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Oil hits 6-week low

“Rule No. 1: Never lose money; rule No. 2: Don’t forget rule No. 1.” – Warren Buffett

 

 

HEADLINES

 

 

  • Dollar takes breather from rally, hovers just off 16-month top
  • Sterling jumps as inflation backs BoE rate hike bets
  • Gold inches higher on softer dollar, yields
  • Oil extends declines as U.S. looks to lead SPR shock treatment
  • Wall Street ends lower as retailers stoke inflation fears
  • EUR/USD to soften through 2022 towards 1.10 – ING

 

 

FOREX

 

 

Dollar takes breather from rally, hovers just off 16-month top

 

The dollar hovered below a 16-month peak in early Asian trade on Thursday, having lost ground on the pound and yen overnight as the U.S. currency took a breather while traders considered whether its recent surge was starting to run out of steam. Strong U.S. retail sales data earlier this week added fuel to the dollar’s recent rally, which started last week after a strong U.S. inflation print bolstered market bets that the Federal Reserve will have to raise rates around the middle of next year.

 

Sterling jumps as inflation backs BoE rate hike bets

 

The pound climbed to a one-week high versus the U.S. dollar and a 21-month peak against the euro on Wednesday after data showed UK inflation surged to a 10-year high last month, backing expectations of an interest rate hike as early as next month.

 

 

COMMODITIES

 

 

Gold inches higher on softer dollar, yields

 

Gold prices edged up on Thursday, as the dollar eased and U.S. bond yields retreated from a three-week high, lifting bullion’s appeal. Benchmark U.S. 10-year Treasury yields were modestly up on Thursday but retreated from a three-week high hit in the previous session, lowering non-yielding gold’s opportunity cost.

 

Oil extends declines as U.S. looks to lead SPR shock treatment

 

U.S. oil was under pressure on Thursday, adding to an overnight plunge on a Reuters report that the United States was asking major oil consumers like China and Japan to consider a coordinated release of oil reserves to lower prices. The bid by the U.S. administration to shock markets comes as inflationary pressures, partly driven by surging energy prices, starts to produce political backlash, as the world fitfully recovers from the worst health crisis in a century.

 

 

STOCKS

 

 

Wall Street ends lower as retailers stoke inflation fears

 

Wall Street benchmarks ended Wednesday lower on inflation fears and supply chain concerns stemming from retailers’ earnings, with investors betting the Federal Reserve will raise interest rates sooner than expected to tame rising prices.

Target Corp was the latest big-name retailer to report positive results, upping its annual forecasts and beating profit expectations, citing an early start to holiday shopping. But shares of the firm fell 4.7%, tracking declines in those of peer Walmart on Tuesday, as both retailers flagged a hit to their third-quarter margins from supply chain issues.

 

 

ANALYSIS

 

 

EUR/USD to soften through 2022 towards 1.10 – ING

 

“Pricing of the ECB policy path fell foul and at one point nearly 30bp of tightening was priced in for 2022. We view that pricing as extreme and unlikely, although it may take eurozone inflation dipping into next spring before the market backs away from that kind of pricing. The eurozone is still expected to run a 0.5% of GDP negative output gap in 2022 and the ECB has made it pretty clear it does not want to repeat the mistakes that Trichet made by tightening policy in July 2008.”

“ Recent terms of trade changes have depressed EUR/USD fair value to around 1.10. That is our year-end 2022 forecast which is well below the consensus of 1.18.”

 

 

CHART


WTI Crude Oil  – Daily Candlesticks

Source: GKFX Prime Metatrader 4

WTISPOT has dropped to a 5-week low in a corrective move from its high at 85. It is now coming down to possible support from the July peak and the 75 level. - Prepared by Trading Writers*

 

 

CALENDAR

 

 

*Times in GMT



Source: FX Street Economic Calendar

 

 

SOURCE

 

 

https://www.fxstreet.com/economic-calendar
https://www.fxstreet.com/news/eur-usd-to-soften-through-2022-towards-110-ing-202111171416
https://www.investing.com/news/commodities-news/oil-under-pressure-as-us-looks-to-lead-spr-shock-treatment-2683369
https://www.reuters.com/article/usa-stocks/us-stocks-wall-street-ends-lower-as-retailers-stoke-inflation-fears-idUSL1N2S82SZ
https://www.reuters.com/article/global-precious/precious-gold-inches-higher-on-softer-dollar-yields-idUSL1N2S901T
https://www.reuters.com/article/global-forex/forex-dollar-takes-breather-from-rally-hovers-just-off-16-month-top-idUSL1N2S901S

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