The market mood is mixed on the weekly price open after US Treasury Secretary Yellen spoke over the weekend and told reporters that “This is not an economy that is in recession”.
Yellen did acknowledge the impacts of high inflation numbers but was upbeat on falls ahead, so the market has weighed her statement as being largely neutral. Delving deeper into the recession comments Yellen also said “You don’t see any of the signs. Now, a recession is a broad-based contraction that affects many sectors of the economy. We just don’t have that”.
European Central Bank President Lagarde also spoke after the market close and noted “We will raise interest rates for as long as it takes to bring inflation back to our target” Her remarks come on the back of the first rate rise from the Bank in 11 years.
These comments confirm Bank is expected to raise rates further at upcoming meetings to combat rising inflation. The EURUSD pair has not given any strong reaction to the comments at all.
Most of the focus remains on the Fed meeting this week, where the US central bank is expected to increase rates by 75 basis points. Strangely, this is not seen as being significant anymore.
In terms of other important market news, Russia has said that it will not be supplying petroleum to countries that have placed a cap on oil prices. The caps are seen as a direct irritation to Russia.
Following remarks on Friday from Russian Central Bank Governor Elvira Nabiullina, Russia is said to clarify its position. Elvira Nabiullina said, “As far as I understand, we won’t be supplying oil to those countries which would impose such a cap and our oil, oil products will be redirected to the countries which are ready to cooperate with us”.
Other stories to watch include COVID-19 and Monkeypox. The WHO gave its strongest warning yet over the weekend that the virus was started to spread across Europe and Africa.
China also reported 982 covid cases on July 23 compared to 817 a day earlier. However the number classified a symptomatic fell to 129 from 164. Both COVID-19 and Monkeypox cases have been rising recently.