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Futures News, September 15th: London spot gold prices fluctuated higher on September 15th, reaching a new all-time high, up 1.59% on a weekly basis to $3,643.06 per ounce. Gold prices fluctuated at high levels during the week. While inflation data prompted a rate cut, the cut was already largely priced in. Meanwhile, US inflation remained contained, with no reflationary expectations. With the Federal Reserves interest rate cut expected next week, the market may react with caution, with increased short-term volatility and a degree of uncertainty surrounding the market. However, the macroeconomic logic for golds upward trend remains intact, and with renewed geopolitical uncertainty, buying on dips may remain the primary strategy. US Treasury Secretary Bensont stated that the US economy inherited by Trump is in worse shape than reported, and that the Federal Reserve should recalibrate interest rates. Fed Chairman Powell has again become a target of criticism from the Trump administration, with Trump again calling for a swift rate cut. The US August CPI was in line with expectations, while the PPI unexpectedly fell sharply. Combined with the dismal employment data, market expectations of a renewed US recession are swirling, making a 25 basis point interest rate cut by the Federal Reserve almost certain. Market focus is on whether the combination of low inflationary pressures and poor employment conditions will lead to more rate cuts, and the market is awaiting comments from Fed officials. Geopolitically, Israel attacked Hamas targets in Qatar this week. Russian government spokesman Dmitry Peskov stated on the 12th that peace talks between Russia and Ukraine have been suspended, but negotiators from both sides remain open to communication through existing channels.A Yomiuri Shimbun poll in Japan showed that in the Liberal Democratic Party election, Sanae Takaichi led with 29% support, while Shinjiro Koizumi had 25% support.1. The three major U.S. stock indices closed mixed, with the Dow Jones Industrial Average down 0.59%, the S&P 500 down 0.05%, and the Nasdaq up 0.44%, reaching new all-time highs. Merck and Sherwin-Williams fell over 2%, leading the Dow lower. The Wind US Tech 7 Index rose 1.14%, with Tesla up over 7% and Apple up over 1%. Chinese concept stocks were mixed, with JinkoSolar up over 6% and Douyu down over 4%. 2. U.S. Treasury yields rose across the board, with the 2-year Treasury yield up 0.99 basis points to 3.549%, the 3-year Treasury yield up 1.94 basis points to 3.527%, the 5-year Treasury yield up 3.81 basis points to 3.633%, the 10-year Treasury yield up 4.57 basis points to 4.070%, and the 30-year Treasury yield up 2.69 basis points to 4.681%. 3. International precious metal futures generally closed higher. COMEX gold futures rose 0.19% to $3,680.70 per ounce, a weekly gain of 0.75%. COMEX silver futures rose 1.26% to $42.68 per ounce, a weekly gain of 2.71%. 4. International oil prices rose slightly. The main contract for US crude oil closed up 0.37% at $62.60 per barrel, a weekly gain of 1.18%. The main contract for Brent crude oil rose 0.77% to $66.88 per barrel, a weekly gain of 2.11%. 5. London base metals rose across the board, with LME zinc futures up 1.93% at $2,956.00/ton, up 3.32% for the week; LME nickel futures up 1.52% at $15,380.00/ton, up 0.95% for the week; LME lead futures up 1.13% at $2,019.00/ton, up 1.71% for the week; LME aluminum futures up 1.03% at $2,701.00/ton, up 3.86% for the week; LME tin futures up 0.74% at $34,955.00/ton, up 1.87% for the week; and LME copper futures up 0.13% at $10,064.50/ton, up 1.69% for the week.Market News: South Koreas trade minister will visit the United States on Monday for tariff negotiations.US President Trump: The Federal Reserve is expected to "cut interest rates significantly."

EUR/USD falls toward 1.0500 as the US labor market tightens and investors investigate Eurozone inflation

Daniel Rogers

Jan 06, 2023 11:19

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In the early Tokyo session, the EUR/USD pair is hanging at the critical support level of 1.0520. The major currency pair is projected to prolong its slide to around the psychological support of 1.0500, as the United States' tight job market has spurred the threat of the Federal Reserve (Fed) sustaining rising interest rates beyond CY2023.

 

Investors applied heavy selling pressure on risk-perceived assets such as the S&P 500 as the better-than-anticipated addition of new payrolls to the U.S. labor market for the month of December could accelerate wage inflation in the future. Risk aversion was encouraged by investors, resulting in a jump in the US Dollar Index (DXY). The USD Index jumped to roughly 105.00 due to a boost in safe-haven demand. A reduction in investors' risk appetite affected the demand for United States government bonds.

 

The Automatic Data Processing (ADP) agency of the United States declared a large increase in the number of employment additions for the month of December, from 150K to 235K, compared to the previous release of 127K. It is abundantly evident that increasing demands for skill will be satisfied by paying higher remuneration, therefore stimulating wage growth and leaving individuals with more spare cash. The declaration could bring about a price index recovery through a spike in retail demand.

 

In the future, the United States Nonfarm Payrolls (NFP) statistics release will give further information on the employment situation. The Unemployment Rate is anticipated to continue at 3.7%. In addition, the disclosure of the facts regarding the Average Hourly Wage will be of the utmost importance.

 

Investors will eagerly scrutinize the release of the Eurozone Harmonized Index of Consumer Prices (HICP) numbers on Friday. In view of the fall in energy prices and German inflation, it is quite possible that Eurozone inflationary pressures will follow a similar trend.

 

As reported by Reuters, European Central Bank (ECB) policymaker Francois Villeroy de Galhau noted in a New Year's address: "It would be desirable to achieve the appropriate 'terminal rate' by the summer of next year, but it is too early to say at what level."


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