Equity markets have been wobbly over the past few weeks as a number of headwinds trouble traders.
Thin summer liquidity often leads to exaggerated price action, although volatility in foreign-exchange markets remains near recent lows.
But Friday’s long-awaited speech by US Federal Reserve chairman Jerome Powell was more dovish than many expected and signalled that monetary policy stimulus will remain, although the world’s most powerful central bank still aims to reduce its bond-buying programme sometime this year.
Mr Powell's more balanced, cautious speech contrasts with recent comments by numerous Fed officials, who have highlighted the case for the central bank to start reducing asset purchases soon.
The most recent Federal Open Market Committee meeting had a more hawkish bias among policymakers that was most obvious in the “dot plot” of the Fed’s forecasts, which showed more voters expected at least two interest rate increases through to 2023.
Foreign-exchange markets have similarly changed track, with broad outperformance recorded in dollar and safe-haven currencies. The greenback floundered in the first half of 2021 but has since perked up and recently hit new highs this year against a basket of other major currencies. The Japanese yen, a classic safe-haven currency, has also found a bid and remains an outperformer.
What is interesting here is that, historically, we typically see these currency pairs stick fairly close to the broader trend in risk sentiment. For example, the Australian dollar and yen pair, well known as the ultimate FX risk gauge, has actually fallen more than 6 per cent since June, even though we have seen a steady rise in US equity markets.
Over the same period, commodity prices have remained relatively static, although oil has moved lower. Clearly then, this decoupling from historic norms had indicated more defensive positioning among foreign exchange traders.
The persistent rise in US stock markets has put the broad-based S&P500 close at record highs as investors focused on a bumper second-quarter results season. Mr Powell’s speech last week also means that the go-slow approach to reining in emergency monetary policy stimulus remains, which is good news for continued risk-taking.
Diverging markets are also evident in equities, with Asian stocks not so upbeat. For instance, Hong Kong is in bear market territory as the Hang Seng index has fallen more than 20 per cent below its February peak, led by internet stocks such as Alibaba.
Other markets in the region are also suffering due to the regulatory clampdown by Chinese authorities, who are pushing for greater social cohesion at the expense of corporate profits.
This is hitting a variety of sectors, including education, gaming and technology. An indication of this effect is the plunge in the Nasdaq Golden Dragon index of large US-listed Chinese stocks, down by about 10 per cent in one week recently, and more than 50 per cent below its peak in February.
The persistent rise in US stock markets has put the broad-based S&P500 close at record highs as investors focused on a bumper second-quarter results season
Hussein Sayed,
chief market strategist at Exinity Group
Recent falls in some Chinese technology stocks might also worsen as investors pull out of equity funds focused on the country’s stocks.
Meanwhile, market wobbles in the US and Europe will persist while the rapid spread of the Delta coronavirus variant continues and amid expectations that crisis-era policy measures are eventually reined in.
The sharp falls elsewhere highlight growing investor concern about a prolonged regulatory clampdown in China. But that said, Mr Powell is still happy to keep the stimulus plentiful and, as there are few alternatives while bond yields remain depressed, stock markets will remain in bid mode.
Hussein Sayed is the chief market strategist at Exinity Group
Benefits of first-time home buyers' scheme
- Priority access to new homes from participating developers
- Discounts on sales price of off-plan units
- Flexible payment plans from developers
- Mortgages with better interest rates, faster approval times and reduced fees
- DLD registration fee can be paid through banks or credit cards at zero interest rates
MATCH INFO
Barcelona v Real Madrid, 11pm UAE
Match is on BeIN Sports
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
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The years Ramadan fell in May
UAE currency: the story behind the money in your pockets
Volvo ES90 Specs
Engine: Electric single motor (96kW), twin motor (106kW) and twin motor performance (106kW)
Power: 333hp, 449hp, 680hp
Torque: 480Nm, 670Nm, 870Nm
On sale: Later in 2025 or early 2026, depending on region
Price: Exact regional pricing TBA
Specs
Engine: Electric motor generating 54.2kWh (Cooper SE and Aceman SE), 64.6kW (Countryman All4 SE)
Power: 218hp (Cooper and Aceman), 313hp (Countryman)
Torque: 330Nm (Cooper and Aceman), 494Nm (Countryman)
On sale: Now
Price: From Dh158,000 (Cooper), Dh168,000 (Aceman), Dh190,000 (Countryman)
BIGGEST CYBER SECURITY INCIDENTS IN RECENT TIMES
SolarWinds supply chain attack: Came to light in December 2020 but had taken root for several months, compromising major tech companies, governments and its entities
Microsoft Exchange server exploitation: March 2021; attackers used a vulnerability to steal emails
Kaseya attack: July 2021; ransomware hit perpetrated REvil, resulting in severe downtime for more than 1,000 companies
Log4j breach: December 2021; attackers exploited the Java-written code to inflitrate businesses and governments
Hot%20Seat
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How to donate
Send “thenational” to the following numbers or call the hotline on: 0502955999
2289 – Dh10
2252 – Dh 50
6025 – Dh20
6027 – Dh 100
6026 – Dh 200
The five pillars of Islam
1. Fasting
2. Prayer
3. Hajj
4. Shahada
5. Zakat
F1 The Movie
Starring: Brad Pitt, Damson Idris, Kerry Condon, Javier Bardem
Director: Joseph Kosinski
Rating: 4/5
Pharaoh's curse
British aristocrat Lord Carnarvon, who funded the expedition to find the Tutankhamun tomb, died in a Cairo hotel four months after the crypt was opened.
He had been in poor health for many years after a car crash, and a mosquito bite made worse by a shaving cut led to blood poisoning and pneumonia.
Reports at the time said Lord Carnarvon suffered from “pain as the inflammation affected the nasal passages and eyes”.
Decades later, scientists contended he had died of aspergillosis after inhaling spores of the fungus aspergillus in the tomb, which can lie dormant for months. The fact several others who entered were also found dead withiin a short time led to the myth of the curse.
Crops that could be introduced to the UAE
1: Quinoa
2. Bathua
3. Amaranth
4. Pearl and finger millet
5. Sorghum
Electoral College Victory
Trump has so far secured 295 Electoral College votes, according to the Associated Press, exceeding the 270 needed to win. Only Nevada and Arizona remain to be called, and both swing states are leaning Republican. Trump swept all five remaining swing states, North Carolina, Georgia, Pennsylvania, Michigan and Wisconsin, sealing his path to victory and giving him a strong mandate.
Popular Vote Tally
The count is ongoing, but Trump currently leads with nearly 51 per cent of the popular vote to Harris’s 47.6 per cent. Trump has over 72.2 million votes, while Harris trails with approximately 67.4 million.
Killing of Qassem Suleimani
RIVER%20SPIRIT
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Tearful appearance
Chancellor Rachel Reeves set markets on edge as she appeared visibly distraught in parliament on Wednesday.
Legislative setbacks for the government have blown a new hole in the budgetary calculations at a time when the deficit is stubbornly large and the economy is struggling to grow.
She appeared with Keir Starmer on Thursday and the pair embraced, but he had failed to give her his backing as she cried a day earlier.
A spokesman said her upset demeanour was due to a personal matter.
The biog
Favourite films: Casablanca and Lawrence of Arabia
Favourite books: Start with Why by Simon Sinek and Good to be Great by Jim Collins
Favourite dish: Grilled fish
Inspiration: Sheikh Zayed's visionary leadership taught me to embrace new challenges.
SPECS
%3Cp%3E%3Cstrong%3EEngine%3A%3C%2Fstrong%3E%202-litre%204-cylinder%20turbo%20and%203.6-litre%20V6%0D%3Cbr%3E%3Cstrong%3ETransmission%3A%20%3C%2Fstrong%3ESeven-speed%20automatic%0D%3Cbr%3E%3Cstrong%3EPower%3A%3C%2Fstrong%3E%20235hp%20and%20310hp%0D%3Cbr%3E%3Cstrong%3ETorque%3A%20%3C%2Fstrong%3E258Nm%20and%20271Nm%0D%3Cbr%3E%3Cstrong%3EPrice%3A%3C%2Fstrong%3E%20From%20Dh185%2C100%0D%3Cbr%3E%3C%2Fp%3E%0A
The specs
Engine: 3.8-litre twin-turbo flat-six
Power: 650hp at 6,750rpm
Torque: 800Nm from 2,500-4,000rpm
Transmission: 8-speed dual-clutch auto
Fuel consumption: 11.12L/100km
Price: From Dh796,600
On sale: now
if you go
The flights
Etihad, Emirates and Singapore Airlines fly direct from the UAE to Singapore from Dh2,265 return including taxes. The flight takes about 7 hours.
The hotel
Rooms at the M Social Singapore cost from SG $179 (Dh488) per night including taxes.
The tour
Makan Makan Walking group tours costs from SG $90 (Dh245) per person for about three hours. Tailor-made tours can be arranged. For details go to www.woknstroll.com.sg
Match info:
Portugal 1
Ronaldo (4')
Morocco 0
The specs
- Engine: 3.9-litre twin-turbo V8
- Power: 640hp
- Torque: 760nm
- On sale: 2026
- Price: Not announced yet
Dust and sand storms compared
Sand storm
- Particle size: Larger, heavier sand grains
- Visibility: Often dramatic with thick "walls" of sand
- Duration: Short-lived, typically localised
- Travel distance: Limited
- Source: Open desert areas with strong winds
Dust storm
- Particle size: Much finer, lightweight particles
- Visibility: Hazy skies but less intense
- Duration: Can linger for days
- Travel distance: Long-range, up to thousands of kilometres
- Source: Can be carried from distant regions
Teenage%20Mutant%20Ninja%20Turtles%3A%20Shredder's%20Revenge
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The low down
Producers: Uniglobe Entertainment & Vision Films
Director: Namrata Singh Gujral
Cast: Rajkummar Rao, Nargis Fakhri, Bo Derek, Candy Clark
Rating: 2/5
Killing of Qassem Suleimani
Real estate tokenisation project
Dubai launched the pilot phase of its real estate tokenisation project last month.
The initiative focuses on converting real estate assets into digital tokens recorded on blockchain technology and helps in streamlining the process of buying, selling and investing, the Dubai Land Department said.
Dubai’s real estate tokenisation market is projected to reach Dh60 billion ($16.33 billion) by 2033, representing 7 per cent of the emirate’s total property transactions, according to the DLD.
England's Ashes squad
Joe Root (captain), Moeen Ali, Jimmy Anderson, Jofra Archer, Jonny Bairstow, Stuart Broad, Rory Burns, Jos Buttler, Sam Curran, Joe Denly, Jason Roy, Ben Stokes, Olly Stone, Chris Woakes.
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