GKFX
RISK WARNING

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 78% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. See our full Risk Disclosure and Terms of Business for further details.

Search LOGIN

Wall St on course for worst week in months amid mounting slowdown fears

 

“Design is not just what it looks like and feels like. Design is how it works.” — Steve Jobs

 

 

 HEADLINES

 

 

  • Dollar near flat but on track for weekly gain; yuan slips past key level
  • Gold dips as dollar extends ascent on Fed concerns
  • Oil prices up after Basra spill, but set for weekly decline
  • Wall St on course for worst week in months amid mounting slowdown fears
  • Spike in Treasury yields pauses as investors look ahead to Fed meeting
  • GBP/USD: No obvious supports until the early 1985 low at 1.0520 – Scotiabank
  • EURUSD Short Term: Upside favored

 

 

Dollar near flat but on track for weekly gain; yuan slips past key level

 

The dollar index was near unchanged on Friday but was on track for a weekly gain as investors expected the U.S. Federal Reserve to remain aggressive when it hikes interest rates next week, while China's yuan eased past the key threshold of 7 per dollar.

The dollar mostly held a slight gain following U.S. data showing consumer sentiment improved moderately in September. The University of Michigan's preliminary September reading on the overall index on consumer sentiment came in at 59.5, up from 58.6 in the prior month. Economists polled by Reuters had forecast a preliminary reading of 60.0 in September.

The dollar , measured against a basket of currencies, rose 0.1% to 109.85. It reached a two-decade high of 110.79 earlier this month. It is headed for a gain for this week.

 

 

COMMODITIES

 

 

Gold dips as dollar extends ascent on Fed concerns

 

Gold prices eased for a fourth consecutive session on Friday to hit their lowest since April 2020, as expectations of a hefty interest rate hike from the U.S. Federal Reserve next week boosted the dollar.

Bullion is highly sensitive to rising U.S. interest rates as they increase the opportunity cost of holding the non-yielding asset.

Spot gold rose 0.6% to $1,673.61 per ounce. U.S. gold futures went up 0.3% to $1,683.00.

 

 

ENERGY

 

 

Oil prices up after Basra spill, but set for weekly decline

 

Oil prices rose on Friday as a spill at Iraq's Basra terminal appeared likely to constrain crude supply, but remained on track for a weekly decline on fears that hefty interest rate increases will curb global economic growth and demand for fuel.

Brent crude futures were up 70 cents, or 0.8%, at $91.54 a barrel by 1:43 p.m. EDT (1743 GMT).

U.S. West Texas Intermediate (WTI) crude futures gained 30 cents, or 0.4%, to $85.40.

Both benchmarks were down about 1% on the week, hurt partly by the U.S. dollar's strong run, which makes oil more expensive for buyers using other currencies. The dollar index was largely flat on the day , but on track for its fourth weekly gain in five weeks.

 

 

STOCKS

 

 

Wall St on course for worst week in months amid mounting slowdown fears

 

U.S. stocks tumbled to two-month lows on Friday as a slowdown warning from FedEx hastened investors' flight to safety at the conclusion of a tumultuous week.

All three major U.S. stock indexes slid to levels not touched since mid-July, with S&P 500 sinking below 3,900, a closely watched support level the benchmark index has tested in recent weeks.

Marking the end of a week rattled by a witches brew of inflation concerns, looming interest rate hikes and ominous economic warning signs, the S&P 500 is on course for its worst weekly percentage plunge since June.

The Nasdaq is set for its biggest Friday-to-Friday drop since January while October 2020 was the last time the blue-chip Dow suffered a steeper weekly drop.

 

 

Spike in Treasury yields pauses as investors look ahead to Fed meeting

 

U.S. Treasury yields were mostly lower on Friday after a wild week that saw a dramatic spike across different time maturities.

The Yield on the 2-year Treasury bond was up less than 1 basis point at 3.878% in afternoon trading. The yield climbed above 3.9% earlier in the day, a level it had not seen since Nov. 1, 2007. The 2-year Treasury is highly sensitive to policy decisions as it is widely recognized as in indicator of how investors think central bank policy will develop in the near future.

The yield on the 10-year Treasury was down slightly at 3.451%. The yield on the 30-year Treasury rose more than 3 basis points to 3.518%.

Yields move opposite to prices. One basis point is equivalent to 0.01%.

 

 

ANALYSIS

 

 

GBP/USD: No obvious supports until the early 1985 low at 1.0520 – Scotiabank 

 

“The outlook for the GBP is bleak from a technical point of view – there are no obvious supports for the GBP below the market until the early 1985 low at 1.0520.” 

“Trend signals are aligned bearishly for the GBP, suggesting little or no scope for counter trend corrections.” 

“Minor rallies are unlikely to be sustained. Look for gains to remain capped in the low/mid 1.14s in the near-term.”

 

 

CHART

 

 

EURUSD Short Term: Upside favored

 

Technical View: Long position above 0.9985. Target 1.0065. Conversely, break below 0.9985, to open 0.9957.

Comments: The pair breaks above the resistance.

 

 

 

 

Source: Trading Central 

 

 

CALENDAR

 

 

*Times in GMT

 

 

 

 

Source: FX Street Economic Calendar

 


Footnotes


https://www.reuters.com/markets/europe/dollar-holds-ground-ahead-fed-yuan-under-pressure-2022-09-16/
https://www.cnbc.com/2022/09/16/gold-interest-rate-hike-demand-inflation.html
https://www.reuters.com/business/energy/oil-extends-losses-recession-fears-2022-09-16/
https://www.reuters.com/markets/europe/futures-fall-fedex-warning-recession-fears-2022-09-16/
https://www.cnbc.com/2022/09/16/2-year-treasury-note-tops-3point9percent-as-investors-anticipate-fed-rate-hikes.html
https://www.fxstreet.com/news/gbp-usd-no-obvious-supports-until-the-early-1985-low-at-10520-scotiabank-202209161352