Posted at 30 August 2022 / Categories Market Roundups
Market Roundup
•Dow down 0.57%, S&P 500 down 0.67%, Nasdaq down 1.02%
• French 12-Month BTF Auction 0.658%,0.680% previous
•French 3-Month BTF Auction -0.027%,0.058% previous
• French 6-Month BTF Auction 0.084%.0.084% previous
•US Aug Dallas Fed Mfg Business Index -12.9,-22.6 previous
•US 3-Month Bill Auction 2.880%, 2.740% previous
• US 6-Month Bill Auction 3.235%, 3.110% previous
Looking Ahead - Economic Data (GMT)
•01:30 Australia Jul Private House Approvals 1.2% previous
•01:30 Australia Jul Building Approvals (MoM) -2.0% forecast, -0.7% previous
Looking Ahead - Economic events and other releases (GMT)
• No significant events
Currency Summaries
EUR/USD: The euro strengthen on Monday as money markets moved to price in a two-thirds chance of a large 75 basis-point European Central Bank rate hike in September on Monday, as policymakers made the case over the weekend for a large move to tame uncomfortably high inflation. ECB governing council member Francois Villeroy de Galhau said on Saturday the bank needed another "significant" hike in September, while ECB policymaker Martins Kazaks said a euro zone recession was very likely but that alone would not bring down inflation, and the bank should opt for a big rate hike next month. Markets now price in two-thirds risk the ECB could hike rates by 75 bps at its September meeting, up from 24% last week. Immediate resistance can be seen at 0.1019(38.2%fib), an upside break can trigger rise towards 1.0041(11DMA).On the downside, immediate support is seen at 0.9972(5DMA), a break below could take the pair towards 0.9926 (23.6%fib).
GBP/USD: The British pound fell to its lowest level since March 2020 on Monday as mounting concern about the economic outlook gave traders added reason to dump the currency against the U.S. dollar. Inflation in Britain has hit a 40-year high and the Bank of England (BoE) has warned of a lengthy recession. Soaring energy bills have exacerbated concern about the economic outlook. British energy bills will jump 80% to an average of 3,549 pounds ($4,188) a year from October, the regulator said on Friday, the latest example of what politicians have called a cost-of-living crisis .Sterling fell to a 2-1/2-year low of $1.1649 in thin trading on a UK public holiday, versus the greenback and was last down 0.23% at $1.1711. Immediate resistance can be seen at 1.1820(38.2%fib), an upside break can trigger rise towards 1.1856(5DMA).On the downside, immediate support is seen at 1.1650(23.6%fib),a break below could take the pair towards 1.1583(Lower BB).
USD/CAD: The Canadian dollar strengthened against the greenback on Monday, as higher oil prices and expectation Bank of Canada will raise interest rate in September boosted Canadian dollar. nvestors ramped up Canadian rate hike bets, with markets pricing in a greater chance of 75 basis point hikes from the Bank of Canada in September. Oil prise spiked amid indications OPEC and their allies plan to decrease production assuming a deal with Iran that lifts sanctions. The loonie was trading 0.1% higher at C$1.3019 to the greenback, after trading in a range of 1.3011 to 1.3075.Immediate resistance can be seen at 1.3080(23.6%fib), an upside break can trigger rise towards 1.3131(15th Jul high).On the downside, immediate support is seen at 1.2987 (5DMA), a break below could take the pair towards 1.2961(38.2%fib).
USD/JPY: The dollar strengthened against yen on Monday as Federal Reserve Chair Jerome Powell signalled interest rates would be kept higher for longer to bring down uncomfortably high inflation. In a speech kicking off the Jackson Hole central banking conference in Wyoming on Friday, Powell said the Fed would continue to raise rates to curb inflation even as it caused pain for households and businesses. Markets are now largely pricing in a 75-basis-point rate hike at the Fed's September meeting. The greenback was up 0.78% against Japan's yen at 138.56 yen. Strong resistance can be seen at 138.99(23.6%fib), an upside break can trigger rise towards 139.83(Higher BB).On the downside, immediate support is seen at 137.67(5DMA), a break below could take the pair towards 137.32(38.2%fib).
Equities Recap
European shares dropped on Monday, with technology stocks leading declines, while bond yields surged as comments from central bankers heightened fears of aggressive measures to stamp out inflation amid rising risks of a recession.
UK's benchmark FTSE 100 closed down by 0.70 percent, Germany's Dax ended up by 0.61 percent, France’s CAC finished the day down by 0.83 percent.
U.S. stocks closed lower on Monday, adding to last week's sharp losses on nagging concerns about the Federal Reserve's determination to aggressively hike interest rates to fight inflation even as the economy slows..
Dow Jones closed down by 0.57 percent, S&P 500 closed down by 0.67 percent, Nasdaq settled down by 1.02 % percent.
Treasuries Recap
The U.S. two-year treasury yield hit its highest in 15 years on Monday as investors repositioned for an extended period of aggressive interest rate hikes by the Federal Reserve following chair Jerome Powell's hawkish speech on Friday.
The two year yield , which is particularly sensitive to interest rate expectations, rose to as high as 3.489%, its highest since late 2007, up 8 basis points from its Friday close.
Benchmark 10-year yields also rose 8 basis points to as high as 3.13% but remain well shy of their mid-June top of 3.49%.
Commodities Recap
Oil prices settled up more than 4% on Monday, extending last week's gain, as potential OPEC+ output cuts and conflict in Libya helped to offset a strong U.S. dollar and a dire outlook for U.S. growth.
Brent crude settled up $4.10, or 4.1%, at $105.09 a barrel, having risen by 4.4% last week. U.S. West Texas Intermediate (WTI) crude gained $3.95, or 4.2%, to$ 97.01, after rallying 2.5% last week.
Gold prices reversed course to trade higher on Monday as a dollar rally lost steam, having pushed bullion to one-month lows earlier in the session after the U.S. Federal Reserve signalled higher interest rates.
Spot gold was steady at $1,737.57 per ounce by 2:15 p.m. ET (1815 GMT). Prices touched their lowest since July 27 at $1,719.56 earlier in the session.U.S. gold futures settled flat at $1,749.7.