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On Monday, US stock indices closed in the negative territory. By the close of trading on the stock exchange Dow Jones Index (US30) decreased by 0.69%, S&P 500 Index (US500) lost 0.84%. The Nasdaq Technology Index (US100) decreased by 0.81%.

Shares of Apple fell by 2% after reports that the company will slow hiring and spending, becoming the next tech giant to take such a step as fears of an economic slowdown hit the sector. IT equipment and services maker IBM beat expectations for quarterly earnings on Monday but warned that the strong dollar would negatively impact the company's results. The Federal Reserve's hawkish activity and heightened geopolitical tensions have caused the dollar to rise against a basket of currencies over the past year, prompting companies with large international operations to temper their forecasts. A stronger dollar is eating into the profits of companies with extensive international operations and converting foreign currencies into dollars.

Companies like Johnson&Johnson (JNJ), Lockheed Martin (LMT), and Netflix (NFLX) report today.

The United States will impose harsh measures on countries that disrupt the international economic order, Treasury Secretary Janet Yellen said Tuesday. "Russia has turned economic integration into a weapon," she said, calling on all responsible countries to unite against Russia's war in Ukraine. The United States is pushing to expand trade ties with South Korea and other trusted allies to increase supply chain resilience and prevent possible manipulation by geopolitical rivals.

Stock markets in Europe mostly rose Monday. German DAX (DE30) gained 0.74% yesterday, French CAC 40 (FR40) added 0.94%, Spanish IBEX 35 (ES35) increased by 0.22%, British FTSE 100 (UK100) was up by 0.90%.

The European Central Bank is walking a tightrope in its planning for an anti-fragmentation instrument, which will be presented after the July 21 Board of Governors meeting. Doubts in Italy about Mario Draghi's government, combined with the highest inflation in Germany since the 1970s, increased monetary tightening in the US, end of the ECB net bond purchases, and uncertainty about the war in Ukraine - all add to the Eurozone's vulnerability. With Draghi facing a new vote of confidence in parliament on July 20, investors are concerned that if a new government is not formed on time, Rome may not meet the conditions for EU Next Generation financing. That would lead to a widening of spreads in the bond market between the stronger and weaker members of the monetary union. And it could depress the euro even further on foreign exchanges, another factor fueling inflation.

At the market's opening today, Asian stocks are mostly down. Japan's Nikkei 225 (JP225) added 0.74% from the opening bell, Hong Kong's Hang Seng (HK50) decreased by 1.15%, and Australia's S&P/ASX 200 (AU200) is trading lower by 0.66%.

Bank of Japan Governor Haruhiko Kuroda is more determined than ever to resist political and market pressures in pursuit of sustainable inflation. The BOJ is in no mood to give up stimulus. BOJ officials see some potential signs of sustainable inflation that need to be encouraged, not eliminated. That leaves the BOJ alone among major central banks in trying to keep rates near zero and limit bond yields.

The RBA intends to do whatever is necessary regarding inflation. The minutes of the Reserve Bank of Australia's July meeting showed that further steps need to be taken to normalize monetary conditions in Australia in the coming months. Bank officials are considering further interest rate hikes of 25 or 50 basis points. Higher interest rates would also help strike a more sustainable balance between supply and demand for goods and services. Inflation is projected to peak later in 2022 and then fall back to 2-3% in 2023.

• S&P 500 (F) (US500) 3,830.85 −32.31 (−0.84%)
• Dow Jones (US30) 31,072.61 −215.65 (−0.69%)
• DAX (DE40) 12,959.81 +95.09 (+0.74%)
• FTSE 100 (UK100) 7,223.24 +64.23 (+0.90%)
• USD Index 107.43 −0.63 (−0.58%)
   

Important events for today:

• Australia RBA Meeting Minutes (m/m) at 04:30 (GMT+3);
• UK Average Earnings Index (m/m) at 09:00 (GMT+3);
• UK Claimant Count Change (m/m) at 09:00 (GMT+3);
• UK Unemployment Rate (m/m) at 09:00 (GMT+3);
• Eurozone Consumer Price Index (m/m) at 12:00 (GMT+3);
• US Building Permits (m/m) at 15:30 (GMT+3);
• UK BoE Gov Bailey Speaks at 20:45 (GMT+3).

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