The Federal Reserve is preparing to end the current cycle of interest rates with most analysts expecting the 0.25% Fed rate hike next week to be the last. 

And as markets get confirmation around this expected step, the focus will then shift to the question of the next date to cut interest rates.

According to a survey by Bank of England to global fund managers, it's expected the Fed will cut interest rates in the second quarter of 2024.

The survey's results predict weak global growth in 2023, with 48% of participants expecting the US to undergo a soft recession.

Otherwise, the managers expect a global recession led by the US economy could start from the first quarter of 2024. 

Experts at the TD Securities Bank in Canada expect the Fed 0.25% interest rate hike to be the last in this current cycle of policy tightening.

The Canadian bank doesn't expect a US interest rate cut early in 2024 according to their economists. 

In fact, the Bank expects the US rate hike to occur in the second quarter of next year, with inflation falling below 3% and unemployment climbing.

Otherwise, the financial markets remain in a state of anticipation to the upcoming policy moves by the US Federal Reserve, which could impact the performance of stocks and bonds heavily. 

A change in the Federal Reserve's policy outlook could cause high volatility in the Forex and financial products markets, and will present fresh challenges to individuals and corporations alike. 

At last, the Fed's policy decision will no doubt be highly sensitive to the US and global markets as the Fed balances the inflation challenges with the need to support growth. 

Gold prices declined in European trade off two-month highs on active profit-taking.

Prices are also pressured by a stronger dollar against a basket of major rivals ahead of important US housing data in June.

Gold Prices Today

Gold prices fell 0.3% to $1,973 an ounce, with a session-high at $1,980, after rising 1.25% yesterday, marking a two-month high at $1,984 following weak US retail sales data.

Such data bolstered the case the Fed will snap the current cycle of policy tightening soon following the expected 0.25% Fed rate hike next week.

Dollar

The dollar index rose 0.3% on Wednesday for a second session off 15-month lows against a basket of major rivals, heaping pressure on dollar-denominated gold futures. 

The rebound is mostly due to short-covering, however investors expect the US economy to undergo a soft recession in the second half of the year.

Traders await important US housing data later today for June, on building permits and housing starts. 

The SPDR

Gold holdings at the SPDR Gold Trust fell 0.86 tones yesterday, the second decline in a row to a total of 912.07 tones, the lowest since March 10.

Euro fell in European trade against a basket of major rivals, extending losses for the second day against dollar and backing off 17-month peak on profit-taking following less aggressive remarks by ECB officials.

Such remarks hurt chances of upcoming interest rate hikes and bolstered the case  that European interest rates might approach neutrality soon.

EUR/USD fell 0.3% to 1.1196, with a session-high at 1.1236, after losing 0.1% yesterday on profit-taking away from a 17-month peak at 1.1275.

ECB

Some European Central Bank member took a more cautious stance on extended policy tightening this year, hurting chances of a 0.25% rate hike next week.

President of De Nederlandsche Bank Klaas Knot said the ECB will monitor inflation signs closely at upcoming months to avoid an overly tightening monetary policy.

The Dollar

The dollar index rose 0.3% on Wednesday for a second session off 15-month lows against a basket of major rivals.

Such recovery comers after US retail sales data which showed sales missed estimates in June, but consumers maintained their spending in other areas, showing flexibility. 

A massive $27 billion four-part deal was inked recently between French company TotalEnergies and the Iraqi Federal Government, and will go into effect in the next four weeks. The massive deal is crucial to enable Iraq to increase its oil output from 4.5 million bpd to 13 million bpd in the span of five years. It'll also free Iraq from relying on Iranian gas and electricity imports. As for the west, the deal is important, as it'll ensure the discovery of new oil and gas reserves in Iraq, which could compensate for missing Russian supplies. It'll also reaffirm western influence in the region in the face of increasing Chinese and Russian influence. This four-part deal from TotalEnergies is a huge deal indeed.

The deal was delayed long enough from 2021 until now, and Iraq's role in this delay wasn't a part of a geopolitical strategy from any side that wants to dominate the world or anything like that, but rather it was simply a dispute on payments to certain Iraqi officials, especially as Iraqi was still rebranding its Iraqi National Oil Company, which is considered one of the most corrupt companies worldwide, with TotalEnergies refusing to take part in  many of the shenanigans taking place in this organization, and thankfully, the organization was outright abolished by a count order in Iraq last October. 

The current deal states the Iraqi government will take 30% of the major contract, with Total Energies gaining 45%, while Qatar Energy gains 25%. 

According to OilPrice.com sources, Iraq was encouraged to  do the deal by Chinese and Russian elements, especially after Iranian-Saudi relations were tentatively resumed again with Chinese patronage. 

China indeed will benefit greatly from the deal, as it seeks a reliable and cheap source of energy to fuel its massive expansion and overtake the US and the world's top economic and political super power by 2030.

A major part of the new deal is extending and completing the project of processing sea water from the Persian gulf and transferring it through pipelines to oil production facilities to maintain pressure in oil pockets and improve the longevity and productivity of oil fields. 

Another major aspect of the deal is collecting and refining natural gas accompanying the process, which is currently burned in five major oil fiends in southern Iraq, and such efforts will help Iraq cut down its Iranian gas imports.

TotalEnergies already has extended experience working all over Iraq, and own major stakes in oil fields in the country, and TotalEnergies is expected to improve the productivity of several fields by two to three times, in addition to building anew solar station with power estimated at 1000 megawatts.