Key Takeaways
- Gold prices surged for a fourth consecutive session, reaching $3,375 with a 0.39% gain, as weaker-than-expected U.S. jobs data significantly boosted expectations for a Federal Reserve interest rate cut in September, with odds now at 87%.
- The Indian Rupee opened weaker against the U.S. Dollar at 87.85, compared to its previous close of 87.65, grappling with persistent depreciation pressures fueled by U.S. tariff threats and foreign fund outflows.
- JPMorgan Chase & Co. (JPM) has raised its target price for Standard Chartered Plc (STAN:LN, SCBFF) to £13.90, citing robust fourth-quarter results, upgraded earnings per share (EPS) estimates, and an increased share buyback program.
- U.S. President Donald Trump's recent tariff imposition on Indian imports is complicating the Reserve Bank of India's (RBI) interest rate decisions, prompting some economists to anticipate earlier easing measures.
Global financial markets are experiencing a mix of reactions to shifting monetary policy expectations, escalating trade tensions, and positive corporate developments. Gold has seen a notable rally, while the Indian Rupee continues to face headwinds from U.S. tariffs. Meanwhile, Standard Chartered has received a significant upgrade from JPMorgan, reflecting strong underlying performance.
Gold Shines as Fed Rate Cut Bets Intensify
Gold prices continued their upward trajectory for a fourth straight session, with the precious metal trading at $3,375, marking a 0.39% increase. This surge is primarily driven by mounting expectations of a Federal Reserve interest rate cut following recent weaker-than-expected U.S. jobs data. The dismal Nonfarm Payrolls report, which saw May and June figures revised down by 258,000, has pushed the probability of a September 17 Fed rate cut to 87%. Lower interest rates reduce the opportunity cost of holding non-yielding assets like gold, making it more attractive to investors seeking safe-haven assets amidst market uncertainty.
Indian Rupee Under Pressure Amid Tariff Concerns
The Indian Rupee (INR) opened at 87.85 against the U.S. Dollar (USD) on Tuesday, a depreciation from its previous close of 87.65. [Headline 2] This weakness is largely attributed to the looming threat of U.S. tariffs on Indian imports, which has contributed to a cautious outlook and foreign fund outflows. Reports indicate that U.S. President Donald Trump's administration has imposed tariffs of up to 25% on some Indian goods, a move that could negatively impact India's GDP growth by 0.1-0.3%. This trade uncertainty is complicating the Reserve Bank of India's (RBI) monetary policy decisions, with some economists now anticipating earlier interest rate easing to support the economy. The rupee had previously slipped past the 87-mark, reaching its lowest level in over four months.
Standard Chartered Receives JPMorgan Boost
JPMorgan Chase & Co. (JPM) has significantly raised its price target for Standard Chartered Plc (STAN:LN, SCBFF) to £13.90 from £11.80, while maintaining an "Overweight" rating. This positive revision follows Standard Chartered's robust fourth-quarter results, which showcased a strong revenue outlook and positioned the bank at the higher end of its projected 5-7% compound annual growth rate (CAGR) from 2023 to 2026. JPMorgan analyst Raul Sinha noted that earnings per share (EPS) estimates for Standard Chartered have been lifted by 6%, 5%, and 4% for the upcoming years. The bank also announced an increased share buyback program, now forecasting an additional $0.25 billion for fiscal year 2025, bringing the total expected buyback to $2.75 billion, with $1.5 billion anticipated in the first half of the year. Standard Chartered's return on tangible equity (ROTE) is projected to rise from 11.7% in fiscal year 2024 to 13.2% by 2026, aligning with the bank's target of "approaching 13%" ROTE.
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.