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Rising yields pressure gold again

“Anything that is measured and watched, improves.” — Bob Parsons, 

 

 

HEADLINES

 

Euro edges higher as risk appetite picks up, focus on ECB meeting 

Gold slips as yields rise with focus on U.S. inflation data

Oil tops $120 a barrel on Saudi pricing despite OPEC+ deal

S&P 500, Nasdaq edge higher in choppy trade as growth stocks rise

Musk threatens to drop Twitter deal if fake-account data not provided

USD/CAD: Risks tilted to the downside on solid growth and aggressive monetary tightening – Wells Fargo

GBPUSD Near Term: Downside favored

 

 

FOREX

 

 

Euro edges higher as risk appetite picks up, focus on ECB meeting 

 

 

The euro edged higher on Monday as risk appetite picked up while investors awaited a European Central Bank (ECB) policy meeting later this week. 

Markets, which have already priced in several ECB rate increases and the end of bond-buying stimulus, want more clarity on what comes after.

Hedge funds are already loaded up on euros. U.S. futures market data shows speculators are holding their most significant net-long euro position in 12 weeks.

 

 

COMMODITIES

 

 

Gold slips as yields rise with focus on U.S. inflation data 

 

 

Gold prices fell on Monday, pressured by an uptick in U.S. Treasury yields as attention turned to U.S. inflation data this week that could strengthen the case for aggressive interest rate hikes by the Federal Reserve. 

U.S. bond yields were higher in the run-up to data on Friday which is expected to show still high inflation. The dollar also firmed, making gold less appealing for overseas buyers.

 

 

Oil tops $120 a barrel on Saudi pricing despite OPEC+ deal 

 

 

Oil prices topped $120 a barrel in choppy trade on Monday buoyed by Saudi Arabia raising its July crude prices but amid doubts that a higher output target for OPEC+ oil producers would ease tight supply. 

Saudi Arabia raised the July official selling price (OSP) for its flagship Arab light crude to Asia by $2.10 from June to a $6.50 premium, the highest since May, when prices hit all-time highs due to worries of disruption in supplies from Russia.

 

 

STOCKS

 

 

S&P 500, Nasdaq edge higher in choppy trade as growth stocks rise 

 

 

The S&P 500 and the Nasdaq rose on Monday, recovering some losses suffered last week as investors bought into heavyweights Apple and Amazon.com, while Twitter dropped after Elon Musk threatened to walk away from his $44 billion buyout deal. 

The gains came after a volatile week when a solid jobs report quashed hopes of a pause in the Federal Reserve's aggressive policy tightening plan to cool decades-high inflation.

Money markets are fully pricing in 50 basis point rate increases by the U.S. central bank next week and in July.

 

 

Musk threatens to drop Twitter deal if fake-account data not provided 

 

 

Elon Musk on Monday warned that he might walk away from his $44 billion offer to acquire Twitter Inc (TWTR.N) if the social media network failed to provide data on spam and fake accounts. 

Twitter shares fell as much as 5.6% to $37.92 and were trading at a steep discount to Musk's offer of $54.20 per share, suggesting that investors did not expect the deal to close at the agreed price. The stock was last down 2%, while Tesla rose 1.2%.

 

 

ANALYSIS

 

 

USD/CAD: Risks tilted to the downside on solid growth and aggressive monetary tightening – Wells Fargo 

 

 

“The solid growth and rapid inflation trends prompted a second straight 50 bps rate hike from the Bank of Canada (BoC) at its June meeting, along with a forceful statement in which the central bank said it is willing to act more forcefully if needed.”

“We now expect a more extended series of 50 bps rate increases to be delivered at the July, September and October announcements. We see the BoC's policy rate ending 2022 at 3.25%, and peaking at 3.75% in 2023.”

“The solid Canadian growth outlook and aggressive central bank tightening means the outlook remains, in our view, for a resilient Canadian dollar. Indeed, given recent gains the Canadian dollar is already approaching our medium-term USD/CAD exchange rate target of CAD1.2500. We clearly see the risks as tilted towards further Canadian dollar gains over time, perhaps to the lower end of a CAD1.2000-1.2500 range.” 

 

 

CHART

 

 

GBPUSD Near Term: Downside favored

Technical View: Short position below 1.258. Target 1.244. Conversely, break above 1.258, to open 1.265.

Comments: The pair breaks below support.

 

 

 

 

Source: Trading Central 



 

CALENDAR

 

 

*Times in GMT

 

 

 

 

Source: FX Street Economic Calendar

 

Footnotes


https://www.cnbc.com/2022/06/06/forex-markets-japanese-yen-dollar-euro.html
https://www.cnbc.com/2022/06/06/gold-markets-us-treasury-yields-interest-rate-outlook.html
https://www.cnbc.com/2022/06/06/oil-markets-saudi-arabia-crude-price-hike.html
https://www.reuters.com/markets/us/futures-rebound-china-adrs-rally-tech-growth-stocks-rise-2022-06-06/
https://www.reuters.com/markets/deals/musk-asks-twitter-data-spam-fake-accounts-again-2022-06-06/
https://www.fxstreet.com/news/usd-cad-risks-tilted-to-the-downside-on-solid-growth-and-aggressive-monetary-tightening-wells-fargo-202206061634