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Powell renominated as Fed Chair

We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful. - Warren Buffett

 

 

HEADLINES

 

 

  • Dollar stands tall as Powell reappointment firms hawkish Fed bets
  • Powell’s Nomination for a Second Term as Fed Chair Is a Bid for Continuity as Inflation Surges
  • Gold melts Monday, logs steepest daily drop in 3 1/2 months 
  • Oil prices settle up 1% on reports OPEC+ could reassess output
  • S&P 500 Closes Down as Powell Nod Triggers Yield Surge, Dents Tech
  • Zoom shares fall after results as Wall Street turns cautious on growth
  • Strong dollar not emerging in positioning data – ING

 

 

FOREX

 

 

Dollar stands tall as Powell reappointment firms hawkish Fed bets

 

The dollar was near a four-and-a-half-year top against the yen on Tuesday, after Federal Reserve Chair Jerome Powell was reappointed for a second term, emboldening bets on higher U.S. interest rates. The Japanese currency is sensitive to moves in U.S. Treasury notes and two-year U.S. Treasury yields rose 8.5 basis points on Monday to their highest since early March 2020. 

U.S. President Joe Biden chose Powell over the other leading candidate Lael Brainard, whom markets consider to be the more dovish of the two, though Brainard will be Fed vice chair.

 

Powell’s Nomination for a Second Term as Fed Chair Is a Bid for Continuity as Inflation Surges

 

The decision Monday to keep Powell for another four-year term follows months of speculation that Biden could replace the Fed chair, appointed by former President Donald Trump, before his term expires in February. While progressives within the Democratic party’s ranks pushed for Fed Governor Lael Brainard, a candidate they viewed as more aligned with their priorities, Biden opted for continuity as the U.S. economy continues to recover from the pandemic. Powell’s re-nomination also means an easier Senate confirmation process, and a relatively firmer hand when it comes to dealing with fast-rising prices.

 

 

COMMODITIES

 

 

Gold melts Monday, logs steepest daily drop in 3 1/2 months 

 

Gold futures skidded lower Monday, registering the steepest daily decline in more than three months, as a rally in Treasury yields and a strengthening of the U.S. dollar buffeted precious metals to kick off a holiday-shortened Thanksgiving week. U.S. markets will be closed on Thursday in observance of Thanksgiving and will end early the Friday after the holiday.

 

Oil prices settle up 1% on reports OPEC+ could reassess output

 

Oil prices rose on Monday, rebounding from recent losses, on reports that OPEC+ could adjust plans to raise oil production if large consuming countries release crude from their reserves or if the coronavirus pandemic dampens demand. Japanese and Indian officials are working on ways to release national reserves of crude oil in tandem with the United States and other major economies to dampen prices, seven government sources with knowledge of the plans told Reuters.

 

 

STOCKS

 

 

S&P 500 Closes Down as Powell Nod Triggers Yield Surge, Dents Tech

 

The S&P 500 give up gains to close lower Monday, led by selloff in tech as investors maintained bets on earlier rate hikes following news that Federal Reserve Chairman Jerome Powell would be nominated for another term. The United States 10-Year surged above 1.6%, helping to stoke a bid on banking stocks. Tech, which was the standout performer last week, underperformed as the rising yields soured sentiment on the sector.

 

Zoom shares fall after results as Wall Street turns cautious on growth

 

Zoom Video Communications (NASDAQ:ZM) Inc's third-quarter revenue growth rate slowed to 35% as demand for its video-conferencing tools eased from the pandemic-fueled heights last year, sending its shares down about 6% on Monday.

 

 

ANALYSIS

 

 

Strong dollar not emerging in positioning data – ING

 

“November has so far been a month dominated by a strengthening of the dollar across the board, but this has, however not translated into a rise in USD net positioning as reported by the CFTC. USD net aggregate positioning versus reported G10 currencies (i.e. G9 excluding NOK and SEK) 

was unchanged in the last weeks of October and the first week of November, and then inched lower (now at +9.8% of open interest) in the week ending 16 November.”

 

 

CHART

 

 

Gold – 4-Hour Candlesticks

Source: GKFX Prime Metatrader 4

XAU/USD has dropped back to 1800, which had acted as resistance during October and could now act as support alongside the 61.8% retracement 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/strong-dollar-not-emerging-in-positioning-data-ing-202111221319
https://www.investing.com/news/economy/dollar-stands-tall-as-powell-reappointment-firms-hawkish-fed-bets-2687546
https://www.investing.com/news/stock-market-news/sp-500-closes-down-as-powell-nod-triggers-yield-surge-dents-tech-2687366
https://www.investing.com/news/commodities-news/oil-slumps-on-prospects-of-emergency-supply-releases-europe-covid19-surge-2686321
https://www.investing.com/news/stock-market-news/zoom-beats-quarterly-revenue-estimates-2687352
https://www.marketwatch.com/story/gold-trades-lower-as-yields-rise-and-dollar-steadies-to-start-trade-thanksgiving-week-11637587759?siteid=yhoof2
https://www.marketwatch.com/articles/jerome-powell-nomination-fed-chair-inflation-surges-51637593157?mod=markets

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