Cable at 2-year low after UK GDP miss

“I try not to make any decisions that I’m not excited about.” — Jake Nickell 

HEADLINES

Sterling hits 2-year low as GDP dips, post-Brexit tensions rise

Gold slides over 2%, palladium sheds 7% as dollar stands tall

Oil rises on tight supplies; trade choppy on demand worries

Bear market beckons as U.S. stocks' 2022 descent deepens

Bitcoin falls 14% after crypto lender Celsius Network freezes withdrawals

GBP/USD to hit new lows for the year if the BoE delivers a cautious message – Scotiabank

EURUSD Short Term: Downside favored

FOREX

Sterling hits 2-year low as GDP dips, post-Brexit tensions rise

Sterling fell to its lowest in two years against a rising dollar on Monday, coming under pressure from data showing Britain's economy unexpectedly shrunk in April and tensions with the European Union over post-Brexit trade with Northern Ireland.

UK gross domestic product contracted by 0.3% after inching down by 0.1% in March, the first back-to-back declines since the early days of the coronavirus pandemic in March and April of 2020.

COMMODITIES

Gold slides over 2%, palladium sheds 7% as dollar stands tall

Gold and palladium suffered sharp declines on Monday, as the dollar rallied on bets for steep interest rate hikes by the U.S. Federal Reserve, eroding appeal for bullion and other precious metals.

Spot gold fell 2.2% to $1,829.52 per ounce by 12:05 p.m. EDT (1605 GMT). Gold futures shed 2.4% to $1,829.80.

The dollar index hit a multi-decade peak, becoming the preferred safe-haven at the expense of gold, since rising interest rates reduce appeal for bullion, which pays no interest.

ENERGY

Oil rises on tight supplies; trade choppy on demand worries

Oil prices rose on Monday in a session of volatile trade, as tight global supplies outweighed worries that demand would be pressured by a flare-up in COVID-19 cases in Beijing and more interest rate hikes. 

Brent crude rose 68 cents to $122.69 a barrel at 12:13 p.m. EDT (1613 GMT). U.S. West Texas Intermediate crude rose 61 cents to $121.28 a barrel. Trade was volatile, with prices down about $3 a barrel earlier.

STOCKS

Bear market beckons as U.S. stocks' 2022 descent deepens

The stock market's brutal year neared a grim milestone as the S&P 500's slide on Monday threatened to leave it in a bear market for the first time since March 2020, fueled by worries over sky high inflation, a hawkish Federal Reserve and future economic growth.

The benchmark S&P 500 (.SPX) index fell below 3837.248 during Monday's session, a decline that on an intraday basis put it more than 20% below its Jan. 3 record closing high. If the index maintains such a decline through the market's close, the 20% drop would confirm a commonly used definition of a bear market.

Bitcoin falls 14% after crypto lender Celsius Network freezes withdrawals

Bitcoin slumped 14% on Monday after major U.S. cryptocurrency lending company Celsius Network froze withdrawals and transfers citing "extreme" conditions, in the latest sign of the financial market downturn hitting the cryptosphere.

The Celsius move triggered a slide across cryptocurrencies, with their value dropping below $1 trillion on Monday for the first time since January 2021, dragged down by bitcoin , the largest token.

After Celsius's announcement, bitcoin touched an 18-month low of $22,725, before rebounding slightly to around $23,924. No.2 token ether dropped as much as 18% to $1,176, its lowest since January 2021.

ANALYSIS

GBP/USD to hit new lows for the year if the BoE delivers a cautious message – Scotiabank 

“The poor GDP showing makes the BoE’s decision even more difficult. We think odds have risen that the bank alludes to an eventual pause in rate hikes – perhaps as soon as August, but more likely in September or November.” 

“OIS markets still seeing two 50 bps hikes across the four BoE meetings between now and November are in for a severe disappointment and the GBP is at clear risk of plumbing new lows for the year (and since mid-2020) under the mid-1.21s if the BoE delivers a cautious message this week.”

CHART

EURUSD Short Term: Downside favored

Technical View: Short position below 1.054. Target 1.042. Conversely, break above 1.054, to open 1.0585.

Comments: The pair remains under pressure. Further weakness favored.

Source: Trading Central 

CALENDAR

*Times in GMT

Source: FX Street Economic Calendar

Footnotes
https://www.reuters.com/markets/europe/sterling-drops-after-surprise-uk-gdp-contraction-april-2022-06-13/
https://www.reuters.com/markets/europe/gold-prised-off-1-month-high-us-bond-yields-climb-2022-06-13/
https://www.reuters.com/markets/europe/oil-prices-slide-beijing-covid-warning-inflation-concerns-2022-06-13/
https://www.reuters.com/markets/europe/bear-market-beckons-us-stocks-2022-descent-deepens-2022-06-13/
https://www.reuters.com/technology/crypto-firm-celsius-pauses-all-transfers-withdrawals-between-accounts-2022-06-13/
https://www.fxstreet.com/news/gbp-usd-to-hit-new-lows-for-the-year-if-the-boe-delivers-a-cautious-message-scotiabank-202206131335