Global Economic and Financial Highlights: July 18, 2024

1

President Biden suffered a setback during his campaign as he tested positive for COVID-19. He had planned to counter the influence of the Republican National Convention by holding an event but was forced to cancel a meeting with a key Latino advocacy group due to the diagnosis. This brings his health back into focus, especially as he tries to demonstrate that his age and mental state do not affect his ability to perform his duties.

Analysis:

Impact on FX:Increased political uncertainty could weaken the USD.

FX Pair:EUR/USD, USD/JPY, GBP/USD

Impact on Shares:

US Stock Market (NASDAQ, S&P 500): Potential negative impact due to increased political uncertainty.

Companies:General Market Indices

4

The Japanese yen surged significantly, causing global currency market turbulence and driving the USD to its lowest level in nearly two months. On Thursday, the Bloomberg Dollar Spot Index continued to fall, dropping 0.4% on Wednesday to the lowest level since late May. In Tokyo trading, the yen broke through 156 against the dollar, reflecting speculation about possible Japanese intervention.

Analysis:

Impact on FX:Yen strength and USD weakness due to market speculation.

FX Pair:USD/JPY, EUR/JPY, GBP/JPY

Impact on Shares:

Global Market: Negative impact on export-dependent Japanese stocks.

Companies:Toyota (7203.T), Sony (6758.T)

7

United Airlines' third-quarter profit will be lower than Wall Street expectations as US airlines cut ticket prices to attract domestic travelers. United Airlines said its adjusted earnings per share for the current quarter will be between $2.75 and $3.25, while analysts' average expectation was $3.38.

Analysis:

Impact on FX:Weak earnings report could weaken the USD.

FX Pair:EUR/USD, USD/JPY, GBP/USD

Impact on Shares:

US Airline Market: Negative impact on airline stocks.

Companies:United Airlines (UAL), Delta Air Lines (DAL), American Airlines (AAL)

8

As the launch of Ethereum ETFs (Ether ETFs) approaches, competition among multiple issuers has intensified. These ETFs have not yet been officially launched, but issuers including BlackRock, Fidelity, Invesco, and Bitwise have already filed documents with the US Securities and Exchange Commission (SEC), detailing the fees for their respective products.

Analysis:

Impact on FX:Increased interest in cryptocurrency could strengthen the USD.

FX Pair:EUR/USD, USD/JPY, GBP/USD

Impact on Shares:

US Market: Positive impact on financial and tech stocks related to cryptocurrencies.

Companies:BlackRock (BLK), Fidelity, Invesco (IVZ), Bitwise

9

Since mid-April, the shipping market has shown signs of tension, with freight volumes increasing and spot container rates rising sharply, especially on routes from Asia to North America and Europe. Companies like Montreal-based Globe Electric have begun feeling the pressure and are planning ahead to address these challenges. (Inflation returning)

Analysis:

Impact on FX:Increased shipping costs could strengthen the USD.

FX Pair:EUR/USD, USD/JPY, USD/CNY

Impact on Shares:

Global Market: Positive impact on shipping and logistics stocks.

Companies:Maersk (MAERSK-B.CO), Globe Electric

10

US industrial production grew steadily for the second consecutive month in June, indicating that the manufacturing sector may be regaining some momentum. Production at factories, mines, and utilities grew by 0.6%, following a revised 0.9% increase in the previous month, marking the largest two-month increase since late 2021. The median expectation in a Bloomberg survey was for a 0.3% increase.

Analysis:

Impact on FX:Strong industrial production data could strengthen the USD.

FX Pair:EUR/USD, USD/JPY, GBP/USD

Impact on Shares:

US Industrial Market: Positive impact on industrial and manufacturing stocks.

Companies:General Electric (GE), Caterpillar (CAT), 3M (MMM)

11

India has raised about $15 billion through secondary sales or bulk transactions this year, more than 150% higher than the same period in 2023, surpassing any previous year's total. Additionally, initial public offerings (IPOs) have raised more than $5 billion this year, more than double the amount in the same period last year. More deals are expected, including a potentially record-breaking IPO from Hyundai Motor India in September or October, which could raise up to $3.5 billion. India's stock market is attracting investors looking to shift investments, especially with China's market underperforming.

Analysis:

Impact on FX:Increased investment could strengthen the INR.

FX Pair:USD/INR, EUR/INR, GBP/INR

Impact on Shares:

Indian Market: Positive impact on stock market sentiment.

Companies:Hyundai Motor India, Reliance Industries (RELIANCE.NS), Tata Consultancy Services (TCS.NS)

13

Argentine President Javier Milei warned voters during his campaign that his “shock therapy” to stabilize the country's chronically ailing economy would be painful, and his predictions have come true. Since Milei took office on December 10, consumer price inflation has accelerated, with prices rising over 100% by May and 276% compared to the same period last year. This occurred after he lifted price controls, devalued the currency, and began cutting transportation and utility subsidies. Despite Wall Street investors welcoming Milei's measures and lifting Argentine bond

prices from their lows, these prices have recently stabilized. With high inflation eroding wages and pension payments, consumer spending has plummeted, pushing Argentina into its sixth recession in the past decade. Milei argues that his sweeping economic reforms are necessary to correct the policy mistakes of his predecessors, which led to a poverty rate of nearly 42%.

Analysis:

Impact on FX:Economic instability could weaken the ARS.

FX Pair:USD/ARS, EUR/ARS, GBP/ARS

Impact on Shares:

Argentine Market: Negative impact on consumer and financial stocks.

Companies:YPF (YPF), MercadoLibre (MELI)

14

The Walt Disney Company leads the race for the 2024 Emmy Awards, with three shows from its Hulu and FX divisions receiving the most nominations. According to the Television Academy announcement in Hollywood on Wednesday, FX's miniseries about feudal Japan, “Shogun,” received 25 nominations, including one for best drama.

Analysis:

Impact on FX:Positive corporate news could strengthen the USD.

FX Pair:EUR/USD, USD/JPY, GBP/USD

Impact on Shares:

US Entertainment Market: Positive impact on Disney stocks and related entertainment companies.

Companies:Walt Disney Company (DIS), Hulu, FX Networks

15

Turkish Foreign Minister Hakan Fidan, along with the defense and energy ministers, visited Niger on Wednesday to secure access to the country's rich uranium resources. The visit aims to fuel Turkey's emerging nuclear power industry. According to sources, the Turkish delegation hopes to use Niger's uranium resources to fuel the Mediterranean Akkuyu nuclear power plant and two other planned nuclear power plants.

Analysis:

Impact on FX:Increased investment in energy could strengthen the TRY.

FX Pair:USD/TRY, EUR/TRY, GBP/TRY

Impact on Shares:

Turkish Market: Positive impact on energy sector stocks.

Companies:Akkuyu Nuclear, Turkish Petroleum Corporation (TPAO)