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The US stock indices did not trade yesterday due to a bank holiday.

According to the OECD, inflation in advanced economies has slowed to its lowest since December 2021. Inflation has slowed in almost all countries except the Netherlands, Norway, and the United Kingdom. In the G7 countries, inflation is now at 4.6%, the lowest level since September 2021. The figures show that core inflation remains steady, even though monetary officials make some progress in controlling consumer prices. Policymakers in advanced economies are still in a tightening mode, with both the US Federal Reserve and the European Central Bank signaling another increase in borrowing costs this month.

The June FOMC minutes will be released today. Investors will be looking for clues as to how far the US Fed can go in terms of raising rates. More than 85% of traders believe the US Fed will raise interest rates this month, and only 37% think the rate will be raised again in September.

Stock markets in Europe were mostly down on Tuesday. German DAX (DE30) was 0.26% lower, French CAC 40 (FR40) decreased by 0.23%, Spanish IBEX 35 (ES35) lost 0.63%, and British FTSE 100 (UK100) was 0.10% lower yesterday.

The Bank of England is considering plans to force more international banks to create subsidiaries in the UK. Analysts believe the move would make it easier for the Bank of England to seize control of subsidiaries such as SVB in London in the event of a collapse.

After the latest inflation figures, British Prime Minister Rishi Sunak announced his full support for the Bank of England but criticized Governor Andrew Bailey. In his January speech, the prime minister said that the promise to halve inflation was his personal responsibility, but if the UK Consumer Price Index remains stubbornly high for the rest of the year, many expect that the Bank of England may see a change in leadership.

Ahead of the OPEC+ meeting, key export giant Saudi Arabia announced Monday that production cuts of one million barrels a day would be extended for another month. Meanwhile, Russia said it would cut exports by 500,000 BPD in August. Normally news of production cuts by two such important players would provide additional support to oil prices. Nevertheless, the demand side still looks weak for the global oil market. This week's key economic data from manufacturing sectors around the world was disappointing from China, Europe, and the United States. As central banks are raising interest rates almost across the board to combat high inflation, lower economic activity is now effectively the goal of monetary policy.

Asian markets mostly rose yesterday. Japan's Nikkei 225 (JP225) was down by 0.97%, China's FTSE China A50 (CHA50) gained 0.33%, Hong Kong's Hang Seng (HK50) added 0.57% on the day, and Australia's S&P/ASX 200 (AU200) closed positive by 0.45% on Tuesday.

China's abrupt announcement on Monday that it will impose export controls on certain types of gallium and germanium, effective August 1, escalated a trade war with the US and could potentially lead to new disruptions in global supply chains. Analysts viewed the move, which the Chinese Commerce Ministry said was aimed at protecting national security, as a response to Washington's escalating efforts to curb China's technological advances. China is the world's largest producer of rare earth elements, a group of metals used in electric vehicles and military technology.

A private survey showed Wednesday that China's services sector grew less than expected in June, raising fears of a slowdown in the country's economic recovery. The figure follows a weak reading on manufacturing activity and points to a slowdown in growth in the second quarter. Nevertheless, analysts believe China's weak data could attract additional stimulus measures from Beijing after liquidity injections and interest rate cuts earlier this year.

• S&P 500 (F) (US500) 4,455.59 0 (0%)
• Dow Jones (US30)34,418.47 0 (0%)
• DAX (DE40) 16,039.17 −41.87 (−0.26%)
• FTSE 100 (UK100) 7,519.72 −7.54 (−0.10%)
• USD Index 103.09 0 (0%)
   

Important events for today:

• Japan Services PMI (m/m) at 03:30 (GMT+3);
• Australia Retail Sales (m/m) at 04:30 (GMT+3);
• German Services PMI (m/m) at 10:55 (GMT+3);
• Eurozone Services PMI (m/m) at 11:00 (GMT+3);
• UK Services PMI (m/m) at 11:30 (GMT+3);
• OPEC Meetings at 13:00 (GMT+3);
• US FOMC Meeting Minutes at 21:00 (GMT+3);
• US FOMC Member Williams Speaks at 23:00 (GMT+3).

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