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[Market Morning] The Minutes of The Fed Meeting Suggest a Tougher Stance, Gold is Approaching $1,730, and The Price of Russian Oil is Capped? US Oil Once Fell More Than 4%
In early Asian trading, the U.S. dollar was trading around 107. The pace of aggressive U.S. interest rate hikes and risk aversion helped drive the U.S. dollar higher; the minutes of the Fed meeting showed that both 50 basis points and 75 basis points of interest rate hikes in July are possible, which shows that , the Federal Reserve acknowledged the impact of interest rate hikes on the economy; when global central banks are tightening monetary policy to deal with inflation, the market is worried that an economic downturn is coming, and gold is under pressure to hit the lowest level in more than nine months; investors are worried that energy demand may Oil hit a 12-week low, hit by the emerging global recession.
On Wednesday, spot gold maintained a downward trend and dived sharply during the US session, eventually closing down 1.43% at $1,739 an ounce; spot silver closed up 0.05% at $19.2 an ounce.
Comment: Gold fell 1.8% on Wednesday to hit a more than nine-month low as the dollar jumped to its highest level since March 2020, seen by investors as a safe-haven asset amid rising recession fears and the Federal Reserve continuing to raise interest rates. Investors fear a looming economic downturn as central banks tighten monetary policy to combat inflation.
Suggestion: short spot gold at 1738.80; the target point is 1720.00
The US dollar index remained strong, achieving four consecutive positives and reaching a high of 107, closing up 0.545% at 107.09; the 10-year US bond yield rebounded in the US session, returning to above 2.9%.
Comment: The dollar rose to a fresh 20-year high on Wednesday, and the euro fell to a new 20-year low, as rising energy prices cast a shadow over the eurozone economy but enhanced the dollar's safe-haven appeal.
Suggestion: short position of EUR/USD 1.01780, target point 1.0080
In terms of crude oil, the two natural oils continued to decline. WTI crude oil fell below US$100 again and closed down 3.03% at US$99.18/barrel; Brent crude oil once fell below US$100 and finally closed down 4.92% at US$101.98/barrel.
Comment: Oil prices fell about 2% in choppy trade on Wednesday, hitting a 12-week low, extending a rout in the previous session as investors grew increasingly concerned about energy demand taking a hit in a possible global recession. API data released in the morning showed US crude oil inventories rose last week while refined oil inventories fell. Crude inventories rose by about 3.8 million barrels in the week to July 1. Gasoline inventories fell by 1.8 million barrels, while distillate stocks fell by about 635,000 barrels.
Suggestion: short the position of US crude oil at 95.080, the target point is 93.460
The three major U.S. stock indexes fluctuated and closed slightly throughout the day. The Dow closed up 0.36%, the Nasdaq closed up 0.35%, and the S&P 500 closed up 0.36%. Less than 6%, Li Auto and Xiaopeng Motors fell by more than 3%.
Comment: Eight of the 11 sectors of the S&P 500 closed higher, led by utilities and technology. Energy stocks underperformed, down 1.7 percent, as recession fears pushed crude prices to their lowest in 12 weeks. of·
Suggestion: Long position of Nasdaq index 11840.000, target point 12147.200
Fed minutes: High inflation may need to raise interest rates to 'more restrictive' levels
In the early morning, the Fed released the minutes of the meeting. Among them, most Fed officials believe that growth risks are skewed to the downside, and it may take some time to reduce the inflation rate to 2%. If inflation persists, the Fed sees "more restrictive" interest rate levels as possible. Fed officials see a 50 or 75 basis point rate hike at the July FOMC meeting and expect economic growth to rebound in the second quarter.
The US plans to expand export controls to China.
The US "New York Times" disclosed on the 5th that the Biden administration plans to expand export restrictions on China and other countries to prevent related companies or institutions from "threatening US national security" or "violating human rights," but there are the US think tanks. Experts believe many countries may not cooperate with the United States in taking relevant measures, given their deep trade ties with China.
IMF: Will cut 2022 global economic growth forecast
IMF Managing Director Georgieva said the possibility of a global recession in 2023 could not be ruled out as the global economic outlook has been "significantly bleak" since the last update of economic forecasts. The International Monetary Fund will cut its forecast for global growth by 3.6% in 2022 in the coming weeks, as IMF economists are still finalizing new projections.
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