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June 16th, Futures News: Following the end of the Iran war, crude oil prices have fallen sharply, lowering cost support for fuel oil. Market participants, driven by bearish sentiment, are mostly adopting a wait-and-see approach, with cautious trading focused on small, immediate needs. Market activity is subdued, and refineries are facing increased difficulties in shipping. It is expected that todays negotiations for slurry oil and wax oil will remain stable with a slight downward trend. While fuel oil prices are supported by low supply levels, the decline is relatively moderate, but sluggish trading at higher levels also carries the risk of further price reductions.On June 16th, Bank of Japan Deputy Governor Shinichi Uchida will replace the hospitalized Governor Kazuo Ueda, responsible for explaining the Bank of Japans latest decisions and future policy direction. Investors will closely watch Uchidas remarks to gauge his views on the future path of interest rate hikes and the Bank of Japans bond-buying policy. He faces a delicate task: to project a sufficiently hawkish stance to prevent a sharp depreciation of the yen, while simultaneously considering Prime Minister Sanae Takaichis inclination towards pro-economic monetary policies. Some economists believe that if Uchida deviates from Uedas position, it could shake the entire situation. Others say that Uchidas style is more direct, differing from Uedas subtle and unbiased communication style. According to the chief economist at Daiwa Institute of Economics, Uchida is likely to draw on his experience in policy implementation to provide a very thoughtful explanation to help market participants better understand the Bank of Japans thinking, particularly regarding the normalization process.A fire broke out at an oil depot in Russias Krasnodar region due to a drone attack.Easing tensions in the Middle East have put pressure on international oil prices. A quick chart shows the pre-market conversion of domestic and international crude oil prices.June 16th - In SpaceXs $86.2 billion IPO, every customer of some of the largest retail brokerage firms in the US received at least one share, highlighting the initial design of the offering to allow retail investors to play a significant role. According to representatives of the companies, all eligible customers received a portion of the stock allocation after submitting stock subscription requests to platforms such as Robinhood, Charles Schwab, and Fidelity. It was reported that SpaceX ultimately allocated approximately 20% of its initial public offering proceeds to global retail investors. Sources indicated that due to demand exceeding $100 billion, many investors hoping for higher allocations were unsuccessful. On its second day of trading, SpaceXs stock price had already surged over 40%, reaching a market capitalization of $2.5 trillion.

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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