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Gold set to snap 5-week losing streak on softer dollar, yields

 

 

“We May Encounter Many Defeats But We Must Not Be Defeated.” – Maya Angelou 

 

 

HEADLINES

 

 

  • Sterling posts biggest weekly gain against dollar in two-months
  • Gold set to snap 5-week losing streak on softer dollar, yields
  • Brent stable as EU tweaks sanctions to allow oil shipments to third countries
  • Wall Street declines as ad tech, social media stocks weigh
  • Twitter blames Musk, weak ad market for drop in revenue
  • EUR/USD: Euro to remain under downward pressure in the near-term – MUFG
  • AUDUSD Near Term: Upside favored

 

 

Sterling posts biggest weekly gain against dollar in two-months

 

 

The pound posted its biggest weakly gain versus the dollar since May 20 this week and rose on Friday versus the dollar as the impact of weak UK economic data on the British currency was tempered by worse numbers coming out of the U.S. and Europe.

Fresh data showed Britain's businesses grew at their slowest pace in 17 months in July and inflation pressures eased, according to an industry survey on Friday that might ease pressure on the Bank of England to deliver a big interest rate hike next month.

 

 

COMMODITIES

 

 

Gold set to snap 5-week losing streak on softer dollar, yields

 

 

Gold headed for its first weekly gain in six on Friday as a pullback in U.S. Treasury yields and the dollar’s decline bolstered non-yielding bullion’s safe-haven appeal as economic risks persisted.

Spot gold rose 0.2% to $1,721.29 per ounce by 2:21 p.m. EDT (1821 GMT). It was up about 1% so far this week, following a strong rebound from a more than one-year low of $1,680.25 on Thursday.

U.S. gold futures settled 0.8% higher at $1,727.4.

Gold’s uptick was helped by a retreat in U.S. 10-year Treasury yields.

 

 

ENERGY

 

 

Brent stable as EU tweaks sanctions to allow oil shipments to third countries

 

 

Brent crude prices were little changed in choppy trading on Friday after the European Union said it would allow Russian state-owned companies to ship oil to third countries under an adjustment of sanctions agreed by member states this week.

Brent crude futures climbed 20 cents, or 0.2%, to $104.03 a barrel by 1:30 p.m. ET (1730 GMT), while U.S. West Texas Intermediate crude (WTI) fell 64 cents, or 0.6%, to $95.70 a barrel.

Under tweaks to sanctions on Russia that came into force on Friday payments related to purchases of Russian seaborne crude oil by EU companies would not be banned.

 

 

STOCKS

 

 

Wall Street declines as ad tech, social media stocks weigh

 

 

Major U.S. indexes dipped on Friday as shares in social media and ad tech firms decline following weak earnings from Twitter and Snap, offsetting gains from card issuer American Express following an upbeat forecast.

Still, the S&P 500 (.SPX) and the Dow (.DJI) are on track to end the week with their biggest gains in nearly a month, with growth stocks doing most of the heavy lifting as markets cheer quarterly reports from Tesla Inc and Netflix Inc (NFLX.O).

Snap Inc's shares tumbled nearly 40%, after the Snapchat owner posted its weakest-ever quarterly sales growth as a public company, while Twitter Inc (TWTR.N) slipped 0.6% following a surprise fall in revenue.

 

 

Twitter blames Musk, weak ad market for drop in revenue

 

 

Twitter Inc (TWTR.N) on Friday blamed its ongoing battle to close its $44-billion acquisition by Elon Musk and a weakening digital advertising market for a surprise fall in quarterly revenue and a net loss.

The results come as Twitter has sued Musk for dropping his offer to buy the company, and is now preparing for a legal showdown in a trial set to begin in October. The deal uncertainty has worried Twitter's advertisers and caused chaos inside the company.

Advertising revenue rose just 2% to $1.08 billion, missing Wall Street expectations of $1.22 billion, according to Refinitiv IBES data.

 

 

ANALYSIS

 

 

EUR/USD: Euro to remain under downward pressure in the near-term – MUFG 

 

 

“We expect the EUR to remain under downward pressure in the near-term driven by ongoing fears over disruption to the euro-zone economy from energy supply constraints and fragmentation risks.”

“The release of the euro-zone PMI surveys for July have further reinforced fears for a sharper slowdown/recession for the euro-zone economy in 2H of this year. We also expect Italian bond yields to continue experiencing upward pressure ahead off the snap elections to be held on 25th September.”

“We are not expecting the ECB to step in to support the Italian bond market in response to higher political uncertainty unless yields spike higher. We expect these negative factors to outweigh the ECB’s more front-loaded tightening.”

 

 

CHART

 

 

AUDUSD Near Term: Upside favored

 

 

Technical View: Long position above 0.691. Target 0.698. Conversely, break below 0.691, to open 0.689.

Comments: The pair remains supported. Further advance favored.

Source: Trading Central 

 

 

CALENDAR

 

 

*Times in GMT

Source: FX Street Economic Calendar

 

 

Footnotes
https://www.reuters.com/markets/europe/sterling-posts-biggest-weekly-gain-against-dollar-two-months-2022-07-22/
https://www.reuters.com/article/global-precious/precious-gold-set-to-snap-5-week-losing-streak-on-softer-dollar-yields-idUSL4N2Z32HZ
https://www.reuters.com/article/global-oil/update-7-brent-edges-higher-on-supply-concerns-after-price-cap-on-russian-oil-idUSL1N2Z303N
https://www.reuters.com/markets/europe/sp-500-nasdaq-futures-fall-social-media-stocks-lead-declines-2022-07-22/
https://www.reuters.com/technology/twitter-revenue-falls-weakening-digital-ad-market-2022-07-22/
https://www.fxstreet.com/news/eur-usd-euro-to-remain-under-downward-pressure-in-the-near-term-mufg-202207221700

 

 

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