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Oil prices rise for fourth day on supply worries

 

“The biggest adventure you can take is to live the life of your dreams.” ― Oprah Winfrey 

 

 

HEADLINES

 

 

  • Sterling set for biggest 6-month drop since 2016
  • Gold choppy as investors weigh rate hikes against recession risks
  • Oil prices rise for fourth day on supply worries
  • Wall St falls in choppy trading on rate hike, growth concerns
  • Treasury yields fall as traders track economic data, Fed remarks
  • GBP/USD: Losses can quickly extend to the mid-1.20s – Scotiabank
  • EURUSD Short Term: Downside favored

 

 

Sterling set for biggest 6-month drop since 2016 

 

Sterling fell against its major peers on Wednesday with dovish comments by a new policymaker keeping the currency firmly on course for its biggest six-month drop against the dollar since 2016, the year of the Brexit referendum.

Swati Dhingra, who is due to join the BoE in August, said the bank should move very gradually to tighten monetary policy because there were signs that an economic slowdown was much more imminent than previously thought.

Sterling has been one of this year's worst performing major currencies, down more than 10% against the dollar, because of worries of a severe economic slowdown, red-hot inflation and growing Brexit-related political uncertainty.

 

 

COMMODITIES

 

Gold choppy as investors weigh rate hikes against recession risks 

 

Gold prices see-sawed on Wednesday, caught between headwinds from aggressive interest rate hikes and support from safe-haven bids spurred by growing recession risks.

Spot gold fell 0.2% to $1,816.88 per ounce by 2 p.m. ET. Prices bounced as much as 0.7% on data showing a contraction in the U.S. economy in the first quarter, before quickly giving up those gains and moving back into the tight range it has been in for the past few sessions.

U.S. gold futures, meanwhile, fell 0.1% to $1,819.7.

 

 

ENERGY

 

Oil prices rise for fourth day on supply worries 

 

Oil prices gained for a fourth straight session on Wednesday with tight supply worries offsetting concerns about a weaker global economy.

Brent crude futures for August advanced 0.3% to $118.29. The August contract will expire on Thursday and the more-active September contract was at $114.06, up 23 cents, or 0.2%.

U.S. West Texas Intermediate (WTI) crude futures added 0.3% to trade at $112.07 per barrel.

Both contracts rose more than 2% on Tuesday as concerns over tight supplies due to Western sanctions on Russia outweighed fears of that demand may slow in a potential future recession.

 

 

STOCKS

 

Wall St falls in choppy trading on rate hike, growth concerns 

 

U.S. stocks fell on Wednesday with a gloomy first-half of the year approaching its end, marred by concerns of an aggressive monetary policy that risks pushing the economy into a recession.

Investors fretted over the impact of hefty rate increases on the U.S. economy, as data showed the GDP contracted in the first quarter amid a record trade deficit, following a Tuesday report that showed consumer confidence hit a 16-month low.

Investors are now bracing for the latter part of the year, anticipating the impact of rising prices, higher yields and a hawkish Federal Reserve on the economy at large, as well as on second-quarter company earnings.

 

Treasury yields fall as traders track economic data, Fed remarks 

 

U.S. Treasury yields slipped Wednesday as investors continue to assess the economic outlook amid rising recession fears.

The yield on the benchmark 10-year Treasury note was down 9 basis points to 3.113%, while the yield on the 30-year Treasury bond dropped 8 basis points to 3.227%. Yields move inversely to prices.

As the second quarter draws to a close on Thursday, concern over a slowing economy and aggressive interest rate hikes from the Federal Reserve continue to dominate market sentiment.

 

 

ANALYSIS

 

GBP/USD: Losses can quickly extend to the mid-1.20s – Scotiabank 

 

“The technical picture for sterling points to losses to the 1.21 figure amid its ongoing failure to hold the 1.23 handle on the five occasions it has broken above the figure in the past week – and the quick selloffs that have followed some of these moves.” 

“Aside from the daily low of 1.2154, there are no obvious support markers until the 1.2100/10 zone and losses can quickly follow to the mid-1.20s.” 

“Resistance is the 1.22 area with the daily high at ~1.2215 and the mid-1.22s subsequently.”

 

 

CHART

 

EURUSD Short Term: Downside favored

 

Technical View: Short position below 1.054. Target 1.043. Conversely, break above 1.054, to open 1.0585.

Comments: The pair remains under pressure. Further weakness favored.

 

 

 

Source: Trading Central 

 


 

CALENDAR

 

*Times in GMT

 

 

Source: FX Street Economic Calendar

 

 

SOURCES 

 

https://www.reuters.com/markets/europe/sterling-near-one-week-low-vs-dollar-eyes-boes-bailey-2022-06-29/
https://www.cnbc.com/2022/06/29/gold-prices-buoyed-by-lower-us-bond-yields-.html
https://www.cnbc.com/2022/06/29/oil-prices-take-breather-after-three-day-rally.html
https://www.reuters.com/markets/europe/futures-edge-lower-fed-hawks-push-faster-rate-hikes-2022-06-29/
https://www.cnbc.com/2022/06/29/treasury-yields-fall-as-traders-track-economic-data-fed-remarks.html
https://www.fxstreet.com/news/gbp-usd-losses-can-quickly-extend-to-the-mid-120s-scotiabank-202206291328

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