[Market Morning] Hawkish Interest Rate Hike Expectations Boosted the 10-year US Bond Yield to 3.10%, the US Index Once Rose Above 109, Approaching A 20-Year High, and Gold Broke Above 1750
In early Asian trading on August 25, the U.S. dollar index was trading around 108.63; the dollar rose on Wednesday, near a 20-year high, as investors waited for Fed Chairman Powell's speech on Friday to find out how aggressive the Fed will take in the fight against inflation. New clues; meanwhile, investors have lowered expectations that the Fed may be inclined to slow the pace of interest rate hikes, gold prices held steady at the 1750 mark; oil prices rose nearly 2%, amid concerns that the United States is in response to the resumption of the draft Iran nuclear deal Additional concessional boosts to Iran will not be considered.

On Wednesday, spot gold failed to challenge $1,755 many times and is still oscillating above the $1,750 mark, finally closing up 0.15% at $1,751.08 per ounce; spot silver closed up 0.01% at $19.11 per ounce.
Comment: Gold prices held steady on Wednesday as the dollar gave up some of its earlier gains while investors awaited clues on interest rate hikes from a meeting of central bankers in Jackson Hole.
Suggestion: go short at 1751.60 of spot gold, target point at 1731.40
The US dollar index rose to a high of 109.13 after a short-term dive, erasing most of the previous gains and falling below the 109 mark, and finally closed up 0.06% at 108.57; the 10-year US bond yield continued to rise and closed at 3.109%.
Comment: The dollar rose against a basket of currencies on Wednesday, near a 20-year high, as investors awaited comments from Federal Reserve Chairman Jerome Powell on Friday for fresh clues on how aggressive the central bank will be in its fight against inflation. With inflation remaining 8.5% annually, well above the Fed's 2% target, investors have tempered expectations that the Fed may be inclined to slow the rate hikes. Investors will peruse Powell's speech at Jackson Hole for any signs that an economic slowdown could prompt the Fed to change tack.
Suggestion: short EUR/USD at 0.99680, target point 0.99020
In terms of crude oil, affected by the progress of the Iran nuclear deal, the two oil prices showed a deep V trend in intraday trading but finally recovered all the lost ground and continued the rally. WTI crude oil rose 1.78% to $95.36 per barrel; Brent crude oil finally closed up 1.6% to $101.69 per barrel.
Comment: Oil prices closed higher on Wednesday in a volatile session on concerns that the US would not consider additional concessions to Iran in response to the resumption of the draft Iran nuclear deal. If the nuclear deal is resumed, Iran, a member of the Organization of the Petroleum Exporting Countries (OPEC), can resume crude exports. Iran said it had received a US response to the European Union's "final" text of the 2015 nuclear deal revived between Iran and the great powers.
Suggestion: long US crude oil at 95.050; the target point is 97.740
The US stock Dow closed up 0.18%, the Nasdaq closed up 0.41%, and the S&P 500 rose 0.29%. Cruise ships, hydrogen energy, and popular Chinese concept stocks were among the top gainers, while infrastructure, banking, and steel stocks were weak.
Comment: US stocks closed higher on Wednesday, boosted by gains in energy and Intuit shares, while investors awaited the Federal Reserve's Jackson Hole meeting this week. Accounting software maker Intuit closed nearly 4% after its upbeat fiscal 2023 revenue forecast and boosted the tech-heavy Nasdaq.
Suggestion: go short at 12916.200 of the Nasdaq index, target point at 12673.800
Record US crude exports to continue through 2023 as the energy crisis deepens.
US overseas crude sales are set to hit a new record next year as US oil gains market share in Europe. Earlier this month, weekly government data showed US crude exports hitting an unprecedented 5 million BPD. According to the most optimistic oil industry sources, US oil shipments will average more than 4 million barrels per day in the coming months and into the next year. As the world grapples with one of the worst energy crises in history, the United States is steadily becoming the go-to supplier for increased oil production. This will likely continue as OPEC has limited spare capacity, and the European Union intends to reduce crude oil purchases from Russia in December. Over the next two years, US suppliers, which have already captured European market share, will likely continue to do so as other producers, including those in the North Sea and West Africa, have seen less steady production growth.
Russian seaborne coal exports disrupted by EU ban.
The European Union has banned entities in its 27 countries from shipping Russian fuel anywhere. This effectively stops Russia's seaborne coal exports. Suek?According to people familiar with the matter, JSC, Russia's largest thermal coal miner, has been unable to deliver the fuel since mid-August. The insurance and reinsurance market is dominated by EU, UK, and Swiss companies, making it difficult for shipowners to find insurance, people familiar with the matter said. The European Union banned coal and other goods from Russia starting Aug. 10, after the ban provided a four-month buffer. Earlier this month, the European Commission said the sanctions against Russia also prohibit EU operators from providing services such as financing and insurance to all such products originating in Russia.
UN Security Council holds an open meeting on the Russia-Ukraine conflict.
On Aug. 24, local time, the United Nations Security Council held an open meeting on the Russian-Ukrainian conflict for half a year. Ukrainian President Volodymyr Zelensky attended the meeting by video. The United Nations has renewed its call for an end to the conflict. UN Secretary-General Antonio Guterres said that the U.N.-led Ukrainian grain export agreement is gradually recovering Ukrainian grain exports. But the Zaporozhye nuclear power plant is still a cause for concern. He reiterated that "any action that poses a risk to the integrity, safety, and security of a nuclear power plant is unacceptable. Any further escalation could lead to self-destruction, and nuclear power plant safety must be guaranteed."
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