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China tightens lockdown in Shanghai Asian equity markets are off to a bad start today, although the US dollar has been steadily rising versus Asian currencies, and the risk-sentiment barometers, the Australian and New Zealand dollars are having a tough day at the office. There is no one theme that is causing Asian equities to crate, but if I had to pick one, it would be that concerns over the depth of the China slowdown are accelerating, with virus restrictions tightening in Beijing and apparently, Shanghai once again.   The weekend G-7 meeting may also be darkening the mood, agreeing to enact a phasing out of Russian oil imports. The important words here are “phasing out,” which was enough to get Japan on board. The language was loose enough to have had little impact on oil prices today, which have fallen today as China slowdown nerves outweigh short-term supply shocks. The G-7 measures are more forward-looking. Still, Asia has a very high dependency on imported energy and the G-7 announcement is certainly not positive for Asia’s growth going forward, implying higher for longer energy prices.   Friday’s US Non-Farm Payrolls rose by 428,000 jobs, not far from median forecasts. The headline number was not enough to juice up the Fed tightening narrative but was definitely not going to allow any hopeful rate hike doves their day in the sun either. The result was a gentle continuation pattern. US equities eased, the US dollar ground higher, and US yields also ground higher. The hump in the US yield curve is now gone with the 2-year to 30-year now back to positive and the 10-year yield now comfortably above 3.0% at 3.15%.   So, net-net, we are still in high inflation tightening Fed, China slowdown, higher energy, and food price environment, with the added uncertainty surrounding Russia’s war on Ukraine, which Vladimir Putin may make official today at Moscow’s May 9th parade. Little surprise, therefore, that Asian markets don’t really want to play today.   Shortly we will receive the China April Trade data. It comes as new home sales plunged by 33.0% over last week’s holiday period, and bankers seized a New York property of a defaulting China property developer according to Bloomberg. China’s private developer leverage saga has been knocked off the headlines but remains a slow-moving trainwreck that is also being exacerbated by the covid-zero policy. Forecasts for the Trade Balance are for a slight gain over March to USD 50.65 billion. There are downside risks in the import component which could flatter the headline, even as exports remain robust. Lower exports or imports or both will likely give the bears more fresh salmon for dinner.   Later today, Indonesia releases its April inflation and trade data. Expectations are for an increase of 0.80% MoM, and 2.60% YoY, while the trade data should be robust, thanks to economic reopening and resource demand. A much higher inflation rate will increase the pressure on Bank Indonesia to hasten its reluctant hiking timetable. BI is struggling to cap USD/IDR at 14,500.00 at the moment and a high inflation print will see another wave of selling hit the rupiah.   Later this week, we have China and India CPI where the risks lie in opposite directions. A lower CPI than 1.50% YoY will increase the pressure on the government and PBOC to hit their stimulus buttons. That could be a short-term boon for mainland equities, but actions speak louder than words, as even China is finding out. After an unscheduled rate hike by the Reserve Bank of India, if India’s inflation moves higher than 7.0% on Friday, the pressure will be on for the RBI to act again. That may give some strength to the rupee but is unlikely to be bullish for local equities.   We can expect some volatility in Philippine markets today as well with the presidential election taking place. It does look at this stage that this marvellous country will shake my faith in democracy and elect a Marcos as President, and a Duterte as Vice-President. Yes, you read those names correctly and yes, politics in Asia as a family business is sadly alive and well. I’m not sure how international investors will view that outcome, but I suspect the BSP’s work is about to get harder in the months ahead. For me, if a Marcos is back in power, I’m looking to get long luxury handbag and shoe producers, who preferably accept cash and cryptos for payment. Let the people eat cake.   In the DM space, US CPI data on Wednesday is the week’s highlight. Like the Non-Farm Payrolls, the outcome is binary. A much higher CPI print equals more Fed tightening equals a higher US dollar and lower equities. A much lower CPI equals a relief rally and a correction lower for the US dollar. CPI prints across the Western Europe heavyweights and the UK throughout the week could also ratchet tightening pressure on the ECB and BOE, although I think this will be in vain as the needs of a war-time economy rightly take precedence. That likely means euro and sterling are going to finish the week lower than where they started today. This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Oil markets remain volatile Oil prices spiked overnight, led by a combination of Shanghai reopening, potential gas supply disruption through Ukraine, Russian sanctions on EU energy entities and a plunge in gasoline inventories in the US. Brent crude rose 5.90% to USD 107.50, and WTI leapt 6.60% higher to USD 105.50 a barrel. In Asia, the risk aversion selling sweeping other asset classes in Asia today has pushed oil prices slightly lower. Brent crude fell 1.20% to USD 106.25, and WTI fell 1.10% to USD 104.40 a barrel. The continuing squeeze on US gasoline, diesel and other distillates is another supportive factor With tensions seemingly ratcheting higher after Russia sanctioned ex-Gazprom JVs in Europe, along with reduced trans-Ukraine pipeline flows, there is limited downside for oil prices in the near term. The continuing squeeze on US gasoline, diesel and other distillates is another supportive factor. Read next: Altcoins: What Is Polkadot (DOT)? Cross-Chain Transfers Of Any Type Of Asset Or Data. A Deeper Look Into Polkadot Protocol | FXMAG.COM Brent crude has formed a nice trendline support going back to January 2022 at USD 101.50, while WTI has formed the same pattern at USD 98.50 a barrel. Resistance remains at USD 114.75 and USD 111.50 a barrel respectively. Failure of the respective USD 101.50 and USD 98.50 trendline supports is likely to provoke a much stronger test of USD 100.00 for Brent, and USD 95.00 for WTI this time around. Eastern European tensions mean this is not my base case, however. I am sticking to my broader calls for the past two months. Brent crude remaining between USD 100.00 to USD 120.00, and WTI between USD 95.00 and USD 115.00 a barrel. Gold survives another day Gold probed the downside overnight, testing support in the USD 1835.00 an ounce region, before rallying to a 0.75% gain, closing at USD 1852.00 an ounce as US yields fell and risk-hedging flows appeared. In Asia gold is relatively quiet compared to the volatility seen in other asset classes today. It has edged 0.17% lower to USD 1848.20 an ounce. Read next: Stablecoins In Times Of Crypto Crash. What is Terra (UST)? A Deep Look Into Terra Altcoin. Terra - Leading Decentralised And Open-Source Public Blockchain Protocol | FXMAG.COM Gold’s support critical near-term support remains the triangle apex at USD 1835.00, the breakout of which in early February, signalled the gold rally to USD 2060.00 an ounce. Its importance is confirmed by the nearby 200-day moving average (DMA), today at USD 1836.00 an ounce. A daily close under USD 1835.00 would be an ominous technical development. Gold has resistance at USD 1860.00 and USD 1884.00 an ounce, its 100-day moving average Failure of USD 1835.00 sets up a test of support at USD 1820.00 and then potentially USD 1780.00 an ounce. Failure of the latter suggests a deeper correction to USD 1700.00. Gold has resistance at USD 1860.00 and USD 1884.00 an ounce, its 100-day moving average. Read next: (BTC) Bitcoin’s Price Tanks Along With Equities. U.S. Stock Market Awaits CPI Report, Poor Performance From The FTSE 100. If the risk-aversion selloff sweeping other asset classes, notably cryptos, accelerates, gold does stand to benefit. Especially is haven buyers also pile into US bond markets, pushing the US yield curve lower. This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

USD/JPY continues to show little movement this week, in sharp contrast to Friday, when the pair jumped a massive 1.55%. In the European session, USD/JPY is trading at 135.02 down 0.09%. The yen had shown some strength against the dollar recently, but took a tumble after the stunning US nonfarm payroll report on Friday. The gain of 528 thousand more was more than double the estimate of 250 thousand, and the dollar responded with sharp gains against the majors. All eyes on US inflation Inflation has been rising in the US and hit 9.1% in June. The July inflation report will be released later today, and the release could have a strong impact on the direction of the US dollar. Headline CPI is expected to fall to 8.7%, down from 9.1%. If the reading does drop to around 8.7%, the markets may start thinking “peak” when it comes to inflation, and the dollar could lose ground. Conversely, if inflation stays around 9% or moves higher, it should be a catalyst for the dollar, as the Fed will have to consider a 75 or even a 100 basis point increase in September. After the inflation release, we’ll hear from Fed members Evans and Kashkari, and it will be interesting to hear their remarks on the heels of today’s inflation release. Last week, the Fed sent out the message that its rate-tightening cycle is not about to end, as the inflation fight is far from over. The spectacular nonfarm payrolls release pointed to continued strong wage growth and the participation rate dropping a notch, from 62.2% to 61.1%. These numbers point to a tighter labour market and stronger inflationary pressures. If today’s inflation report confirms that inflation is still accelerating, I would expect to hear hawkish remarks from Fed officials, which would likely give the US dollar a boost. . USD/JPY Technical USD/JPY is putting pressure on resistance at 134.40, which was tested on Wednesday. 136.30 is the next resistance line There is support at 133.65 and 131.80 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Source: https://www.marketpulse.com/20220810/yen-drifting-as-us-inflation-looms/

Oil treading water after volatile 24 hours Needless to say, it was quite a volatile session in oil markets on Wednesday. A positive surprise on inflation was followed by a huge inventory build reported by EIA and then the highest US output since April 2020. Meanwhile, oil transit via the Druzhba pipeline resumed after a brief pause that jolted the markets. That’s a lot of information to process in the space of a couple of hours and you can see that reflected in the price action. And it keeps coming this morning, with the IEA monthly oil report forecasting stronger oil demand growth as a result of price incentivised gas to oil switching in some countries. It now sees oil demand growth of 2.1 million barrels per day this year, up 380,000. It also reported that Russian exports declined 115,000 bpd last month to 7.4 million from around 8 million at the start of the year. The net effect of all of this is that oil prices rebounded strongly on Wednesday but are pretty flat today. WTI is back above $90 but that could change if we see progress on the Iran nuclear deal. It’s seen plenty of support around $87-88 over the last month though as the tight market continues to keep the price very elevated. Gold performs handbrake turn after breakout It was really interesting to see gold’s reaction to the inflation report on Wednesday. The initial response was very positive but as it turned out, also very brief. Having broken above $1,800, it performed a swift u-turn before ending the day slightly lower. It can be difficult to gauge market reactions at the moment, in part because certain markets seem to portray far too much economic optimism considering the circumstances. With gold, the initial response looked reasonable. Less inflation means potentially less tightening. Perhaps we then saw some profit-taking or maybe some of that economic optimism crept in and rather than safe havens, traders had the appetite for something a little riskier. Either way, gold is off a little again today but I’m not convinced it’s peaked. From a technical perspective, $1,800 represents a reasonable rotation point. Fundamentally, I’m just not convinced the market is currently representative of the true outlook. For a look at all of today’s economic events, check out our economic calendar: www.marketpulse.com/economic-events/ This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Source: Oil stablizes, gold pares gains

US stocks appear to be on a permanent rollercoaster ride as investors debate continued signs of a strong economy alongside rising rates, which remains a drag on higher valuation companies. For Wall Street to remain fully confident in piling back into stocks, inflation needs to be showing signs it is easing and that is not happening yet. ​ ​   Market conditions look dangerous but some of these discounts are looking very attractive. ​ It seems that the base case is still that the inflation peak is in place and that the Fed will look to signal a gradual tightening path. Unless inflation shocks prove otherwise, the risk-reward ratios for some of the beloved mega-cap tech stocks are looking attractive. ​ It won’t happen immediately, but when the economy starts to show signs of weakness, that will give investors the green light to buy stocks.   Investors just can’t confidently buy stocks as too much uncertainty persists with what will happen with global growth and how far the Fed will take tightening beyond the summer. ​   NFP The US labor market remains strong as broadbased hiring continues. The economy added 428,000 in April, much more than the analysts estimate of 380,000, also matching the slight downward revision in the prior month. Wage pressures might be showing signs of easing as average hourly earnings ticked lower. ​ Still most signs suggest the labor market is tight and that wage pressures are not quite ready to post a meaningful drop. ​ ​ The labor market remains robust and that should keep the Fed’s half-point tightening on cruise control until the Jackson Hole Symposium.   Oil Crude prices just want to head higher as energy traders completely fixate over the looming European sanctions on Russian oil. ​ No one wants to be on the wrong side of a major crude supply disruption headline, so whatever oil price dips that happen will be short-lived. ​ US oil rig counts continue to rise, but that has not led to increased production. ​ The weekly Baker Hughes report showed oil rig counts rose by 5 to 557 rigs. ​   Gold Gold prices are still licking their wounds following the bond market selloff. ​ Eventually investors will need additional safe-havens, so gold might start to attract some flows if the dollar softens as the global bond market selloff extends. The dollar is slightly softer today, but that doesn’t mean it is ready to lose its crown. ​ Gold could still remain vulnerable to further downward pressure if inflation does not show further signs of peaking next. ​   Gold is trending right between the 50- and -200 day simple moving averages but still looks like it isn’t quite ready to rally. ​ Next week will be pivotal for inflation expectations and for Fed speak that could confirm their commitment to tightening by half a point per meeting until the Jackson Hole Symposium. ​   Read on Oanda This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

OANDA Senior Market Analyst Craig Erlam reviews the latest market news with Jonny Hart. They discuss the UK Autumn Statement and US economic data. Subscribe on Android This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Market Insights Podcast (Episode 399) - MarketPulseMarketPulse

The latest weekly gold survey shows Wall Street analysts are bearish for the current week, while sentiment among retail investors is roughly balanced. Analysts believe that the rise in U.S. bond yields, which reached a new 15-year high on Thursday, remains a significant restraining factor for gold.   The slowdown in China's economy also deters investors. According to Edward Moya, Senior Market analyst at OANDA, the yield on Treasury bonds is at a level that supports the Federal Reserve's monetary policy, and this is a difficult environment for gold. However, his opinion on gold prices for the current week is neutral, as he believes that bond yields are likely close to their peak, and gold sales dynamics are probably slowing down. For selling pressure on gold to persist, bond yields would need to continue rising. But most analysts believe a decline in gold prices is more likely.   Presumably, Federal Reserve Chairman Jerome Powell, speaking at the annual central bank meeting in Jackson Hole on Friday, will maintain his hawkish stance. And rates will remain high going forward. Last week, 16 Wall Street analysts participated in a gold survey. Among the participants, ten analysts, or 63%, were bearish for the current week. Two analysts, or 13%, were optimistic, while four analysts, or 25%, took a neutral stance. In online polls, 941 votes were cast. Of those, 415 respondents, or 44%, expect price increases. Another 386, or 41%, favor price decreases, while 140 voters, or 15%, voted for a neutral position.       Despite this, Adrian Day, president of Adrian Day Asset Management, is bullish on prices for the next few months. He believes that investors should not ignore short-term price dynamics, as it is rare to see such a drop without any continuation, adding that this week may see a decrease in prices, but this will not affect long-term growth. James Stanley, market strategist at Stone X, said even if Powell takes a neutral stance in Jackson Hole, gold will find it hard to change its bearish technical outlook. Likely, the technical support level will remain at $1875.