Dollar still needed .. Pound sterling

In its report on money markets, NBK said last week 's market activity had been limited, as the trend for safe haven badets continued worldwide in August. The concern over the slowdown in global economic growth, exacerbated by trade tensions between China and the United States, has also increased pressure on the stock markets and boosted demand for Treasury securities. Japanese yen, gold and other badets considered safe. The Japanese yen, which is increasingly bought in times of economic instability, was on track for the second consecutive week against the dollar, while 10-year US Treasuries fell below the 2% mark for the first time in three years.

The dollar remained indispensable even though the outlook for the Fed's monetary policy had been completely changed and monetary policy was easing in comparison with the tightening of measures taken since the beginning of the year. Traders expect the Fed to lower interest rates by at least 50 basis points and eventually by 75 basis points before the end of the year. The hawkish tone adopted by the Fed at its last meeting seems to be insufficient to deter expectations of further rate cuts. Some investors and economists are concerned that the trade war between the United States and China is entering a new phase that could further damage the global economy. If the economic data provided does not start to give more positive signals, or if the US and China are able to mitigate their dispute, investors expect the Fed to further reduce interest rates to ease pressure and continue to grow.

Pound sterling

In the UK, the pound sterling remained under pressure against its monetary counterparts and hit its two-year low against the euro after a report revealed that new Prime Minister Boris Johnson was ready to hold elections after the October 31 deadline for secession from the EU. The growing uncertainty surrounding the UK's separation from the EU and weak global economic growth also resulted in a contraction in the second quarter for the first time in nearly seven years. Output fell 0.2% in the last three months in June, which is worse than the performance expected by economists and slowed compared to 0.5% growth in the first quarter, according to data from the Office for National Statistics. The UK economy has not contracted since 2012. The manufacturing and construction sectors collapsed after a vigorous start early in the year. The services sector was the only positive contributor to GDP growth in the second quarter. However, service sector growth was weak at 0.1%, while it was the weakest since 2016. Data pushed the pound below the 1.21 USD mark and its highest level. down this week.

Japanese bond yields are at their lowest

Japan's government bond yields hit a three-year low of -0.218 percent as a result of widespread concerns over the US-China trade war, the national report said. As part of its efforts to combat declining yields, the Bank of Japan has stopped buying long-term bonds. The Bank of Japan has reduced its purchases from 20 billion yen to 160 billion dollars (188.8 million dollars).

The Bank of Japan said it set its "near zero" target rates for 10-year bond yields of 20 basis points above or below zero. With this in mind, the bond purchase reduction program is a technical step to maintain 10-year bond yields in line with the current target. But the reduction in badet purchases as many of the world's central banks introduce more easing into their monetary policy highlights the lack of ammunition from the Bank of Japan, which has already set a huge record and lowered interest rate at negative levels.

Oil prices continued to fall more than 9% this month and more than 5% this week. OPEC pledged last week to continue supporting prices. Saudi Arabia has announced plans to maintain crude oil exports below 7 million bpd in August and September to rebalance the market.