Search LOGIN

Wall Street climbs over 2% at end of strong week

“Risk more than others think is safe. Dream more than others think is practical.” — Howard Schultz 

 

 

HEADLINES

 

 

  • U.S. dollar slides as markets re-evaluate Fed rate path
  •  Gold eyes weekly decline as rate hikes loom
  • Oil rises over 2%, but still set for weekly drop on recession fears
  • Wall Street climbs over 2% at end of strong week
  • European stocks log best session in more than 3 months; tech shares gain 3.8%
  • EUR/USD: Downside risk keep the focus on 1.0000 – Danske Bank
  • GBPJPY Near Term: Upside favored

 

U.S. dollar slides as markets re-evaluate Fed rate path 

 

 

The U.S. dollar slipped on Friday and wason track for its first weekly decline this month, as traders dialed down bets on where interest rates may peak and brought forward their views on the timing of interest rate cuts to counter a possible recession. 

A significant factor this week has been the fall in oil and commodity prices, which has eased inflation fears and allowed equity markets to rebound. This has eroded the safe-haven bid that has been boosting the dollar against other major currencies.

In late morning New York trading, the dollar index , which measures the U.S. unit against six major currencies, fell 0.3% to 104.06.

 

 

COMMODITIES

 

 

Gold eyes weekly decline as rate hikes loom 

 

 

Gold steadied on Friday as the dollar retreated, but bullion was still on pace to post a weekly fall of nearly 1% as the non-yielding asset wrestled with the prospect of higher interest rates. 

Spot gold was 0.3% higher at $1,829 per ounce, after earlier touching a one-week low of $1,820.30. U.S. gold futures gained 0.1% to $1,831.20.

Bullion in considered an inflation hedge and but higher U.S. interest rates increase the opportunity cost of holding it.

However in the short term, the Fed will hike rates aggressively, providing some headwinds for gold, Fritsch added.

 

 

ENERGY

 

 

Oil rises over 2%, but still set for weekly drop on recession fears 

 

 

Oil rose by more than 2% on Friday supported by tight supply, although crude was heading for a second weekly fall on concern that rising interest rates could push the world economy into recession. 

Brent crude was up $2.78, or 2.5%, at $112.83 a barrel by 12:10 p.m. EDT (1610 GMT), while U.S. West Texas Intermediate (WTI) crude gained $3.02, or 2.9%, to $107.29.

Oil came close this year to an all-time high of $147 reached in 2008 as Russia's invasion of Ukraine exacerbated tight supplies just as demand has been recovering from the COVID pandemic.

 

 

STOCKS

 

 

Wall Street climbs over 2% at end of strong week 

 

 

Wall Street's main indexes jumped more than 2% on Friday as signs of slowing economic growth and a recent pullback in commodity prices tempered expectations for the Federal Reserve's rate-hike plans and set stocks on course for strong weekly gains. 

All 11 S&P 500 sectors were up strongly, with financials (.SPSY), materials (.SPLRCM) and industrials (.SPLRCI) leading the way.

Fed funds futures traders are now pricing for the benchmark rate to rise to about 3.5% by March, down from expectations last week that it would increase to around 4%.

 

 

CURRENCIES

 

 

European stocks log best session in more than 3 months; tech shares gain 3.8% 

 

 

European markets closed sharply higher on Friday to end a volatile week, as investors around the world assessed inflation and fears of an economic recession. 

The pan-European Stoxx 600 index closed up by 2.6% provisionally, its best day in more than three months, with tech shares adding 3.8% to lead gains as all sectors finished in positive territory.

Weaker-than-expected euro zone business activity data on Thursday compounded fears that the bloc could be headed for a recession, and sent European stocks to a fresh 2022 low.

 

 

ANALYSIS

 

 

EUR/USD: Downside risk keep the focus on 1.0000 – Danske Bank 

 

 

“Fundamentally, the US should continue to be a high(er) interest rate market and equities continue to appeal to foreign investors. This means the US is likely to attract capital, which helps the USD.”

“The large negative terms-of-trade shock to Europe vs US, a further cyclical weakening among trading partners, the coordinated tightening of global financial conditions, broadening USD strength and downside risk to the euro area make us keep our focus on EUR/USD moving still lower (targeting 1.00) – a view not shared by consensus.”

“The key risk to shift EUR/USD towards 1.15 is seeing global inflation pressures fade and industrial production increase. The upside risk also include a renewed focus on easing Chinese credit policy and a global capex uptick but neither appear to be materialising, at present.” 

 

 

CHART

 

 

GBPJPY Near Term: Upside favored

 

 

Technical View: Long position above 164.7. Target 167.25. Conversely, break below 164.7, to open 163.8.

Comments: The pair breaks above the resistance.

Source: Trading Central 



 

CALENDAR

 

 

*Times in GMT

Source: FX Street Economic Calendar

 

Footnotes
https://www.reuters.com/markets/us/dollar-stumbles-rate-path-fuels-recession-worries-2022-06-24/
https://www.cnbc.com/2022/06/24/gold-set-for-second-straight-weekly-drop-on-worries-over-rate-hikes.html
https://www.reuters.com/business/energy/oil-prices-rise-tight-supply-inventory-uncertainty-2022-06-24/
https://www.reuters.com/markets/europe/futures-rise-investors-scale-back-rate-hike-expectations-2022-06-24/
https://www.cnbc.com/2022/06/24/europe-markets-open-to-close-volatile-week-as-investors-assess-recession-prospects.html
https://www.fxstreet.com/news/eur-usd-downside-risk-keep-the-focus-on-10000-danske-bank-202206241655
 


 

UNLIMITED ACCESS!

The best way to keep track of your accounts. Get notifications
and access your dashboard any time!

Open a live or demo account, make secure deposits or get latest
market updates for free!