????? BOJ Surprises with Rate Hike!

Hala,

?????♀? Rain couldn't stop the fun as Olympic triathletes dove into the Seine after days of "will they, won't they" water quality drama. Thanks to €1.4 billion in clean-up, the Seine's ready—just in time!(1) ??

amana’s Take

• Hold your horses, July! As the Federal Open Market Committee (FOMC) gears up for its remaining meetings in 2024, chatter about potential rate cuts intensifies. Despite steady economic indicators, experts doubt a rate cut in July, pointing to the Fed's cautious stance. Looks like we'll have to keep our fireworks for another occasion.
• Encouraging inflation data fuels speculation of a rate cut by September, with a possibility of another reduction before year-end. The Fed’s moves will be data-driven, closely watching inflation and economic trends. It’s like watching a slow-motion chess game, where every move counts.
• 2025 Predictions – Not So Fast. While some predict multiple rate cuts in 2025, experts advise caution. The Fed is likely to adopt a measured approach, ensuring stability before making significant policy shifts. So, don't break out the party hats just yet; the Fed might prefer a slow waltz to a quickstep.

Stock Market Update

???? US stocks took a rollercoaster ride on Tuesday: megacap tech stocks sent the market on a wild drop ahead of earnings. The S&P 500 slid 0.5% to 5,436.44 and the Nasdaq 100 lost 1.38% to 18,796.27, while the Dow strutted higher, adding 0.5% to 40,743.33.(2) Tech tripped, but the Dow strutted on! ????

???? Meanwhile, Mideast stocks fared similarly on weak oil and Fed jitters: Abu Dhabi was flat at 9,396, while Dubai slipped 0.6% to 4,284.(3) ????

????? BOJ's Surprise Rate Hike!

The Bank of Japan (BOJ) has thrown a curveball by raising interest rates from 0-0.1% to 0.25% and announcing a plan to halve monthly bond buying to 3 trillion yen by Q1 2026.(4) This move, unexpected by most analysts, takes Japan's monetary policy in a different direction compared to the Federal Reserve, which is inching towards rate cuts. Investors are now closely watching this economic balancing act as the BOJ tackles rising inflation expectations. ????

?? Key Points in the Balancing Act:

• Rate Hike: BOJ raises short-term policy rate from 0-0.1% to 0.25%. ??
• Bond Buying: Monthly bond buying to halve to 3 trillion yen in Q1 2026. ??
• Stock Reaction: Japanese banking stocks rise, Nikkei higher post-hike. ??
• Yen Movement: Yen initially rallies to a three-month high (151.58 per dollar), then reverses. ??
• Inflation Focus: BOJ cites broadening wage hikes and rising service prices. ??

???? The Fed's Countermove

While the BOJ tightens, the Fed looks set to cut rates in September, adding to the global economic drama. BOJ Governor Kazuo Ueda emphasized the need for vigilance against inflation, suggesting further hikes if the economy aligns with projections. As Japan adjusts its monetary policy, the BOJ's unexpected actions contrast sharply with the Fed's approach, setting the stage for a dynamic economic seesaw. How will the balancing act play out? Stay tuned! ????

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Closer to Home?

• ??? Dubai’s prime residential market zoomed ahead in H1 with a 2.9% capital value boost, leaving cities like Singapore and New York in the dust. As the Middle East’s top performer, it’s fueled by record transactions and insatiable demand.(5) ??
• ?? Dubai International Financial Centre (DIFC) turned 20 with flair, boasting over 6,000 active companies—a 24% annual leap. In H1 alone, 820 new firms jumped aboard, with FinTech and innovation up 33% YoY. Talk about a birthday bash!(6) ??
• ?? Meanwhile, Saudi Ceramics took a dramatic 90% profit drop to SAR 4.74M in H1 2024, with sales barely budging. EPS also sank from SAR 0.48 to SAR 0.05. Their earnings seem to have cracked under the strain.(7) ??

What Else Is Trending

• ???? Microsoft's shares slid 7% despite beating earnings and revenue forecasts, all due to a cloudy outlook on their cloud business. Revenue jumped 15% to $64.73 billion YoY in Q4, but executives promise a sunny growth forecast for 2025.(8) ??
• ??? Meanwhile, oil prices took a 1% spill to hit a seven-week low, thanks to whispers of weak Chinese demand and OPEC+'s supply plans. Brent slid to $78.63, while WTI dipped to $74.73.(9) ?
• ?? Lastly, gold prices glimmered up 1% as investors bet on Fed hints about rate cuts. Spot gold shined 0.8% at $2,403.47 an ounce.(10) ?

??Quote of the Day

"Despite sluggish consumer spending, monetary officials sent a decisive signal by raising interest rates and allowing for a more gradual balance sheet reduction." — Fred Neumann, chief Asia economist at HSBC

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Sources:-(1) AP News, (2) (8) CNBC, (3) (4) (9) (10) Reuters (5) (6) (7) Zawya?