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Market News Financial Breakfast on June 13: U.S. Inflation is "Fierce Than Tigers", Gold and U.S. Dollar Climb to New Highs
Financial Breakfast on June 13: U.S. Inflation is "Fierce Than Tigers", Gold and U.S. Dollar Climb to New Highs
At the beginning of the Asian market, spot gold rose slightly, reaching a high of more than one month to US$1,878.65 per ounce, because data on Friday showed that the US CPI in May recorded the largest annual increase since 1981. In addition, the University of Michigan in June The initial reading of the U.S. consumer confidence index hit a record low, which also boosted safe-haven buying demand for gold. The U.S. dollar index also edged higher, hitting a nearly four-week high of 104.45 at one point, as market expectations for a hawkish Fed rate hike this week intensified. U.S. crude oil opened lower and moved lower, as market worries about the epidemic in Asia rebounded, weighing on the demand outlook.
2022-06-13
7937
At the beginning of the Asian market on Monday (June 13), spot gold rose slightly, reaching a high of more than one month to US$1,878.65 per ounce, as data on Friday showed that the US CPI in May recorded the largest annual increase since 1981. Gold's appeal has increased, as gold inflation is seen as one of the tools against inflation. In addition, the University of Michigan's initial U.S. consumer confidence index in June hit a record low, which also boosted gold's safe-haven buying demand. The U.S. dollar index also edged higher, hitting a four-week high of 104.45 at one point, as market expectations for a hawkish Fed rate hike this week increased after the CPI data. U.S. crude oil opened lower and moved lower, and is currently trading around 118.68. The market's worries about the Asian epidemic have rebounded, suppressing the demand outlook.
In terms of commodity closings, August gold futures on COMEX closed up 1.2% on Friday at $1,875.50 an ounce, up 1.4% this week. WTI July crude oil futures closed down $0.84, or 0.69%, at $120.67/barrel, up 1.51% this week; Brent August crude oil futures closed down $1.06, or 0.86%, at $122.01/barrel. For the week, it rose about 1.80%.
U.S. stocks closed, the S&P 500 fell 2.9% last Friday; it fell more than 5% for the week; the Dow Jones fell 2.7%, and 4.6% for the week; the Nasdaq Composite fell 3.5%, and fell 5.6% for the week; Nas The Dak 100 fell 3.6%, down 5.7% for the week; the Russell 2000 fell 2.7%, down 4.4% for the week.
U.S. CPI hits biggest annual gain since 1981 in May, Americans feel the heat of high inflation , food costs have soared, suggesting the Fed may take a 50-basis-point rate hike into September to fight inflation. The CPI rose 1.0% in May after rising 0.3% in April, and is forecast for a 0.7% month-on-month rise. CPI rose 8.6% year-on-year in May, the largest year-on-year increase since December 1981, after rising 8.3% year-on-year in April. The core CPI rose 0.6% in May from the previous month, the same as the increase in April. Core CPI rose 6.0% year-on-year in May. 6.2% increase in April
The University of Michigan's preliminary U.S. consumer confidence index hit a record low in June ① U.S. consumer confidence fell to a record low in early June, as soaring inflation continued to impact household finances.
②Data released last Friday showed that the University of Michigan's consumer confidence index fell to 50.2 in June from 58.4 in May. The figure was weaker than the expectations of all economists polled by Bloomberg, with a median forecast of 58.1.
③ Inflation expectations, which are closely watched by the Fed, also moved higher earlier this month, with 46% of respondents attributing the negative view to persistent price pressures. Only 13% of respondents expect their income to grow faster than inflation, the lowest rate in nearly a decade.
"Throughout the survey, consumers were very concerned that inflation would continue to eat into their incomes, and the factors they cited were unlikely to abate anytime soon," survey director Joanne Hsu said in a statement. Consumer spending remains strong, but a broad-based deterioration in sentiment could lead them to cut spending, slowing growth."
The U.S. Treasury Department says the government's May budget deficit was $66 billion
The U.S. Treasury Department said the government's May budget deficit was $66 billion, well below the median forecast of $120 billion, reflecting the economic recovery from the coronavirus pandemic Government revenue continued to be strong in the wake of a moderate recovery and a further reduction in spending related to the health crisis. Revenue in May fell 16% from a year earlier to $389 billion, the Treasury Department said. Spending fell 24% to $455 billion in May.
Bernanke believes that the Fed has the opportunity to avoid a severe recession in the fight against inflation. ① Former Fed Chairman Bernanke said that as long as the supply-side inflation pressure improves, the Fed leaders may achieve the so-called soft landing.
② "The U.S. economy is a mixed bag today," Bernanke said on the show on Sunday. "A recession is a possibility. Economists are trying hard to predict a recession, but I think there's a decent chance, a reasonable chance, that the Fed will achieve what Jerome Powell called a 'softer landing.'"
③ Bernanke said that in this case, the hottest inflation in the United States in 40 years will be seen to cool, and there will be no recession or only a very mild recession. He pointed to political support for Fed independence and expressed hope that supply chains would improve and oil and food prices would stabilize or slow.
④ In contrast, a loss of confidence in the Fed could lead policymakers to take drastic measures, he said. Bernanke said the strong U.S. labor market is a factor that shows "with a little luck and if the supply side improves, the Fed can keep inflation down without the costs of the early '80s."
Summers urges the Fed to face up to the severity of inflation, saying recession risks are imminent ① Former U.S. Treasury Secretary Lawrence Summers urged the Fed to recognize the severity of inflation at this week's meeting, as recession risks have emerged on the horizon.
② "When inflation is as high as it is and unemployment is as low as it is, it's almost always a recession within two years," he said on the show on Sunday. On inflation, "the Fed's forecasts tend to be overly optimistic, and I hope they fully appreciate the magnitude of the problem."
③ Summers pointed out that there is a risk of recession in the next year, and the probability of recession within two years exceeds that of no recession.
④ Summers has been predicting high inflation since last year. The inflation path depends on Russian President Vladimir Putin's Ukraine war and its impact on oil prices, he said. The U.S. consumer price index accelerated to 8.6% year-on-year in May, suggesting price pressures are becoming entrenched.
⑤ "It's at risk of going up further, and I don't think it's going to come back down very, very quickly," Summers said. He is a Harvard professor and a paid contributor to Bloomberg TV.
⑥ For the Biden administration, Summers said there is "not much way" to keep gasoline prices down while the war in Ukraine continues.
Former IMF Economist: The Central Bank Is Totally Fucked Up, The Fed May Need To Raise Rates To 5%
① A former chief economist at the International Monetary Fund (IMF) said that central banks erred by convincing themselves that basic economic principles no longer apply, sending inflation soaring to multi-decade highs.
②Olivier Blanchard, now a researcher at the Peterson Institute for International Economics in Washington, said the Fed may have to raise interest rates to 5% to bring prices back under control.
③ Blanchard said at the Amundi World Investment Forum in Paris that central banks “could screw up, and they did.”
④ He added that Federal Reserve Chairman Jerome Powell "could have said we totally screwed up and we need to raise interest rates now" to 5%.
⑤ Inflation has soared to 40-year highs in many parts of advanced economies against the backdrop of rising energy prices, supply problems, a tight labor market and Russia’s invasion of Ukraine. Interest rates at major central banks will be rising "over the next two to three years", Blanchard said. "We have to be prepared for U.S. rates to hit 5 percent, the market is implying a very low probability of rates exceeding 4 percent. I think it should be higher."
U.S. government will waive pre-departure COVID-19 testing requirements for incoming international air travelers
Following strong lobbying from airlines and the travel industry, the U.S. government will waive pre-departure COVID-19 testing requirements for incoming international air travelers, at 12:01 a.m. on Sunday effective. The administration will announce that the federal Centers for Disease Control and Prevention will no longer require pre-departure COVID-19 testing for travelers coming to the U.S., as science and data determine this requirement is no longer necessary. The CDC will make a reassessment of the decision within 90 days, officials said.
Canada Created More Jobs Than Expected in May reason for the hike. Canada added a net 39,800 jobs in May, all full-time, beating expectations for a gain of 30,000, Statistics Canada data showed. The unemployment rate fell to 5.1%, another record low, better than expectations that it would remain at 5.2%.
A bridge over Ukraine's Severo Donetsk river was destroyed by Russian troops, evacuation routes cut off
Russian troops bombed the besieged Ukrainian city of Severo Donetsk and another city across the river, local officials said on Sunday bridges between, cutting off possible evacuation routes for civilians. Severo Donetsk has become the epicenter of a fierce battle for control of the Udon Bass region. Russian forces have taken control of most of the city, but Ukrainian forces still hold an industrial area and the Azot chemical plant where hundreds of civilians have taken refuge.
Traders and Barclays are eyeing the possibility of a 75bps rate hike by the Fed
Traders see a 50% chance of a 75bps rate hike by the Fed in July, while Barclays expects it to be as soon as next week Add so much. Barclays became the first major Wall Street firm to expect a 75 basis point rate hike after data showed inflation accelerated in May, rather than the 50 basis point policymakers have repeatedly hinted at. At the same time, money markets have also raised bets on larger rate hikes in July and September.
Goldman Sachs: Energy prices not rising enough to curb demand
Energy prices need to climb further before Americans start cutting back on consumption, said Damien Courvalin, head of energy research and commodities strategist at Goldman Sachs. Prices are not high enough to dampen demand growth, which is growing given that global economic growth remains strong. And so far, the momentum has shown that consumers are still resilient enough to absorb higher oil prices.
ECB official: Hope for a September rate hike larger than the 25bps rate hike currently planned for July
ECB Governing Council and Austrian Central Bank President Holzmann says he wants a September rate hike That's bigger than the 25 basis point rate hike currently planned for July. Asked if he would accept a smaller rate hike in July but hope for a 50 basis point or more hike in September, he said that would not be wrong, adding that higher inflation persisted The longer it takes, the greater the risk that inflation expectations will become unanchored.
Russia's central bank cuts its benchmark rate to 9.5% from pre-Ukrainian crisis level
Russia's central bank cut its benchmark interest rate to 9.5 percent, where it was before the crisis in Ukraine, and said it will continue to explore more room to cut rates as inflation slows from a near 20-year high and an economic contraction looms. The rate cut exceeded the average forecast in a Reuters poll earlier this week by 100 basis points
U.S. stocks fell for a third straight day on Friday and posted their biggest weekly loss since January, as inflation unexpectedly accelerated to a 40-year high in May, forcing traders to up their bets that the Federal Reserve will raise interest rates more aggressively. The S&P 500 fell 2.9% on Friday, its ninth weekly loss in the past 10 weeks. Bank of America shares fell sharply on Friday after the inflation data, led by Wells Fargo. Riskier assets underperformed the broader market, with biotech stocks tumbling.
Ed Moya, senior market analyst at Oanda, said the Fed will now be forced to raise rates further as inflation is clearly not temporary and not ready to peak.
Friday's rout was a continuation of three months of turmoil in U.S. stocks. The S&P 500 has fallen 19% from its all-time high in January, while the Nasdaq 100 has lost 28% this year.
All eyes will now turn to this week's Fed meeting and policymakers' rate statement. Traders are speculating on a streak of 50 basis points of rate hikes until September, and have increased bets on a possible 75 basis point hike in the coming months.
Bill Adams, chief economist at Comerica Bank, said that the longer inflation persists and the faster the Fed raises interest rates, the greater the headwind to economic growth. bring greater downside risk.
Gold prices rebounded in choppy trade on Friday as the focus turned to economic risks after rising U.S. inflation data supported bets on aggressive interest rate hikes. U.S. consumer prices accelerated in May, suggesting the Federal Reserve may continue to raise interest rates by 50 basis points until September. Gold fell to $1,824.92, its lowest since May 19, as investors Safe-haven gold quickly erased losses as it assessed the impact of the data on the economy, further boosted after U.S. consumer confidence fell to an all-time low in early June, according to a University of Michigan survey.
Tai Wong, an independent metals trader in New York, said gold had been on a crazy roller coaster ride, hitting a low this month after the CPI report, before rebounding sharply and rebounding again after the worst consumer confidence report on record; Wong added that the fate of gold next week may depend on the Federal Reserve meeting.
Gold rallied despite a stronger dollar and higher U.S. bond yields; like gold, silver erased its initial losses, gaining 0.91% to $21.86 an ounce.
Crude oil prices rose for the seventh week in a row, although accelerating U.S. inflation capped crude gains, tight fuel supply and demand kept market fundamentals bullish; West Texas Intermediate fell 0.7% on Friday and was in the $4 range on the day The intra-day volatility was volatile; despite Friday's losses, WTI crude was up 1.5% for the week.
A Labor Department report showed that inflation rose to a 40-year high in May, sending a chill across financial markets and possibly signaling further aggressive rate hikes by the Federal Reserve.
"What we're dealing with is runaway inflation and crude oil will be at the mercy of the market," said Tariq Zahir, managing director of global macro programs at Tyche Capital Advisors LLC.
As traders assess the impact of inflation on long-term demand, the spot market is showing extreme nervousness. North Sea Forties crude traded at a premium of more than $4 to its benchmark on Friday, the highest level since at least 2008.
Treasury yields soared and the dollar extended gains as U.S. inflation hit a 40-year high in May and traders raised their forecasts for how much the Federal Reserve will raise interest rates next. The yen was largely flat on Friday after five straight days of losses, erasing intraday gains after rising as Japanese officials expressed concerns about the pace of the yen's depreciation.
The U.S. dollar index rose 0.83% to 104.17 on Friday, and extended gains on Monday (June 13), once refreshing a near four-week high of 104.45. As investors flock to safe-haven assets and the market expects the Fed to aggressively raise interest rates; data released by the U.S. Labor Department on Friday showed that the CPI rose 8.6% year-on-year in May, exceeding analysts' expectations of 8.3%.
U.S. Treasury bond yields rose across the board, with short-term yields rising the most; 2-year Treasury yields are currently up 24 basis points to 3.05%; U.S. stock markets tumbled.
USD/JPY was flat on Friday; it fell 0.7% to 133.37 during the session; Japan's Ministry of Finance, Bank of Japan and Financial Services Agency issued a statement saying they were "concerned" about the recent rapid decline in the yen against the dollar and that they would "appropriately" if necessary "Take action on the exchange rate. At the beginning of the Asian market on Monday, the dollar against the yen once refreshed the high of more than 20 years at 134.84, an increase of about 0.33%.
The dollar will see a mild correction against the yen later this year, HSBC strategists wrote in a note, citing further debate over the Bank of Japan's yield curve control policy in the second half of the year and a potentially volatile risk appetite.
The euro fell as much as 1.1% to 1.0506 against the dollar on Friday; it extended losses on Monday, falling as much as 0.3% to 1.0485, refreshing a near one-month low. Jordan Rochester, FX strategist at Nomura, predicts EUR/USD falling to 1.04 with a stop loss of 1.0825, believing that "the near-term top of ECB-driven euro strength" has arrived, including the ECB's clear guidance for the next two meetings, and relative ECB , the market is pricing the Fed relatively dovish.
GBP/USD fell 1.43% to $1.2310 on Friday, falling for a second week in a row. Britain's gloomy economic outlook made investors nervous. GBP/USD extended losses on Monday, once refreshing a near one-month low of 1.2270 .
USD/CAD rose 0.66% to 1.2780 on Friday; Canada added more jobs than expected in May, the unemployment rate fell to 5.1%, and wages rose more than expected; USD/CAD rose 0.9% during the session.
In terms of commodity closings, August gold futures on COMEX closed up 1.2% on Friday at $1,875.50 an ounce, up 1.4% this week. WTI July crude oil futures closed down $0.84, or 0.69%, at $120.67/barrel, up 1.51% this week; Brent August crude oil futures closed down $1.06, or 0.86%, at $122.01/barrel. For the week, it rose about 1.80%.
U.S. stocks closed, the S&P 500 fell 2.9% last Friday; it fell more than 5% for the week; the Dow Jones fell 2.7%, and 4.6% for the week; the Nasdaq Composite fell 3.5%, and fell 5.6% for the week; Nas The Dak 100 fell 3.6%, down 5.7% for the week; the Russell 2000 fell 2.7%, down 4.4% for the week.
Looking Ahead Monday
market news
U.S. CPI hits biggest annual gain since 1981 in May, Americans feel the heat of high inflation , food costs have soared, suggesting the Fed may take a 50-basis-point rate hike into September to fight inflation. The CPI rose 1.0% in May after rising 0.3% in April, and is forecast for a 0.7% month-on-month rise. CPI rose 8.6% year-on-year in May, the largest year-on-year increase since December 1981, after rising 8.3% year-on-year in April. The core CPI rose 0.6% in May from the previous month, the same as the increase in April. Core CPI rose 6.0% year-on-year in May. 6.2% increase in April
The University of Michigan's preliminary U.S. consumer confidence index hit a record low in June ① U.S. consumer confidence fell to a record low in early June, as soaring inflation continued to impact household finances.
②Data released last Friday showed that the University of Michigan's consumer confidence index fell to 50.2 in June from 58.4 in May. The figure was weaker than the expectations of all economists polled by Bloomberg, with a median forecast of 58.1.
③ Inflation expectations, which are closely watched by the Fed, also moved higher earlier this month, with 46% of respondents attributing the negative view to persistent price pressures. Only 13% of respondents expect their income to grow faster than inflation, the lowest rate in nearly a decade.
"Throughout the survey, consumers were very concerned that inflation would continue to eat into their incomes, and the factors they cited were unlikely to abate anytime soon," survey director Joanne Hsu said in a statement. Consumer spending remains strong, but a broad-based deterioration in sentiment could lead them to cut spending, slowing growth."
The U.S. Treasury Department says the government's May budget deficit was $66 billion
The U.S. Treasury Department said the government's May budget deficit was $66 billion, well below the median forecast of $120 billion, reflecting the economic recovery from the coronavirus pandemic Government revenue continued to be strong in the wake of a moderate recovery and a further reduction in spending related to the health crisis. Revenue in May fell 16% from a year earlier to $389 billion, the Treasury Department said. Spending fell 24% to $455 billion in May.
Bernanke believes that the Fed has the opportunity to avoid a severe recession in the fight against inflation. ① Former Fed Chairman Bernanke said that as long as the supply-side inflation pressure improves, the Fed leaders may achieve the so-called soft landing.
② "The U.S. economy is a mixed bag today," Bernanke said on the show on Sunday. "A recession is a possibility. Economists are trying hard to predict a recession, but I think there's a decent chance, a reasonable chance, that the Fed will achieve what Jerome Powell called a 'softer landing.'"
③ Bernanke said that in this case, the hottest inflation in the United States in 40 years will be seen to cool, and there will be no recession or only a very mild recession. He pointed to political support for Fed independence and expressed hope that supply chains would improve and oil and food prices would stabilize or slow.
④ In contrast, a loss of confidence in the Fed could lead policymakers to take drastic measures, he said. Bernanke said the strong U.S. labor market is a factor that shows "with a little luck and if the supply side improves, the Fed can keep inflation down without the costs of the early '80s."
Summers urges the Fed to face up to the severity of inflation, saying recession risks are imminent ① Former U.S. Treasury Secretary Lawrence Summers urged the Fed to recognize the severity of inflation at this week's meeting, as recession risks have emerged on the horizon.
② "When inflation is as high as it is and unemployment is as low as it is, it's almost always a recession within two years," he said on the show on Sunday. On inflation, "the Fed's forecasts tend to be overly optimistic, and I hope they fully appreciate the magnitude of the problem."
③ Summers pointed out that there is a risk of recession in the next year, and the probability of recession within two years exceeds that of no recession.
④ Summers has been predicting high inflation since last year. The inflation path depends on Russian President Vladimir Putin's Ukraine war and its impact on oil prices, he said. The U.S. consumer price index accelerated to 8.6% year-on-year in May, suggesting price pressures are becoming entrenched.
⑤ "It's at risk of going up further, and I don't think it's going to come back down very, very quickly," Summers said. He is a Harvard professor and a paid contributor to Bloomberg TV.
⑥ For the Biden administration, Summers said there is "not much way" to keep gasoline prices down while the war in Ukraine continues.
Former IMF Economist: The Central Bank Is Totally Fucked Up, The Fed May Need To Raise Rates To 5%
① A former chief economist at the International Monetary Fund (IMF) said that central banks erred by convincing themselves that basic economic principles no longer apply, sending inflation soaring to multi-decade highs.
②Olivier Blanchard, now a researcher at the Peterson Institute for International Economics in Washington, said the Fed may have to raise interest rates to 5% to bring prices back under control.
③ Blanchard said at the Amundi World Investment Forum in Paris that central banks “could screw up, and they did.”
④ He added that Federal Reserve Chairman Jerome Powell "could have said we totally screwed up and we need to raise interest rates now" to 5%.
⑤ Inflation has soared to 40-year highs in many parts of advanced economies against the backdrop of rising energy prices, supply problems, a tight labor market and Russia’s invasion of Ukraine. Interest rates at major central banks will be rising "over the next two to three years", Blanchard said. "We have to be prepared for U.S. rates to hit 5 percent, the market is implying a very low probability of rates exceeding 4 percent. I think it should be higher."
U.S. government will waive pre-departure COVID-19 testing requirements for incoming international air travelers
Following strong lobbying from airlines and the travel industry, the U.S. government will waive pre-departure COVID-19 testing requirements for incoming international air travelers, at 12:01 a.m. on Sunday effective. The administration will announce that the federal Centers for Disease Control and Prevention will no longer require pre-departure COVID-19 testing for travelers coming to the U.S., as science and data determine this requirement is no longer necessary. The CDC will make a reassessment of the decision within 90 days, officials said.
Canada Created More Jobs Than Expected in May reason for the hike. Canada added a net 39,800 jobs in May, all full-time, beating expectations for a gain of 30,000, Statistics Canada data showed. The unemployment rate fell to 5.1%, another record low, better than expectations that it would remain at 5.2%.
A bridge over Ukraine's Severo Donetsk river was destroyed by Russian troops, evacuation routes cut off
Russian troops bombed the besieged Ukrainian city of Severo Donetsk and another city across the river, local officials said on Sunday bridges between, cutting off possible evacuation routes for civilians. Severo Donetsk has become the epicenter of a fierce battle for control of the Udon Bass region. Russian forces have taken control of most of the city, but Ukrainian forces still hold an industrial area and the Azot chemical plant where hundreds of civilians have taken refuge.
Traders and Barclays are eyeing the possibility of a 75bps rate hike by the Fed
Traders see a 50% chance of a 75bps rate hike by the Fed in July, while Barclays expects it to be as soon as next week Add so much. Barclays became the first major Wall Street firm to expect a 75 basis point rate hike after data showed inflation accelerated in May, rather than the 50 basis point policymakers have repeatedly hinted at. At the same time, money markets have also raised bets on larger rate hikes in July and September.
Goldman Sachs: Energy prices not rising enough to curb demand
Energy prices need to climb further before Americans start cutting back on consumption, said Damien Courvalin, head of energy research and commodities strategist at Goldman Sachs. Prices are not high enough to dampen demand growth, which is growing given that global economic growth remains strong. And so far, the momentum has shown that consumers are still resilient enough to absorb higher oil prices.
ECB official: Hope for a September rate hike larger than the 25bps rate hike currently planned for July
ECB Governing Council and Austrian Central Bank President Holzmann says he wants a September rate hike That's bigger than the 25 basis point rate hike currently planned for July. Asked if he would accept a smaller rate hike in July but hope for a 50 basis point or more hike in September, he said that would not be wrong, adding that higher inflation persisted The longer it takes, the greater the risk that inflation expectations will become unanchored.
Russia's central bank cuts its benchmark rate to 9.5% from pre-Ukrainian crisis level
Russia's central bank cut its benchmark interest rate to 9.5 percent, where it was before the crisis in Ukraine, and said it will continue to explore more room to cut rates as inflation slows from a near 20-year high and an economic contraction looms. The rate cut exceeded the average forecast in a Reuters poll earlier this week by 100 basis points
List of major global market conditions
U.S. stocks fell for a third straight day on Friday and posted their biggest weekly loss since January, as inflation unexpectedly accelerated to a 40-year high in May, forcing traders to up their bets that the Federal Reserve will raise interest rates more aggressively. The S&P 500 fell 2.9% on Friday, its ninth weekly loss in the past 10 weeks. Bank of America shares fell sharply on Friday after the inflation data, led by Wells Fargo. Riskier assets underperformed the broader market, with biotech stocks tumbling.
Ed Moya, senior market analyst at Oanda, said the Fed will now be forced to raise rates further as inflation is clearly not temporary and not ready to peak.
Friday's rout was a continuation of three months of turmoil in U.S. stocks. The S&P 500 has fallen 19% from its all-time high in January, while the Nasdaq 100 has lost 28% this year.
All eyes will now turn to this week's Fed meeting and policymakers' rate statement. Traders are speculating on a streak of 50 basis points of rate hikes until September, and have increased bets on a possible 75 basis point hike in the coming months.
Bill Adams, chief economist at Comerica Bank, said that the longer inflation persists and the faster the Fed raises interest rates, the greater the headwind to economic growth. bring greater downside risk.
precious metal
Gold prices rebounded in choppy trade on Friday as the focus turned to economic risks after rising U.S. inflation data supported bets on aggressive interest rate hikes. U.S. consumer prices accelerated in May, suggesting the Federal Reserve may continue to raise interest rates by 50 basis points until September. Gold fell to $1,824.92, its lowest since May 19, as investors Safe-haven gold quickly erased losses as it assessed the impact of the data on the economy, further boosted after U.S. consumer confidence fell to an all-time low in early June, according to a University of Michigan survey.
Tai Wong, an independent metals trader in New York, said gold had been on a crazy roller coaster ride, hitting a low this month after the CPI report, before rebounding sharply and rebounding again after the worst consumer confidence report on record; Wong added that the fate of gold next week may depend on the Federal Reserve meeting.
Gold rallied despite a stronger dollar and higher U.S. bond yields; like gold, silver erased its initial losses, gaining 0.91% to $21.86 an ounce.
crude
Crude oil prices rose for the seventh week in a row, although accelerating U.S. inflation capped crude gains, tight fuel supply and demand kept market fundamentals bullish; West Texas Intermediate fell 0.7% on Friday and was in the $4 range on the day The intra-day volatility was volatile; despite Friday's losses, WTI crude was up 1.5% for the week.
A Labor Department report showed that inflation rose to a 40-year high in May, sending a chill across financial markets and possibly signaling further aggressive rate hikes by the Federal Reserve.
"What we're dealing with is runaway inflation and crude oil will be at the mercy of the market," said Tariq Zahir, managing director of global macro programs at Tyche Capital Advisors LLC.
As traders assess the impact of inflation on long-term demand, the spot market is showing extreme nervousness. North Sea Forties crude traded at a premium of more than $4 to its benchmark on Friday, the highest level since at least 2008.
foreign exchange
Treasury yields soared and the dollar extended gains as U.S. inflation hit a 40-year high in May and traders raised their forecasts for how much the Federal Reserve will raise interest rates next. The yen was largely flat on Friday after five straight days of losses, erasing intraday gains after rising as Japanese officials expressed concerns about the pace of the yen's depreciation.
The U.S. dollar index rose 0.83% to 104.17 on Friday, and extended gains on Monday (June 13), once refreshing a near four-week high of 104.45. As investors flock to safe-haven assets and the market expects the Fed to aggressively raise interest rates; data released by the U.S. Labor Department on Friday showed that the CPI rose 8.6% year-on-year in May, exceeding analysts' expectations of 8.3%.
U.S. Treasury bond yields rose across the board, with short-term yields rising the most; 2-year Treasury yields are currently up 24 basis points to 3.05%; U.S. stock markets tumbled.
USD/JPY was flat on Friday; it fell 0.7% to 133.37 during the session; Japan's Ministry of Finance, Bank of Japan and Financial Services Agency issued a statement saying they were "concerned" about the recent rapid decline in the yen against the dollar and that they would "appropriately" if necessary "Take action on the exchange rate. At the beginning of the Asian market on Monday, the dollar against the yen once refreshed the high of more than 20 years at 134.84, an increase of about 0.33%.
The dollar will see a mild correction against the yen later this year, HSBC strategists wrote in a note, citing further debate over the Bank of Japan's yield curve control policy in the second half of the year and a potentially volatile risk appetite.
The euro fell as much as 1.1% to 1.0506 against the dollar on Friday; it extended losses on Monday, falling as much as 0.3% to 1.0485, refreshing a near one-month low. Jordan Rochester, FX strategist at Nomura, predicts EUR/USD falling to 1.04 with a stop loss of 1.0825, believing that "the near-term top of ECB-driven euro strength" has arrived, including the ECB's clear guidance for the next two meetings, and relative ECB , the market is pricing the Fed relatively dovish.
GBP/USD fell 1.43% to $1.2310 on Friday, falling for a second week in a row. Britain's gloomy economic outlook made investors nervous. GBP/USD extended losses on Monday, once refreshing a near one-month low of 1.2270 .
USD/CAD rose 0.66% to 1.2780 on Friday; Canada added more jobs than expected in May, the unemployment rate fell to 5.1%, and wages rose more than expected; USD/CAD rose 0.9% during the session.
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