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June 26th - European semiconductor companies followed their Asian counterparts lower as investors sold off artificial intelligence-related stocks. Micron Technologys strong earnings and optimistic outlook, reported after Wednesdays close, failed to reignite the rally in AI-related stocks on Thursday. On Friday, South Korean memory chip maker SK Hynix closed down 8.4%, and TSMC fell 2.1%. In European markets, Dutch semiconductor equipment maker ASML fell 0.9%, and ASM International fell 3.3%. German chipmaker Infineon Technologies fell 2.9%, and STMicroelectronics fell 2.5%. Meanwhile, E-mini Nasdaq 100 futures fell 0.8%.According to TASS, Russia is considering a short-term ban on diesel exports lasting several months.On Friday, June 26, the Hang Seng Index closed down 405.05 points, or 1.76%, at 22,671.86; the Hang Seng Tech Index closed down 150.33 points, or 3.41%, at 4,255.59; the H-share Index closed down 147.54 points, or 1.94%, at 7,460.84; and the Red Chip Index closed down 47.94 points, or 1.26%, at 3,749.09.The yield on German two-year government bonds fell to a seven-week low of 2.508% after the release of the European Central Banks consumer expectations survey, down 3 basis points on the day.On June 26th, Fitch Ratings BMI Commodities Research division remained bullish on gold, maintaining its 2026 average gold price forecast of $4,600 per ounce. The firm also believes the Federal Reserve will not make any moves on interest rates this year. As noted last week, the Feds hawkish tone has fueled expectations of rate hikes, posing a significant downside risk to gold. However, as long as inflationary pressures related to the Middle East conflict materialize as expected, and with the recent US-Iran agreement beginning to subside, the most likely outcome is that interest rates will remain unchanged for an extended period. Short-term gold price movements may be driven by Fed policy signals, and precious metals are susceptible to market expectation repricing and a renewed strengthening of the US dollar in the short term.

EUR/USD approaches 1.00 despite a potential German energy crisis; Jackson Hole forecasts a pullback

Daniel Rogers

Aug 25, 2022 14:59

截屏2022-08-25 上午10.23.25.png 

 

The EUR/USD has detected buying activity after trading sideways at 0.9960 throughout the Tokyo session. As the US dollar index (DXY) trades badly at the open, the pair is climbing to reclaim the fabled 1.0000 level. The DXY has fallen to approximately 108.50 after experiencing selling pressure close to 108.50.

 

The contrasting reactions of market players to Federal Reserve (Fed) chair Jerome Powell's remarks on interest rate guidance at the Jackson Hole Economic Symposium have perplexed investors. The DXY is volatile due to two schools of thought regarding the Fed's stance on interest rates following a decline in the private sector.

 

As a result of the Fed's aggressive interest rate rises, PMI numbers have decreased dramatically. As a result, one school of thought contends that the Fed should slow down because a decline in economic activity could hurt the confidence of the private sector. In addition, the second school of thought favors maintaining the existing rate of interest rate hikes, as price stability is the primary objective.

 

On the Eurozone front, the probability of a German energy crisis is rising as the energy-supplying Nord Stream 1 pipeline from the Baltic Sea to Germany undergoes unscheduled maintenance over the last three days of August. During a time when the German energy market is already suffering supply difficulties, new supply constraints may cause energy prices to skyrocket.


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