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On the morning of September 1 local time, President Xi Jinping will attend the 26th meeting of the Council of Heads of State of the Shanghai Cooperation Organisation (SCO) at the Bishkek Palace of Happiness and deliver an important speech.September 1st - According to the latest statistics from Flight Manager DAST, 18 China-Japan routes cancelled all flights in August, the latter half of the summer travel season. A total of 1,120 flights from mainland China to Japan were cancelled in August, representing a cancellation rate of 30.1%.On September 1st, Westpac Bank predicted that the Reserve Bank of New Zealand (RBNZ) would raise interest rates by 25 basis points to 2.75% on September 2nd, a prediction consistent with market expectations. The bank anticipates that the RBNZs policy forecasts will suggest a year-end rate of 3%, with a peak potentially approaching 3.3%. Regarding a potential further rate hike in October, the bank expects the RBNZ to signal a data-dependent outcome. Unless the RBNZ deviates from Westpacs expected "data-dependent" framework in its statements about October policy action, the potential for a sharp market reaction is limited. The bank believes the probability of a hawkish surprise, an upward revision of the neutral rate assumption, or a clearer signal of consecutive rate hikes in October and December is only 10% to 15%; similarly, the probability of a dovish surprise suggesting a pause in rate hikes before December is also 10% to 15%. This implies that the risks around the baseline scenario are roughly symmetrical, with no significant bias.September 1st - The National Essential Medicines List, which serves as the basis for the allocation and use of medicines by medical institutions, was released by the National Health Commission, the State Administration of Traditional Chinese Medicine, and the National Center for Disease Control and Prevention to better meet the basic medication needs of the public for disease prevention and treatment. The list officially came into effect today (September 1st). This update adds 68 new chemical drugs and biological products, focusing on chronic and common diseases with high incidence rates and expanding the range of diseases covered. The update also pays special attention to pediatric medication, focusing on common childhood illnesses and expanding the types of medicines suitable for children.September 1st - As of August 31st, during the 62-day summer travel season, the Guangzhou Railway Bureau of China Railway transported a total of 128 million passengers, an increase of 3.223 million passengers compared to last year, representing a year-on-year growth of 2.6%, setting a new record for passenger volume during the same period in previous summer travel seasons.

Gold Price Prediction: XAU/USD bears at $1,650 on Fed hawkishness and China news

Daniel Rogers

Sep 19, 2022 14:34

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During early Monday morning in Europe, the gold price (XAU/USD) maintains a position close to the intraday low at $1,670. In doing so, metal prices endure the weight of a stronger U.S. dollar amidst a sluggish session caused by Japanese and British vacations. The cause may be related to the Fed's hawkish bets and China-related news stories.

 

US Dollar Index (DXY) reverses a two-day slump while posting intraday gains of 0.18 percent at 109.85 as of press time. Indicators of the U.S. dollar's value versus the six major currencies have recently been buoyed by the University of Michigan's September consumer sentiment report and the market's positive expectations on the Fed's next move. Consequently, the probability of a 75-basis-point (bps) rate hike by the Federal Reserve increased to 80%, while the market's estimates of a one-percentage-point increase in the Fed rate rose to 20% at the latest.

 

US President Biden stated elsewhere, "I'm more positive than I've been in a long time." The national leader also claimed that inflation will be brought under control. On the same line are the covid updates from China, which have unlocked Dalian and Chengdu while observing zero coronavirus cases in Beijing and one, as opposed to zero the day before, outside of Shanghai's quarantine zone. However, US President Biden's willingness to support Taiwan in the event that China assaults Taiwan and hawkish expectations for the Federal Reserve appear to weigh on the steel price ahead of the major monetary policy pronouncements.

 

In addition, the People's Bank of China (PBOC) reduces the 14-day reverse repo rate by 10 basis points to 2.15 percent. "With no maturing reverse repos on Monday, the Chinese central bank injects 12 billion yuan," reports Reuters. The same might have indicated that the dragon nation is not in recovery mode and requires more rate cuts than rate raises, which could have caused the gold price to plummet. The cause is China's position as one of the world's largest gold consumers.

 

In light of this, the S&P 500 Futures post modest losses while mirroring Wall Street's Friday close. Notably, the selling in Japan curbs bond movements in Asia, but yields are robust near the multi-day high due to fears of a recession and hawkish Fed views.

 

Moving forward, a light economic calendar and important market holidays may limit intraday XAU/USD price fluctuations. However, bears are expected to maintain control because to aggressive Fed expectations, which, if dashed, might defy the bearish chart pattern and spark the long-awaited rally.

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