At the beginning of the Asian session on Tuesday (August 2), the dollar traded near 105.40, and the dollar weakened on Monday as investors raised bets that the Fed's aggressive policies would plunge the US economy into recession; gold prices extended their rally, approaching a one-month high, and with geopolitical tensions, gold prices may have room for further upside; crude oil plunged more than 4%, demand concerns increased, while investors prepared for this week's supply meeting between OPEC and its oil-producing allies.
On the commodity close, Brent crude futures fell 3.8 percent to settle at $100.03 a barrel, down as low as $99.09 at one point earlier in the session. U.S. crude futures fell 4.8 percent to settle at $93.89 a barrel, down as low as $92.42 earlier.
The S&P 500 fell 0.28% to close at 4118.59 points. The Nasdaq fell 0.18 percent to close at 12,368.98, the Dow Jones Industrial Index fell 0.14 percent to close at 32,798.60, and U.S. futures rose 0.3 percent at $1,787.70 an ounce.
Tuesday Preview
Global market quotes at a glance
U.S. stocks closed lower on Monday, with intraday volatility as ExxonMobil and other energy stocks moved lower while Boeing rose while investors digested the biggest monthly gains recorded in two years in July.
Stocks gave back some of the strong gains recorded last week, and U.S. stocks jumped last week, driven by bets that the Fed might not need to raise rates as aggressively as some feared. The S&P 500 and NASDAQ recorded their largest monthly percentage gains since 2020 in July, also fueled by stronger-than-expected second-quarter results. The S&P 500 moved up and down the flat on Monday, with some investors becoming more cautious after the recent rally.
The Fed said its goal is to curb inflation and lower demand by raising interest rates, but some investors and analysts worry that the Fed's aggressive move could push up unemployment and weaken the economy.
Tom Martin, senior portfolio manager at GLOBALTInvestments, said, "There are still many questions about whether we have actually come out of the economic predicament, and may not have been, and even the (economic) impact of the Fed's interest rate hikes is far from apparent." ”
Data released monday showed that U.S. manufacturing activity slowed to a lesser-than-expected level in July, with signs that supply constraints are easing. Multiple previous surveys showed that manufacturing in Asia and Europe lost momentum in July as production slowed due to weak global demand and China's strict COVID-19 lockdowns.
Demand concerns dragged oil prices lower, weighing on the energy sector. The S&P 500 Energy Stock Index tumbled, losing the most of its 11 sectors. ExxonMobil fell 2.5 percent, one of the biggest drags on the S&P 500.
Markets will carefully analyze the monthly U.S. jobs report, which will be released on Friday, for clues about what the Fed will do next to deal with inflation at decades-highs.
noble metal
Gold prices approached a one-month high on Monday as the dollar fell as investors waited for economic data that could affect the Fed's path to tighten policy.
Daniel Pavelonis, senior market strategist at RJOFutures, said gold has more upside given major issues such as Russia, Ukraine, and some resistance to the U.S. dollar.
Safe-haven gold has also recently found some support from weak economic data, including an unexpected contraction in the U.S. economy in the second quarter and a slowdown in manufacturing activity in the euro area. People will be watching Friday's monthly U.S. jobs report, which could affect the Fed's interest rate hikes.
Copper prices hit a four-week high on Monday, helped by a weaker dollar, but copper prices retreated slightly as data showed a slowdown in global manufacturing activity, a major source of metal demand.
Robin Bhar, an independent analyst, said: "[For copper] looks encouraging. If the Fed can slow down its rate hikes, things will get better. He added that metal inventories are low and supply is limited.
crude
Oil prices fell more than 4 percent on Monday as weak manufacturing data in several countries weighed on demand outlooks, while investors prepared for this week's supply meeting between OPEC and its oil-producing allies.
Wang Tao, a technical analyst at Reuters, said brent crude oil fell below the support level of $102.68, triggering a trend into the $99.52-101.26 range.
Factories across the United States, Europe and Asia struggled to gain momentum in July as sluggish global demand and production slowed by pandemic regulations, which may have heightened fears of an economic slide toward recession, the survey on Monday showed.
Both Brent and U.S. crude fell for the second straight month in July for the first time since 2020 as soaring inflation and higher interest rates raised fears of a recession that would erode fuel demand.
Analysts surveyed by Reuters cut their forecast for the average Brent price in 2022 to $105.75, the first downward revision since April. Their forecast for the average price of U.S. crude oil fell to $101.28. OPEC+, which is composed of the OPEC and its allies, including Russia, will meet on Wednesday to decide on September's output.
Two of the eight OPEC+ sources surveyed by Reuters said a modest september increase would be discussed at the Aug. 3 meeting. The rest said production was likely to remain stable.
foreign exchange
The dollar weakened on Monday as investors raised bets that the Fed's aggressive policies would plunge the U.S. economy into recession, with U.S. manufacturing activity slowing to a slower-than-expected pace in July, with signs that supply constraints were easing and manufacturing input price sub-indicators falling to a two-year low, suggesting inflation may have peaked.
While a survey released Monday by the Institute for Supply Management (ISM) showed that the sub-indicators that measure manufacturing employment shrank for the third consecutive month, Timothy Fiore, chairman of the ISM Manufacturing Business Investigation Committee, noted that "businesses continue to recruit at a strong pace with few signs of layoffs, hiring freezes or reducing the number of employees through attrition." ”
Better-than-expected ISM U.S. manufacturing data suggests that the economy did not fall into recession despite a contraction in gross domestic product (GDP) in the first half of this year. However, companies over-ordered for fear of shortages of goods, resulting in excess inventory, which in turn limited new orders.
Pooja Sriram, an economist at Barclays, said: "In the context of weak demand for consumer goods, the post-pandemic replenishment inventory cycle is gradually ending. That exacerbates the risk of a more serious hard landing for manufacturing later this year. That being said, the overall Purchasing Managers' Index (PMI) still needs to fall by a considerable margin to qualify for a thorough recession. ”
The ISM National Factory Activity Index fell to 52.8 in July, its lowest since June 2020, when the industry was emerging from the downturn caused by the pandemic. June was 53.0. Readings above 50 indicate expansion in manufacturing, which accounts for 11.9 percent of the U.S. economy.
The South African rand, which strengthened on Monday, was helped by a weaker dollar and the rand was highly vulnerable to changes in global market sentiment and changes in the outlook for U.S. monetary policy.
This week, South Africa will publish a Purchasing Managers' Index (PMI) survey for manufacturing and the economy as a whole. Investors will also watch the debate within the ruling African National Congress about the role of central banks. Investec analyst Annabel Bishop said in a research note: "The rand will remain heavily dependent on the global market environment, but there have been some small positive results over the past few days that have given the rand a boost. “
The pound edged higher against the dollar, and analysts at ING said there would be a bit of a wait-and-see approach to the pound before the Bank of England announced interest rates on Thursday, and interest rate expectations suggest that the market has now fully absorbed the possibility of a 50 basis point rate hike, which is also our basic hypothetical scenario. However, we believe there are some risk of a pullback that cannot be ignored in hawkish pricing in the market, which could trigger some weakness in the pound.
Market Highlights
Moody's: The Fed is expected to continue to raise rates in front of several upcoming FOMC meetings, and the Fed is expected to raise the federal funds rate to 3.50%-3.75% by the end of the year and to raise interest rates above 4.0% by March 2023.
Iran ordered the start of hundreds of new centrifuges
On August 1, local time, Iran Atomic Energy Organization spokesman Kamal Wandi said that Iran has ordered the start of hundreds of new centrifuges. He pointed out that the work was carried out in accordance with the contents of the Anti-Sanctions Strategy Law previously promulgated by the Iranian parliament, which aims to counter US sanctions and protect Iran's interests. (CCTV)
Putin: Russia's starting point is that nuclear war cannot be won or fought
According to the news released by the Russian president's website, on August 1, Moscow local time, Russian President Putin sent a congratulatory letter to the participants of the 10th Review Conference of the Treaty on the Non-Proliferation of Nuclear Weapons held in New York, saying that nuclear war cannot be won or fought. Putin said that the Treaty on the Non-Proliferation of Nuclear Weapons is a key component of the international security system and that the Treaty serves the interests of both nuclear-weapon States and non-nuclear-weapon States. Putin said Russia has fully fulfilled the bilateral agreement with the United States to reduce and limit related weapons. Putin said that Russia's starting point is that nuclear war cannot be won or fought. The Russian side maintains that all members of the international community enjoy equal and indivisible security.
Ukraine has limited the number of food ships per day to 3
Ukraine's infrastructure minister, Kubrakov, said on August 1 that in order to ensure the safety of the route, the number of grain ships departing from Ukrainian ports will be limited to 3 per day in about 2 weeks. After the route is actually confirmed to be safe, grain exports can reach 3 million tons per month in 4-6 weeks. (CCTV)
Gazprom's natural gas production fell by 12% in the first seven months of this year
Gazprom (GAZ) said on Aug. 1 that the company produced 262.4 billion cubic meters of natural gas in the first seven months of this year, down 12 percent from the same period last year. Gazprom wrote on social media on the same day: "Preliminary data show that from January to July 2022, Gazprom natural gas production was 262.4 billion cubic meters, down 12% from the same period last year, or 35.8 billion cubic meters." (CCTV News)
Libya's oil production and exports rebounded in the second half of July
Libya's crude oil production and exports climbed after the ban was lifted in mid-July, a trend that could help ease concerns about the OPEC member's ability to supply global markets. According to Bloomberg Tanker Tracking data, Libya's average exports in July were about 589,000 bpd, the lowest level since October 2020. However, after the lockdown was lifted on July 15, exports in the second half of the month were more than double the volume of the first half. The Libyan government has appointed a new chairman to run the national oil company, and officials have struck a deal with protesters and tribal leaders to reopen oil fields and export terminals that have been largely closed for months. Oil Minister MohamedOun said oil production rebounded to 1.2 million barrels per day.
G7: Ukraine does not need to repay its debt and interest until the end of 2023
On August 1, local time, Germany, the rotating chairman of the Group of Seven, announced that the Group of Seven decided that Ukraine would not need to repay its debts and interest to the Group of Seven by the end of 2023. The German federal government said that in addition to military and humanitarian assistance, the Group of Seven will also give financial support to the Ukrainian government. Ukraine currently has $1.5 billion in debt in the Group of Seven and about $130 billion worldwide. (CCTV News)
The EU provides Ukraine with another €1 billion in economic aid
On August 1, local time, the European Commission announced that it would provide economic assistance totaling 1 billion euros to Ukraine in two batches on the same day and 2. The aid was disbursed under the EU's macro-financial assistance project and was provided to the Ukrainian side in the form of long-term low-interest loans.
Russia imposed sanctions on 39 British citizens
On August 1, local time, the Russian side announced sanctions against 39 British politicians, journalists and businessmen.
Ukrainian Defense Minister: 4 sets of "Haimas" multiple rocket launcher systems arrived in Ukraine
On August 1, local time, Ukrainian Defense Minister Leznikov announced on social media that 4 sets of "Haimas" multiple rocket launcher systems have arrived in Ukraine.
This article originated from Huitong Network