The month of August began with European and US stock gains lower than those achieved last July, and US-China tensions escalated
Reports of China’s threats have sparked controversy recently, as China considers Taiwan a sovereign territory of China. Which led to a decline in stocks in the Asian trading session.
The rally in US stocks last week was due to investors feeling that inflation has reached its peak. Which led to a sharp drop in US Treasury yields.
The decline in the US 10-year yields below the 2.7% level indicates the possibility of a further decline of about 2% in the short term.
Today, Tuesday, 2.8.2022, we may witness a decline in the European and American stock indices. With attention drawn to gold after settling above the $1750 level for an ounce.
This week we look forward to the Bank of England’s interest rate announcement, after UK inflation reached its highest level in 40 years. An interest rate hike of 50 points from the Bank of England is expected and may surprise the markets.
Also, the US jobs numbers will be released next Friday, 5.08.2022. The US economy is expected to add 250,000 jobs in July. While the unemployment rate is expected to remain unchanged at 3.6%, with the hourly wage rate rising to 0.3%.