Investment banks bet on weakening USD: Major global investment banks — including Morgan Stanley, JPMorgan, Goldman Sachs, and HSBC — have all decreased their optimistic USD forecasts or cut their negative forecasts even further after US inflation fell to its slowest pace since March 2021 in June, the Financial Times reported. The inflation figures pushed the USD to a 15-month low on increasing expectations that the Federal Reserve can follow through with its monetary tightening policies without hurting the economy. “Signs of further improvement in the global growth-inflation mix and a US soft landing sow the seeds for USD weakness ahead,” HSBC analysts said in a note.

The EUR is rallying as the USD sinks: The EUR is on track for its longer rally against the USD since 2004 as the greenback weakens, according to Bloomberg. The EUR jumped 0.4% during yesterday’s trading to USD 1.1276, its highest level since early 2022.

Rising rates are taking their toll on corporate debt: The rising threat of corporate debt defaults around the world is becoming more pressing as more companies see their debt downgraded to junk and borrowing costs continue to climb, Reuters reports. Retailer Casino is in court-backed talks with lenders over some EUR 6.5 bn of net debt while Swedish landlord SBB got downgraded to junk in May, threatening Sweden's precarious property market — among others engulfed by debt. S&P Global expects default rates for junk-rated companies in the US to rise to 4.25% by March 2024 from 2.5% this March, with their European counterparts expected to see an increase to 3.6% from 2.8%.

The market is shrugging it off: Last week, t he cost of insuring exposure to a basket of European junk-rated securities hit its lowest level in a little more than a year, implying that investors aren’t taking the idea of a coming mass-default all that seriously. “You have a lot of complacency in the market, if you think that statistics show that we have had already as many defaults globally in the first five months of 2023 as in the whole 2022,” said one fixed income analyst.

EGX30

17,608

+0.6% (YTD: +20.6%)

USD (CBE)

Buy 30.84

Sell 30.96

USD at CIB

Buy 30.85

Sell 30.95

Interest rates CBE

18.25% deposit

19.25% lending

Tadawul

11,769

-0.1% (YTD: +12.3%)

ADX

9,698

+0.2% (YTD: -5.0%)

DFM

4,022

+0.1% (YTD: +20.6%)

S&P 500

4,558

+0.8% (YTD: +18.8%)

FTSE 100

7,454

+0.6% (YTD: 0.0%)

Euro Stoxx 50

4,370

+0.3% (YTD: +15.2%)

Brent crude

USD 79.63

+1.6%

Natural gas (Nymex)

USD 2.62

+4.3%

Gold

USD 1,981.10

+1.3%

B T C

USD 29,781

-0.5% (YTD: +80.0%)

THE CLOSING BELL-

The EGX30 rose 0.6% at yesterday’s close on turnover of EGP 1.52 bn (21.3% below the trailing 90-day average ) . Foreign investors were net sellers. The index is up 20.6% YTD.

In the green: Heliopolis Housing (+5.5%), Qalaa Holdings (+4.1%) and Ibnsina Pharma (+4.0%).

In the red: Taaleem Management Services (-1.3%), Ezz Steel (-0.8%) and Egypt Kuwait Holding (-0.8%).

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