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[Quick Facts]

1. U.S. import prices fell further in June.

2. UK becomes the first European country to join CPTPP.

3. U.S. economy remains at risk of recession.

4. Biden leads other U.S. presidential candidates in fundraising.

5. Kazuo Ueda says economic uncertainty remains high.

6. Iraq was forced to exchange oil for gas with Iran under U.S. sanctions against Iran.

7. Global gold ETF demand turned negative during H1 2023.

[News Details]

U.S. import prices fell further in June

The U.S. import price index fell 0.2% in June, and the data in May was revised to a decline of 0.4% MoM from a decline of 0.6%, the U.S. Department of Labor announced last Friday. The rise in fuel costs was offset by declines in other areas. The annualized rate of the import price index has dropped for five consecutive months. Consumer and producer prices were reported to have risen modestly in June, which further suggests that inflationary pressures on the economy are easing.

UK becomes the first European country to join CPTPP

On July 16, the UK formally signed and joined the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) in Auckland, New Zealand, becoming the first signatory following the 11 founding members of the pact, which is seen as the UK's attempt to strengthen its trade ties with the Pacific region after it left the European Union in 2020.

The combined GDP of these countries will be £12 trillion, or 15% of global GDP after the UK joins the pact which is due to come into force in the second half of 2024 when the UK will become a voting member of the CPTPP, from which businesses can benefit.

U.S. economy remains at risk of recession

With recent U.S. economic data largely exceeding economists' expectations, the market holds a widespread view that the U.S. economy will have a soft landing. But being better than expected doesn't mean all is fine. That's because the Federal Reserve's efforts to bring inflation back to 2% will slowly squeeze household and business spending, triggering a mild recession early next year. Slowing deflation coupled with a weak job market will erode disposable income in the months ahead. Ultimately, this will lead to slower growth and a "mild recession" in early 2024.

Meanwhile, it's too early for the Fed to declare victory on the inflation front. For headline inflation to eventually fall by 1 percentage point to reach the Fed's 2% target, it will cost longer time than last year's sharp decline.

Biden leads other U.S. presidential candidates in fundraising

U.S. President Joe Biden's re-election campaign raised $72 million in the second quarter, leading all rivals including his predecessor, Donald Trump, according to results from the second quarter of 2023, The Hill reported. President Biden's fundraising numbers are more than double that of former President Trump and any other candidate, giving him a majorly successful second quarter, the report said. The campaign said Biden also has $77 million in cash on hand, which it said was the most "amassed by a Democrat at any comparable point in history."

Kazuo Ueda says economic uncertainty remains high

Bank of Japan Governor Kazuo Ueda said the U.S. and global economies are not slowing down as much as thought, but uncertainty remains high. The future trajectory of U.S. inflation will be a focus of market attention. At the same time, he said that the functioning of the bond market has not changed much from the last monetary policy meeting in June; yield curve distortions have improved significantly from earlier times.

Iraq was forced to exchange oil for gas with Iran under U.S. sanctions against Iran

Recently, many parts of Iraq have been hit by high temperatures, with the highest temperatures in some areas even approaching 50 degrees Celsius. As imports of natural gas are blocked due to the U.S. sanctions, Iraq's power supply is seriously inadequate. A large number of people are struggling to live in the heat. Iraq has now reached an agreement with Iran on the exchange of crude oil for natural gas after several days of negotiations, Iraqi Prime Minister Mohammed Shayya' Sabbar Al-Sudani recently announced, thus bypassing U.S. sanctions against Iran and improving Iraq's domestic power supply.

Global gold ETF demand turned negative during H1 2023

Global gold ETF outflows amounted to about $3.7 billion in June, resulting in a negative net demand in the first half of the year, The World Gold Council disclosed on July 14. The World Gold Council said that the global physically-backed gold ETFs ended three consecutive months of inflows and turned into a net outflow in June. Total global gold ETF holdings fell 56 tons to 3,422 tons, and total global gold ETF assets under management declined 4% from the previous month. In early June, major stock markets performed strongly, which could shift investors' focus from safe-haven assets such as gold to stocks.

[Focus of the Day]

UTC+8 16:15 European Central Bank President Christine Lagarde speaks