Oil hits 7-year high, Goldman Sachs miss

An investment in knowledge pays the best interest.  - Benjamin Franklin

HEADLINES

• Dollar posts best daily gain in two weeks, boosted by U.S. Treasury yields
• Oil hit 7-year highs as tight supply bites
• Gold slips on stronger dollar, yields as focus turns to Fed meet
• Wall St sinks as yields spike, financials fall after Goldman miss
• S&P 500 Index set to hit the 5,000 level in June – UBS

FOREX

Dollar posts best daily gain in two weeks, boosted by U.S. Treasury yields

The dollar posted its best daily gain in two weeks on Tuesday following a jump in benchmark U.S. Treasury yields, while the yen steadied after initially sliding as the Bank of Japan said it would stick to its ultra-loose monetary policy. The U.S. currency also rose to a one-week high against a basket of currencies.

Investors are focused on next week's meeting of the U.S. Federal Reserve, which will likely signal that it will raise interest rates in March for the first time in more than three years. The fed funds futures  have fully priced in the March tightening and four rate hikes in 2022.

COMMODITIES

Oil hit 7-year highs as tight supply bites

Oil prices on Tuesday climbed to their highest since 2014 as investors worried about global political tensions involving major producers such as the United Arab Emirates and Russia that could exacerbate the already tight supply outlook.

Gold slips on stronger dollar, yields as focus turns to Fed meet

Gold prices fell on Tuesday, as the dollar and U.S. Treasury yields strengthened with investors turning their attention to next week's Federal Reserve policy meeting for more signals on its rate hike timeline.

STOCKS

Wall St sinks as yields spike, financials fall after Goldman miss

Wall Street's main indexes fell sharply on Tuesday as weak results from Goldman Sachs weighed on financial stocks and tech shares continued their sell-off to start the year as U.S. Treasury yields rose to milestones. 

The Nasdaq dropped most among major indexes on Tuesday and now has fallen about 9.7% from its Nov. 19 record closing high, close to confirming a 10% correction for the first time since early 2021.

Goldman Sachs(GS) shares tumbled 7% after the investment bank missed quarterly profit expectations amid weak trading activity. The financials sector, which has been one of the better-performing groups in 2022, dropped 2.3%.

ANALYSIS

S&P 500 Index set to hit the 5,000 level in June – UBS

“We forecast 2022 revenue growth of 8%, translating into earnings per share growth of 12%.”

“Our S&P 500 price targets are 5,000 and 5,100 for June and December, respectively.”

“We retain a bias for cyclical parts of the market, including energy and financials, balanced by exposure to the attractively valued but more defensive healthcare sector.”

CHART

Euro / US dollar – Daily Candlesticks

Source: GKFX Prime Metatrader 4

EUR/USD has declined from the top of a rising channel and a long-term downtrend line. Should the lower channel line break, it could confirm a new downtrend has started. - Prepared by Trading Writers*

CALENDAR

*Times in GMT

Source: FX Street Economic Calendar

SOURCES

https://www.fxstreet.com/economic-calendar
https://www.reuters.com/business/nasdaq-futures-slump-2-rising-yields-spark-tech-rout-2022-01-18/
https://www.reuters.com/markets/europe/gold-prices-flat-firmer-us-yields-hurt-appeal-2022-01-18/
https://www.reuters.com/business/energy/oil-rises-more-than-7-year-high-mideast-tensions-2022-01-18/
https://www.nasdaq.com/articles/forex-dollar-posts-best-daily-gain-in-two-weeks-boosted-by-u.s.-treasury-yields