Once again, the rise in government bond yields is acting as the catalyst for the sell off in stocks.
The attention is once again turning to a number of central banks, waiting for what they will decide and whether it will turn towards narrowing the gap between their policies and the policy of the FED, which is on the path of tightening monetary policy and raise interest again before the end of this year. On the other hand, the markets keep their eyes on the Chinese economy and the data that may confirm the stability of the second largest global economies.
US stocks rose at the beginning of the day after FED Governor Janet Yellen confirmed the gradual rate hike and that raising it again this year would be appropriate. She pointed out that the economy is strong enough to accommodate further gradual rise in interest rates, and reducing the Fed's huge portfolio of bonds.
The economic calendar did not differ much from yesterday and was not filled with important economic data or events except from a few speeches from members of the FED and the BOE.
The economic calendar today was free of any major events or economic data, and the markets did not see any noticeable movements during today's trading. In today's economic data, China's inflation figures did not change in June as the CPI rose 1.5% and the PPI rose by 5.5% the same reading of May.
The markets are looking for a few data and economic events this week but they are very important, after a week of US labor market data, and the markets will not look far away, as they will focus on what coming out from Janet Yellen about FED monetary policy. Here are the highlights of the markets:
The first week of each month is usually full of important economic data, and the markets are particularly eyeing the US labor market data on which the US Federal Reserve relies heavily on determining the course of tightening monetary policy.
Today's economic agenda is full of some important economic data, as the Australian trade balance began to show a trade surplus of 2.47$ billion in May. Exports rose by 9%, while imports rose by only 1%.
The markets were calm in today's trading amidst the absence of important data and events on the economic calendar, as the markets are awaiting the minutes of the Fed's last meeting in June which raised interest rates to 1.25%, plus the issue of reducing its balance.
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