The exchange of attacks and retaliation between Hamas and Israel over the weekend has turned into a quagmire. However, the reaction in financial markets since the beginning of the week has been relatively limited. After rising, crude oil prices have remained high, and we are now waiting for the next material. In the stock market, initially there was a widespread selling reaction to avoid risks, but the stock market gradually declined. The US stock market closed with heavy buying yesterday. This seems to have been influenced by dovish statements from the US financial authorities. As US bond yields fall, dollar selling pressure is spreading. It seems that the pattern of “buying dollars in an emergency” is not what is often said.
However, there has been no change in the overall trend of the dollar’s appreciation that has continued since July. It can be said that the recent depreciation of the dollar is still within the scope of correction. It will be interesting to see whether there will be a clear signal of a weaker dollar, such as the dollar index dropping below the 21-day moving average.
There are many statements from US financial officials scheduled today. Yesterday, Federal Reserve Bank President Logan Dallas said, “Rising yields may reduce the need to raise interest rates,” and Fed Vice Chairman Jefferson said, “The Fed can proceed with caution,” raising the possibility of further rate hikes. was not mentioned. Later on, in overseas markets, former Federal Reserve economist Roberto Perli, Atlanta Federal Reserve President Bostic, Federal Reserve Board Director Waller, Minneapolis Federal Reserve President Kashkari, and San Francisco Federal Reserve President Daley are scheduled to give speeches and participate in events. I would like to pay attention to his comments regarding his evaluation of last week’s US employment statistics and the impact of geopolitical risks in the Middle East.
Economic indicators will be announced such as Turkey’s employment statistics (August), Turkey’s industrial production index (August), and rice wholesale inventories (final figures) (August). Market attention is focused on tomorrow’s U.S. Producer Price Index and the day after tomorrow’s U.S. Consumer Price Index, and today’s indicators seem to be receiving less attention.
There are no major US economic indicators today, so the topic will be Israel vs. Hamas.
Currently, Israel has announced a “total siege” that will cut off electricity, water, gas, and other supplies to Gaza. With Israel carrying out heavy airstrikes on Gaza and calling up 300,000 reservists, there is a high possibility that this time it will launch a large-scale war, including a ground war.
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