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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.

"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.

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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.

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.

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

Dear clients,

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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.

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.

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.

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.

IN THE PURSUIT OF PROFIT. MARATHON OF VOLATILE INSTRUMENTS

Dear clients,

The market is frozen waiting for a new push, but is it a reason for us to slow down?

We are launching the volatility marathon; during the week you will be presented with a selection of the most profitable instruments that have already proved themselves in trading.

Signals will be published from 7:30 GMT on our social networks and Telegram channel.

Forwards to success!

"UNTIL THE JOB IS DONE." JEROME POWELL'S SPEECH IN JACKSON HOLE

Dear clients,

Fed Chairman Jerome Powell said on Friday that the Federal Reserve may need to raise interest rates once again to bring down still too high inflation and promised caution at upcoming meetings, noting both the progress made in easing price pressures and the risks posed by the unexpected strength of the U.S. economy.

While Powell's statements weren't as hawkish as a year ago at the annual economic policy symposium in Jackson Hole, they were still quite sharp, and investors now see another rate hike before the end of the year as more likely.

"We will proceed cautiously in deciding whether to tighten policy further or, conversely, to keep the rate unchanged and await further data," Powell said in his keynote speech. "The Fed's objective is to bring inflation down to its 2% target, and we will do so."

The Fed has raised rates by 5.25 percentage points since March 2022, and inflation at the Fed's preferred rate has fallen to 3.3% from a peak of 7% last summer. While the decline was a "welcome development," Powell believes inflation "remains too high."

"We are prepared to raise rates further, if appropriate, and intend to keep policy at a restrictive level until we are confident that inflation is moving steadily downward toward our target," he said.

However, given "signs that the economy may not be cooling as expected," including "particularly strong" consumer spending and a "possible recovery" in the housing sector, Powell said that above-trend growth "could jeopardise further progress on inflation and warrant further monetary tightening."

His speech showed the Fed struggling with conflicting signals from the economy, with inflation reportedly slowing strongly without much cost to the economy — a good outcome, but one that raised the possibility that Fed policy is not tight enough to finish the job.

Unlike last year's closely watched speech at a conference organised by the Federal Reserve Bank of Kansas City — in which Powell warned in stark terms of impending policy tightening — Powell did not talk about the coming "pain" for the public caused by further policy tightening.

But he also didn't make it clear that a rate cut was imminent, nor did he hint, as some policymakers have done, at the need to adjust rates downward once inflation becomes more sustainable.

At the end of the day, futures contracts tied to the Fed's discount rate estimated the probability of a rate hike in September at just under 20%, but the odds of the rate ending the year in the 5.5%-5.75% range, a quarter point above the current range, were higher than the 50% probability. The yield on two-year Treasuries ended the day at 5.08%, the highest since June 2007.

Powell said it is difficult to accurately gauge how high above the "neutral" interest rate the current base rate is, and therefore difficult to gauge how much the Fed is restraining growth and inflation.

Powell reiterated what has become the Fed's standard diagnosis of inflation progress: easing goods inflation and declining housing inflation are "on track," but concerns that continued consumer spending on a wide range of services and a tight labour market may make a return to 2% difficult.

Recent declines in measures of core inflation, excluding food and energy prices, "are welcomed, but two months of good data is just the beginning of what will be needed to build confidence in a sustained decline in inflation," Powell emphasised.

Although Powell's tone was not as harsh as last year, when he dispelled market perceptions in very blunt terms that the Fed at the time was nearing the end of its rate hike cycle and would cut rates before the end of this year. Nevertheless, it was clear that he did not want to discard any options.

Powell ended his remarks Friday with almost the same phrase he used last year in Jackson Hole: "We're going to keep at it until the job is done."

"ATTENDRE ET ESPÉRER". CHINESE STOCKS RALLY

Dear clients,

Chinese stocks led the rally in Asian equities on Tuesday as investors welcomed Beijing's efforts to support markets, while bonds rose and the dollar declined amid possible softening in U.S. data.

MSCI, the broadest index of Asia-Pacific shares besides Japan, rose 1%, Hong Kong's Hang Seng was up more than 2% and mainland China's blue chips (.CSI300) were up 1.5%.

In recent days, China has halved stamp duty on share trading, relaxed margin lending rules, slowed new listings and approved new retail funds, at least signalling a determination to stabilise the market.

And while foreign investors sold their shares on Monday on an initial bounce after the measures were announced over the weekend, they net bought about $500 million worth of Chinese stocks on Tuesday, perhaps in the hope that more substantial relief would follow.

"We doubt that these policies alone can change confidence or determine the direction of the market," Bank of America analysts said.

"Financial markets are merely a reflection of the underlying economy, and we need policies that can address the underlying economic fundamentals .... In our view, the next 2-3 weeks are still an important window for policy action."

Shares in Hong Kong were led by shares in China's struggling Country Garden and electric car maker BYD, which reported a threefold increase in first-half profit.

TIME TO COUNT THE CHICKEN. NON-FARM PAYROLL REPORT

Dear clients,

Nonfarm Payrolls report is the indicator that shows the change in the number of employed in the US non-farm sector. This time we'll be looking at the report, how it reflects on the market and the way to trade on it.

Join us on August 30 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.

SAVED BY THE GAVEL: BITCOIN'S STARK REVERSAL

Dear clients,

Bitcoin's gains from a U.S. court ruling bolstering the future prospects of funds targeting retail investors saved the cryptocurrency from a disappointing month and instilled renewed optimism about its long-term prospects.

The Securities and Exchange Commission's rejection of Grayscale Investments' proposal was "arbitrary and prejudicial", a federal court said Tuesday, giving the crypto asset manager a landmark victory.

The cryptocurrency surged more than 7% on the news, setting the course for its best day since March and cutting some of the heavy losses suffered over the summer.

Plagued by lower demand for risky assets caused by rising U.S. Treasury yields and a drop in volatility during quiet summer trading, bitcoin was on track for its worst month since November 2022 before the ruling, when confusion reigned following the liquidation of the FTX exchange. Its monthly losses are now around 5%.

Investors said Grayscale's victory will likely now factor into future SEC rulings on spot bitcoin fund ETFs filed by several major financial firms this year, including the world's largest asset manager BlackRock.

The emergence of spot bitcoin ETFs could help the cryptocurrency industry tap into a large amount of previously untapped funds from retail investors, which in turn would help boost the bitcoin price.

TRADING SIGNALS: NFP FOR AUGUST

Dear clients,

On September 1, we are expecting the publication of data on Nonfarm Payroll, a measure of U.S. manufacturing employment. The report significantly affects the movement of the US dollar and related instruments.

What indicators are expected this time, let's find out from our expert:

The leading employment indicators from ADP and ISM point to the release of weak Non-Farm Employment data, which is negative for the US dollar, as this situation allows the US Fed to keep interest rates at the current level. On Friday, consider selling USDZAR, USDCAD and buying AUDUSD, XAUUSD.

Get ready to harvest with 101% bonus!

CAUSE AND EFFECT: GRADUAL RECOVERY OF THE OIL MARKET

Dear clients,

Oil prices were about to break a two-week losing streak as they rose for the fourth consecutive session on Friday on the back of supply cuts and expectations that the OPEC+ group of oil producers will extend production cuts until the end of the year.

West Texas Intermediate (WTI) crude rose 21 cents, or 0.3%, to $83.84 a barrel, while Brent crude was up 26 cents, also up 0.3%, to $87.09 a barrel as of 0605 GMT. For the week, WTI is up more than 5% and Brent is up about 3%.

Analysts expect Saudi Arabia to extend a voluntary oil production cut of 1 million barrels a day for October, adding to cuts by the Organization of the Petroleum Exporting Countries.

"We continue to expect production cuts to be extended and prices above $90 per barrel (on a sustained basis) will be required to attract OPEC supply to the market, as well as incentivize U.S. shale oil producers to increase drilling activity," National Australia Bank said in a client note on Friday.

U.S. crude inventories fell by a more-than-expected 10.6 million barrels last week, government data showed Wednesday. Commercial crude inventories have fallen by 34 million barrels since mid-July.

Traders and investors often view changes in U.S. inventories as a proxy for changes in the balance of global production and consumption, and spot prices and quotes may rise if inventories continue to deplete.

"Signs of increased demand have also been evident in the commodities market, with implied gasoline demand rising for the first time in three weeks," ANZ said in a research note on Friday.

A weakening US dollar, which looks set to end a six-week winning streak, also helped prices. A stronger dollar puts pressure on demand for oil, making the commodity more expensive for buyers holding other currencies.

A survey showing renewed growth in Chinese factory activity and Beijing's measures to support China's weakened housing market also helped boost oil prices on Friday as traders hoped it would stimulate demand in the world's second-largest oil-consuming country.