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Oil up 4% on robust U.S. fuel consumption, tight supply outlook

“The road to success is dotted with many tempting parking spaces.” — Will Rogers 

 

 

HEADLINES

 

 

  • Dollar bounces as Fed seen keeping up aggressive rate hikes
  • Gold ticks lower as dollar strength dulls appeal
  • Oil up 4% on robust U.S. fuel consumption, tight supply outlook
  • S&P 500, Nasdaq edge up late; Cisco Systems jumps after forecast
  • Bond yields tick lower, cooling off after Fed’s meeting minutes released
  • GBP/USD set to fall below 1.20 again – Commerzbank
  • AUDUSD Near Term: Upside favored

 

 

Dollar bounces as Fed seen keeping up aggressive rate hikes

 

 

The U.S. dollar index hit a three-week high on Thursday as investors reevaluated Wednesday's minutes from the Federal Reserve’s July meeting as more hawkish than originally interpreted and after data showed solid U.S. economic momentum.

The dollar pared gains on Wednesday after the meeting minutes showed that Fed officials were concerned the U.S. central bank could raise rates too far as part of its commitment to get inflation under control.

Investors reconsidered this interpretation on Thursday, however, and focused on the likelihood that the U.S. central bank will continue to aggressively hike rates to stem inflation.

 

 

COMMODITIES

 

 

Gold ticks lower as dollar strength dulls appeal

 

 

Gold prices eased on Thursday under pressure from a firmer dollar although losses were capped by a dip in Treasury yields, while investors looked for more economic cues that could influence rate hikes.

Spot gold fell 0.2% to $1,758.42 per ounce by 2:18 p.m. EDT (1818 GMT), having slipped to $1,759.17 on Wednesday, its lowest since Aug. 3. U.S. gold futures settled down 0.3% at $1,771.2 per ounce.

The dollar hit a three-week high, making gold - which is priced in the currency - more expensive for overseas buyers.

 

 

ENERGY

 

 

Oil up 4% on robust U.S. fuel consumption, tight supply outlook

 

 

Oil prices gained about 4% on Thursday as positive U.S. economic data and robust U.S. fuel consumption offset concerns that slowing economic growth in other countries could undercut demand.

Brent futures rose $3.41, or 3.6%, to $97.06 a barrel by 2:16 p.m. EDT (1816 GMT), while U.S. West Texas Intermediate (WTI) crude rose $3.00, or 3.4%, to $91.11.

Prices rose more than 1% during the previous session, although Brent at one point fell to its lowest since February, as signs of a slowdown mounted in some places.

 

STOCKS

 

 

S&P 500, Nasdaq edge up late; Cisco Systems jumps after forecast

 

 

The S&P 500 and Nasdaq were up slightly in afternoon trading Thursday as Cisco Systems shares jumped on an upbeat sales forecast, but trading was choppy as investors assessed the outlook for interest rate hikes.

Investors initially saw Wednesday's minutes from the Federal Reserve's July meeting as suggesting policymakers may be less aggressive than previously thought when they raise interest rates in September.

But the minutes did not clearly hint at the pace of rate increases and showed policymakers committed to raising rates to tame inflation.

 

 

Bond yields tick lower, cooling off after Fed’s meeting minutes released

 

 

Bond yields ticked downward on Thursday, cooling after the previous session’s rise following the release of the Federal Reserve Open Market Committee’s July meeting minutes.

The yield on the benchmark 10-year Treasury note was 1 basis point lower at 2.884%, while the yield on the 30-year Treasury bond traded roughly a basis point lower at 3.135%. The yield on the short-term 2-year Treasury note was nearly 5 basis points lower at 3.25%.

Yields move inversely to prices, and a basis point is equal to 0.01%.

 

 

ANALYSIS

 

 

GBP/USD set to fall below 1.20 again – Commerzbank 

 

 

“The BoE seems rather behind the curve in terms of fighting inflation, although it is ready to tighten further despite the expected recession.”

“I fear that it will not be possible for the pound to regain ground in this situation for the time being. It will be especially difficult against the dollar. Hence, I think it is quite likely that cable will fall below 1.20 again.”

 

 

CHART

 

 

AUDUSD Near Term: Upside favored

 

Technical View: Long position above 0.6895. Target 0.699. Conversely, break below 0.6895, to open 0.685.

Comments: The pair is expected to resume advance after correction.

Source: Trading Central 

 

CALENDAR

 

 

*Times in GMT

Source: FX Street Economic Calendar

 

Footnotes
https://www.reuters.com/markets/europe/dollar-firm-fed-digs-inflation-fight-2022-08-18/
https://www.reuters.com/article/global-precious/precious-gold-ticks-lower-as-dollar-strength-dulls-appeal-idUSL4N2ZU2QE
https://www.reuters.com/business/energy/oil-prices-ease-russia-output-increases-2022-08-18/
https://www.reuters.com/markets/europe/futures-tick-higher-ahead-weekly-jobless-claims-data-2022-08-18/
https://www.cnbc.com/2022/08/18/bond-yields-tick-lower-cooling-down-after-feds-meeting-minutes-released-.html
https://www.fxstreet.com/news/gbp-usd-set-to-fall-below-120-again-commerzbank-202208180625

 

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