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Hello everyone, today XM Forex will bring you "【XM Group】: Five major events that will happen in the global market this week". Hope it will be helpful to you! The original content is as follows:
What will happen next in the Middle East? The conflict surrounding Iran remains highly watched, but monetary policy is also closely watched.
1) The world is waiting for Iran's response
The mission is edoyoko.completed—This is a message sent by US President Donald Trump after US B-2 bombers attacked three nuclear facilities in Iran. Does he want to reach an agreement now? What trump cards does Tehran have?
Investors and governments are trying to figure out whether Iran, which vows retaliation, will close the Strait of Hormuz, through which about 20% of global oil production is passing. Another option is to attack U.S. bases in the Middle East, trying to expand conflict and make war more controversial in the United States.
Other options may be to negotiate a new agreement, but it will take some time – Iranians tend to delay before they react.
Although the uncertainty is high, the market response is clearer. The US dollar (USD) is a safe-haven asset again, while gold loses its glory.
Oil responds quickly to any adverse development, but the market is accelerating its decline in such volatility. I expect the current reaction mechanism to continue this week.
2) Trade agreements may become the focus
Will the EU accept a 10% basic tariff? This is a hot topic in the negotiations between the EU and the United States. Ensuring a transatlantic trade agreement is crucial to the growth of the two sides of the Taiwan Strait and is about security.
Washington continues to negotiate with other countries, such as Japan, India and Canada. Any agreement reached before the U.S. self-set July 9 deadline will boost sentiment in global markets, especially in relevant countries.
However, evenThe White House denies that delaying the deadline is also edoyoko.completely feasible—just don't expect it until the last moment.
At the same time, Trump may make some bluffs and threats. He was encouraged by the court's ruling that he would allow him to continue to impose reciprocal tariffs ahead of his July 31 hearing. This poses a risk to the market. A few weeks ago, he threatened to impose a 50% tariff on all European goods, and then spoke with European edoyoko.commission President Ursula von der Leyen and agreed to keep the tariffs unchanged as negotiations go.
3) Powell faces sharp problems about the impact of tariffs
Jerome Powell, chairman of the Federal Reserve (Fed), will face legislators in succession meetings at 22:00 Beijing time on Tuesday and Wednesday. While his prepared speech is unlikely to deviate from the message he conveyed in the recent interest rate decision, their questions could trigger the answer to market volatility.
The impact of tariffs on inflation is probably the hottest topic. If Powell reiterates the basic fact that someone has to pay tariffs—importers, retailers, and ultimately consumers—the market may not like it. Trump’s staunch supporters may ask him for evidence – because overall inflation has not risen significantly – his response will be interesting.
Another problem will be the war in the Middle East and its impact on prices. While the rise in gasoline prices is obvious, any edoyoko.comments about the secondary effect will also attract much attention.
I expect Powell to evade any questions about his future or successor choice. He might just say Congress has given the Fed a task that the responsibility for changing the role of banks is on the lawmakers.
These testimonies last for a long time and headlines may appear at unexpected moments.
4) U.S. GDP and other data may lead to volatile trading
On Thursday, 20:30 Beijing time, has the US economy indeed contracted in the first quarter? The third and final readings of the U.S. gross domestic product (GDP) will confirm a slight contraction, mainly due to the early impact of tariffs. As long as the personal consumption part of GDP remains optimistic, investors will be satisfied.
In addition to GDP, the United States will also release other data. Weekly unemployment benefits applications have stabilized at a higher level, while durable goods orders in May may show a decrease in investment.
If all data points move in a specific direction—either beyond expectations or not—the impact will be more significant. Data mixing will trigger volatile trading, but will not change the trend.
5) Core PCE is close to its promised goal
On Friday, 20:30 Beijing time, personal consumption expenditure (PCE) adapts to changes in consumer preferences faster, so it is considered to be more accurate than the Consumer Price Index (CPI) data released earlier this month.
Most importantly, the Fed thinks so too. More specifically, the Fed focuses on core PCE, excluding volatile energy and food prices, the dataIt has been declining towards the central bank's annual target of 2%.
After a 2.5% increase in April, a slight increase is now expected. The last time the core PCE rose 0.1% month-on-month, there may be similar growth now.
It must be emphasized that tariff-induced inflation has not yet appeared in the data due to reduced inventory and other reasons. Prices may rise in the edoyoko.coming months.
The calendar-based events have a release date, and Trump's statement is released in US time, but the trends in the Middle East may trigger headlines at any time. This makes the current situation even more edoyoko.complicated. Please be cautious when trading.
The above content is all about "【XM Group】: Five major events that will happen in the global market this week". It was carefully edoyoko.compiled and edited by the editor of XM Forex. I hope it will be helpful to your transactions! Thanks for the support!
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