Disappointing Chinese data and sudden decisions by China’s central bank unsettled global markets, while oil prices fell sharply in Monday’s trade after Iran announced partial progress in ongoing nuclear deal talks in the Austrian capital Vienna. .
China’s central bank unexpectedly cut interest rates for the second time this year, draining some liquidity from the banking system in an effort to revive credit demand to support the coronavirus-ravaged economy.
The People’s Bank of China (the central bank) announced that it has decided to cut the interest rate on its 400 billion yuan ($59.33 billion) one-year medium-term loan facility to some financial institutions by 10 basis points from 2.85 percent to 2.75 percent.
New bank loans in China fell more than expected in July, while credit growth slowed overall as the novel coronavirus outbreak, job concerns and a deepening housing crisis worried businesses and consumers. to take more debt.
The People’s Bank of China attributed this action to “reasonably maintaining sufficient liquidity in the banking system.”
The renminbi fell to a one-week low of 6.7696 per dollar, compared with a previous close of 6.7430, after the People’s Bank of China unexpectedly cut borrowing costs for medium-term loans and short-term liquidity instruments for a second time. . Year
According to IRNA, Iran’s Ministry of Foreign Affairs spokesman Nasser Kanani said: “There is a relative change in the Vienna negotiations, but not all of our demands are met and we are waiting for the sanctions to be lifted.”
Kanani added in his weekly press conference: We have other expectations from the other side and we believe that the interests of the Iranian people should be realized.
Kanani emphasized: reaching an agreement is related to the fulfillment of Tehran’s demands, and if these demands are met, we may soon witness the signing of an agreement.
If an agreement is reached on the revival of the Iran nuclear agreement, if the embargo on Iranian oil is lifted, the oil markets can receive nearly 5 million barrels of Iranian oil.
On Monday, oil prices fell sharply, about 5 percent, to the lowest level in about eight months, as Brent crude fell 4.9 percent to $93 a barrel, and U.S. crude fell by 11:48 a.m. GMT decreased by 4.8% to 87.5%.
China’s industrial production, retail sales and fixed-asset investment fell short of analysts’ estimates on Monday as a nascent recovery from severe coronavirus lockdowns weakened, Reuters reported.
“Of course the bad data from China will affect fears of a recession for the rest of the world,” said Ipek Ozkardskaya, market analyst at Swissquote. He added: This decreased the value of the euro against the dollar.
The dollar rallied on dovish comments from Federal Reserve policymakers, reacting to early signs that U.S. inflation may have peaked.
Richmond Fed President Thomas Barkin told CNBC on Friday that he would like to see inflation move toward the Fed’s 2 percent target for a while before pausing to raise interest rates.
The U.S. dollar index rose 0.25 percent against six rivals to 105.96, consolidating near the midpoint of its range for the month.
Analysts will look to the minutes of the Federal Reserve’s latest meeting on Wednesday for more clues about what policymakers are thinking, while Friday’s retail sales data will provide fresh insight into the health of the economy. Gives.
The euro fell 0.24 percent to $1.0232, weighed down by problems facing Europe due to the war in Ukraine, the search for non-Russian energy sources and the damage to the German economy from a lack of rain.
Source: Lebanon Debate
