EUR/USD 1.16141
-0.097%
Gold 4434.77
-0.854%
Oil 89.430
-0.234%
USD/JPY 156.234
0.280%
GBP/USD 1.35183
-0.046%
GBP/JPY 211.206
0.242%
Browse More
  • English
  • 简体中文
  • 繁體中文
  • Tiếng Việt
  • ไทย
  • Indonesia
Subscribe
Real-time News
On September 5th, stronger-than-expected US August jobs data triggered renewed bets on a possible Federal Reserve rate hike, but Wall Street risk assets did not show significant panic. Data showed increased resilience in the job market, leading traders to raise their expectations for a rate hike at the Feds September 16th meeting. US Treasuries experienced a sell-off, the dollar strengthened, and the S&P 500 fell on Friday but still recorded a weekly gain. Unlike previous rate hikes that often triggered capital outflows, this round of bond market adjustments has not yet spread to other risk assets. Credit spreads remain low, limiting pressure on corporate bonds and stock index markets. JPMorgan Chase stated that US Treasury liquidity has deteriorated significantly, but corporate bond ETFs and stock index futures markets have not yet experienced similar tension. Market resilience mainly stems from economic growth and corporate profits, especially as AI investment continues to drive large-scale capital expenditures by technology companies. Analysts point out that the market is currently more focused on whether yields will rise rapidly than on the jobs data itself. The market focus will shift to inflation data and whether the Fed will reconsider its rate hike path due to inflationary pressures. If yields rise further rapidly, it could force investors to reduce their risk exposure.US officials: The White House has no plans to hold an artificial intelligence meeting in mid-September.OpenAI CEO Altman: GPT-6 Astra is now available to all Pro, Enterprise, and Business Premium users and is available via API. Our next step is to begin rolling it out to Plus and Business users. Thank you for your patience.The Israel Defense Forces (IDF) are continuing operations in the security zone to eliminate threats to Israeli civilians and soldiers. The IDF will continue to take measures against Hezbollahs repeated attempts to harm Israeli soldiers.The Israel Defense Forces stated that the operation constituted a "blatant violation" of Hezbollahs rules and that retaliatory strikes had been carried out against targets in southern Lebanon.

Investor attention is on the Fed's minutes as recession fears drive the US Dollar Index towards 107.00

Daniel Rogers

Aug 16, 2022 11:47

截屏2022-08-16 上午9.53.03.png

 

The US Dollar Index (DXY) rises for a third day in a row during Tuesday's Asian session, gaining bids to 106.58. Thus, the greenback's signal captures the market's rush for risk-free assets in response to worries about the US and China's economies as well as worries about geopolitics in the Middle East, China, and Russia. It is noteworthy that aggressive Fed remarks and weaker US data enhance market trepidation and help DXY bulls.

 

Despite this, the DXY bulls closely monitor the gloomy statistics coming out of China and the US, particularly in light of the recession fears.

 

In August, the US NY Empire State Manufacturing Index fell from 11.1 in July to 31.3, below market estimates of 8.5. The August NAHB homebuilder confidence index in the US fell from 55 to 49, the lowest level since the start of 2020.

 

In other news, China's retail sales slowed in July to 2.7% YoY from 3.1% earlier and 5.0% forecast, while industrial production (IP) fell to 3.8% from 3.8% previously and 4.0% market estimates. Additionally, in an effort to counter bearishness, the People's Bank of China (PBOC) shocked the markets on Monday by reducing the rates on its medium-term lending facility (MLF) by 10 basis points (bps).

 

It should be emphasized that news stories about deteriorating coronavirus conditions in Shanghai, China's financial center, and the restart of Russian bond trading on Wall Street did not spur investors' desire to take risks. The Wall Street Journal's (WSJ) rumors of a potential meeting between US Vice President Joe Biden and his Chinese counterpart Xi Jinping may also encourage investors to take more risks. In a similar vein, Chinese President Xi proposed new efforts to revive the second-largest economy in the world.

 

The Pentagon said on Monday that the US, South Korea, and Japan took part in a missile warning and ballistic missile search and tracking exercise last week off the coast of Hawaii. Between August 22 and September 1, the US and South Korea will collaborate on military drills. The DXY rises as a result of the additional stress that geopolitical worries place on market sentiment.

 

The three-day downtrend in US 10-year Treasury yields is around 2.775%, while S&P 500 Futures are down at least 0.13 percent day-to-day.

 

Moving on, the secondary US housing and activity data released today should be of interest to DXY traders ahead of the release of the FOMC Minutes on Wednesday. The dollar's gauge might remain on the bear's radar if US data keep getting worse.

 

The three-week-old resistance line, which is now support at 106.35, would need to be broken for an extended period of time for DXY bulls to hit the monthly high above 107.00. However, in order to approach July's yearly high close to 109, the bulls need confirmation from late July's peak at 107.45.


Suggestion