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Oil up 2.5% as no immediate Saudi output boost expected

 

 

“Try not to become a man of success. Rather become a man of value.” – Albert Einstein

 

 

HEADLINES

 

 

  • Dollar climbs further, pinning euro, yen at multi-decade lows
  • PRECIOUS-Gold slides as dollar rallies on steep Fed rate hike bets
  • Oil prices fall ahead of potential large U.S. rate hike
  • UK stocks slide over 1% on U.S. inflation scare, weak earnings
  • Bond yields rise as yield curve inversion sends worrying recession signals
  • EUR/USD to target 0.96 on a sustained drop under parity – Scotiabank
  • AUDUSD Near Term: Downside favored

 

 

Dollar dips on profit taking, Fed rate path in focus

 

 

The dollar fell on Friday as investors evaluated how high the Federal Reserve is likely to raise interest rates by when it meets later this month and as investors took profits after a strong rally that sent the greenback to a two-decade high on Thursday.

The greenback has jumped as the Fed is expected to raise rates faster and further than peer central banks as inflation soars to four-decade highs.

The dollar briefly gained on Friday after data showed that U.S. retail sales increased more than expected in June.

 

 

COMMODITIES

 

 

Gold heads toward fifth weekly decline on dollar strength

 

 

Gold prices eased on Friday and were poised for a fifth straight weekly loss, as expectations of a sizeable rate hike by the U.S. Federal Reserve powered the dollar and eroded bullion’s appeal.

Spot gold firmed to $1,704.01 per ounce by 12:54 p.m. ET, but has lost about 2% so far this week. U.S. gold futures also eased 0.19% to $1,702.6.

The dollar held at a two-decade high, making bullion more expensive for overseas investors. Gold looks to be in a free fall, and typically buyers will restrain themselves until the price finds some decent support, said independent analyst Ross Norman.

 

 

ENERGY

 

 

Oil up 2.5% as no immediate Saudi output boost expected

 

 

Oil was up 2.5% on Friday after a U.S. official told Reuters that an immediate Saudi oil output boost was not expected, and as investors question whether OPEC has the room to significantly ramp up crude production.

The comment during U.S. President Joe Biden's Middle East visit comes at a time when spare capacity at members of the Organization of the Petroleum Exporting Countries (OPEC) is running low.

Brent crude futures were up $2.40, or 2.4%, to $101.50 a barrel by 12:57 p.m. EDT (1657 GMT), while West Texas Intermediate crude rose $2.41, or 2.5%, to $98.19.

 

STOCKS

 

 

Wall St gains as bets of supersized rate hike recede

 

 

U.S. stocks climbed on Friday as upbeat retail sales data allayed some concerns about an imminent recession, while investors scaled back bets of a supersized interest rate hike in July after comments from Federal Reserve policymakers.

The benchmark S&P 500 (.SPX) and the blue-chip Dow (.DJI)indexes rose after a five-day run of losses, which were mostly sparked by worries of a 100-basis-point interest rate hike at the coming policy meeting following hot inflation data.

Banks earnings also hit full stride, with Citigroup , jumping 11.1% after posting a smaller-than-expected 27% drop in quarterly profit on usual strength in its treasury services business and as its trading desks cashed in on market volatility.

 

 

Bond yields slip, key yield curve inversion narrows as investors consider the Fed’s next move

 

 

A key Treasury yield curve inversion narrowed on Friday, after hitting its steepest level since 2000 the previous day.

Yield-curve inversions, or when shorter-term government bonds have higher yields than longer-term ones, are often viewed by markets as signs that a recession is coming.

The gap between the 2-year and 10-year yields shrunk Friday but remained inverted as stocks popped and traders weighed the possibility that the U.S. Federal Reserve will hike interest rates by 75 basis points at its next meeting, not 100 basis points.

 

 

ANALYSIS

 

 

GBP/USD to plummet towards the 1.15 handle – Scotiabank 

“A more cautious BoE than traders are expecting underpins our expectation for a weaker GBP in the months ahead towards 1.15.”

“Intraday support after the 1.18 zone is 1.1775 and the Thu low of 1.1760.”

“Resistance past 1.18 is 1.1875/85 and the figure area followed by the mid-1.19s.”

 

 

CHART

 

 

EURJPY Near Term: Upside favored

Technical View: Long position above 137.8. Target 140.2. Conversely, break below 137.8, to open 137.

Comments: The pair is expected to resume descend after correction.

Source: Trading Central 

 

 

CALENDAR

*Times in GMT

Source: FX Street Economic Calendar


Footnotes
https://www.reuters.com/markets/us/dollar-pauses-breath-fed-officials-leave-market-pondering-over-rates-path-2022-07-15/
https://www.cnbc.com/2022/07/15/gold-markets-interest-rates-us-dollar.html
https://www.reuters.com/business/energy/oil-prices-climb-amid-questions-over-scale-us-rate-hike-2022-07-15/
https://www.reuters.com/markets/europe/futures-crawl-higher-wells-fargo-down-after-results-2022-07-15/
https://www.cnbc.com/2022/07/15/bond-yields-slip-key-yield-curve-inversion-narrows-as-investors-consider-the-feds-next-move.html
https://www.fxstreet.com/news/gbp-usd-to-plummet-towards-the-115-handle-scotiabank-202207151335
 

 

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