Posted at 27 August 2022 / Categories Market Roundups
Market Roundup
•Fed will keep tightening until inflation controlled – Powell
•Core PCE increases 0.1% in July vs. 0.6% rise in June
•Indexes down: Dow 3.03%, S&P 3.37%, Nasdaq 3.94%
•US Jul Personal Income (MoM) 0.2%,0.6% forecast,0.6% previous
•US Wholesale Inventories (MoM) 0.8%, 1.4% forecast, 1.8% previous
•US Core PCE Price Index (YoY) 4.6%, 4.7% forecast, 4.8% previous
•US Jul Retail Inventories Ex Auto 0.4%, 1.5% previous
•US Jul PCE Price index (YoY) 6.3%,6.8% previous
•US Jul Personal Spending (MoM) 0.1%, 0.4% forecast, 1.1% previous
•US Jul PCE price index (MoM) 0.1%1.0% previous
•US Jul Core PCE Price Index (MoM) 0.1%, 0.3% forecast, 0.6% previous
•US Michigan 5-Year Inflation Expectations 2.90%,3.00% forecast,2.90% previous
•US Aug Michigan Current Conditions 58.6,55.5 forecast,58.1 previous
•US Aug Michigan Consumer Sentiment 58.2,55.1 forecast, 51.5 previous
•Canada Jun Budget Balance (YoY) 10.20B, 5.32B previous
•Canada Jun Budget Balance 4.88B, 2.66B previous
•17:00 U.S. Baker Hughes Total Rig Count 765, 762 previous
•U.S. Baker Hughes Oil Rig Count 605, 601 previous
Looking Ahead – Economic data (GMT)
•No significant events
Looking Ahead - Events, Other Releases (GMT)
•No events ahead
Fxbeat
EUR/USD: The euro declined against dollar on Friday after Federal Reserve Chair Jerome Powell adopted a hawkish tone to battling inflation, but did not settle the debate on how large a rate increase is likely at the U.S. central bank’s September meeting. The U.S. economy will need tight monetary policy "for some time" before inflation is under control, which means slower growth, a weaker job market and "some pain" for households and businesses, Powell said on Friday in remarks that warned there is no quick cure for fast rising prices. The euro dipped 0.07% to $0.9963. It has bounced from a 20-year low of $0.99005 on Tuesday. Immediate resistance can be seen at 1.0056 (9DMA), an upside break can trigger rise towards 1.0131(38.2%fib).On the downside, immediate support is seen at 0.9992(23.6%fib), a break below could take the pair towards 0.9865 (Lower BB).
GBP/USD: The British pound fell on Friday, on track for a weekly loss after a hawkish speech by U.S. Federal Reserve Chair Jerome Powell boosted the dollar. The dollar index strengthened after Powell said the U.S. economy will need tight monetary policy “for some time” before inflation is under control. Powell gave no indication of how high interest rates might rise.The pound-dollar pair fluctuated as the dollar reacted to Powell’s speech, hitting at one-week low of $1.1765.The pound was down 0.6% on the day at $1.177, on track for a 0.5% weekly loss. Immediate resistance can be seen at 1.1902(38.2%fib), an upside break can trigger rise towards 1.1791(5DMA).On the downside, immediate support is seen at 1.1855(38.2%fib),a break below could take the pair towards 1.1698 (Lower BB).
USD/CAD: The Canadian dollar weakened against its U.S. counterpart on Friday as investor sentiment buckled on Federal Reserve Chair Jerome Powell's hawkish tone to battling inflation. Wall Street tumbled and the U.S. dollar rose against a basket of major currencies after Powell said the Fed will raise borrowing costs as high as needed to restrict growth, and would keep them there "for some time" to bring down inflation. The remarks dashed investors' hopes that the Fed's aggressive approach to hikes might be modified soon, particularly after data showing that U.S. inflation eased considerably in July. The Canadian dollar was trading 0.8% lower at 1.3025 to the greenback Immediate resistance can be seen at 1.3039 (23.6%fib), an upside break can trigger rise towards 1.3084 (Higher BB).On the downside, immediate support is seen at 1.2983(5DMA), a break below could take the pair towards 1.2944 (38.2%fib).
USD/JPY: The dollar steadied against yen on Friday after Federal Reserve Chair Jerome Powell said the U.S. economy will need tight monetary policy "for some time" before inflation is under control. Tight monetary policy "for some time" means slower growth, a weaker job market and "some pain" for households and businesses, Powell said in a speech to the central banking conference in Jackson Hole, Wyoming. The dollar erased early losses to turn positive against a basket of currencies, while gold, which loses appeal as interest rates rise, fell after Powell's comments. The dollar index rose to 108.78, up 0.30% on the day, after earlier falling as low as 107.54. The dollar gained 0.66% against the Japanese yen to 137.39..Strong resistance can be seen at 137.53(Daily high), an upside break can trigger rise towards 138.00(Psychological level).On the downside, immediate support is seen at 137.04 (5DMA), a break below could take the pair towards 136.20(38.2%fib).
Equities Recap
European shares tumbled on Friday, with Germany in the lead as investors fretted over downbeat consumer sentiment data in the continent's biggest economy, while a reiterated hawkish stance from Federal Reserve Chair Jerome Powell added to fears.
UK's benchmark FTSE 100 closed down by 0.70 percent, Germany's Dax ended down by 0.08 percent, France’s CAC finished the day down by 1.66 percent.
Wall Street ended Friday with all three benchmarks more than 3% lower, as Federal Reserve Chief Jerome Powell's signal that the central bank would keep hiking rates to tame inflation nixed nascent hopes for a more modest path among some investors.
Dow Jones closed down by 3.03 percent, S&P 500 ended down by 3.37 percent, Nasdaq finished the day down by 3.94 percent.
Treasuries Recap
U.S. two-year Treasury yields briefly popped to their highest levels since October 2007 before stabilizing near two-month highs on Friday after Federal Reserve Chair Jerome Powell reiterated that the U.S. central bank will continue to raise interest rates to fight inflation.
The two-year U.S. Treasury yield, which typically moves in step with interest rate expectations, was up 2.9 basis points at 3.403%, slightly below its high for the year of 3.4350% in June.
Commodities Recap
Gold fell over 1% on Friday after Federal Reserve Chair Jerome Powell in his speech at Jackson Hole said the U.S. economy needed a tight monetary policy until inflation was under control.
Spot gold fell 1.2% to $1,738.14 per ounce by 1335 p.m. ET, en route to fall for a second straight week, down about 0.4% so far. U.S. gold futures settled 1.2% lower at $1,749.8
Oil prices ended higher on Friday, boosted by signals from Saudi Arabia that OPEC could cut output, but trading was volatile as investors digested and ultimately shrugged off warnings from the head of the U.S. Federal Reserve about economic pain ahead.
Brent crude futures rose $1.65 to settle at $100.99 a barrel. U.S. West Texas Intermediate (WTI) crude futures rose 54 cents to settle at $93.06 a barrel. Both contracts rose and fell by $1 throughout the session.