The dollar index traded near 107.50 in early Asian trading on Friday (August 19), Beijing time; the dollar rose nearly 1 percent on Thursday to a one-month high as Fed officials talked about the need for further rate hikes and investors reassessed the Minutes of the Fed's July meeting as more hawkish than initially interpreted, with gold prices falling back; oil prices surging more than 3.5 percent, with positive U.S. economic data and strong U.S. fuel consumption offset concerns that slower economic growth in other countries could weaken demand.
On the commodity close, Brent futures rose 3.1 percent to close at $96.59 a barrel, while U.S. crude rose 2.7 percent to close at $90.50 and U.S. futures fell 0.3 percent at $1,771.2 an ounce.
The U.S. stock market closed with the Dow Jones Industrial Index up 0.06% to 33,999.04; the S&P 500 up 0.23% to 4,283.74; and the NASDAQ up 0.21% to 12,965.34.
Friday Preview
At 21:00 Richmond Fed President Barkin attends a symposium
Global market quotes at a glance
U.S. stocks closed higher on Thursday as Cisco's optimistic sales forecasts helped boost tech stocks, while data showed the U.S. economy remained relatively strong. Investors are still evaluating the minutes of the Fed's July meeting, released Thursday, with their initial reading that they supported the Fed's less aggressive stance. But the minutes did not explicitly hint at the pace of rate hikes and showed policymakers' commitment to continuing to raise rates to curb inflation.
Rick Meckler, partner at CherryLaneInvestments, said: "We are at a point where people are trying to judge whether the inevitable rate hikes will stifle the upward momentum of the market. There are indeed two camps, one feeling that the worst is over and continuing to buy stocks that have been sold, while the other feeling that the worst period has not yet arrived, and the current trend is some form of bear market rally that will fall back. Traders expect a 50 basis point hike in September to be more likely than a third consecutive 75 basis point hike.
Meanwhile, Cisco shares jumped 5.8 percent, one of the biggest gainers in the three major indices, and the company released an optimistic first-quarter sales forecast late Wednesday as China's economy recovered from the coronavirus pandemic eased supply chain shortages.
Data on Thursday showed a strong U.S. economy, supporting the idea that the Fed might need to be more hawkish. The Philadelphia Fed's manufacturing index recovered from a negative 12.3 in July to a positive 6.2 in August. Stronger than expected by all 30 economists in the Reuters survey.
A group of Fed officials said Thursday that the Fed needs to continue to raise borrowing costs to keep inflation in check, though they are still discussing how quickly and how high they should raise rates. So far this year, the Fed has raised its benchmark interest rate by 225 basis points. The focus now could shift to fed Jackson Hall's annual seminar later next week.
noble metal
Gold prices retreated on Thursday, weighing on the dollar's strength, and investors were looking for more economic clues that could affect rate hikes, although falling Treasury yields limited the draw. Investors continued to digest the minutes of the Fed's July meeting released the day before. The minutes suggest the Fed will raise interest rates further, but also suggest that officials are beginning to acknowledge more explicitly the risk of going too far and dampening economic activity.
Daniel Ghali, commodities strategist at TD Securities, said the decline in US Treasury yields may be the reason for the slight recovery of non-interest gold, as the rate hike has been largely digested by the market. But the Fed is likely to refute the idea that the rate hike cycle could end at an upcoming Jackson Hall symposium because "it's too early to declare victory against inflation." ”
Meanwhile, data shows that initial jobless claims in the U.S. fell last week and were sharply revised down the previous week' data suggest that labor market conditions remain tight despite slowing momentum due to rising interest rates. Separately, Fed Daley said a 50 or 75 basis point rate hike in September would be "reasonable." On the physical market, Switzerland's gold exports to asian powers rose to their highest level since December 2016 in July.
crude
Oil prices rose more than 3.5 percent on Thursday as positive U.S. economic data and strong U.S. fuel consumption offset fears that slower growth in other countries could weaken demand.
Oil prices rose more than 1 percent in the previous session, though Brent crude briefly fell to its lowest point since February as there were signs of economic slowdown in some places. Edward Moya, senior market analyst at data and analytics firm OANDA, said oil prices rebounded "after another round of impressive U.S. economic data boosted optimism about an improved outlook for crude oil demand," OPEC would not allow the recent correction in oil prices to continue.
U.S. jobless claims fell last week, and previous data were sharply revised, suggesting that labor market conditions remain tight despite rising interest rates leading to slower economic momentum.
Haitham Al-Ghais, secretary general of the Organization of the Petroleum Exporting Countries (OPEC), told Reuters on Thursday that underinvestment by policymakers, lawmakers and the oil and gas industry was responsible for the high energy prices, not OPEC.
At its next meeting in September, OPEC+, including other oil producers such as Russia, "can cut production if necessary, or it can increase production," Gas said. It all depends on how things go. ”
U.S. crude inventories fell 7.1 million barrels in the week ending Aug. 12, compared with expectations of a 275,000 barrel decline, as exports hit a record 5 million bpd, according to the U.S. Energy Information Administration (EIA). Open interest in U.S. crude futures fell to their lowest level since January 2015 on Wednesday as investors feared the central bank would continue to raise interest rates, cutting back on risky assets such as commodities.
foreign exchange
The dollar index surged to a one-month high on Thursday as Fed officials spoke of the need for further rate hikes and investors reassessed the Minutes of the Fed's July meeting as more hawkish than initially read.
A group of Fed officials said Thursday that the Fed needs to continue to raise borrowing costs to keep inflation in check, though they are still discussing how quickly and how high they should raise rates. St. Louis Fed President Bullard said he is currently leaning toward supporting a third consecutive 75 basis point hike in September given the economy's strong momentum.
San Francisco Fed President Daley said a 50 or 75 basis point rate hike in September would be a "reasonable" way to get short-term borrowing costs to the levels needed to reduce inflation. "We need to get interest rates up to a neutral level, which is around 3 percent, but it's likely to raise rates to the restrictive zone, which is just over 3 percent this year and a further small hike next year on top of just over 3 percent," Daley told CNN International.
Joseph Trevisani, a senior analyst at the New York FXStreet.com, said: "Almost everyone at the Fed has been very firm in what they say, we have to raise rates, we have to raise rates, and interest rates are going to be higher. ”
The dollar narrowed gains on Wednesday after the minutes of the Fed's July meeting showed officials feared they might raise rates too much in their efforts to control inflation, interpreted as moderately dovish. The minutes also show an important aspect of the Fed's debate in the coming months: when to slow down rate hikes.
But analysts say it would be a mistake to focus on these parts of the minutes, rather than the overarching idea that interest rates need to continue to rise.
WinThin, head of global monetary strategy at BrownBrothersHarriman, said in a note: "Except for the part about slowing down the pace of rate hikes, the rest of the minutes are very hawkish. The dollar index rose 0.71 percent to 107.39 in late trading, after previously reaching its highest level since July 19 at 107.57.
The euro hit $1.0078, its lowest since July 18. USDJPY rose to 135.90, the yen's lowest level since July 28. The pound is trading low at 1.1920, its lowest since July 22.
The probability of a 75 basis point rate hike in September since the Fed minutes were released has dropped to 42 percent from 52 percent earlier on Wednesday, and now the probability of a 50 basis point hike is 58 percent. However, ahead of the Fed's September meeting, August consumer price inflation and employment data could affect the magnitude of the rate hike.
The September meeting will also provide new information on how high Fed officials expect interest rates to rise. Traders believe that the benchmark rate will peak at 3.66% in March. Trevisani said he expected the Fed to raise rates to around 4 percent, adding that even that would be unlikely to be enough to curb the 8.5 percent year-on-year price increase.
Data on Thursday showed that initial jobless claims in the U.S. fell last week, and the previous week's figures were revised down sharply. A report released by the Philadelphia Fed also highlighted strong demand for labor. The report showed a surge in manufacturing employment in the mid-Atlantic coast in August.
But the housing market is becoming sluggish. The National Real Estate Association (NAR) report showed that existing home sales fell 5.9 percent in July to a seasonally adjusted annualized rate of 4.81 million households, the lowest level since the coronavirus lockdown in May 2020.
Market Highlights
The Fed's Kashkali said it must bring inflation down as quickly as possible, even at the expense of triggering a recession
Minneapolis Federal Reserve Chairman Neel Kashkari said Thursday that the Fed needs to bring down "very, very" high inflation as soon as possible, even at the expense of a potential recession. We need to reduce demand by raising interest rates. The fundamentals are strong, but as to whether the Fed can lower inflation without plunging the economy into recession, he said, "I don't know." ”
UN Secretary-General António Guterres held a press conference in Ukraine
On August 18, local time, UN Secretary-General Guterres held a press conference with Ukrainian President Zelenskiy and Turkish President Recep Tayyip Erdogan in Ukraine. Guterres said the Ukrainian Transport for Food Security Initiative has been effective in curbing global food prices, but there is still work to be done. Global food prices have fallen markedly as 21 food carriers have left Ukraine, with the FAO Food Price Index falling 9 percent in July, the biggest drop since 2008, Guterres said. Guterres warned that there are still problems with supply chains, energy and transportation costs. (CCTV News)
Starbucks in Russia will resume operations under the new name "StarsCoffee"
According to Russia Today, the Starbucks coffee chain in Russia will resume operations in Russia under the new name "StarsCoffee", and the coffee shop in the capital Moscow opened under the new name on August 18. After the American coffee brand Starbucks announced its withdrawal from the Russian market in May this year, Russian singer Timati announced in July that she would acquire and take over all of Starbucks' assets in Russia together with Russian entrepreneur Pinski. (CCTV Finance)
The Iranian Foreign Minister held a telephone conversation with the Omani Foreign Minister to discuss the Iranian nuclear issue
On August 18, local time, Iranian Foreign Minister Abdullahyan had a telephone conversation with Omani Foreign Minister Badr. The two sides exchanged views on bilateral relations, the regional situation and the Vienna talks on the Iranian nuclear issue. Iranian Foreign Minister Abdullahyan pointed out that Iran aims to reach a good and stable agreement, and after Iran sees the relevant opinions of the United States on the final text of the Vienna talks, if the United States can safeguard Iran's economic interests and abide by the "red line" set by Iran, the parties will reach an agreement. Abdullahyan also stressed that until everything is agreed, it is not certain that the parties can reach a good agreement.
The £230 rise in a month Brits are going crazy for bills
As energy prices climb, some UK gas users received a "ridiculous" energy bill. British homeowner Richard White and his partner live in a three-bedroom house, and his family's gas bill in June soared from £200 to £429.41 (about 3,500 yuan), which is expected to cost him £5,000 this year. He quickly contacted supplier British Gas and asked it to explain why the price increase was justified. He said: "This is not the home of arctic expeditions, so it is absurd that British Gas is predicting that we will have to pay a fee of £5,000. Richard said if the company could not fully resolve his complaint within 8 weeks, he would escalate the issue to the energy regulator's Office of natural gas and electricity markets (Ofgem).
For the first time since March, India has reduced its oil imports from Russia and instead bought more Saudi oil
Data obtained from trade and oil industry sources showed india's overall oil imports fell in July, with Russian crude oil imports falling for the first time since March this year, while Saudi Arabia's crude oil imports rebounded for the first time in five months. India, the world's third-largest oil importer and consumer, saw its oil imports in July fall 3.2 percent from June to 4.63 million barrels per day, the data showed. Among them, Russian crude oil imports were about 877,400 barrels per day, down about 7.3% from June, while Saudi crude oil imports were about 824,700 barrels per day, an increase of 25.6% month-on-month. Overall, Russia remains India's second-largest oil supplier, with Iraq at the top and Saudi Arabia in third.
For the first time, moscow exchange's daily trading volume exceeded that of the US dollar
According to the news released by Moscow Exchange, the rmb trading volume delivered by Moscow Exchange the next day exceeded that of the US dollar for the first time. As of 12:46 Moscow time, the volume of rmb trading reached 29.3 billion rubles, the volume of trading in the US dollar was 28.8 billion rubles, and the trading volume of the euro was 35.3 billion rubles. (Russian Satellite News Agency)
VR headset global shipments soared by nearly 250% In the first half of the year, the retail sales of the mainland VR market exceeded 800 million yuan
According to CCTV Finance, since last year, the VR virtual reality industry has entered the fast lane of development. In 2021, the global shipment of VR head-mounted displays reached 10.95 million units, breaking through the industry inflection point of 10 million units of annual shipments, and in the first quarter of this year, VR headsets maintained hot sales, and global shipments increased by 241.6% year-on-year. In China, the popularity of the VR industry is gradually increasing. The data shows that in the first half of 2022, the retail sales of China's VR market exceeded 800 million yuan, an increase of 81% year-on-year, and the average sales price of head-mounted displays rose from the early 1,000 yuan below 1,000 yuan to about 1,740 yuan. However, some insiders believe that the scale of the VR hardware market in the mainland is still in the initial stage of development, and the platform and content need to be further improved.
This article originated from Huitong Network