Market Highlight 05.07.2024

China's robust economic growth in the first quarter has boosted government optimism, but economists expect the growth rate to slow in the coming months due to the ongoing real estate market crisis and escalating trade tensions. Forecasts suggest that the second-quarter growth of the world's second-largest economy could be at +5,1% year-over-year, following a strong +5,3% growth in the first quarter. The GDP growth data is scheduled to be released on July 15th , coinciding with an important session to discuss economic policies. The mixed picture of China's economy is driven by its heavy reliance on manufacturing and exports, while consumption and real estate are major drags. This reliance makes China more vulnerable to external shocks, especially as trade protectionism rises or if the US economy slows down.

The decline of the USD has continued for the sixth consecutive day, with a drop of about 0,2% recorded last night. Over the week, the USD Index has fallen nearly 0,7% after four consecutive weeks of gains. The market is awaiting tonight's crucial U.S non-farm payroll report for June. A significant drop in employment data (if it occurs) would prompt the Federal Reserve to cut interest rates as early as September. However, next week's U.S CPI report for June needs close monitoring, as inflation is likely to rise again during the summer, which could support a USD rebound.

The USD/VND interbank exchange rate remained stable with a narrow trading range around 25.450 yesterday, coinciding with the US Independence Day holiday on July 4th . This trend is expected to continue on the last trading day of the week, as the market awaits crucial U.S economic data tonight.

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