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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.

The US Dollar Index is trying to regain 109 ahead of US Durable Goods Orders data from Jackson Hole

Alina Haynes

Aug 24, 2022 15:26

截屏2022-08-24 上午10.16.07.png 

 

As traders wait for the day's significant triggers amid a sluggish opening, the US Dollar Index (DXY) continues its rise toward the multi-year high established in July, adding bids to 108.60 in the Asian session on Wednesday.

 

The dollar index dropped from a multi-year high of 109.27 against the six major currencies the day before yesterday. While the present downturn in US data is driving the quote to retreat, the DXY bulls are supported by concerns of an economic slowdown and the US Federal Reserve's (Fed) quick rate hikes.

 

The president of the Minneapolis Fed, Neel Kashkari, was quoted by Reuters as saying that misreading the underlying inflation dynamics is the biggest worry. If the Fed sees inflation creeping closer to their target of 2%, they may slow their rate of rate hikes, according to the official.

 

However, traders in fed funds futures are pricing in a 52.5% chance of a rate hike of 75 basis points (bps) at the upcoming Fed meeting. On Monday, Reuters reported that a rate hike of 50 basis points in September was somewhat more likely than 50 percent.

 

Preliminary readings released on Tuesday by the US S&P Global Manufacturing PMI for August showed a decline to 51.3 from 52.0 expected and 52.2 earlier, while the Services index plunged to 44.1 from 47.3 compared to 49.2 market expectations. As reported by S&P Global, the Composite PMI has fallen to 45, the lowest level in 27 months, signaling a potential crisis for the US economy.

 

In addition, the number of newly constructed homes sold in the United States dropped to 0.511 million in July, down from 0.585 million the previous month and 0.575 million the market had predicted. The US Richmond Fed Manufacturing Index dropped to -8.0 in August from a reading of 0.0 the month before.

 

At press time, US 10-year Treasury rates were lingering at 3.05%, the highest level in a month, despite small advances for the day on Wall Street. S&P 500 Futures have been declining somewhat as of press time, which is notable.

 

DXY volatility may be constrained in the future by the light schedule preceding the North American session. Next, keep an eye on the US Durable Goods Orders for July, which are predicted to rise 0.6% after rising 2.0% in June. As markets try to predict the Fed's next move, Friday's speech by Fed Chairman Jerome Powell at the Jackson Hole conference hosted by the Kansas City Fed will be crucial.

 

DXY bears are threatened by a rising support line that has been in place for two weeks near 108.00, but the buyers won't be convinced until the uptrend is confirmed above 109.30.


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