In this article, we have covered the highlights of global market news about the Gold Spot US Dollar, Crude oil prices, Chinese Yuan Chips, and S&P 500.
With XAU/USD Expected to Have the Worst Week in Two Months, the NFPs are now the focus of the gold price outlook.
With the price of the yellow metal down nearly 3.7 percent as the weekend approaches, gold prices are on track to have their worst week in almost two months. This week’s rise in the US dollar has been a significant factor in gold’s decline. The strength of the dollar this week seems to have been primarily caused by outside sources. The latter include Europe’s monetary policy problems and developed nations that threaten global growth projections.
Fedspeak seemed to significantly impact Thursday’s improvement in market confidence. James Bullard and Christopher Waller of the Fed emphasized that a smooth landing for the central bank had a “strong possibility.” This optimism probably caused the US dollar to weaken, enabling anti-fiat gold prices to stabilize after suffering significant losses earlier this week.
Over the next twenty-four hours, things will get increasingly intriguing. The June non-farm payroll data will be closely watched. US employment growth is predicted to be 268k, down from 390k in May. But average hourly wages could get more attention. A decrease from 5.2 percent to 5.0 percent year over year is seen. Watching salaries will be crucial if the central bank wants to stabilize inflation expectations.
Crude oil prices rebound as US output remains stable heading into July.
While US inventories unexpectedly rise for the first time in three weeks, the price of oil continues its recovery from the weekly low ($95.10), and crude may try to retrace its losses from the monthly high ($111.45) as the Relative Strength Index (RSI) rises above-oversold zone.
The Organization of Petroleum Exporting Countries (OPEC) plans to “adjust upward the overall monthly production for August 2022 by 0.648 mb/d.” Still, slowing consumption may produce headwinds for crude as US inventories jump 8.235 million in the week ending July 1 versus expectations for a 1.043 million decline. Additionally, current market conditions may keep a lid on crude prices.
Given the weaker demand picture, it is unclear whether OPEC will stick to its current production plan throughout the year. Additionally, events from the US might impact crude prices as the recent increase in oil supply looks to be ending.
As iron ore catches a bid on stimulus news, Chinese Yuan Chips fall to the dollar.
Following the third day of advances on Wall Street, with the S&P 500 finishing 1.49 percent higher, Asia Pacific markets seem to be opening higher. Investors are still concerned about a potential global recession, but markets have reduced their bets on Federal Reserve rate hikes, which are expected to peak early in 2019. Nevertheless, traders could exercise caution heading into the weekend in anticipation of tonight’s US non-farm payrolls announcement. According to a Bloomberg poll, analysts anticipate the headline number for June to come in at +268k.
The US Dollar dropped with the risk-on market mentality, which helped the Australian Dollar move higher versus the US Dollar. Another positive factor for the AUD might be an increase in iron ore prices. According to reports quoted by Bloomberg News, China may consider further stimulus measures. Beijing could agree to let local governments sell special bonds until the end of the year to pay for infrastructure projects. Congress would probably have to approve the action. Since the news broke, the Yuan has become stronger than the US dollar.
The USDCAD is best set up for volatility from NFP, while the S&P 500 surrenders to seasonality.
The S&P 500 had its highest daily gain in two weeks during the most recent session, but the overall picture remained unchanged. No matter how one measures it—by volume, general interest, or theoretical underpinnings—there is still a definite lack of excitement. Furthermore, even if the June NFPs are scheduled for release on Friday morning in New York, it is doubtful that the main event risk will serve as a significant foundation for a sustained bullish transformation.
There is a critical divergence from creating a long-lasting trend when the forecast is characterized by rapidly tightening financial conditions and increased recession certainty. Nevertheless, in a rally that has lasted four straight sessions, the SPX has outperformed other risk indicators. Even with the 1.5 percent gain this past session, it has been the least fruitful four-day charge of that period, which ties the most incredible run of gains for this “risk” benchmark dating back to November 8.
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