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Nasdaq slumps more than 2% on fears of aggressive Fed

 

 

“Listen, smile, agree, and then do whatever you were gonna do anyway.“ – Robert Downey Jr 

 

 

HEADLINES

 

  • Dollar higher on risk aversion; euro revisits parity
  • PRECIOUS-Gold, other precious metals slump on rallying dollar
  • Europe braces for more cuts in Russian oil and gas exports
  • Nasdaq slumps more than 2% on fears of aggressive Fed
  • 10-year Treasury yield climbs above 3%
  • USD/CAD: Low/mid 1.29s to hold as loonie finds it difficult to gain ground – Scotiabank
  • EURUSD Short Term: Downside favored

 

 

Dollar higher on risk aversion; euro revisits parity

 

The U.S. dollar rose across the board on Monday, briefly driving the euro back below parity, as investors shied away from riskier assets amid growing fears that interest-rate hikes in the United States and Europe, aimed at curbing inflation, would weaken the global economy.

Against a basket of currencies, the dollar was 0.5% higher at 108.71 , not far from the two-decade high of 109.29 touched in mid-July.

The greenback has found support in recent sessions as several Federal Reserve officials reiterated an aggressive monetary tightening stance ahead of the Fed's Jackson Hole, Wyoming, symposium this week.

 

 

COMMODITIES

 

PRECIOUS-Gold, other precious metals slump on rallying dollar

 

Gold prices fell to near a one-month low on Monday amid sharp declines in precious metals due to a stronger dollar as looming Federal Reserve interest rate hikes dented bullion's appeal.

Extending losses into a sixth session, spot gold was down 0.7% to $1,736.03 per ounce by 11:23 a.m. EDT (1523) GMT after hitting its lowest level since July 27 earlier in the session. U.S. gold futures     dropped 0.8% to $1,749.30.

The dollar hit a fresh five-week high versus major currencies, making greenback-priced gold more expensive for overseas buyers.

 

 

ENERGY

 

Europe braces for more cuts in Russian oil and gas exports

 

Europe faces fresh disruption to energy supplies due to damage to a pipeline system bringing oil from Kazakhstan through Russia that was reported by the pipeline operator on Monday, adding to concerns over a plunge in gas supplies.

CPC, which handles about 1% of global oil and whose largest shareholder is Russian pipeline firm Transneft, said exports from two of its three mooring points at a Black Sea terminal had been suspended, confirming a Reuters report.

Natural gas prices jumped on Monday, with outages at Norwegian and UK gas fields adding to concerns.

 

 

STOCKS

 

Nasdaq slumps more than 2% on fears of aggressive Fed

 

Wall Street's main indexes tumbled on Monday in a dour start to the week as investors worried about hawkish signals from U.S. Federal Reserve policymakers against the backdrop of slowing economic growth.

Ten of the 11 major S&P 500 sectors declined in mid-day trading, with information technology (.SPLRCT), consumer discretionary (.SPLRCD) and communication services (.SPLRCL) stocks down 2% each.

High-growth and technology companies such as Apple Inc (AAPL.O) and Tesla Inc (TSLA.O) fell 1.7% and 2.8%, respectively, as the benchmark 10-year U.S. Treasury yield rose past 3% for the first time since July 21.

 

10-year Treasury yield climbs above 3%

 

The 10-year Treasury yield climbed above 3% for the first time in a month as investors looked ahead to the Jackson Hole economic symposium.

The yield on the benchmark 10-year Treasury note gained nearly 4 basis points to 3.026% at 11:34 a.m. ET, climbing above 3% level for the first time since July 21.

Meanwhile, the yield on the 30-year Treasury bond advanced roughly 4 basis points to 3.264%. Yields move inversely to prices, and a basis point is equal to 0.01%.

The yield on the short-term 2-year Treasury note rose 5 basis points to trade at about 3.32%.

 

 

ANALYSIS

 

USD/CAD: Low/mid 1.29s to hold as loonie finds it difficult to gain ground – Scotiabank 

 

“Weaker stocks and softer oil prices remain headwinds for the CAD and while the BoC policy backdrop remains supportive in broad terms, there is little opportunity for the CAD to differentiate itself from the USD ahead of the key Jackson Hole event at the end of the week at least.” 

“USD-bullish, short-term trend indicators suggest the bar to a strong CAD rebound is quite high at the moment.”

“USD losses may be limited to the low/mid 1.29s.”

“Resistance is 1.3020/50.”

 

 

CHART

 

EURUSD Short Term: Downside favored

 

Technical View: Short position below 1.0025. Target 0.995. Conversely, break above 1.0025, to open 1.005.

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

 

 

Source: Trading Central 

 

 

CALENDAR

 

*Times in GMT

 

 

Source: FX Street Economic Calendar

 

 

SOURCES

 

https://www.reuters.com/markets/us/dollar-hits-5-week-high-hawkish-fed-before-jackson-hole-2022-08-22/
https://www.reuters.com/article/global-precious/precious-gold-other-precious-metals-slump-on-rallying-dollar-idUSL4N2ZY2MA
https://www.reuters.com/business/energy/kazakh-oil-exports-via-russia-hit-by-damaged-equipment-2022-08-22/
https://www.reuters.com/markets/europe/futures-drop-rate-hike-worries-persist-2022-08-22/
https://www.cnbc.com/2022/08/22/us-treasury-yields-investors-look-ahead-to-jackson-hole.html
https://www.fxstreet.com/news/usd-cad-low-mid-129s-to-hold-as-loonie-finds-it-difficult-to-gain-ground-scotiabank-202208221331