Australia Exchange Foreign Exchange July 20 Financial Breakfast: Gold prices are holding near eight-week highs, and the market hopes that the Federal Reserve will soon suspend interest rate hikes

On July 20, the dollar rallied on Wednesday after data showed that British inflation fell more than economists expected in June, sending the pound sharply lower against other major currencies. Gold prices hovered near eight-week highs after recent economic data reignited hopes that the Federal Reserve may soon pause its rate hike cycle.

Beijing time on Thursday (July 20), the dollar rallied on Wednesday after data showed that British inflation fell more than economists expected in June, causing the pound to fall sharply against other major currencies; gold prices hovered near eight-week highs, after recent economic data rekindled hopes that the Federal Reserve may soon pause its rate hike cycle.

Commodity closing situation:US gold futures settled flat at $1980.80. Brent crude ended at $79.46 a barrel, down 0.21 per cent. US crude ended at $75.35 a barrel, down 0.53 per cent.

US stock market closing:The Dow Jones index closed up 0.31% at 35,060.81; the S & P 500 index closed up 0.22% at 4,565.20; the Nasdaq Composite index closed up 0.03% at 14,358.02.

Thursday ForwardPrecious metal

Gold prices hovered near eight-week highs on Wednesday after recent economic data rekindled hopes that the Federal Reserve may soon pause its rate hike cycle.

On Tuesday, gold prices hit their highest level since May 24 at $1984.19, up about 1.2 percent at the end of the day after data showed U.S. retail sales rose less than expected in June.

Edward Moya, senior market analyst at OANDA, said: "The market is very confident that interest rate hikes are coming to an end and inflation has slowed. After the Fed meeting, if the market believes the Fed will no longer remain extremely hawkish, gold could hit $2,000."

According to foreign media surveys, the Federal Reserve is expected to raise its benchmark overnight interest rate by 25 basis points on July 26, which most economists believe will be the last rate hike in the current tightening cycle. Investors are also watching weekly jobless claims data to be released on Thursday.

Silver rose 0.3% to $25.15 an ounce; platinum fell 1% to $973.00; and palladium fell 1.1% to $1,305.17.

crude oil

Oil prices fell on Wednesday as investors took profits after an earlier rally on tight U.S. crude supplies. After both contracts rose more than $1 a barrel, gains were narrowed in late trading. Phil Flynn, an analyst at Price Futures Group, said market participants took advantage of the higher prices to take profits.

A stronger dollar index also weighed on oil prices. Data from the Energy Information Administration (EIA) on Wednesday showed U.S. crude inventories fell by 708,000 barrels last week to 457.40 million barrels, while a Reuters poll showed analysts expected a 2.40 million reduction.

Inventories in the US Strategic Petroleum Reserve have climbed for the first time since January 2021, according to data, as the US tries to restock after record cuts last year. "This is the end of an era and a reminder that the release of reserves is over and the market is on a firmer footing," Mr. Flynn said.

foreign exchange

The dollar rallied on Wednesday after data showed British inflation fell more than economists expected in June, sending the pound sharply lower against other major currencies.

Inflation in the UK was 7.9 per cent in June, the lowest in more than a year, according to data that will ease some of the pressure on the Bank of England to keep raising interest rates sharply. Most economists polled by foreign media had forecast that inflation in the 12 months to June would fall to 8.2 per cent from 8.7 per cent in May.

Joe Manimbo, senior market analyst at Convera, said: "This is the first time in five months that we have seen an unexpected downturn in inflation. The previous trend was the opposite, which has raised some doubts about the Bank of England raising interest rates sharply again next month."

Before Wednesday's data, traders saw a roughly 60% chance that the Bank of England would raise interest rates by 50 basis points on August 3. After the data, they saw a 60% chance of a 25 basis point hike.

Mr. Manimbo added: "The dollar is getting a respite because it is the inflation data that really determines the course; the dollar was hit by cooling inflation last week and now it is the pound's turn."

Sterling fell 0.81 per cent to $1.2929 after trading as low as $1.2868, its lowest level since July 11. On Thursday, it hit $1.3144, its highest level since April 2022. The euro rose 0.59 per cent to 0.8662.

Sterling has also suffered profit-taking after its recent gains. "Sterling is overbought after its gains in recent weeks," said Kenneth Broux, head of foreign exchange and rates at Socie ́ te ́ Ge ́ ne ́ rale (601166) corporate research.

The dollar index rose 0.32 percent to 100.26. The euro fell 0.24 percent to $1.1202 against the dollar. The dollar slumped last week after data showing a slowdown in U.S. consumer and producer price inflation in June boosted expectations that the Federal Reserve will stop raising interest rates after its July 25-26 meeting, which is still widely expected to announce a 25 basis point rate hike.

Fed funds futures traders expect the Fed to raise interest rates by a further 32 basis points, with the benchmark rate expected to peak at 5.40 percent in November.

U.S. data released on Wednesday showed that the start of new single-family homes in the United States fell in June, but building permits rose to the highest level in 12 months, and new home construction was supported at a time when there was a severe shortage of second-hand homes for sale.

The European Central Bank is also expected to raise interest rates by 25 basis points next week. European Central Bank Governing Council and Bank of Greece Governor Stonaras said on Wednesday that another 25 basis point rate hike by the European Central Bank should be enough, and further tightening could hurt the economy.

Market News

Ramsden: The central bank may accelerate the pace of reducing its holdings of government bonds

Ramsden, deputy governor of the Bank of England, said he thought the central bank was likely to accelerate the pace of its balance sheet reduction, or so-called quantitative tightening programme. Ramsden said inflation in the UK remained "too high" despite falling more than expected in June. He declined to say what impact Wednesday's latest data might have on the Monetary Policy Committee's August interest rate decision. However, he said further tightening would be needed if there was evidence of continued pressure. In addition, he pointed out that the central bank would reduce its stock of government bonds and corporate bonds by a total of 100 billion pounds by October. However, he said the central bank had now almost completely emptied its corporate bond portfolio, which may have given it room to sell more government bonds.

Top Wall Street banks cut more than 20,000 jobs in the first half

Wall Street's biggest banks cut a total of 21,000 jobs in the first half of the year as trading and capital markets activity slumped. Severance payments pushed up costs at the top banks, with expenses related to staffing changes and compensation rising 6% to $95.50 billion. Goldman Sachs CEO Solomon said they started work on adjusting headcount in early January, and they have taken some action so far this year, and he is satisfied with the situation now. Elsewhere, Citi has set aside $450 million in severance pay so far this year after cutting 5,000 jobs; Morgan Stanley disclosed the cost of cutting jobs by $308 million; Bank of America has adopted a different strategy, reducing its headcount by about 5,000 since January, but the bank is not filling vacancies. Overall, Wall Street revenues at the top US banks fell 8.9 per cent to $67 billion in the first six months of the year.

National Development and Reform Commission: Let the innovation sources of the private economy fully flow, and let the creative vitality of the private economy fully burst out

The relevant person in charge of the National Development and Reform Commission answered a reporter's question on the "Opinions of the Central Committee of the Communist Party of China and the State Council on Promoting the Development and Growth of the Private Economy". It is mentioned that it is necessary to do a good job in the interpretation and publicity of documents, tell the stories of private enterprises and entrepreneurs, create an atmosphere in which the whole society cares and supports the development of the private economy, and enhance the enthusiasm and initiative of private enterprises to seek development, reform and innovation. Let the source of innovation of the private economy fully flow, and let the creative vitality of the private economy fully burst out.

From January to June, the national average utilization of power generation equipment was 1,733 hours, a decrease of 44 hours compared with the same period last year

On July 19, the National Energy Administration released the statistics of the national power industry from January to June. From January to June, the national power generation equipment accumulated an average of 1733 hours of utilization, a decrease of 44 hours over the same period of the previous year. Among them, hydropower 1239 hours, a decrease of 452 hours over the same period of the previous year; solar power (000591) generated 658 hours, a decrease of 32 hours over the same period of the previous year; nuclear power 3770 hours, an increase of 97 hours over the same period of the previous year; thermal power 2142 hours, an increase of 84 hours over the same period of the previous year; wind power 1237 hours, an increase of 83 hours over the same period of the previous year.

The United States has granted a 120-day exemption to allow Iraq to pay electricity bills to Iran through a third party

On July 18, local time, the United States signed a 120-day waiver allowing Iraq to pay electricity bills to Iran through third-party banks to avoid Iran's implementation of power cut measures in Iraq this summer; according to foreign media reports on the 18th, an anonymous US official said that US Secretary of State Blinken signed a waiver allowing Iraq to deposit the money in a non-Iraqi bank in a third country to pay electricity bills to Iran. However, this amount is still restricted. Iran can only use the funds with US permission, and can only use it for the purchase of humanitarian supplies.

Ministry of Commerce: Further relax restrictions on foreign investors' strategic investment in listed companies

Zhu Bing, director of the Department of Foreign Investment Management of the Ministry of Commerce, said that we will promote the rational reduction of the negative list for foreign investment access and further cancel or relax the restrictions on foreign investment access. Deepen the construction of a comprehensive demonstration zone for the expansion and opening up of the national service industry. Take the initiative to launch a new batch of innovative pilot measures in accordance with the rules, regulations, management and standards related to high-standard economic and trade agreements, and steadily expand the institutional opening up of the service industry. Revise the "Measures for the Administration of Strategic Investment by Foreign Investors in Listed Companies" to further relax the restrictions on strategic investment by foreign investors in