???? ECB Eyes September Rate Cut

Hala,

A Japanese man retired at 45 after extreme penny-pinching for 21 years—saving almost 235 million yen by living in a dorm, eating rice, and skipping AC.(1) Now, thanks to the yen’s drop, he’s wondering if it was all worth it. ???? #FrugalFail

amana’s Take

• The US Dollar's recent rally hit a speed bump as all eyes turned to Fed Chair Jerome Powell's speech at Jackson Hole. After flexing its muscles on Thursday with strong economic data, the USD Index slipped 0.2% on Friday, hovering around 101.30.
• While the dollar took a breather, US stock futures showed signs of life, with gains between 0.3% and 0.55% during the European session. Investors are cautiously optimistic, but the real test will come with Powell's comments later today.
• The USD/JPY pair dipped 0.5% after the Bank of Japan's Governor doubled down on monetary easing. Meanwhile, EUR/USD and GBP/USD held steady, and gold inched up, but stayed under the elusive $2,500 mark.

Stock Market Update

??↘? US stocks hit the brakes on Thursday as investors geared up for Fed Chair Jerome Powell’s speech at Jackson Hole. The S&P 500 slid 0.89% to 5,570.64, the Dow slipped 0.43% to 40,712.78, and the Nasdaq 100 shed 1.68% to 19,491.84.(2) It’s like Wall Street took a breather before Powell’s policy storm. ???

??↗? Meanwhile, most Mideast stocks rose, buoyed by Fed minutes hinting at upcoming rate cuts. Abu Dhabi and Dubai gained 0.3%, closing at 9,371 and 4,309, respectively.(3) ???

???? ECB Navigates Foggy Waters Toward September Rate Cut

As the European Central Bank (ECB) sails through foggy economic waters, recent minutes from its July meeting reveal that the crew is keeping an "open mind" about a potential rate cut in September.(4) Despite concerns over stubborn core inflation, the ECB is staying the course, with officials believing they’re still on track to hit the 2% inflation target. ????

????? Navigational Checkpoints:?

• July Meeting: ECB held the benchmark deposit rate at 3.75%.
• Core Inflation: Stays at 2.9% for July, unchanged from May and June.
• Services Inflation: Slight dip to 4% from 4.1% in June.
• Wage Growth: Negotiated wages slowed to 3.6% in Q2 2024 from 4.7% in Q1.

??? Preparing for the Next Voyage??

With market expectations high for a quarter-point cut in September, the ECB's crew remains cautious, closely watching for any signs of stagflation. The minutes highlight that September will be the ideal time to reassess and possibly recalibrate their course. As the ECB approaches its next meeting, all eyes are on how the winds of economic data will steer their decision. ?????

?Closer to Home?

• ?? Breaking: Crypto paychecks are now a thing in Dubai! In a landmark ruling, an employee won a dispute over unpaid wages, including 5,250 EcoWatt tokens, marking a significant milestone for digital currency in the UAE’s job market.(5) ??
• ?? East Gas Company (EGC), owned by Saudi Arabia’s Amiantit Co. and other major players, seeks approval to directly list 20% on Nomu—ditching the intermediaries for a cost-effective debut.(6) Looks like they’re taking the fast lane to the market! ?
• ???Saudi Arabia’s economy is set for a comeback in H2 2024, with GDP expected to rise 1.7% this year and 4.7% in 2025, according to CreditSights. After shrinking 0.4% YoY in Q2 and 0.8% in all of 2023, the kingdom’s ready to turn the tide.(7) ??

What Else Is Trending

• ?? Germany’s largest lender, Deutsche Bank, settles with 60% of Postbank claimants at €31 per share, unlocking €430 million pretax profit for Q3 and lifting shares up 4% to a one-month high(8)—not bad for a decade-old headache! ??
• ??? Meanwhile, oil prices gained on Thursday as rate cut buzz fueled a rebound after a four-day slide. Brent advanced 1.54% to $77.22 a barrel, and WTI climbed 1.5% to $73.01.(9) ?
• ?? Lastly, gold prices lost its sparkle, dropping over 1% as the dollar bounced back and Treasury yields climbed. Spot gold slipped to $2,480.75 per ounce.(10) ?

??Quote of the Day

"The September meeting was widely seen as a good time to re-evaluate the level of monetary policy restriction. “That meeting should be approached with an open mind." — ECB July Meeting Minutes

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Sources: (1) South China Morning Post, (2) (8) CNBC, (3) (9) Reuters, (4) Financial Times, (5) CryptoSlate, (6) (7) (10) Zawya