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Market News [Market Morning] Europe and the United States have significant ups and downs, a 100-point shock! Historically, crude oil declined by 5%.

[Market Morning] Europe and the United States have significant ups and downs, a 100-point shock! Historically, crude oil declined by 5%.

The dollar traded near 106.6; the dollar fell slightly on Thursday, the euro rose against the dollar shock, up to 1.0279, the highest in the past two weeks, and the European Central Bank exceeded expectations in raising interest rates to curb inflation, but also launched a new bond-buying program TIP.

TOPONE Markets Analyst
2022-07-22
494

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U.S. President Joe Biden tested positive for the new pneumonia crown, and symptoms are mild


European "hawkish" rate hike of 50 basis points, the launch of the anti-financial fragmentation tool TPI


U.S. Financial Stability Oversight Council to meet on July 28


U.S. initial jobless claims for last week were 251,000, higher than market expectations


Italy will hold an early general election on September 25


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On Thursday, spot gold touched $1680 before the European Central Bank announced its interest rate resolution, then rebounded sharply to touch the $1720 mark, eventually closing up 1.27% at $1718.02/oz; spot silver showed a deep V trend, erasing all intra-day losses, eventually closing up 0.95% at $18.83/oz.


Comment: Gold prices rebounded from a one-year low on Thursday, after rising more than 1%, as the dollar retreated, and continued economic concerns boosted gold's safe-haven appeal. The euro jumped against the dollar at one point, helping to push gold prices higher; the euro then narrowed its gains. The European Central Bank exceeded expectations for a rate hike on Thursday as concerns about runaway inflation overwhelmed concerns about growth, even as the eurozone economy is suffering from the impact of the Russia-Ukraine war.


Suggestion: short spot gold at 1717.50, target point at 1710.00.


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The dollar index intra-day volatility, a short dip after a rapid rebound of nearly 100 points, then retracted gains and finally closed down 0.43% at 106.58; 10-year U.S. bond yields fell sharply, finally closed at 2.882%; the euro against the dollar by the European Central Bank unexpectedly raised interest rates, pulling up nearly 80 points, followed by a sharp turnaround fell 120 points, and finally still narrowly defended the 1.02 mark. 


Comment: The euro rose against the dollar Thursday shock, up to $1.0279, the highest in nearly two weeks, after the European Central Bank raised interest rates for the first time since 2011, raising rates by 50 basis points to curb inflation. The ECB raised its indicator deposit rate to 0%, breaking its guidance of making a 25 basis point rate hike and joining the ranks of other central banks worldwide to raise borrowing costs.


Suggestion: EUR/USD is short at 1.02150 position, target point 1.01500.


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In crude oil, the two oils dived during the day; WTI crude oil once plunged 5% during the day after a small rebound, eventually closing down 3.1% at $98.92/barrel; Brent crude oil closed down 2.62% at $104.81/barrel.


Comment: Oil prices fell more than $3 on Thursday as U.S. gasoline inventories increased and demand concerns were raised by the European Central Bank's interest rate hike, while the return of Libyan oil to the market and the resumption of Russian gas deliveries to Europe eased supply constraints.


Suggestion: U.S. crude oil short at 95.610, target point 92.770.


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The three major U.S. stock indexes rose for the third day in a row, with the Nasdaq closing up 1.37%, the Dow up 0.51%, and the S&P 500 up nearly 1%. Tesla closed up 9.7% after the results, a new high since May 10, Chinese stocks in general rose, and the Nasdaq China Golden Dragon index rose 1.61%.


Comment: U.S. stocks closed higher Thursday, helped by a late-afternoon rally and a climb in growth stock giants, including Tesla. The technology-dominated Nasdaq led gains, up nearly 1.4 percent, while the S&P 500 hit its highest closing level since June 9, and the Dow Jones industrials climbed 0.5 percent.


Suggestion: Nasdaq 12516.200 position to do more, the target point 12738.600.


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U.S. President Joe Biden tested positive for new crown pneumonia with mild symptoms.


U.S. President Joe Biden tweeted a video saying he tested positive for the New Guinea virus but is in good health. A U.S. White House spokesman said Biden's risk of developing severe symptoms is greatly reduced because he has doubled his vaccination. The cumulative number of confirmed cases of New Coronavirus pneumonia in the United States is now more than 90 million. This figure means that, on average, one out of every 3.6 people in the United States is infected with the new coronavirus. 


European "hawkish" rate hike of 50 basis points, the launch of the anti-financial fragmentation tool TPI.


The European Central Bank unexpectedly raised interest rates by 50 basis points in July, the first time in 11 years, and ended the era of negative interest rates in the eurozone. In addition, the ECB also launched an anti-financial fragmentation tool, TPI, to prevent financial fragmentation within the eurozone. The ECB said that TPI purchases are not subject to "ex-ante restrictions" and the size of purchases depends on the severity of policy transmission risks, but did not provide other details on TPI, including size, duration, threshold, and other key information.


U.S. initial jobless claims came in at 251,000 last week, above market expectations.


U.S. initial jobless claims for the week to July 16 came in at 251,000, compared to expectations of 240,000, as the number of people applying for unemployment insurance in U.S. states rose for the third consecutive week, reaching the highest level since last November. Agencies believe this is because more companies are announcing layoffs, which indicates some weakness in the otherwise solid job market.

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