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Earnings Downgraded due to Rising Interest rate Risks and Slowing Growth


US stock declined on Monday and failed to hold onto gains. S&P500 erased a rally that reached 1% earlier in the day, while the Nasdaq 100 underperformed after an advance that briefly drove the tech 20% above its June low. Nvidia tumbled almost 6.5% with a release of a gloomy forecast. Mounting risks of more aggressive interest rate policy and slowdown economic growth have sparked earnings downgrade.

The latest survey from the Fed Bank of New York showed that consumers’ expectations for US inflation would sharply decline over the coming years, with the dropping price of oil playing a key role in those results and likely contributing to a lower headline rate of inflation for July released on Wednesday. Still, almost all inflation measures are running well above the Fed’s 2% target.

The benchmark, S&P500 slid with a 0.12% loss on daily basis, although it gained 1% growth at the beginning of the trading session. However, six out of eleven still stayed in positive territory, as Real Estate performed best among all groups, rising 0.71% for the day, while Information Technology got the worst performance and fell 0.88% on Monday. The Dow Jones Industrial Average almost remained not changed, Nasdaq 100 declined by 0.4%, and the MSCI World index rose 0.1% for the day.

Main Pairs Movement

US dollar eased on Monday, giving back some gains it made following Friday’s blockbuster U.S. jobs report. Investors stayed aside to look ahead to Wednesday’s inflation data for more clues about Federal Reserve’s next steps. The DXY index dropped sharply in the first half of Monday and touched a daily-low level below 106.1, then regain fresh transactions and rebound to the 106.4 level.

The GBP/USD has little changed up for the day, as investors await US CPI data and the release of UK Gross Domestic Product (GDP) released on Friday. The cables mildly climbed to a daily high level around 1.214 before the US trading session, then confronted huge selling pressure and oscillates in a narrow range of 1.206 to 1.208 from the late New York session.
Meanwhile, EURUSD wavered between 1.018 to 1.020 after strong downside traction during the US trading session. The pairs little advanced with a 0.14% gain on Monday.

The Gold rose with a 0.76% gain on daily basis on Monday, amid a weak US dollar across the board and retreating US bond yields. XAUUSD managed to attract fresh buying and builds on its steady intraday ascent through the early New York session, and touched a daily high above $1786 marks. It’s also worth noting that, WTI and Brent oil surged by 1.97% and 1.82% respectively, which would be a sign of consumer data announced on Wednesday.