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Dollar strength, looming rate hikes pin gold near 9-month low

 

“Today’s Accomplishments Were Yesterday’s Impossibilities.” – Robert H. Schuller

 

 

HEADLINES

  • Take Five: Dollar takes it all
  • Dollar strength, looming rate hikes pin gold near 9-month low
  • U.S. crude, gasoline stockpiles likely fell last week
  • Global shares decline, bond yields slide as inflation fears swirl
  • Musk makes meme on Twitter legal threat after scrapping $44 billion deal
  • GBP/USD to suffer a sustained move below 1.1936 for a fall to 1.1500/1.1409 – Credit Suisse
  • USDJPY Near Term: Upside favored

 

 

Take Five: Dollar takes it all

 

The dollar's 12% year-to-date rise has raised global concern, and will surely be debated when G20 policymakers meet on July 15-16. All the more so, if it vaults to parity against the euro for the first time in 20 years.

British politics, Chinese lockdowns, U.S. banks' results and central bank hawks also bear watching.

 

 

COMMODITIES

 

Dollar strength, looming rate hikes pin gold near 9-month low

 

Gold was pinned at near a nine-month low on Monday as bets for aggressive interest rate hikes by the U.S. Federal Reserve and the dollar’s ascent dimmed appeal for bullion.

Spot gold fell 0.3% to $1,737.32 per ounce by 10:34 a.m. ET (1434 GMT). U.S. gold futures dipped 0.3% to $1,737.00.

Despite recession risks, lately investors have opted for dollar over gold, pushing the currency to a near-two decade peak, also eroding appeal for bullion among overseas buyers.

 

 

ENERGY

 

U.S. crude, gasoline stockpiles likely fell last week

U.S. crude and gasoline inventories were seen down last week, while distillate stockpiles likely rose, a preliminary Reuters poll showed on Monday.

Five analysts polled by Reuters estimated on average that crude inventories decreased by around 1.9 million barrels in the week to July 8.

The poll was conducted ahead of reports from the American Petroleum Institute, an industry group, due at 4:30 p.m. EST (2130 GMT) on Tuesday, and the EIA, the statistical arm of the U.S. Department of Energy, due at 10:30 a.m. (1530 GMT) on Wednesday.

Crude inventories (USOILC=ECI) rose by 8.2 million barrels in the week to July 1, compared with analysts' expectations for a draw of 1 million barrels.

 

 

STOCKS

 

Global shares decline, bond yields slide as inflation fears swirl

 

World equities and U.S. bond yields fell on Monday as investors braced for a U.S. inflation report that could force another super-sized hike in interest rates, with policymakers battling rising prices while being wary of the threat of recession.

The pan-European STOXX 600 index (.STOXX) lost 0.53% and MSCI's gauge of stocks across the globe (.MIWD00000PUS) shed 1.25%.

The euro hovered just above parity versus the dollar as the biggest single pipeline carrying Russian gas to Germany entered annual maintenance, with flows expected to stop for 10 days.

 

Musk makes meme on Twitter legal threat after scrapping $44 billion deal

 

Elon Musk on Monday mocked Twitter Inc's (TWTR.N) threat to sue him following his move to abandon the $44 billion takeover deal, tweeting the social media firm would need to disclose more information on bots and spam accounts.

The series of tweets on Monday was Tesla Inc chief's first public response since he made public his intention to ditch the offer on Friday because Twitter had breached multiple provisions of the merger agreement.

 

 

ANALYSIS

 

GBP/USD to suffer a sustained move below 1.1936 for a fall to 1.1500/1.1409 – Credit Suisse 

 

“With a top in place in trade-weighted terms and with short-term momentum reaccelerating, we look for a sustained break of the 1.1936 June low in due course. This should then clear the way for further weakness to next support at 1.1861/57 ahead of 1.1775 and eventually 1.1500/1.1409, the bottom of the six-year range and potential long-term trend support stretching back to 1985. Our bias remains to then look for a more important floor to be found here.” 

“Near-term resistance is seen at 1.2003, then 1.2039/49, with the recent reaction high and 13-day exponential average at 1.2057/89 ideally capping on a closing basis.”

 

 

CHART

 

USDJPY Near Term: Upside favored

 

Technical View: Long position above 136.25. Target 137.25. Conversely, break below 136.25, to open 135.95.

Comments: The pair breaks above the resistance.

 

 

 

Source: Trading Central 

 

 

CALENDAR

 

*Times in GMT

 

 

Source: FX Street Economic Calendar


 

SOURCES

 

https://www.reuters.com/business/take-five/global-markets-themes-graphic-2022-07-08/
https://www.reuters.com/article/global-precious/precious-dollar-strength-looming-rate-hikes-pin-gold-near-9-month-low-idUSL4N2YS2IN
https://www.reuters.com/business/energy/us-crude-gasoline-stockpiles-likely-fell-last-week-2022-07-11/
https://www.reuters.com/markets/europe/global-markets-wrapup-1-pix-2022-07-11/
https://www.reuters.com/markets/europe/twitter-slides-after-musks-44-bln-deal-falls-apart-2022-07-11/
https://www.fxstreet.com/news/gbp-usd-to-suffer-a-sustained-move-below-11936-for-a-fall-to-11500-11409-credit-suisse-202207111211

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