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Market News June 11 Financial Breakfast: Strong Inflation Data, U.S. Dollar Rising, Stock Market Slumping, Gold Recovered to $50
June 11 Financial Breakfast: Strong Inflation Data, U.S. Dollar Rising, Stock Market Slumping, Gold Recovered to $50
On June 10, as U.S. inflation hit a 40-year high in May, traders raised their forecasts for the Fed to raise interest rates next. Gold fell intraday to $1,824.92, its lowest since May 19, following the release of the inflation data, but the safe-haven gold rebounded sharply above $50 as investors assessed the impact of the data on the economy. U.S. oil fell nearly 1% in late trading, and the market is still evaluating the impact of a larger-than-expected rise in U.S. CPI on future Fed policy and the U.S. economy.
2022-06-11
11645
The U.S. dollar index hit a nearly four-week high of 104.23 on Friday (June 10) after data showed U.S. consumer prices accelerated in May, reinforcing expectations that the Federal Reserve may raise interest rates by 50 basis points into September. to fight inflation. Spot gold rose by more than 1% and closed at $1,871.39 per ounce in late trading. The U.S. May inflation data strengthened the market’s expectations for the Fed to continue aggressively raising interest rates, and also highlighted the increased risk of recession facing the U.S. economy. Oil prices fell along with stocks, ending the week slightly higher despite accelerating U.S. inflation curbing gains in crude, as tight fuel supply and demand kept market fundamentals bullish.
In terms of commodities closing, COMEX August gold futures closed up 1.2% 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%.
Closing situation of US stocks: S&P 500 fell 2.9%; fell more than 5% for the week; Dow Jones fell 2.7%, fell 4.6% for the week; Nasdaq Composite fell 3.5%, fell 5.6% for the week; Nasda The Gram 100 fell 3.6%, down 5.7% for the week; the Russell 2000 fell 2.7%, down 4.4% for the week.
U.S. stocks fell for a third 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, with Wells Fargo leading losses. 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 next 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, in a $4 range on the day The moves were volatile; WTI crude was up 1.5% for the week despite Friday's losses.
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, the highest level since mid-May, as investors flocked to safe-haven assets; data released by the U.S. Labor Department on Friday showed that CPI rose 8.6% year-on-year in May, beating analysts’ forecast of 8.3%. expected.
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; at one point, it fell 0.7% to 133.37; Japan's Ministry of Finance, Bank of Japan and Financial Services Agency issued a statement saying they were "concerned" about the recent rapid decline of the yen against the USD and that they would "appropriately" discuss the exchange rate if necessary. Take action.
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 1.1% to 1.0506 against the dollar at one point; Jordan Rochester, a foreign exchange strategist at Nomura, predicted that the euro would fall to 1.04 against the dollar, with a stop loss of 1.0825, believing that "the recent top of the euro's strength driven by the European Central Bank" has arrived, because the European Central Bank Clear guidance from the meeting, and the market pricing the Fed relatively dovish relative to the ECB.
Sterling fell 1.43% to $1.2310, its second straight weekly loss, as Britain's gloomy economic outlook made investors nervous.
USD/CAD rose 0.66% to 1.2780; 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.
[The U.S. CPI in May increased by 8.6% year-on-year, which was the highest growth rate in 40 years in March]
[U.S. inflation reports are frequent, the Biden administration says it is giving the Fed "the space it needs"] As U.S. inflation unexpectedly hits a 40-year high and consumer confidence falls to a record low, the White House claims policymakers are effectively addressing the cost of living Talk of a soaring problem received a heavy blow on Friday morning. Brian Deese, director of the White House National Economic Council, said: "Today's data underscores what the president has said and what we're focusing on -- fighting inflation must be our number one economic priority... The Fed has the tools it needs, we Also giving them the space they need to run...in energy prices, we know the drivers...we're facing a bad war in Europe that's driving up oil prices as well as gasoline prices. The president is using With all the current administrative mandates, we need everyone to work harder."
[U.S. President Biden: We will try to bring down inflation, and we will do everything possible to bring down U.S. prices. U.S. inflation is not pulling back as sharply as we would like, but the all-important measure of core inflation is pulling back. As the oil industry struggles to increase oil production in the U.S., oil and gas companies should not be making excessive profits]
[Traders and Barclays both set their sights on the possibility of a 75bps rate hike by the Fed] Traders see a 50% chance that the Fed will raise rates by 75bps in July, while Barclays expects to raise rates as soon as next week 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 have not risen enough to curb demand] Goldman Sachs energy research director and commodity strategist Damien Courvalin said that energy prices need to climb further before Americans start cutting back on consumption. 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.
In terms of commodities closing, COMEX August gold futures closed up 1.2% 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%.
Closing situation of US stocks: S&P 500 fell 2.9%; fell more than 5% for the week; Dow Jones fell 2.7%, fell 4.6% for the week; Nasdaq Composite fell 3.5%, fell 5.6% for the week; Nasda The Gram 100 fell 3.6%, down 5.7% for the week; the Russell 2000 fell 2.7%, down 4.4% for the week.
List of major global market conditions
U.S. stocks fell for a third 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, with Wells Fargo leading losses. 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 next 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 Metals and Crude Oil
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, in a $4 range on the day The moves were volatile; WTI crude was up 1.5% for the week despite Friday's losses.
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, the highest level since mid-May, as investors flocked to safe-haven assets; data released by the U.S. Labor Department on Friday showed that CPI rose 8.6% year-on-year in May, beating analysts’ forecast of 8.3%. expected.
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; at one point, it fell 0.7% to 133.37; Japan's Ministry of Finance, Bank of Japan and Financial Services Agency issued a statement saying they were "concerned" about the recent rapid decline of the yen against the USD and that they would "appropriately" discuss the exchange rate if necessary. Take action.
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 1.1% to 1.0506 against the dollar at one point; Jordan Rochester, a foreign exchange strategist at Nomura, predicted that the euro would fall to 1.04 against the dollar, with a stop loss of 1.0825, believing that "the recent top of the euro's strength driven by the European Central Bank" has arrived, because the European Central Bank Clear guidance from the meeting, and the market pricing the Fed relatively dovish relative to the ECB.
Sterling fell 1.43% to $1.2310, its second straight weekly loss, as Britain's gloomy economic outlook made investors nervous.
USD/CAD rose 0.66% to 1.2780; 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.
market news
[The U.S. CPI in May increased by 8.6% year-on-year, which was the highest growth rate in 40 years in March]
[U.S. inflation reports are frequent, the Biden administration says it is giving the Fed "the space it needs"] As U.S. inflation unexpectedly hits a 40-year high and consumer confidence falls to a record low, the White House claims policymakers are effectively addressing the cost of living Talk of a soaring problem received a heavy blow on Friday morning. Brian Deese, director of the White House National Economic Council, said: "Today's data underscores what the president has said and what we're focusing on -- fighting inflation must be our number one economic priority... The Fed has the tools it needs, we Also giving them the space they need to run...in energy prices, we know the drivers...we're facing a bad war in Europe that's driving up oil prices as well as gasoline prices. The president is using With all the current administrative mandates, we need everyone to work harder."
[U.S. President Biden: We will try to bring down inflation, and we will do everything possible to bring down U.S. prices. U.S. inflation is not pulling back as sharply as we would like, but the all-important measure of core inflation is pulling back. As the oil industry struggles to increase oil production in the U.S., oil and gas companies should not be making excessive profits]
[Traders and Barclays both set their sights on the possibility of a 75bps rate hike by the Fed] Traders see a 50% chance that the Fed will raise rates by 75bps in July, while Barclays expects to raise rates as soon as next week 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 have not risen enough to curb demand] Goldman Sachs energy research director and commodity strategist Damien Courvalin said that energy prices need to climb further before Americans start cutting back on consumption. 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.
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