Interest rate expectations on both sides of the Atlantic are looking very different: Monetary policy in the US and Europe is expected to start diverging from next month as sticky inflation forces the European Central Bank to maintain its aggressive stance at the same time as the Federal Reserve debates bringing its tightening cycle to an end.

  • The Fed: Wall Street is only getting more (over?) confident that the Federal Reserve will leave rates unchanged when it meets next month, with stocks rising for a fourth consecutive session yesterday. (Reuters)
  • The ECB: Meanwhile in Europe, stubborn inflation in Germany and Spain are raising expectations that the European Central Bank will continue to hike rates in September. (Financial Times)

MEANWHILE- In the embattled Chinese real estate sector: Country Garden, the country’s biggest real estate developer currently fighting to avoid defaulting on its debts next month, just posted a USD 7 bn loss for the first six months of the year. (Financial Times)

ALSO- Visa + Mastercard are hiking merchant fees: Visa and Mastercard are set to increase charges retailers pay when accepting customers’ credit, debit and prepaid cards. The higher “interchange” fees are expected to come into play in October and April, and could see the payment giants receive an extra USD 502 mn a year. Bloomberg and the Wall Street Journal have more.

EGX30

18,818

+1.0% (YTD: +28.9%)

USD (CBE)

Buy 30.83

Sell 30.96

USD at CIB

Buy 30.85

Sell 30.95

Interest rates CBE

19.25% deposit

20.25% lending

Tadawul

11,575

+1.2% (YTD: +10.5%)

ADX

9,744

-0.2% (YTD: -4.6%)

DFM

4,067

-0.4% (YTD: +21.9%)

S&P 500

4,515

+0.4% (YTD: +17.6%)

FTSE 100

7,474

+0.1% (YTD: +0.3%)

Euro Stoxx 50

4,315

-0.3% (YTD: +13.8%)

Brent crude

USD 85.95

+0.5%

Natural gas (Nymex)

USD 2.81

+5.5%

Gold

USD 1,971.00

+0.3%

BTC

USD 27,265

-1.4% (YTD: +64.9%)

THE CLOSING BELL-

The EGX30 rose 1.0% at yesterday’s close on turnover of EGP 2.3 bn (11% above the 90-day average). Regional investors were net sellers. The index is up 28.9% YTD.

In the green: CIB (+3.3%), Heliopolis Housing (+2.5%) and Edita (+2.2%).

In the red: Orascom Construction (-3.4%), Alexandria Containers (-3.3%) and Beltone Financial Holding (-2.4%).

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