It's scary, but it's coming. China's digital currency, the e-CNY, has seen huge growth, with transactions totaling 1.8 trillion yuan ($249 billion) by the end of June 2022, according to Yi Gang, governor of China's central bank. This is way up from just 100 billion yuan in 2021 used in the form of central bank digital currency (CBDC). So far, the e-CNY is mostly being used for domestic payments within China, where 120 million digital wallets have been set up so far. China is leading the way globally in creating government-backed digital money, though it's still early days. While there is increasing adoption of this technology in the east, there is a huge pushback in the west against the potential loss of freedom.
EQUITY
The major U.S. stock indexes ended mixed Wednesday, with the S&P 500 and Dow Jones posting gains while the Nasdaq declined ahead of big tech earnings. Netflix's share price dropped 9% after its mixed earnings showed significant subscriber growth but missed its revenue forecast amid competition and Hollywood strikes. Investors rushed to Microsoft after it announced a $30 subscription to Generative AI integrated apps, while Tesla fell even on higher earnings as it neared a technical cycle.
GOLD
Gold prices are up on expectations that interest rate hikes have eased off, but the Fed meeting next week could change that if they signal further hikes. Gold could tumble from its current lofty levels. For now, though, it's all about rate hike outlooks rather than inflation when it comes to the gold market.
OIL
Oil prices remain volatile and slightly lower this week amid weak fuel demand concerns and China's growth struggles, though the EIA forecasts tighter supplies and higher prices ahead. The dollar rebound has also weighed on crude prices as investors eye next week's Fed meeting.
CURRENCY
The dollar rebounded Wednesday as UK inflation cooled faster than expected, slashing the pound and easing pressure on the Bank of England to hike rates. The surprise inflation slowdown led traders to bet the BoE would downshift rate hikes. This inflation reprieve in another region provided some relief for the battered dollar after rapid US disinflation reduced Fed tightening bets.
