Key Takeaways
- Israeli military is preparing for several days of combat against Syrian forces, with directives to reinforce troops in the Golan and strike governmental targets, including the Ministry of Defense in Damascus.
- U.S. Producer Price Index (PPI) for June came in flat month-over-month, at 0.0%, significantly below the estimated 0.2% and previous 0.1%, indicating a further easing of inflationary pressures.
- The European Union has proposed a substantial €1.98 trillion draft budget for 2028-2034, signaling strategic financial planning for the bloc's future.
- France is set to reduce the interest rate on its popular regulated savings products, following a recommendation from the central bank, which could impact French banks and savers.
Escalating tensions in the Middle East dominate recent headlines, as the Israeli military prepares for what it describes as "several days of combat" against Syrian forces. Directives from Israel's Chief of Staff include reinforcing forces, conducting combat strikes, enhancing intelligence gathering, and bolstering ground forces in the Golan Heights. Notably, instructions have been given to target Syrian governmental sites, specifically the Ministry of Defense in Damascus. Reports also indicate that explosions have been heard in Damascus. This comes as Israeli Defense Minister Israel Katz warned that Israel would escalate military operations if Syrian regime forces do not withdraw from the Sweida area, where deadly clashes involving the Druze community have occurred.
In economic news, fresh data from the United States indicates a cooling of producer-level inflation. The Producer Price Index (PPI) for Final Demand in June registered 0.0% month-over-month, falling short of the 0.2% estimate and the prior month's 0.1% increase. On a year-over-year basis, the PPI rose by 2.3%, softer than both the 2.5% forecast and May's 2.6%. Similarly, the PPI Ex Food And Energy also came in flat at 0.0% month-over-month, below the 0.2% estimate, and saw a year-over-year increase of 2.6%, less than the 2.7% expected. This data suggests easing inflationary pressures at the producer level, which could influence future monetary policy decisions by the Federal Reserve. Separately, the US New York Fed Services Business Activity Index improved slightly in July to -9.3 from a previous -13.2.
Meanwhile, in Europe, the European Union has put forth a significant €1.98 trillion draft budget for the 2028-2034 period. This long-term financial framework aims to address a range of challenges, from global economic competition to increased defense demands. The proposal signals the bloc's commitment to strategic investments over the coming years.
Adding to the European economic landscape, France is poised to cut the rate on its popular regulated savings products, following a recommendation from the central bank. This move, which could impact millions of French savers and the profitability of French banks, is influenced by recent dips in inflation. The Livret A rate, a key savings account, is expected to decrease, offering relief to French banks that have not fully capitalized on higher interest rates in recent years.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.