In the early trading of the Asian market on Tuesday (August 23), the dollar index traded around 109. The dollar rose across the board on Monday, hitting a five-week high to 109.10. As several Federal Reserve officials reiterated their aggressive tightening of monetary policy, the euro fell below parity against the dollar again, and investors are increasingly worried that the actions of the United States and Europe hike rate hikes to curb inflation will weaken the global economy, so they stay away from risky assets. Gold prices fell to their lowest in nearly a month; oil prices rebounded from intraday lows, and the market weighed the warnings of Saudi Arabia's OPEC+ about possible production cuts, and the possibility that the nuclear deal could bring sanctioned Iranian oil back to the market.
commodity closing, 1 October Brent crude oil futures fell 0.25% to close at $96.48 per barrel, while September U.S. crude oil futures due Monday fell 0.6% to $90.23 per barrel. The more active October contract fell 0.03% to $90.41 a barrel; U.S. gold futures fell 0.8% to $1,748.4 an ounce.
U.S. stock closed, S&P 500 index fell sharply by 2.14%, closing at 4137.99 points. Nasdaq index fell 2.55% to close at 12,381.57 points. Dow Jones Industrial Index fell 1.91% to close at 33,063.61 points.
Tuesday forward
Global market trends at a glance
U.S. stocks closed sharply lower on Monday, and investors were nervous about the Federal Reserve's seminar held in Jackson Hall, Wyoming later this week, and the Federal Reserve is expected to emphasize its firm commitment to curbing inflation. All 11 sectors of the S&P 500 index fell, leading the decline was non-essential consumer goods stocks, down 2.84%, followed by information technology stock , down 2.78%. Nvidia fell 4.6%, Amazon fell 3.6%, Microsoft and Apple both fell more than 2%, and the 10-year U.S. Treasury yield hit its highest since July 21. The CBOE market volatility index, known as the Wall Street panic indicator, rose to 23.9, the highest in more than two weeks.
Market focus is on Fed Chairman Powell’s speech at the Jackson Hall central bank seminar on Friday to further understand how radical the Fed may be in future interest rate hikes. "Powell will try to make a hawkish voice to curb inflation expectations and tighten financial conditions, so this is likely to be a negative catalyst for the market," said Jay Hatfield, chief investment officer of Infrastructure Capital Management. "The Fed may raise interest rates by 50 basis points in September.
However, traders disagree on whether to raise interest rates by 50 basis points or 75 basis points, after several policy makers downplayed recent dovish expectations and stressed that the Fed is committed to fighting inflation. Investors will also focus on details of the Fed's plan to shrink its nearly $9 trillion balance sheet, a process that began in June.
The gas industry said last week that it would suspend gas supply to Europe for three days at the end of August, and European stocks fell, which also exacerbated negative sentiment on Wall Street. AMCEntertainmentHoldingsInc
Precious metals
Gold prices fell to their lowest level in nearly a month on Monday. As the dollar strengthened, precious metals fell sharply, and the Federal Reserve's upcoming interest rate hikes also weakened the attractiveness of gold.
TDSecurities commodity strategist Daniel Ghali said gold was under pressure due to the dollar and market expectations, and the market expected Fed Chairman Powell to strengthen the Fed's hawkish stance when he spoke at the central bank meeting in Jackson Hall, Wyoming later this week. Gold may fall below $1,700 after the Jackson Hall meeting.
Economists in Reuters interview said that the Fed could cut interest rates by 50 basis points in September due to expectations that U.S. inflation has reached its peak and concerns about a recession are growing.
spot silver fell 0.3% to $18.96 an ounce, hitting its lowest in four weeks earlier in the session. Ghali said, “Silver has been underperforming in recent trading days, reflecting a slowdown in industrial demand and a deteriorating speculative gastrointestinal aid."
Crude oil
Oil prices rebounded from intraday lows on Monday, almost flat in volatile trading, with the market weighing Saudi Arabia's warnings about possible production cuts by OPEC+, which consists of the Organization of Petroleum Exporting Countries (OPEC) and its allies, and the possibility that the nuclear deal could bring sanctioned Iranian oil back to the market.
Saudi state news agency SPA reported on Monday by citing Saudi Arabia's energy minister Prince Abdulaziz's speech to Bloomberg News, Prince Abdulaziz said that OPEC+ has the means and flexibility to deal with challenges, including by cutting oil production.
Meanwhile, 1 White House said on Sunday that leaders from the United States, Britain, France and Germany discussed efforts to resume the 2015 Iran nuclear deal, which could bring sanctioned Iranian oil back to global markets. U.S. State Department said it is closer to reaching a nuclear deal than two weeks ago.
Earlier in the session, concerns about the possible global economic slowdown and weakening fuel demands were depressed by concerns about the possibility of aggressive U.S. rate hikes could lead to a global economic slowdown and weaken fuel demand, driving down oil prices. Dennis Kissler, senior vice president of trading at BOKFinancial, said: "The fundamentals seem to be more bearish in the near future until we see some positive economic signs in the United States or China, which looks unlikely. ”
According to a Reuters survey, the Fed will raise interest rates by 50 basis points in September as inflation is expected to peak and concerns about recession are growing. Investors will closely watch Fed Chairman Powell’s speech at the annual global central bank meeting in Jackson Hall, Wyoming on Friday.
Forex
USD rose across the board on Monday, rising past parity against the euro again, and investors are increasingly worried that the U.S. and Europe’s action to curb inflation will weaken the global economy and therefore stay away from riskier assets. The U.S. dollar rose 0.8% against a basket of currencies, hitting a more than five-week high of 109.02, not far from the 20-year high hit in mid-July 109.29. 3
USD has been supported in recent trading days as several Fed officials reiterated their aggressive tightening of monetary policy. Earlier this week, the Fed will hold a seminar in Jackson Hall, Wyoming.
’s latest speech was Thomas Barkin, chairman of the Federal Reserve Bank of Richmond, who said on Friday that the “strong will” of Fed officials are tending to speed up interest rates and make efforts in the early stages. Michael Brown, head of market intelligence at Caxton, said: “The market saw the reality from Fed officials who spoke last week that it was impossible to immediately turn dovishly, followed by risk aversion. "Investors now clearly expect Fed Chairman Powell to send a relatively hawkish message on Friday, with a perfect combination of risk aversion and the Fed hawkish tone, and the dollar will move higher, especially as growth concerns, especially concerns about European growth continue to increase," said Brown. ”
Euro fell. Russian national energy giant Gazprom said last Friday that Russia's main pipeline for supplying natural gas to Europe will be stopped by the end of this month for three days. Investors are worried that the suspension of supply could exacerbate the energy crisis that has put pressure on the euro in recent months.
German central bank Governor Nager told the German Rhine Post that the German economy is one of the most vulnerable to the disruption of Russian gas supply, and that if the energy crisis continues to worsen, the German economy "probably" suffers recession in the winter. The euro briefly fell below $1 for the first time since July 14, down 1.1% at $0.99345.
Brown said: "0.9950 seems to be the key level because that is the previous low." If it falls below that level, we may see a further sharp drop, especially as the ECB’s window to tighten its policy is rapidly closing. ”
pound fell to its lowest level since mid-July on Monday, with surges in energy costs and summer strikes highlighting the cost of living in the UK, raising concerns about a further slowdown in the economy. The pound fell 0.64% to $1.17,565, just a short distance from the nearly two and a half years low of $1.17,435 hit in mid-July.
Market News
EU Agency Report: Russia's cessation of natural gas supply may greet Germany's GDP loss 2.5%
Italian media quoted the EU agency's " European Stability Mechanism " assessment and analysis report that if Russia stops natural gas supply in August, it may cause the eurozone countries to exhaust natural gas reserves by the end of the year, and the two most risky countries, Italy and Germany, may lose 2.5%. According to the analysis, Russia's suspension of natural gas supply may trigger energy rationing and economic recession in euro zone countries. If no measures are taken, the euro zone's GDP may lose 1.7%; if the EU's requirement to reduce natural gas consumption by up to 15% by countries on its own, the euro zone's GDP loss may be 1.1%.
survey shows that 72% of economists expect the next U.S. recession to begin in mid-2023
A new survey by the National Association for Business Economics (NABE) shows that 72% of economists surveyed expect the next U.S. recession to begin in mid-2023. The survey also showed that 73% of economists said they had “no confidence” or “not very confident” about the Fed saying they would drop inflation to 2% over the next two years without causing a recession, and only 13% said they were “confident” or “very confident” that the Fed could achieve this. In addition, according to the National Institute of Economics (NBER), 19% of economists say the U.S. economy has fallen into recession, and only 20% of economists expect the U.S. recession will not begin before the second half of 2023.
Saudi Energy Minister: The oil futures market has fallen into a vicious cycle of self-continuing
Asked whether he is worried about the current market situation, the Saudi energy minister said that the oil futures market has fallen into a vicious cycle of self-continuing , with very thin liquidity and extremely volatility, which weakens the basic function of market price regulation and prevents physical users from bearing the cost of hedging and managing risks. This has negatively affected the smooth and efficient operation of the oil market, energy commodities and other commodities, and has created new risks. This vicious cycle is amplified by many factors, including unproven reports of demand damage, recurring news about massive supply recovery, and ambiguity and uncertainty about the potential impact of price caps, embargoes and sanctions.
Former U.S. Treasury Secretary urged the Fed to bluntly state the impact of interest rate hikes on the economy
Former U.S. Treasury Secretary Summers called on the Fed to send a clear message that it needs to implement restrictive policies to push up the U.S. unemployment rate and thus calm inflation. "What I worry most is that the Fed will continue to suggest that it can have everything, including low inflation, low unemployment and a healthy economy," Summers said. If the Fed continues to assure the outside world that it can easily defeat inflation, it will leave people very doubting the future prospects and may further undermine its credibility. At Jackson Hall meeting, we hope we can get a clear message that policy is not restrictive yet, that restrictive policies are needed to curb inflation, and that we need to accept the consequences of it. I hope that "this message can be clearly conveyed."
People's Bank of China held a symposium on the analysis of the monetary and credit situation of some financial institutions
meeting and emphasized that policy-based development banks should make good use of policy-based development financial tools, increase support for related projects in key areas such as network infrastructure construction, industrial upgrading infrastructure construction, urban infrastructure construction, agricultural and rural infrastructure construction, and national security infrastructure construction, to form physical workload as soon as possible, and drive loan issuance. We must adhere to the principles of marketization and rule of law, and coordinate the relationship between stable credit growth and preventing financial risks. (People's Bank of China )
Iran: Oil production capacity will exceed 4 million barrels per day by March 2023
An official from the Iranian National Oil Company said that the Iranian Ministry of Petroleum and its subsidiaries have formulated detailed plans to increase crude oil production to 4.038 million barrels per day by March 20, 2023.Hormuz Qalavand, head of oil and gas production supervision at Iranian National Petroleum Corporation, said the plan includes drilling new wells in onshore and offshore oil fields and repairing existing wells, with special attention to the reduction of natural gas combustion and environmental hazards.
This article is from Huitong.com
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