt policymakers to take a pause.

However, he cautioned against expecting any rate easing in the near future. "We'll be comfortable cutting rates when we're comfortable cutting rates, and that won't be this year," Powell said.

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ADVERTISING INTELLIGENCE. META'S AD REVENUES

Dear clients,

Meta shares rose nearly 8% on Thursday as an encouraging revenue forecast showed that artificial intelligence is helping the social media giant increase engagement and ad sales even in a volatile economy.

The market value of the company, which owns Facebook, was set to rise by about $60 billion after strong second-quarter earnings prompted 18 analysts to raise their target prices for the stock, which has already more than doubled this year.

Although Meta's 12% growth in ad revenue in the second quarter outpaced Google's 3% growth, earnings reports from both digital advertising giants confirmed a rebound in the sector.

Meta and Google have a combined market capitalisation of around $160 billion in the near term, exceeding the individual market value of around 90% of the companies in the S&P 500 index.

Meta's results were also boosted by improved monetisation of Reels, the short video format that is the company's answer to TikTok. According to CEO Mark Zuckerberg, annual revenue from Reels exceeds $10 billion, up from $3 billion last autumn.

The positive view from analysts confirms that a focus on cutting costs and boosting engagement through artificial intelligence has helped Meta emerge as a Wall Street favourite this year after being derided for much of 2022 for huge spending on the ambitious metaverse.

Meta's accelerating revenue growth has helped allay some fears about an expected surge in costs in 2024 due to legal fees and rising infrastructure costs, which are seen as key to the tech sector's feverish AI race.

[FreshForex]

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THE DISCOUNT MINE. REDUCED SPREADS ON GOLD AND SILVER TRADING

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BAD APPLE

Dear clients,

Apple on Thursday predicted that its sales slump would continue into the current quarter, sending its stock tumbling despite beating Wall Street forecasts for sales and earnings in its fiscal third quarter.

Apple shares fell about 2% after the company predicted that the sales decline could be the fourth consecutive quarter of decline. Profit growth in the period was led by higher services sales, but lower-than-expected sales of Apple's best-known device, the iPhone, did not satisfy investors. Company executives said iPhone sales would improve in the fourth quarter, but didn't say by how much.

Apple is in a tricky position: its entrenched iPhone is fighting for share with Android rivals in a mature market, and its next big product, the Vision Pro mixed-reality headset announced in June, has yet to get into the hands of consumers.

Apple said sales in its fiscal third quarter ended July 1 fell 1.4% to $81.8 bln and earnings per share rose 5% to $1.26. That exceeded analysts' expectations of $81.69 bln and $1.19 per share, according to Refinitiv's IBES data. Weak iPhone sales were balanced by strong sales in the services segment, which includes Apple TV+, as well as sales in China, which grew 8% year-over-year.

At the same time, Apple managed to outperform the weakest smartphone market in China in a decade. According to Counterpoint Research, total smartphone sales in China fell 8% in the second calendar quarter, hitting the lowest level since 2014. Apple CEO Tim Cook, on the other hand, said that iPhone sales in China had "doubled" and that sales in other segments in China were also strong.

This helped Apple boost sales in the Greater China region to $15.76 bln, up from $14.60 bln in the same quarter last year.

According to Refinitiv, iPhone sales totalled $39.67 bln, below analysts' expectations of $39.91 bln. Cook said the number of iPhone units reached a new high, but did not provide any figures.

[FreshForex]

AMAZON'S CLOUD NINE

Dear clients,

Amazon.com shares rose more than 8% on Friday on signs that the company's growth engines, e-commerce and cloud technology, are doing well in a volatile economy, helping the broader market fend off Apple's 4.8% drop after iPhone sales slumped.

Reports summarised a positive earnings season for most major US tech companies, from Google to Meta, thanks to a rebound in the digital advertising market and increased demand for cloud services after nearly a year of decline.

Shares in retail giant Amazon closed at a near one-year high and boosted its market value by more than $109 bil.The better-than-expected performance of Amazon's cloud business in the second quarter also boosted other members of the cherished "trillion-dollar club", with Microsoft and Alphabet up more than 2%. Wall Street analysts said Amazon's above-forecast quarterly earnings and sales showed that both of its key businesses can grow together after two years of "nasty surprises."

According to Refinitiv, at least 26 analysts - nearly half of those analysing the company's stock — raised their price forecasts for Amazon, bringing the median forecast to $170. That represents a gain of nearly 32% for Amazon stock, which is up nearly 50% so far this year.

The surge in Amazon stock reflects analysts raising their estimates for its earnings. At $139.57, the stock is valued at 47 times consensus earnings per share in 2024, according to Refinitiv's updated estimates.

ISSUED IN DIGITAL. STABLECOIN BY PAYPAL

Dear clients,

On Monday, payments giant PayPal announced the launch of a dollar-stablecoin, becoming the first major financial technology company to adopt digital currencies for payments and transfers.

The announcement by PayPal, whose shares rose 2.66% on Monday, reflects a show of confidence in the troubled cryptocurrency industry, which has struggled with regulation over the past 12 months, exacerbated by a string of high-profile crashes.

While "stable coins" have been around for quite some time, they have yet to successfully embed themselves into the mainstream consumer payments ecosystem.

Instead, consumers mostly use stablecoins as a means of trading other cryptocurrencies such as bitcoin and ether. The world's largest stablecoin is Tether, followed by USD Coin, issued by cryptocurrency provider Circle.

Previous attempts by major mainstream companies to launch stablecoins have met stiff resistance from financial regulators and politicians. Plans by Meta, Facebook back then, to launch the Libra stablecoin in 2019 were scrapped after regulators raised concerns that it could disrupt global financial stability.

Since then, a number of major economies, from the United Kingdom to the European Union, have drafted rules governing the circulation of stablecoins. The EU rules will come into force in June 2024.

PayPal's stablecoin, dubbed PayPal USD, is backed by dollar deposits and short-term U.S. Treasuries and will be issued by Paxos Trust Co. It will be gradually made available to PayPal customers in the US.

The token will be exchangeable for US dollars at any time and can also be used to buy and sell other cryptocurrencies that PayPal offers on its platform, including bitcoin.

WEEKLY OUTLOOK: GOLD, SILVER

Dear clients,

According to the World Gold Council, the demand for gold is steadily decreasing, thus shifting the price dynamics. This time, we'll be looking at precious metals, their current status and future movements.

Join us on August 9 at 12:00 GMT.

During webinars, FreshForex analyst will answer your questions regarding the market situation and comment on the latest news.

If you missed the previous webinars, you can always find them here.

[FreshForex]

TRADING SIGNALS: JULY INFLATION IN THE USA

Dear clients,

A closely watched US inflation report may help solve one of the most pressing questions among traders: whether the market has correctly identified the short-term trajectory of interest rates.

What to expect this month, our expert comments:

The market is expecting US inflation to rise by 0.3 p.p. to 3.3% on the back of unemployment falling to a multi-year low and wages continuing to grow at a strong pace, allowing Americans to increase consumer spending. Rising inflation is negative for the US stock market. On Thursday, consider selling #NQ100, #SP500, #Barric, #Amgen.

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A PLEASANT SURPRISE OR AN UNNECESSARY VARIABLE? UK ECOMOMICAL DATA

Dear clients,

The UK economy unexpectedly showed growth in the second quarter, laying the groundwork for further interest rate hikes by the Bank of England, but it remains the only major economy that has yet to recover the levels that preceded the economic crisis of late 2019.

Official data released on Friday showed the economy grew by 0.2% in the second quarter, contradicting economists' early forecasts. The data led to a sharp rise in sterling against the US dollar and euro.

The strong figures have bolstered bets that the Bank of England will continue to raise interest rates, as it emphasised this month that the strength of the economy is one of the factors on which it will base its decision. The central bank itself had forecast the economy to grow at 0.1% in the second quarter.

Now the Bank of England has a new headache — they may well have paused interest rate rises in the near future, but with such data it is much harder to do so, experts say.

British government bond yields rose after the market opened while investors were digesting the data.

Manufacturing recorded its best quarter since the start of 2019, aside from the initial rebound after the first COVID-19 lockout of 2020, with output up 1.6% quarter-on-quarter. Business investment also rose 3.4% for the quarter.

"The measures we are taking to tackle inflation are starting to work, which means we are laying the solid foundations we need to grow the economy," said Treasury Secretary Jeremy Hunt.

Although Britain, unlike the eurozone, has so far managed to avoid recession, the data confirmed the relatively poor performance of its economy since the start of the COVID-19 pandemic.

At the end of the second quarter, the British economy was 0.2% below year-end 2019 levels, compared to growth of 0.2% in Germany, 1.7% in France, 2.2% in Italy and 6.2% in the US.

GROWTH AND ACHIEVEMENTS. NEW FRESHFOREX AWARD

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PROCRUSTEAN MARKET. THE INTERNATIONAL ENERGY AGENCY REPORT

Dear clients,

OPEC+ supply cuts could lead to lower oil inventories for the rest of this year, which could lead to further price increases before economic factors limit global demand growth in 2024, the International Energy Agency (IEA) said on Friday.

The IEA said that if current OPEC+ targets are maintained, oil inventories could fall by 2.2 million barrels per day (bpd) in the third quarter and 1.2 million bpd in the fourth quarter, "which could lead to further price increases".

"The deepening of OPEC+ supply cuts has collided with improving macroeconomic sentiment and record-high global oil demand," the Paris-based energy organisation said in its monthly oil market report.

Demand growth is forecast to slow sharply to 1 million bpd next year, the IEA said, citing weak macroeconomic conditions, a fading post-pandemic economic recovery and the growing use of electric vehicles.

The IEA's forecast for demand growth is down 150,000 bpd from last month and is at odds with OPEC, which on Thursday maintained its forecast that oil demand in 2024 will grow by a much larger 2.25 million bpd.

For 2023, the IEA and OPEC views are less far apart.

The IEA expects demand to grow by 2.2 million bpd in 2023, fuelled by summer air travel, increased oil use in the power sector and rising petrochemical activity in China. OPEC expects growth of 2.44 million bpd.

The projections show an average of 102.2 million bpd of demand this year, with China accounting for more than 70% of the growth, despite concerns about the economic health of the world's top oil importer.

Oil prices fell more than 1% on Monday as concerns about China's fragile economic recovery and a stronger dollar dampened seven-week gains amid supply cuts from OPEC+ production cuts.

Reflecting the supply cuts, the price spread between first- and second-month Brent crude was unchanged on Monday after settling at 67 cents on Friday, the widest since March.

[FreshForex]

BY A BOOTSTRAPS. RATE CUT BY CHINA'S CENTRAL BANK

Dear clients,

China's central bank unexpectedly cut its key rate for the second time in three months on Tuesday, signalling again that the country's authorities are stepping up efforts to ease monetary policy to stimulate a faltering economic recovery.

Analysts said the move opened the door for a possible cut in China's benchmark lending rate next week.

Market watchers said slower credit growth and higher deflation risk in July necessitated additional monetary easing measures to stem the slowdown in the economy, while default risks of some housing developers and a payment miss by a private asset manager also affected confidence in the financial market.

The People's Bank of China said it cut the rate on one-year medium-term loans worth 401 billion yuan ($55.25 billion) to some financial institutions by 15 basis points to 2.50% from 2.65% previously.

The medium-term rate serves as a benchmark for the benchmark rate, and markets largely use the medium-term rate policy as a precursor to any changes in credit benchmarks. The monthly fixing of the base rate is due next Monday.

The central bank also lent 204 billion yuan in seven-day reverse repayment deals, lowering borrowing costs by 10 basis points to 1.80% from 1.90% earlier, it said in an online statement.

China remains an exception among global central banks as it has loosened monetary policy to support a stalled economic recovery, while other countries are in a tightening cycle struggling with high inflation. Tuesday's rate change widened the yield gap with other major economies, particularly the U.S., putting pressure on the yuan and risking capital outflows.

FUTURES SECURED. COINBASE' LEGAL TRIUMPH.

Dear clients,

Coinbase Global announced on Wednesday that it has received permission to offer cryptocurrency futures to retail customers in the United States, in a major victory against a lawsuit by the US Securities and Exchange Commission (SEC).

The move will allow Coinbase to offer bitcoin and ether futures directly to eligible US customers. Until now, only the company's institutional clients have been able to trade such products.

Coinbase shares rose 3% to $81.55 after receiving approval from the National Futures Association (NFA), a separate regulatory organisation authorised by the Commodity Futures Trading Commission (CFTC).

"This is a critical milestone that reaffirms our commitment to operating a regulated and compliant business," Coinbase said in a statement.

The company has openly criticised the SEC, which in a June lawsuit accused Coinbase of illegal activity because it failed to register as an exchange.

CEO Brian Armstrong also said that an unfriendly regulatory environment could cause more U.S. cryptocurrency companies to go offshore, and SEC Chairman Gary Gensler's coercive approach could stifle innovation in the industry.

The NFA approval, which came nearly two years after Coinbase's filing, could allow the company to enter a largely untapped market.

The global derivatives market accounts for nearly 80% of the entire cryptocurrency market, and bets on futures and other leveraged derivatives are often the cause of volatility in the broader market.

MORE CURRENCIES, WIDER OPTIONS

Dear clients,

Trading is becoming even more convenient, our set of available currencies in which you can deposit and hold an account has received a major update:

National currencies: Malaysian ringgit (MYR), Nigerian naira (NGN), Tanzanian shilling (TZS), Kazakhstani tenge (KZT) and South African rand (ZAR)

The list of cryptocurrencies has also been expanded. All presented options are sought-after coins with high capitalisation:

Cryptocurrencies: Tether (USDT), Litecoin (LTC), Ripple (XRP), Bitcoin Cash (BCH), Binance Coin (BNB), Cardano (ADA)

Deposit in the way that suits you!

HOUSE DIVIDED. FED MEETING MINUTES

Dear clients,

At the US Federal Reserve meeting held on July 25-26, opinions on the need for further interest rate hikes were divided: "some participants" pointed to the risks to the economy from excessive rate hikes, while "most" policymakers continued to favour fighting inflation, according to the minutes of the meeting published on Wednesday.

"Participants remained determined to bring inflation down to the target level of 2%," said the minutes of the meeting, at which Federal Open Market Committee policymakers unanimously decided to raise the benchmark overnight interest rate to a range of 5.25%-5.50%. "Most participants continue to believe that inflation is subject to significant upside risks, which may warrant further monetary tightening".

However, cautious views on the implications of further monetary tightening played a more prominent role in the discussion at last month's meeting, suggesting a widening spread of views at the Fed as policymakers weigh the evidence of lower inflation and assess the potential damage to jobs and economic growth if rates are raised more than necessary.

The group also "discussed a number of risk management considerations that could affect future policy decisions," the minutes said. While the majority of the panel acknowledged inflation as the main risk, "some participants noted that while economic activity had been resilient and the labour market remained strong, downside risks to economic activity and higher unemployment remained."

Overall, the minutes said, Fed policymakers agreed that uncertainty remained high and that future interest rate decisions would depend on a "body of" data that would arrive in the "coming months" that would "help clarify the extent to which the disinflation process continues," which could signal a more patient approach to further increases in borrowing costs.

[FreshForex]

THRILL RIDE: BITCOIN'S EXTRAORDINARY FALL

Bitcoin's extraordinary fallBitcoin hit a new two-month low on Friday, breaking out of its recent narrow range amid a wave of negative sentiment sweeping global markets.

Bitcoin fell 7.2% last Thursday, the biggest one-day drop since November 2022, when the leading FTX exchange collapsed.

It then fell to a two-month low of $26,172 in Asian trading on Friday, the lowest since 16 June.

A wave of sell-offs gripped global markets, with major Wall Street indexes closing lower on Thursday and Asian stocks starting a third week of losses due to concerns about the health of China's economy and fears that US interest rates will rise longer given the economy's resilience.

Ether, the second-largest cryptocurrency, remained steady at $1,685.20, also falling sharply on Thursday.

Some analysts attributed the cryptocurrencies' fall to a Wall Street Journal report that Elon Musk's SpaceX sold its bitcoin holdings, writing down their value by $373 million. Musk is influential among crypto-enthusiasts, and bitcoin prices have previously fluctuated in response to his tweets.

Bitcoin has held near the $30,000 mark in recent months, gradually recovering this year after a sharp drop in 2022 when various cryptocurrency companies collapsed, leaving investors with heavy losses.

Cryptocurrency markets got a boost in June as BlackRock applied to launch a spot bitcoin exchange-traded fund (ETF) in the US. Some investors took the move as a sign that the US Securities and Exchange Commission would approve applications to launch a spot bitcoin ETF from various asset managers, including Grayscale.

THE SUSPENSE OVER JACKSON HOLE

Dear clients,

A sharp rise in US Treasury yields is sending shivers through risky areas of the market, leaving investors wondering how bad the damage will be to a rally that has lifted everything from equities to bitcoin this year.

Strong economic growth has fuelled expectations that the Federal Reserve will raise rates for longer, pushing Treasury yields this month to their highest level since 2007. The rise has made it harder for holders of stocks and other speculative assets to ignore their gains, which have continued for most of the year even as yields have steadily risen.

The S&P 500 index lost 4% this month as the yield on 10-year U.S. Treasuries rose to a more than 15-year high of 4.35% on Monday. At the same time, the S&P 500 technology sector fell 5.7%, bitcoin fell more than 10%, and the ARK Innovation ETF, a bastion of many high-growth companies, fell 18.5%. Stocks generally rose on Monday, with the S&P 500 index up 0.7% for the day.

Rising Treasury yields, which change inversely with Treasury bond prices, can take the gloss off speculative assets by offering investors attractive payouts on investments that are considered essentially risk-free because they are backed by the U.S. government. Rising rates also raise the cost of capital in the economy, making it harder for everyone from individuals to companies to service debt.

The most important test for markets will be the annual meeting of central bankers in Jackson Hole. On Friday, Fed Chairman Jerome Powell is scheduled to give a speech on the economic outlook.

According to the latest weekly Refinitiv Lipper data, US investors were net sellers of equity funds for the third consecutive week in the seven days to 16 August. At the same time, they were attracted by strong returns in money market funds, which attracted about $32.5bn in the past week, the largest inflows since 5 July.

Investor positioning in the equity market fell for a fourth straight week to a two-month low, according to Deutsche Bank data.

However, bets against equities have been losing ground this year. Many investors believe equities will hold strong this year, which has seen them rebound from widespread fears of recession and turmoil in the banking sector. The S&P 500 index has gained 14.6% over the past year. Goldman Sachs strategists said Monday that the volume of stocks held by retail and institutional investors is below historical norms, suggesting the bull market may have additional fuel left if the economy remains strong.

EXPLORING THE NEW NATIONAL CURRENCIES

Dear clients,

More choices never hurt and just recently FreshForex introduced new Asian and African options. This time, we'll be checking out new national currencies.

Join us on August 23 at 12:00 GMT.

During webinars, FreshForex analyst will answer your questions regarding the market situation and comment on the latest news.

If you missed the previous webinars, you can always find them here.

[FreshForex]

UNARTIFICIAL VALUATION: NVIDIA'S QUARTERLY REPORT

Dear clients,

Nvidia's strong quarterly earnings forecast met Wall Street's high expectations on Wednesday, sending a host of artificial intelligence-related stocks soaring and adding momentum to the stalled recovery of the U.S. stock market.

Following the signal, Nvidia shares jumped nearly 10% to a record high of $516, boosting the company's market value by about $110bn to $1.27 trillion and cementing its lead as the world's most expensive chip maker.

That came after the company posted a fiscal third-quarter earnings forecast that exceeded analysts' expectations, helped by growing demand for its high-end chips that power much of the world's major artificial intelligence technology.

Nvidia's additional $25 billion share buyback announced on Wednesday came amid a stock that has already tripled this year, making it the first trillion-dollar chip business in history, as investors bet Nvidia will be a key beneficiary of the artificial intelligence boom.

Everyone from AI startups to major cloud service providers such as Microsoft are keen to get their hands on more Nvidia chips. Demand from China is also on the rise, as companies there place rush orders to stock up on chips before further restrictions on U.S. exports take effect.

S&P 500 E-Mini futures rose 0.5% and Nasdaq E-Mini futures climbed 0.9%, suggesting Wall Street is likely to open higher on Thursday. Investors had been awaiting Nvidia's earnings report this week as a potential spark for renewed gains in the sluggish U.S. stock market.

Nvidia shares have more than tripled this year as the chipmaker is at the centre of a rally in technology stocks fuelled by optimism about the potential of artificial intelligence. Nvidia's forecast added to investor optimism. Following the report's release, the value of shares in big tech companies related to artificial intelligence increased by more than $70bn, in addition to the value of Nvidia's stock.

Nvidia expects third-quarter revenue to be around $16bn, plus or minus 2%. Analysts polled by Refinitiv on average expected $12.61bn.

FOOT OFF THE PEDAL. THE ECB AND THE COMING RATES

Dear clients,

According to eight sources with direct knowledge of the discussions, European Central Bank policymakers are increasingly concerned about the deteriorating growth prospects for the economy and, while the discussion remains open, the idea of holding off on rate hikes is gaining momentum.

The ECB has raised rates at each of its last nine meetings in a bid to rein in price growth, most recently on July 27 when it left open the choice of its next meeting in September, with policymakers divided between a pause and further tightening.

Talks with eight policymakers in Europe and on the sidelines of the US Federal Reserve's symposium in Jackson Hole suggest proponents of a "pause" are growing stronger after key economic indicators over the past six weeks have come in below expectations, suggesting a recession has become likely.

Several sources said the odds were evenly split between a rate hike and a pause, while some said a pause was more likely. But none of the sources said they thought a rate hike was the most likely outcome, even if that was their preference.

That's markedly different from six weeks ago, when a rate hike in September was still considered the most likely outcome. However, all sources agreed that even in the event of a pause, the ECB would have to make it clear that its work is not yet done and that further policy tightening may be needed.

They said it could take several months, possibly until early 2024, to be sure that eurozone inflation, now at 5.3%, is moving towards the 2% target.

The sources also agreed that the discussion remains open and nothing will be decided until the next inflation figure on August 31 and the ECB's new economic forecasts. The next ECB meeting will be held on September 14.

Markets are currently split between the chances of a rate hike in September and a pause, but expect the ECB to still go for a final rate hike of 25 basis points to 4% at some point later this year.