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Treasury yields rally lifts USD

“Risk comes from not knowing what you are doing.” - Warren Buffet

 

 

HEADLINES

 

 

 

  • U.S. dollar rises, lifted by higher Treasury yields
  • Euro Flat as Tight German Election Promises Slow Progress on Forming New Govt
  • Gold pressured by firmer dollar, higher U.S. yields
  • U.S. oil prices settle at a nearly 3-year high; natural-gas futures up 11%
  • Wall Street pivots to value as Treasury yields rise
  • JPMorgan CEO says Bitcoin price could rise 10x but still won’t buy it
  • GBP/USD set to plummet on a break below the 1.36 support level – MUFG

 

 

FOREX

 

 

U.S. dollar rises, lifted by higher Treasury yields

 

The U.S. dollar gained for a second straight session on Monday, bolstered by the rise in Treasury yields ahead of a slew of Federal Reserve speakers this week who could reinforce expectations of the start of asset purchase tapering before the end of the year. U.S. benchmark 10-year Treasury yields hit a three-month high of $1.516%.

 

Euro Flat as Tight German Election Promises Slow Progress on Forming New Govt

 

The dollar opened flat against the euro on Monday after a narrow win for the center-left in Germany's parliamentary elections. The center-left Social Democratic Party took the biggest share of the vote, with preliminary estimates showing it on 26%, two percentage points ahead of the center-right Christian Democratic bloc. As such, the party of the retiring Angela Merkel looks likely to go into opposition for the first time in 16 years.

 

 

COMMODITIES

 

 

Gold pressured by firmer dollar, higher U.S. yields

 

Gold prices steadied in choppy trading on Monday, with gains curbed by a stronger dollar and an uptick in U.S. Treasury yields, while investors awaited speeches from Federal Reserve policymakers for more clues on the tapering strategy. Market focus will now be on speeches by Fed officials this week including Chair Jerome Powell, who will testify before Congress on the central bank’s policy response to the pandemic.

 

U.S. oil prices settle at a nearly 3-year high; natural-gas futures up 11%

 

Oil futures climbed Monday, with U.S. prices settling at their highest in almost three years. Natural-gas futures, meanwhile, rallied back to their highest level since February 2014. "Both oil and natural gas are expected to continue higher in the months ahead as fundamentals decidedly favor the bulls right now, while momentum and technicals both point to higher prices in the near to medium term," said Tyler Richey, co-editor at Sevens Report Research.

 

 

STOCKS

 

 

Wall Street pivots to value as Treasury yields rise

 

Wall Street began the last week of September and the quarter with investors backing value over growth on Monday as tech shares, hurt by rising Treasury yields, weighed on the broader market. Of the three major U.S. stock indexes, the blue-chip Dow Jones Industrial Average was the sole gainer, buoyed by economically sensitive smallcaps and transports. Declines in megacap tech and tech-adjacent shares dragged the S&P 500 index and the Nasdaq Composite index into negative territory.

 

 

CRYPTO

 

 

JPMorgan CEO says Bitcoin price could rise 10x but still won’t buy it

 

In an online interview with Times of India, Jamie Dimon, CEO of investment banking behemoth JPMorgan Chase, slandered Bitcoin’s popular appeal, despite stating that the leading digital asset could increase 10x in a matter of five years.

A historically staunch critic of Bitcoin (BTC), Dimon called it a fraud back in 2017 and cited the reported capability for criminals to evade capture from authorities by operating their financial transactions in BTC rather than U.S. dollars.

 

 

ANALYSIS

 

 

GBP/USD set to plummet on a break below the 1.36 support level – MUFG

 

“The pound’s failure recently to track higher UK yields could reflect concern that tightening policy so soon into the COVID-19 recovery is an unfavourable development for the UK economy. The BoE is clearly starting to put more weight on dampening upside inflation risks than continuing to support the recovery.”

“Recent economic data has already shown a loss of growth momentum over the summer, and worsening supply side problems strongly suggest that growth could slow further heading into the winter.” “We expect cable to fall further especially once support at the 1.3600-level is broken.” 

 

 

CHART

 

 

British pound / Japanese yen – Daily Candlesticks

Source: GKFX Prime Metatrader 4

GBP/JPY is breaking above a downtrend line connecting the highs since June 1. The breakout is happening after a successful test of the 200 DMA and support at 149. - 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/gbp-usd-set-to-plummet-on-a-break-below-the-136-support-level-mufg-202109270916
https://www.reuters.com/article/usa-stocks/us-stocks-wall-street-pivots-to-value-as-treasury-yields-rise-idUSL1N2QT1ZG
https://www.reuters.com/article/global-precious/precious-gold-pressured-by-firmer-dollar-higher-u-s-yields-idUSL1N2QT1G1
https://www.msn.com/en-us/money/markets/us-oil-prices-settle-at-a-nearly-3-year-high-natural-gas-futures-up-11/ar-AAOSBfM
https://www.investing.com/news/forex-news/euro-flat-as-tight-german-election-promises-slow-progress-on-forming-new-govt-2626929
https://www.cnbc.com/2021/09/27/forex-markets-japanese-yen-china-evergrande-group-australian-dollar.html
https://cointelegraph.com/news/jpmorgan-ceo-says-bitcoin-price-could-rise-10x-but-still-won-t-buy-it

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