Beijing time on Tuesday (August 30) Asian morning, the dollar index traded near 108.78; the dollar index hit a 20-year high on Monday, helped by the hawkish speech of Federal Reserve Chairman Powell, but the rally was limited, the end of the session fell from the high, as the European Central Bank's interest rate hike expectations boosted the euro, the market believes that the euro is stealing some of the limelight of the dollar; gold prices turned to rise, as the dollar rally lost momentum, once touched a one-month low; crude oil rose more than 4%, due to OPEC+ possible production cuts and the Libyan conflict , helping to offset the impact of a strong dollar and a gloomy outlook for U.S. economic growth.
Commodity close: Brent crude futures settled 4.1 percent at $105.09 a barrel, U.S. crude futures rose 4.2 percent at $97.01 a barrel, and U.S. futures were flat at $1,749.7 an ounce.
U.S. stocks closed: The Dow Jones Industrial Index fell 0.57% to 32,098.99; the S&P 500 fell 0.67% to 4,030.61; and the NASDAQ fell 1.02% to 12,017.67.
Tuesday Preview
20:00 Fed Barkin speaks on U.S. inflation and the economy; 23:00 Fed Williams speaks on the outlook for the U.S. economy.
Global quotes at a glance
U.S. stocks closed lower on Monday, continuing last week's plunge as fears linger over the Fed's determination to aggressively raise interest rates to combat inflation amid a slowdown. Fed Chairman Jerome Powell said on Friday that the U.S. economy will need "some time" of tightening monetary policy until inflation is under control, and hopes of a more dovish rate hike are dashed after recent data suggest inflationary pressures are peaking.
The S&P 500 recovered from its intraday lows, falling 1 percent intraday, its lowest in a month, but the index still posted its biggest two-day percentage decline in two and a half months.
Randy Frederick, vice president of trading and derivatives at Charles Schwab, said, "Frankly, last Friday's big drop was overdone, and I know (Powell) said he was going to take a tough stance on inflation, but to be honest, it's not much different from what he's said over the past few weeks, his attitude is a little more hawkish, but I mean, oh my God, who's going to be surprised by that, is there anything wrong with that?" I don't expect a big rise or a big drop in the short term, and I expect the market to be volatile, at least until the rate hike on September 21. ”
Large tech stocks and growth stocks were the biggest drag on the index as Treasury yields rose, with Apple down 1.37 percent and Microsoft down 1.07 percent. The Wall Street Fear Index, the CBOE Volatility Index, reached a seven-week high of 27.67 points.
Money market traders see a 72.5% chance of a 75 basis point rate hike from the Fed at its September meeting, which would be the third time in a row to raise rates by such magnitude. They expect the Fed's federal funds rate to reach around 3.7 percent by the end of the year.
The two-year Treasury yield, which is particularly sensitive to interest rate expectations, briefly hit a 15-year high, while the much-watched part of the yield curve, the two-year/10-year yield curve, remains heavily inverted. Many see inversion as a reliable signal that a recession is imminent.
The highlight of this week's economic data is the August non-farm payrolls report, which will be released on Friday. Any sign of a slowdown in the labor market could ease pressure on the Fed to continue to raise rates sharply. The S&P 500 climbed nearly 11 percent from mid-June to Friday's close. The index recently found support above the 50-day moving average, but is still well below its 200-day moving average. Despite the rebound, some investors remain concerned as September approaches, as stocks have generally performed weakly in September over the course of a history, coupled with expectations that the Fed will raise interest rates that month.
Energy stocks rose 1.54 percent, a bright spot, helped by crude oil prices jumping about 4 percent due to possible OPEC+ production cuts and conflict in Libya.
noble metal
Gold prices turned lower to higher on Monday as the dollar rally lost momentum and earlier intraday, hitting a one-month low, hurt by the Federal Reserve's hints on Friday that it would continue to raise rates sharply.
Bob Haberkorn, senior market strategist at RJOFutures, said, "Gold was sold off after Powell's speech, and now the rise is purely due to low-sucking buying and a pullback in the dollar, and gold prices will soon start to fall into a tight range until further clues from the Fed emerge." ”
In his opening remarks for the Jackson Hall Central Bank symposium in Wyoming on Friday, Powell said the Fed would raise borrowing costs to the level needed to limit growth and would keep that level "for some time" to push inflation back down. For now, market participants are generally expecting the Fed to raise rates by 75 basis points at its September meeting.
Goldman Sachs analysts have sharply lowered their forecasts for Britain's economic growth and expect a recession to begin later this year as soaring inflation hits household disposable incomes, which in turn hit consumption.
crude
Oil prices rose more than 4 percent at their closing price on Monday, continuing last week's gains as possible OPEC+ production cuts and the conflict in Libya helped offset the strong dollar and the gloomy outlook for U.S. economic growth.
Saudi Arabia, the largest producer of the Organization of the Petroleum Exporting Countries (OPEC), raised the possibility of a production cut last week, with sources saying that if Iran reaches a nuclear deal with the West, the cut could coincide with an increase in Iranian supply. OPEC+, which is composed of OPEC and oil-producing allies such as Russia, will meet on September 5 to formulate policies.
Sugandha Sachdeva, vice president of commodity research at Religare Broking, said: "Oil prices are gradually moving higher because people want OPEC and its allies to cut production to restore market balance in response to the resumption of the Iran nuclear deal. ”
International Energy Agency (IEA) Administrator Fatih Birol said on Monday that IEA member states could release more oil from the Strategic Petroleum Reserve (SPR) when the current release plan expires in November if it deems it necessary.
Gains in oil prices were limited by a strong dollar, which hit a 20-year high on Monday after Fed Chairman Jerome Powell said it would keep interest rates higher for longer to curb inflation.
CMCmarkets analyst Tina Teng said: "Although the strong dollar has dampened commodity prices overall, the lack of supply in the oil market is likely to continue to support the upward trend."
The unrest in the Libyan capital over the weekend, which killed 32 people, raised fears of a full-blown conflict in the country that caused the OPEC country's crude oil supply to be interrupted.
Preliminary surveys released by Reuters on Monday showed U.S. crude inventories expected to fall by 600,000 barrels last week, as did distillate and gasoline inventories. Crude inventories in U.S. emergency reserves fell by 3.1 million barrels in the week ended Aug. 26, the smallest release since the end of April, according to the U.S. Department of Energy. Strategic Petroleum Reserve (SPR) inventories fell to 450 million barrels, the lowest level since December 1984.
foreign exchange
The dollar index hit a 20-year high on Monday, helped by a hawkish speech by Fed Chairman Jerome Powell, but gains were limited and pulled back from highs at the end of the session as the European Central Bank's expectations of higher interest rates raised boosted the euro. The dollar index hit 109.48 at the start of the session, its highest since September 2002.
In his opening remarks for the Jackson Hall Central Bank symposium in Wyoming on Friday, Powell said the Fed would raise borrowing costs to the level needed to limit growth and would keep that level "for some time" to push inflation back down. U.S. inflation is now more than three times the Fed's 2% target.
Joe Manimbo, senior market analyst at Convera, said: "Powell's speech last week sounded very hawkish, which largely shattered the perception of a policy reversal early next year. ”
Money markets have stepped up their bets on a more aggressive rate hike by the Fed in September, and the probability of a 75 basis point rate hike is now expected to be around 70 percent. U.S. Treasury yields rose sharply, with two-year Treasury yields hitting a 15-year high of about 3.49 percent.
Traders await the U.S. August jobs report, which will be released on Sept. 2, which will be the last major observation of the health of the economy in the face of rising interest rates and stubbornly high inflation ahead of the Fed's next policy meeting.
ECB Executive Wing Schnabel pointed out that the ECB could raise interest rates by 75 basis points at its September 8 meeting, pushing the euro up.
Schnabel said on Saturday that the ECB needs to take strong action to combat inflation and maintain public trust. That trust now seems to be waning.
Manimbo said that "the euro is stealing some of the limelight from the dollar, and there is a view that the ECB may follow the example of the Fed in announcing a super-large rate hike next month," the euro rose 0.29% against the dollar at the end of the session at $0.9993, still below parity.
Janvon Gerich, principal analyst at Nordea, said: "Given the inflation situation, central banks are not interested in anything right now other than showing a hawkish stance, so they will raise interest rates aggressively. ”
German Deputy Chancellor and Minister of Economy and Climate Protection Habeck said he expected gas prices to fall soon as Germany made progress towards its storage targets, which could also support the euro.
The pound hit a two-and-a-half-year low of $1.1649 against the dollar at one point, falling 0.23 percent at $1.1703 at the end of the session. Monday was a public holiday in the UK and markets were trading lightly.
Market Highlights
According to Iranian media reports on the 29th, the International Atomic Energy Agency announced in its latest report on Iran's nuclear activities that Iran has begun to use one of the three sets of IR-6 centrifuge cascades newly installed in the Natanz nuclear facility for uranium enrichment activities. (CCTV)
GDP growth in the OECD region remained weak in the second quarter
Preliminary data released by the Organization for Economic Cooperation and Development (OECD) on the 29th showed that in the second quarter of 2022, the gross domestic product (GDP) of the OECD region increased by 0.3% month-on-month, unchanged from the previous quarter. The data showed that the G7 GDP grew by 0.2% month-on-month in the second quarter, slightly higher than the zero growth in the first quarter. Among them, the economies of the United States and the United Kingdom both fell by 0.1% in the second quarter, the growth rate of the German economy slowed sharply to 0.1% from 0.8% in the first quarter, the economy of Japan and France both grew by 0.5% in the second quarter, and the economies of Italy and Canada increased by 1.0% and 1.1% respectively in the second quarter.
Cui Dongshu, China's share of new energy vehicles in the world rose to 68% in July
Cui Dongshu, secretary general of the Association, said through his personal WeChat public account that the trend of new energy passenger vehicles in the world in 2022 is strong, with sales reaching 5 million units from January to July, an increase of 70% year-on-year. Among them, sales in July were 830,000 units, an increase of 73% year-on-year. Less than 4% of commercial vehicles in the world's new energy vehicles, new energy passenger cars as the mainstay. From January to July 2022, China accounted for 60.6% of the world's new energy share, of which China accounted for 68% of the world's share in July.
Ukraine's Ministry of Energy forecasts 40 percent less winter gas use than last year
Ukrainian Pravda reported on August 29 local time that the Ministry of Energy of Ukraine expects Ukraine's gas consumption in the 2022-2023 heating season to be 40% less than last year. Yaroslav Zheleznyak, vice chairman of the Taxation Committee of the Supreme Rada (Parliament) of Ukraine, said that Ukraine's air consumption in autumn and winter is expected to be about 11.7 billion cubic meters, compared with about 19.4 billion cubic meters in the last heating season. (CCTV News)
Deputy Prime Minister of Ukraine: Negotiations on Ukraine's accession to the European Union could start next year
According to Ukrainian media reported on August 29 local time, Ukrainian Deputy Prime Minister Stefanishina said that negotiations on Ukraine's accession to the European Union may begin in 2023. She said that at present, it is absolutely realistic to see the 2023 accession negotiations begin, and Ukraine has completed a lot of preliminary assessment and preparation work with the EU before.
The cost of transit through the Turkish Straits will increase fivefold
According to turkey's Sabah daily newspaper, from October 7, Turkey will increase the transit costs of the Bosphorus and Dardanelles by five times. Turkey canceled the 1983 transit fee discount and is now expected to receive $200 million a year from transit fees, up from $40 million. The increase in transit fees is in line with the 1936 Montreux Strait Regime Convention, which provides for warships entering the Black Sea from the Mediterranean Sea through the Turkish Strait.
In the first half of 2022, the scale of information consumption in the mainland was 3.24 trillion yuan
A few days ago, it was learned from the Ministry of Industry and Information Technology that information consumption in the mainland has become a rapidly growing, innovative and active consumption field with wide radiation. The market size increased from 2.8 trillion yuan in 2014 to 6.8 trillion yuan in 2021. In the first half of this year, the scale of information consumption on the mainland reached 3.24 trillion yuan, an increase of 6% year-on-year.
This article originated from Huitong Network