Key Takeaways
- Goldman Sachs has revised its European Central Bank (ECB) forecast, now expecting no rate cuts in 2025 and a terminal deposit rate holding at 2%, a significant shift from its previous expectation of 1.75% and a September 25 basis point (bps) cut.
- J.P. Morgan has lowered its price target for Dow Inc. (DOW) from $28 to $25, citing a weaker demand outlook and margin pressures in the chemical sector.
- The U.S. dollar has strengthened against the Japanese yen, rising 0.27% to 147.38, driven by shifting investor sentiment ahead of key economic data.
- Tragically, 15 Thai nationals have died as a result of the ongoing border conflict with Cambodia, with the toll recorded as of early Friday.
In a notable shift in monetary policy expectations, Goldman Sachs has scrapped its forecast for an ECB rate cut in 2025. The investment bank now anticipates the terminal deposit rate will hold at 2%, up from its prior expectation of 1.75%, and has withdrawn its call for a 25 basis point cut in September. This revision suggests a more hawkish outlook for European monetary policy, potentially impacting borrowing costs and economic growth in the Eurozone.
Meanwhile, the chemical sector faces headwinds as J.P. Morgan has adjusted its price target for Dow Inc. (DOW). The new target is set at $25, a decrease from the previous $28, due to concerns over weaker demand and margin pressures. This downgrade reflects broader challenges within the industry, including weak demand in China and Europe, increased global capacity, and higher interest rates. Other analysts have also adjusted their targets for Dow Inc. (DOW) recently, with Citi lowering its target to $28 from $30 and UBS to $26 from $28.
In currency markets, the U.S. dollar has gained ground against the Japanese yen, increasing by 0.27% to trade at 147.38. This movement comes amid shifting investor sentiment and anticipation of upcoming economic data. The yen has been under pressure due to expectations of the Bank of Japan maintaining ultra-low interest rates, while resilient U.S. economic data has strengthened the case for potential Federal Reserve rate hikes.
Tragically, the ongoing border conflict between Thailand and Cambodia has resulted in a significant loss of life. The Thai Health Ministry has confirmed that 15 Thai nationals have died as a result of the clashes as of early Friday. Reports indicate that hospitals and civilian areas in Thailand have been damaged by artillery attacks, leading to evacuations. Both nations have accused each other of initiating the hostilities, which have escalated to include heavy weapons, rockets, and fighter jets.
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.