Market Review: Interest Rate Expectations, Tech Innovations, and Global Economic Events

Overview of Global Market Performance This Week

Global financial markets experienced a diverse set of movements this week, driven by significant economic data, changing interest rate expectations, prominent geopolitical developments, and news surrounding tech innovations.

Currency Performance

Dollar Index: The Dollar Index lacked a clear trend this week. Following the release of US CPI data showing only a modest rise in inflation, the dollar weakened amid increased expectations of a September interest rate cut. Subsequently, the index rebounded after PPI data came in higher than expected, raising concerns about a potential return of inflation. By the end of the week, the index settled at 97.82, marking its second consecutive week of decline.

Other Currencies: The Euro and British Pound both recorded gains against the dollar for the second consecutive week. The US dollar saw a slight decline against the Japanese Yen, driven by expectations that the Bank of Japan may consider raising interest rates to combat inflation.

Commodity Performance

Gold: Gold prices recorded an overall decrease, settling at $3335.73 per ounce, a decrease of 1.8%. Prices initially fell earlier in the week following comments from the US President regarding no tariffs on gold imports. However, the weaker dollar and geopolitical uncertainty provided some support for gold prices.

Oil: Oil prices experienced volatile swings this week. After hitting lows of over two months due to pessimistic forecasts from the IEA and pressure from the US President ahead of a meeting with the Russian President, prices rebounded towards the end of the week. Nonetheless, oil prices recorded their second consecutive week of decline.

Stock Market and Cryptocurrency Performance

Stock Markets: Equity markets performed strongly this week. The Shanghai Composite Index in China rose, reaching its highest level since 2022. In the US, the Dow Jones rose by 1.74%, the S&P 500 by 0.94%, and the Nasdaq by 0.81%.

Bitcoin: Bitcoin prices saw a notable increase, surpassing $12,4000 per coin, reaching a new record high.

Investment Bank Views

• Goldman Sachs: Predicts that the Federal Reserve will cut interest rates three times this year and twice more in 2026, bringing the terminal rate to between 3% and 3.25%.
• Nomura: Expects the Federal Reserve to cut interest rates three times consecutively before next March.
• Bank of America: Believes there are sufficient reasons for a September rate cut, despite persistent inflation and rising tariffs.

Significant Events

• Putin-Trump Meeting: No final agreement was reached to end the conflict in Ukraine.
• US Inflation Data: Led to increased expectations of a September rate cut.
• Changes in the Federal Reserve Management: The US President has appointed critics of the Federal Reserve's policies to key positions.
• New Policies to Encourage Consumer Spending: A program to provide financial support for personal consumption loans has been launched.

Developments in the Technology Sector

• Apple: Is developing a range of AI-powered devices, including a desktop robot, a new Siri system, and smart home devices.
• Intel: Is in talks with the US government regarding a government investment in a chip manufacturing plant in Ohio.

Note: This analysis is for informational purposes only and does not constitute investment advice. Investors should consult a financial advisor before making any investment decisions.