U.S. dollar and bond yields retreat on speculation of Fed’s rate hike pause

Posted on by Vrasidas Neofytou

Based on the dovish commentary by Fed officials and the speculation the US central bank may stand pat until year-end, Treasury yields extended recent losses, retreating their 16-year peak, with the yield on the 10-year Treasury falling 16 basis points to trade near 4.62%, while the yield on the 2-year Treasury broke below the key 5% mark, falling as low as 4.92%.

The two Fed officials signaled that the recent surge in bond yields could lead to the tightening in credit conditions the central bank is looking for, which could give policymakers a reason to call an end to raising rates in this cycle.

Based on the dovish commentary by Fed officials and the speculation the US central bank may stand pat until year-end, Treasury yields extended recent losses, retreating their 16-year peak, with the yield on the 10-year Treasury falling 16 basis points to trade near 4.62%, while the yield on the 2-year Treasury broke below the key 5% mark, falling as low as 4.92%.

Fed Bank of San Francisco President Mary Daly said tighter financial conditions may mean the central bank “doesn’t have to do as much,” while the Atlanta Fed President Raphael Bostic, said Tuesday he believes current rates are high enough to get inflation back to the Fed’s 2% target.

The two Fed officials signaled that the recent surge in bond yields could lead to the tightening in credit conditions the central bank is looking for, which could give policymakers a reason to call an end to raising rates in this cycle.

Based on the dovish commentary by Fed officials and the speculation the US central bank may stand pat until year-end, Treasury yields extended recent losses, retreating their 16-year peak, with the yield on the 10-year Treasury falling 16 basis points to trade near 4.62%, while the yield on the 2-year Treasury broke below the key 5% mark, falling as low as 4.92%.

Fed Bank of San Francisco President Mary Daly said tighter financial conditions may mean the central bank “doesn’t have to do as much,” while the Atlanta Fed President Raphael Bostic, said Tuesday he believes current rates are high enough to get inflation back to the Fed’s 2% target.

The two Fed officials signaled that the recent surge in bond yields could lead to the tightening in credit conditions the central bank is looking for, which could give policymakers a reason to call an end to raising rates in this cycle.

Based on the dovish commentary by Fed officials and the speculation the US central bank may stand pat until year-end, Treasury yields extended recent losses, retreating their 16-year peak, with the yield on the 10-year Treasury falling 16 basis points to trade near 4.62%, while the yield on the 2-year Treasury broke below the key 5% mark, falling as low as 4.92%.

Dollar weakness triggered a rebound on major peers, with Euro coming off multi-month lows to rise over the $1.06 level, Pound Sterling bounced to nearly $1.23, the beaten-down Japanese Yen rebounded to ¥148.80, while the growth-sensitive Australian and New Zealand dollars bounced to $0.6430 and $0.6050 respectively.

Fed Bank of San Francisco President Mary Daly said tighter financial conditions may mean the central bank “doesn’t have to do as much,” while the Atlanta Fed President Raphael Bostic, said Tuesday he believes current rates are high enough to get inflation back to the Fed’s 2% target.

The two Fed officials signaled that the recent surge in bond yields could lead to the tightening in credit conditions the central bank is looking for, which could give policymakers a reason to call an end to raising rates in this cycle.

Based on the dovish commentary by Fed officials and the speculation the US central bank may stand pat until year-end, Treasury yields extended recent losses, retreating their 16-year peak, with the yield on the 10-year Treasury falling 16 basis points to trade near 4.62%, while the yield on the 2-year Treasury broke below the key 5% mark, falling as low as 4.92%.

Dollar weakness triggered a rebound on major peers, with Euro coming off multi-month lows to rise over the $1.06 level, Pound Sterling bounced to nearly $1.23, the beaten-down Japanese Yen rebounded to ¥148.80, while the growth-sensitive Australian and New Zealand dollars bounced to $0.6430 and $0.6050 respectively.

Fed Bank of San Francisco President Mary Daly said tighter financial conditions may mean the central bank “doesn’t have to do as much,” while the Atlanta Fed President Raphael Bostic, said Tuesday he believes current rates are high enough to get inflation back to the Fed’s 2% target.

The two Fed officials signaled that the recent surge in bond yields could lead to the tightening in credit conditions the central bank is looking for, which could give policymakers a reason to call an end to raising rates in this cycle.

Based on the dovish commentary by Fed officials and the speculation the US central bank may stand pat until year-end, Treasury yields extended recent losses, retreating their 16-year peak, with the yield on the 10-year Treasury falling 16 basis points to trade near 4.62%, while the yield on the 2-year Treasury broke below the key 5% mark, falling as low as 4.92%.

DXY-U.S. dollar index, 2-hour chart

Dollar weakness triggered a rebound on major peers, with Euro coming off multi-month lows to rise over the $1.06 level, Pound Sterling bounced to nearly $1.23, the beaten-down Japanese Yen rebounded to ¥148.80, while the growth-sensitive Australian and New Zealand dollars bounced to $0.6430 and $0.6050 respectively.

Fed Bank of San Francisco President Mary Daly said tighter financial conditions may mean the central bank “doesn’t have to do as much,” while the Atlanta Fed President Raphael Bostic, said Tuesday he believes current rates are high enough to get inflation back to the Fed’s 2% target.

The two Fed officials signaled that the recent surge in bond yields could lead to the tightening in credit conditions the central bank is looking for, which could give policymakers a reason to call an end to raising rates in this cycle.

Based on the dovish commentary by Fed officials and the speculation the US central bank may stand pat until year-end, Treasury yields extended recent losses, retreating their 16-year peak, with the yield on the 10-year Treasury falling 16 basis points to trade near 4.62%, while the yield on the 2-year Treasury broke below the key 5% mark, falling as low as 4.92%.

DXY-U.S. dollar index, 2-hour chart

Dollar weakness triggered a rebound on major peers, with Euro coming off multi-month lows to rise over the $1.06 level, Pound Sterling bounced to nearly $1.23, the beaten-down Japanese Yen rebounded to ¥148.80, while the growth-sensitive Australian and New Zealand dollars bounced to $0.6430 and $0.6050 respectively.

Fed Bank of San Francisco President Mary Daly said tighter financial conditions may mean the central bank “doesn’t have to do as much,” while the Atlanta Fed President Raphael Bostic, said Tuesday he believes current rates are high enough to get inflation back to the Fed’s 2% target.

The two Fed officials signaled that the recent surge in bond yields could lead to the tightening in credit conditions the central bank is looking for, which could give policymakers a reason to call an end to raising rates in this cycle.

Based on the dovish commentary by Fed officials and the speculation the US central bank may stand pat until year-end, Treasury yields extended recent losses, retreating their 16-year peak, with the yield on the 10-year Treasury falling 16 basis points to trade near 4.62%, while the yield on the 2-year Treasury broke below the key 5% mark, falling as low as 4.92%.

DXY-U.S. dollar index, 2-hour chart

Dollar weakness triggered a rebound on major peers, with Euro coming off multi-month lows to rise over the $1.06 level, Pound Sterling bounced to nearly $1.23, the beaten-down Japanese Yen rebounded to ¥148.80, while the growth-sensitive Australian and New Zealand dollars bounced to $0.6430 and $0.6050 respectively.

Fed Bank of San Francisco President Mary Daly said tighter financial conditions may mean the central bank “doesn’t have to do as much,” while the Atlanta Fed President Raphael Bostic, said Tuesday he believes current rates are high enough to get inflation back to the Fed’s 2% target.

The two Fed officials signaled that the recent surge in bond yields could lead to the tightening in credit conditions the central bank is looking for, which could give policymakers a reason to call an end to raising rates in this cycle.

Based on the dovish commentary by Fed officials and the speculation the US central bank may stand pat until year-end, Treasury yields extended recent losses, retreating their 16-year peak, with the yield on the 10-year Treasury falling 16 basis points to trade near 4.62%, while the yield on the 2-year Treasury broke below the key 5% mark, falling as low as 4.92%.

Greenback came off its 10-month high of 107 level hit last week, despite receiving some safety bids following Hamas’ attack on Israel on the weekend, which raised fears of a wider conflict in the energy-rich Middle East and Persian Gulf region.

DXY-U.S. dollar index, 2-hour chart

Dollar weakness triggered a rebound on major peers, with Euro coming off multi-month lows to rise over the $1.06 level, Pound Sterling bounced to nearly $1.23, the beaten-down Japanese Yen rebounded to ¥148.80, while the growth-sensitive Australian and New Zealand dollars bounced to $0.6430 and $0.6050 respectively.

Fed Bank of San Francisco President Mary Daly said tighter financial conditions may mean the central bank “doesn’t have to do as much,” while the Atlanta Fed President Raphael Bostic, said Tuesday he believes current rates are high enough to get inflation back to the Fed’s 2% target.

The two Fed officials signaled that the recent surge in bond yields could lead to the tightening in credit conditions the central bank is looking for, which could give policymakers a reason to call an end to raising rates in this cycle.

Based on the dovish commentary by Fed officials and the speculation the US central bank may stand pat until year-end, Treasury yields extended recent losses, retreating their 16-year peak, with the yield on the 10-year Treasury falling 16 basis points to trade near 4.62%, while the yield on the 2-year Treasury broke below the key 5% mark, falling as low as 4.92%.

Greenback came off its 10-month high of 107 level hit last week, despite receiving some safety bids following Hamas’ attack on Israel on the weekend, which raised fears of a wider conflict in the energy-rich Middle East and Persian Gulf region.

DXY-U.S. dollar index, 2-hour chart

Dollar weakness triggered a rebound on major peers, with Euro coming off multi-month lows to rise over the $1.06 level, Pound Sterling bounced to nearly $1.23, the beaten-down Japanese Yen rebounded to ¥148.80, while the growth-sensitive Australian and New Zealand dollars bounced to $0.6430 and $0.6050 respectively.

Fed Bank of San Francisco President Mary Daly said tighter financial conditions may mean the central bank “doesn’t have to do as much,” while the Atlanta Fed President Raphael Bostic, said Tuesday he believes current rates are high enough to get inflation back to the Fed’s 2% target.

The two Fed officials signaled that the recent surge in bond yields could lead to the tightening in credit conditions the central bank is looking for, which could give policymakers a reason to call an end to raising rates in this cycle.

Based on the dovish commentary by Fed officials and the speculation the US central bank may stand pat until year-end, Treasury yields extended recent losses, retreating their 16-year peak, with the yield on the 10-year Treasury falling 16 basis points to trade near 4.62%, while the yield on the 2-year Treasury broke below the key 5% mark, falling as low as 4.92%.

The DXY-U.S. dollar index, which tracks the value of the greenback against six major peers, hit a weekly low of 105.70 on Tuesday night after the dovish comments from two Fed officials, raising hopes interest-rate hikes may be done for now.

Greenback came off its 10-month high of 107 level hit last week, despite receiving some safety bids following Hamas’ attack on Israel on the weekend, which raised fears of a wider conflict in the energy-rich Middle East and Persian Gulf region.

DXY-U.S. dollar index, 2-hour chart

Dollar weakness triggered a rebound on major peers, with Euro coming off multi-month lows to rise over the $1.06 level, Pound Sterling bounced to nearly $1.23, the beaten-down Japanese Yen rebounded to ¥148.80, while the growth-sensitive Australian and New Zealand dollars bounced to $0.6430 and $0.6050 respectively.

Fed Bank of San Francisco President Mary Daly said tighter financial conditions may mean the central bank “doesn’t have to do as much,” while the Atlanta Fed President Raphael Bostic, said Tuesday he believes current rates are high enough to get inflation back to the Fed’s 2% target.

The two Fed officials signaled that the recent surge in bond yields could lead to the tightening in credit conditions the central bank is looking for, which could give policymakers a reason to call an end to raising rates in this cycle.

Based on the dovish commentary by Fed officials and the speculation the US central bank may stand pat until year-end, Treasury yields extended recent losses, retreating their 16-year peak, with the yield on the 10-year Treasury falling 16 basis points to trade near 4.62%, while the yield on the 2-year Treasury broke below the key 5% mark, falling as low as 4.92%.

The DXY-U.S. dollar index, which tracks the value of the greenback against six major peers, hit a weekly low of 105.70 on Tuesday night after the dovish comments from two Fed officials, raising hopes interest-rate hikes may be done for now.

Greenback came off its 10-month high of 107 level hit last week, despite receiving some safety bids following Hamas’ attack on Israel on the weekend, which raised fears of a wider conflict in the energy-rich Middle East and Persian Gulf region.

DXY-U.S. dollar index, 2-hour chart

Dollar weakness triggered a rebound on major peers, with Euro coming off multi-month lows to rise over the $1.06 level, Pound Sterling bounced to nearly $1.23, the beaten-down Japanese Yen rebounded to ¥148.80, while the growth-sensitive Australian and New Zealand dollars bounced to $0.6430 and $0.6050 respectively.

Fed Bank of San Francisco President Mary Daly said tighter financial conditions may mean the central bank “doesn’t have to do as much,” while the Atlanta Fed President Raphael Bostic, said Tuesday he believes current rates are high enough to get inflation back to the Fed’s 2% target.

The two Fed officials signaled that the recent surge in bond yields could lead to the tightening in credit conditions the central bank is looking for, which could give policymakers a reason to call an end to raising rates in this cycle.

Based on the dovish commentary by Fed officials and the speculation the US central bank may stand pat until year-end, Treasury yields extended recent losses, retreating their 16-year peak, with the yield on the 10-year Treasury falling 16 basis points to trade near 4.62%, while the yield on the 2-year Treasury broke below the key 5% mark, falling as low as 4.92%.

The U.S. dollar declined for a fifth straight day on Wednesday as Treasury yields fell amid speculation that the Federal Reserve might halt its interest rate hikes following a string of softer commentary on the monetary outlook by policymakers, and the limited impact of the Israel-Hamas military conflict in the global economy.

The DXY-U.S. dollar index, which tracks the value of the greenback against six major peers, hit a weekly low of 105.70 on Tuesday night after the dovish comments from two Fed officials, raising hopes interest-rate hikes may be done for now.

Greenback came off its 10-month high of 107 level hit last week, despite receiving some safety bids following Hamas’ attack on Israel on the weekend, which raised fears of a wider conflict in the energy-rich Middle East and Persian Gulf region.

DXY-U.S. dollar index, 2-hour chart

Dollar weakness triggered a rebound on major peers, with Euro coming off multi-month lows to rise over the $1.06 level, Pound Sterling bounced to nearly $1.23, the beaten-down Japanese Yen rebounded to ¥148.80, while the growth-sensitive Australian and New Zealand dollars bounced to $0.6430 and $0.6050 respectively.

Fed Bank of San Francisco President Mary Daly said tighter financial conditions may mean the central bank “doesn’t have to do as much,” while the Atlanta Fed President Raphael Bostic, said Tuesday he believes current rates are high enough to get inflation back to the Fed’s 2% target.

The two Fed officials signaled that the recent surge in bond yields could lead to the tightening in credit conditions the central bank is looking for, which could give policymakers a reason to call an end to raising rates in this cycle.

Based on the dovish commentary by Fed officials and the speculation the US central bank may stand pat until year-end, Treasury yields extended recent losses, retreating their 16-year peak, with the yield on the 10-year Treasury falling 16 basis points to trade near 4.62%, while the yield on the 2-year Treasury broke below the key 5% mark, falling as low as 4.92%.

The U.S. dollar declined for a fifth straight day on Wednesday as Treasury yields fell amid speculation that the Federal Reserve might halt its interest rate hikes following a string of softer commentary on the monetary outlook by policymakers, and the limited impact of the Israel-Hamas military conflict in the global economy.

The DXY-U.S. dollar index, which tracks the value of the greenback against six major peers, hit a weekly low of 105.70 on Tuesday night after the dovish comments from two Fed officials, raising hopes interest-rate hikes may be done for now.

Greenback came off its 10-month high of 107 level hit last week, despite receiving some safety bids following Hamas’ attack on Israel on the weekend, which raised fears of a wider conflict in the energy-rich Middle East and Persian Gulf region.

DXY-U.S. dollar index, 2-hour chart

Dollar weakness triggered a rebound on major peers, with Euro coming off multi-month lows to rise over the $1.06 level, Pound Sterling bounced to nearly $1.23, the beaten-down Japanese Yen rebounded to ¥148.80, while the growth-sensitive Australian and New Zealand dollars bounced to $0.6430 and $0.6050 respectively.

Fed Bank of San Francisco President Mary Daly said tighter financial conditions may mean the central bank “doesn’t have to do as much,” while the Atlanta Fed President Raphael Bostic, said Tuesday he believes current rates are high enough to get inflation back to the Fed’s 2% target.

The two Fed officials signaled that the recent surge in bond yields could lead to the tightening in credit conditions the central bank is looking for, which could give policymakers a reason to call an end to raising rates in this cycle.

Based on the dovish commentary by Fed officials and the speculation the US central bank may stand pat until year-end, Treasury yields extended recent losses, retreating their 16-year peak, with the yield on the 10-year Treasury falling 16 basis points to trade near 4.62%, while the yield on the 2-year Treasury broke below the key 5% mark, falling as low as 4.92%.

Crude oil, dollar, and gold rose on rising geopolitical risk

Posted on by Vrasidas Neofytou

In this context, the DXY-U.S. dollar index gained 0.50% to 106.60, the Japanese Yen rose across the board, while gold and silver added nearly 1% to $1,850/oz, and $22/oz respectively.

History taught us that investors prefer the safety of those traditional haven assets to hedge against international turmoil while moving away from risk and growth-sensitive assets, such as stocks, Euro, Pound Sterling, and Australian and New Zealand dollars.

In this context, the DXY-U.S. dollar index gained 0.50% to 106.60, the Japanese Yen rose across the board, while gold and silver added nearly 1% to $1,850/oz, and $22/oz respectively.

The conflict in Israel that erupted during the weekend has prompted a move into safe-haven assets of the U.S. dollar, gold, and Japanese Yen, on the back of the rising geopolitical risk, and the risk aversion sentiment.

History taught us that investors prefer the safety of those traditional haven assets to hedge against international turmoil while moving away from risk and growth-sensitive assets, such as stocks, Euro, Pound Sterling, and Australian and New Zealand dollars.

In this context, the DXY-U.S. dollar index gained 0.50% to 106.60, the Japanese Yen rose across the board, while gold and silver added nearly 1% to $1,850/oz, and $22/oz respectively.

The conflict in Israel that erupted during the weekend has prompted a move into safe-haven assets of the U.S. dollar, gold, and Japanese Yen, on the back of the rising geopolitical risk, and the risk aversion sentiment.

History taught us that investors prefer the safety of those traditional haven assets to hedge against international turmoil while moving away from risk and growth-sensitive assets, such as stocks, Euro, Pound Sterling, and Australian and New Zealand dollars.

In this context, the DXY-U.S. dollar index gained 0.50% to 106.60, the Japanese Yen rose across the board, while gold and silver added nearly 1% to $1,850/oz, and $22/oz respectively.

Safe-haven bids on the dollar, gold, and yen:

The conflict in Israel that erupted during the weekend has prompted a move into safe-haven assets of the U.S. dollar, gold, and Japanese Yen, on the back of the rising geopolitical risk, and the risk aversion sentiment.

History taught us that investors prefer the safety of those traditional haven assets to hedge against international turmoil while moving away from risk and growth-sensitive assets, such as stocks, Euro, Pound Sterling, and Australian and New Zealand dollars.

In this context, the DXY-U.S. dollar index gained 0.50% to 106.60, the Japanese Yen rose across the board, while gold and silver added nearly 1% to $1,850/oz, and $22/oz respectively.

Safe-haven bids on the dollar, gold, and yen:

The conflict in Israel that erupted during the weekend has prompted a move into safe-haven assets of the U.S. dollar, gold, and Japanese Yen, on the back of the rising geopolitical risk, and the risk aversion sentiment.

History taught us that investors prefer the safety of those traditional haven assets to hedge against international turmoil while moving away from risk and growth-sensitive assets, such as stocks, Euro, Pound Sterling, and Australian and New Zealand dollars.

In this context, the DXY-U.S. dollar index gained 0.50% to 106.60, the Japanese Yen rose across the board, while gold and silver added nearly 1% to $1,850/oz, and $22/oz respectively.

However, the military conflict has a proximity with the most important oil-producing and exporting area, the Persian Gulf, and next of some of the most neuralgic maritime checkpoints in the world, the Canal Suez in Egypt, the Strait of Aden in Yemen, and indirectly, with the Iranian-controlled Strait of Hormuz in Persian Gulf.

Safe-haven bids on the dollar, gold, and yen:

The conflict in Israel that erupted during the weekend has prompted a move into safe-haven assets of the U.S. dollar, gold, and Japanese Yen, on the back of the rising geopolitical risk, and the risk aversion sentiment.

History taught us that investors prefer the safety of those traditional haven assets to hedge against international turmoil while moving away from risk and growth-sensitive assets, such as stocks, Euro, Pound Sterling, and Australian and New Zealand dollars.

In this context, the DXY-U.S. dollar index gained 0.50% to 106.60, the Japanese Yen rose across the board, while gold and silver added nearly 1% to $1,850/oz, and $22/oz respectively.

However, the military conflict has a proximity with the most important oil-producing and exporting area, the Persian Gulf, and next of some of the most neuralgic maritime checkpoints in the world, the Canal Suez in Egypt, the Strait of Aden in Yemen, and indirectly, with the Iranian-controlled Strait of Hormuz in Persian Gulf.

Safe-haven bids on the dollar, gold, and yen:

The conflict in Israel that erupted during the weekend has prompted a move into safe-haven assets of the U.S. dollar, gold, and Japanese Yen, on the back of the rising geopolitical risk, and the risk aversion sentiment.

History taught us that investors prefer the safety of those traditional haven assets to hedge against international turmoil while moving away from risk and growth-sensitive assets, such as stocks, Euro, Pound Sterling, and Australian and New Zealand dollars.

In this context, the DXY-U.S. dollar index gained 0.50% to 106.60, the Japanese Yen rose across the board, while gold and silver added nearly 1% to $1,850/oz, and $22/oz respectively.

The main reason for the smaller-than-expected crude oil gain is that both sides, Israel, and Palestinian-controlled territories such as Gaza are not any major crude oil producers-players on the global energy scene, or the current conflict does not directly put any major source of oil supplies in danger (pipelines, maritime chokepoints).

However, the military conflict has a proximity with the most important oil-producing and exporting area, the Persian Gulf, and next of some of the most neuralgic maritime checkpoints in the world, the Canal Suez in Egypt, the Strait of Aden in Yemen, and indirectly, with the Iranian-controlled Strait of Hormuz in Persian Gulf.

Safe-haven bids on the dollar, gold, and yen:

The conflict in Israel that erupted during the weekend has prompted a move into safe-haven assets of the U.S. dollar, gold, and Japanese Yen, on the back of the rising geopolitical risk, and the risk aversion sentiment.

History taught us that investors prefer the safety of those traditional haven assets to hedge against international turmoil while moving away from risk and growth-sensitive assets, such as stocks, Euro, Pound Sterling, and Australian and New Zealand dollars.

In this context, the DXY-U.S. dollar index gained 0.50% to 106.60, the Japanese Yen rose across the board, while gold and silver added nearly 1% to $1,850/oz, and $22/oz respectively.

The main reason for the smaller-than-expected crude oil gain is that both sides, Israel, and Palestinian-controlled territories such as Gaza are not any major crude oil producers-players on the global energy scene, or the current conflict does not directly put any major source of oil supplies in danger (pipelines, maritime chokepoints).

However, the military conflict has a proximity with the most important oil-producing and exporting area, the Persian Gulf, and next of some of the most neuralgic maritime checkpoints in the world, the Canal Suez in Egypt, the Strait of Aden in Yemen, and indirectly, with the Iranian-controlled Strait of Hormuz in Persian Gulf.

Safe-haven bids on the dollar, gold, and yen:

The conflict in Israel that erupted during the weekend has prompted a move into safe-haven assets of the U.S. dollar, gold, and Japanese Yen, on the back of the rising geopolitical risk, and the risk aversion sentiment.

History taught us that investors prefer the safety of those traditional haven assets to hedge against international turmoil while moving away from risk and growth-sensitive assets, such as stocks, Euro, Pound Sterling, and Australian and New Zealand dollars.

In this context, the DXY-U.S. dollar index gained 0.50% to 106.60, the Japanese Yen rose across the board, while gold and silver added nearly 1% to $1,850/oz, and $22/oz respectively.

However, the crude oil prices have retreated during the day since the conflict has had a minimal impact on the physical oil market, with not yet any fear of a reduction in oil supply or maritime or land transport in the short term.

The main reason for the smaller-than-expected crude oil gain is that both sides, Israel, and Palestinian-controlled territories such as Gaza are not any major crude oil producers-players on the global energy scene, or the current conflict does not directly put any major source of oil supplies in danger (pipelines, maritime chokepoints).

However, the military conflict has a proximity with the most important oil-producing and exporting area, the Persian Gulf, and next of some of the most neuralgic maritime checkpoints in the world, the Canal Suez in Egypt, the Strait of Aden in Yemen, and indirectly, with the Iranian-controlled Strait of Hormuz in Persian Gulf.

Safe-haven bids on the dollar, gold, and yen:

The conflict in Israel that erupted during the weekend has prompted a move into safe-haven assets of the U.S. dollar, gold, and Japanese Yen, on the back of the rising geopolitical risk, and the risk aversion sentiment.

History taught us that investors prefer the safety of those traditional haven assets to hedge against international turmoil while moving away from risk and growth-sensitive assets, such as stocks, Euro, Pound Sterling, and Australian and New Zealand dollars.

In this context, the DXY-U.S. dollar index gained 0.50% to 106.60, the Japanese Yen rose across the board, while gold and silver added nearly 1% to $1,850/oz, and $22/oz respectively.

However, the crude oil prices have retreated during the day since the conflict has had a minimal impact on the physical oil market, with not yet any fear of a reduction in oil supply or maritime or land transport in the short term.

The main reason for the smaller-than-expected crude oil gain is that both sides, Israel, and Palestinian-controlled territories such as Gaza are not any major crude oil producers-players on the global energy scene, or the current conflict does not directly put any major source of oil supplies in danger (pipelines, maritime chokepoints).

However, the military conflict has a proximity with the most important oil-producing and exporting area, the Persian Gulf, and next of some of the most neuralgic maritime checkpoints in the world, the Canal Suez in Egypt, the Strait of Aden in Yemen, and indirectly, with the Iranian-controlled Strait of Hormuz in Persian Gulf.

Safe-haven bids on the dollar, gold, and yen:

The conflict in Israel that erupted during the weekend has prompted a move into safe-haven assets of the U.S. dollar, gold, and Japanese Yen, on the back of the rising geopolitical risk, and the risk aversion sentiment.

History taught us that investors prefer the safety of those traditional haven assets to hedge against international turmoil while moving away from risk and growth-sensitive assets, such as stocks, Euro, Pound Sterling, and Australian and New Zealand dollars.

In this context, the DXY-U.S. dollar index gained 0.50% to 106.60, the Japanese Yen rose across the board, while gold and silver added nearly 1% to $1,850/oz, and $22/oz respectively.

Brent crude oil, 1-hour chart

However, the crude oil prices have retreated during the day since the conflict has had a minimal impact on the physical oil market, with not yet any fear of a reduction in oil supply or maritime or land transport in the short term.

The main reason for the smaller-than-expected crude oil gain is that both sides, Israel, and Palestinian-controlled territories such as Gaza are not any major crude oil producers-players on the global energy scene, or the current conflict does not directly put any major source of oil supplies in danger (pipelines, maritime chokepoints).

However, the military conflict has a proximity with the most important oil-producing and exporting area, the Persian Gulf, and next of some of the most neuralgic maritime checkpoints in the world, the Canal Suez in Egypt, the Strait of Aden in Yemen, and indirectly, with the Iranian-controlled Strait of Hormuz in Persian Gulf.

Safe-haven bids on the dollar, gold, and yen:

The conflict in Israel that erupted during the weekend has prompted a move into safe-haven assets of the U.S. dollar, gold, and Japanese Yen, on the back of the rising geopolitical risk, and the risk aversion sentiment.

History taught us that investors prefer the safety of those traditional haven assets to hedge against international turmoil while moving away from risk and growth-sensitive assets, such as stocks, Euro, Pound Sterling, and Australian and New Zealand dollars.

In this context, the DXY-U.S. dollar index gained 0.50% to 106.60, the Japanese Yen rose across the board, while gold and silver added nearly 1% to $1,850/oz, and $22/oz respectively.

Brent crude oil, 1-hour chart

However, the crude oil prices have retreated during the day since the conflict has had a minimal impact on the physical oil market, with not yet any fear of a reduction in oil supply or maritime or land transport in the short term.

The main reason for the smaller-than-expected crude oil gain is that both sides, Israel, and Palestinian-controlled territories such as Gaza are not any major crude oil producers-players on the global energy scene, or the current conflict does not directly put any major source of oil supplies in danger (pipelines, maritime chokepoints).

However, the military conflict has a proximity with the most important oil-producing and exporting area, the Persian Gulf, and next of some of the most neuralgic maritime checkpoints in the world, the Canal Suez in Egypt, the Strait of Aden in Yemen, and indirectly, with the Iranian-controlled Strait of Hormuz in Persian Gulf.

Safe-haven bids on the dollar, gold, and yen:

The conflict in Israel that erupted during the weekend has prompted a move into safe-haven assets of the U.S. dollar, gold, and Japanese Yen, on the back of the rising geopolitical risk, and the risk aversion sentiment.

History taught us that investors prefer the safety of those traditional haven assets to hedge against international turmoil while moving away from risk and growth-sensitive assets, such as stocks, Euro, Pound Sterling, and Australian and New Zealand dollars.

In this context, the DXY-U.S. dollar index gained 0.50% to 106.60, the Japanese Yen rose across the board, while gold and silver added nearly 1% to $1,850/oz, and $22/oz respectively.

Brent crude oil, 1-hour chart

However, the crude oil prices have retreated during the day since the conflict has had a minimal impact on the physical oil market, with not yet any fear of a reduction in oil supply or maritime or land transport in the short term.

The main reason for the smaller-than-expected crude oil gain is that both sides, Israel, and Palestinian-controlled territories such as Gaza are not any major crude oil producers-players on the global energy scene, or the current conflict does not directly put any major source of oil supplies in danger (pipelines, maritime chokepoints).

However, the military conflict has a proximity with the most important oil-producing and exporting area, the Persian Gulf, and next of some of the most neuralgic maritime checkpoints in the world, the Canal Suez in Egypt, the Strait of Aden in Yemen, and indirectly, with the Iranian-controlled Strait of Hormuz in Persian Gulf.

Safe-haven bids on the dollar, gold, and yen:

The conflict in Israel that erupted during the weekend has prompted a move into safe-haven assets of the U.S. dollar, gold, and Japanese Yen, on the back of the rising geopolitical risk, and the risk aversion sentiment.

History taught us that investors prefer the safety of those traditional haven assets to hedge against international turmoil while moving away from risk and growth-sensitive assets, such as stocks, Euro, Pound Sterling, and Australian and New Zealand dollars.

In this context, the DXY-U.S. dollar index gained 0.50% to 106.60, the Japanese Yen rose across the board, while gold and silver added nearly 1% to $1,850/oz, and $22/oz respectively.

The international benchmark Brent initially opened with a gap at nearly $89/b, or 4.5% up, before retreating to near $87.50/b during the day, while the U.S. West Texas Intermediate rose 4.6% to $88.20/b before falling to $85.50/b mark.

Brent crude oil, 1-hour chart

However, the crude oil prices have retreated during the day since the conflict has had a minimal impact on the physical oil market, with not yet any fear of a reduction in oil supply or maritime or land transport in the short term.

The main reason for the smaller-than-expected crude oil gain is that both sides, Israel, and Palestinian-controlled territories such as Gaza are not any major crude oil producers-players on the global energy scene, or the current conflict does not directly put any major source of oil supplies in danger (pipelines, maritime chokepoints).

However, the military conflict has a proximity with the most important oil-producing and exporting area, the Persian Gulf, and next of some of the most neuralgic maritime checkpoints in the world, the Canal Suez in Egypt, the Strait of Aden in Yemen, and indirectly, with the Iranian-controlled Strait of Hormuz in Persian Gulf.

Safe-haven bids on the dollar, gold, and yen:

The conflict in Israel that erupted during the weekend has prompted a move into safe-haven assets of the U.S. dollar, gold, and Japanese Yen, on the back of the rising geopolitical risk, and the risk aversion sentiment.

History taught us that investors prefer the safety of those traditional haven assets to hedge against international turmoil while moving away from risk and growth-sensitive assets, such as stocks, Euro, Pound Sterling, and Australian and New Zealand dollars.

In this context, the DXY-U.S. dollar index gained 0.50% to 106.60, the Japanese Yen rose across the board, while gold and silver added nearly 1% to $1,850/oz, and $22/oz respectively.

The international benchmark Brent initially opened with a gap at nearly $89/b, or 4.5% up, before retreating to near $87.50/b during the day, while the U.S. West Texas Intermediate rose 4.6% to $88.20/b before falling to $85.50/b mark.

Brent crude oil, 1-hour chart

However, the crude oil prices have retreated during the day since the conflict has had a minimal impact on the physical oil market, with not yet any fear of a reduction in oil supply or maritime or land transport in the short term.

The main reason for the smaller-than-expected crude oil gain is that both sides, Israel, and Palestinian-controlled territories such as Gaza are not any major crude oil producers-players on the global energy scene, or the current conflict does not directly put any major source of oil supplies in danger (pipelines, maritime chokepoints).

However, the military conflict has a proximity with the most important oil-producing and exporting area, the Persian Gulf, and next of some of the most neuralgic maritime checkpoints in the world, the Canal Suez in Egypt, the Strait of Aden in Yemen, and indirectly, with the Iranian-controlled Strait of Hormuz in Persian Gulf.

Safe-haven bids on the dollar, gold, and yen:

The conflict in Israel that erupted during the weekend has prompted a move into safe-haven assets of the U.S. dollar, gold, and Japanese Yen, on the back of the rising geopolitical risk, and the risk aversion sentiment.

History taught us that investors prefer the safety of those traditional haven assets to hedge against international turmoil while moving away from risk and growth-sensitive assets, such as stocks, Euro, Pound Sterling, and Australian and New Zealand dollars.

In this context, the DXY-U.S. dollar index gained 0.50% to 106.60, the Japanese Yen rose across the board, while gold and silver added nearly 1% to $1,850/oz, and $22/oz respectively.

A surprise deadly attack by land, sea, and air on Israel by Palestinian militants Hamas from Gaza on Saturday morning has resumed fears for oil supply disruption in the oil-rich Middle East, adding upward pressure on the crude oil prices at the opening bell on Sunday night.

The international benchmark Brent initially opened with a gap at nearly $89/b, or 4.5% up, before retreating to near $87.50/b during the day, while the U.S. West Texas Intermediate rose 4.6% to $88.20/b before falling to $85.50/b mark.

Brent crude oil, 1-hour chart

However, the crude oil prices have retreated during the day since the conflict has had a minimal impact on the physical oil market, with not yet any fear of a reduction in oil supply or maritime or land transport in the short term.

The main reason for the smaller-than-expected crude oil gain is that both sides, Israel, and Palestinian-controlled territories such as Gaza are not any major crude oil producers-players on the global energy scene, or the current conflict does not directly put any major source of oil supplies in danger (pipelines, maritime chokepoints).

However, the military conflict has a proximity with the most important oil-producing and exporting area, the Persian Gulf, and next of some of the most neuralgic maritime checkpoints in the world, the Canal Suez in Egypt, the Strait of Aden in Yemen, and indirectly, with the Iranian-controlled Strait of Hormuz in Persian Gulf.

Safe-haven bids on the dollar, gold, and yen:

The conflict in Israel that erupted during the weekend has prompted a move into safe-haven assets of the U.S. dollar, gold, and Japanese Yen, on the back of the rising geopolitical risk, and the risk aversion sentiment.

History taught us that investors prefer the safety of those traditional haven assets to hedge against international turmoil while moving away from risk and growth-sensitive assets, such as stocks, Euro, Pound Sterling, and Australian and New Zealand dollars.

In this context, the DXY-U.S. dollar index gained 0.50% to 106.60, the Japanese Yen rose across the board, while gold and silver added nearly 1% to $1,850/oz, and $22/oz respectively.

A surprise deadly attack by land, sea, and air on Israel by Palestinian militants Hamas from Gaza on Saturday morning has resumed fears for oil supply disruption in the oil-rich Middle East, adding upward pressure on the crude oil prices at the opening bell on Sunday night.

The international benchmark Brent initially opened with a gap at nearly $89/b, or 4.5% up, before retreating to near $87.50/b during the day, while the U.S. West Texas Intermediate rose 4.6% to $88.20/b before falling to $85.50/b mark.

Brent crude oil, 1-hour chart

However, the crude oil prices have retreated during the day since the conflict has had a minimal impact on the physical oil market, with not yet any fear of a reduction in oil supply or maritime or land transport in the short term.

The main reason for the smaller-than-expected crude oil gain is that both sides, Israel, and Palestinian-controlled territories such as Gaza are not any major crude oil producers-players on the global energy scene, or the current conflict does not directly put any major source of oil supplies in danger (pipelines, maritime chokepoints).

However, the military conflict has a proximity with the most important oil-producing and exporting area, the Persian Gulf, and next of some of the most neuralgic maritime checkpoints in the world, the Canal Suez in Egypt, the Strait of Aden in Yemen, and indirectly, with the Iranian-controlled Strait of Hormuz in Persian Gulf.

Safe-haven bids on the dollar, gold, and yen:

The conflict in Israel that erupted during the weekend has prompted a move into safe-haven assets of the U.S. dollar, gold, and Japanese Yen, on the back of the rising geopolitical risk, and the risk aversion sentiment.

History taught us that investors prefer the safety of those traditional haven assets to hedge against international turmoil while moving away from risk and growth-sensitive assets, such as stocks, Euro, Pound Sterling, and Australian and New Zealand dollars.

In this context, the DXY-U.S. dollar index gained 0.50% to 106.60, the Japanese Yen rose across the board, while gold and silver added nearly 1% to $1,850/oz, and $22/oz respectively.

The Israel-Hamas conflict has been the major price catalyst in the global markets on the first trading day of the week, with crude oil prices jumping 4%, while investors pursued safety on the U.S. dollar, gold, and Japanese Yen to cover against rising geopolitical risk.

A surprise deadly attack by land, sea, and air on Israel by Palestinian militants Hamas from Gaza on Saturday morning has resumed fears for oil supply disruption in the oil-rich Middle East, adding upward pressure on the crude oil prices at the opening bell on Sunday night.

The international benchmark Brent initially opened with a gap at nearly $89/b, or 4.5% up, before retreating to near $87.50/b during the day, while the U.S. West Texas Intermediate rose 4.6% to $88.20/b before falling to $85.50/b mark.

Brent crude oil, 1-hour chart

However, the crude oil prices have retreated during the day since the conflict has had a minimal impact on the physical oil market, with not yet any fear of a reduction in oil supply or maritime or land transport in the short term.

The main reason for the smaller-than-expected crude oil gain is that both sides, Israel, and Palestinian-controlled territories such as Gaza are not any major crude oil producers-players on the global energy scene, or the current conflict does not directly put any major source of oil supplies in danger (pipelines, maritime chokepoints).

However, the military conflict has a proximity with the most important oil-producing and exporting area, the Persian Gulf, and next of some of the most neuralgic maritime checkpoints in the world, the Canal Suez in Egypt, the Strait of Aden in Yemen, and indirectly, with the Iranian-controlled Strait of Hormuz in Persian Gulf.

Safe-haven bids on the dollar, gold, and yen:

The conflict in Israel that erupted during the weekend has prompted a move into safe-haven assets of the U.S. dollar, gold, and Japanese Yen, on the back of the rising geopolitical risk, and the risk aversion sentiment.

History taught us that investors prefer the safety of those traditional haven assets to hedge against international turmoil while moving away from risk and growth-sensitive assets, such as stocks, Euro, Pound Sterling, and Australian and New Zealand dollars.

In this context, the DXY-U.S. dollar index gained 0.50% to 106.60, the Japanese Yen rose across the board, while gold and silver added nearly 1% to $1,850/oz, and $22/oz respectively.

The Israel-Hamas conflict has been the major price catalyst in the global markets on the first trading day of the week, with crude oil prices jumping 4%, while investors pursued safety on the U.S. dollar, gold, and Japanese Yen to cover against rising geopolitical risk.

A surprise deadly attack by land, sea, and air on Israel by Palestinian militants Hamas from Gaza on Saturday morning has resumed fears for oil supply disruption in the oil-rich Middle East, adding upward pressure on the crude oil prices at the opening bell on Sunday night.

The international benchmark Brent initially opened with a gap at nearly $89/b, or 4.5% up, before retreating to near $87.50/b during the day, while the U.S. West Texas Intermediate rose 4.6% to $88.20/b before falling to $85.50/b mark.

Brent crude oil, 1-hour chart

However, the crude oil prices have retreated during the day since the conflict has had a minimal impact on the physical oil market, with not yet any fear of a reduction in oil supply or maritime or land transport in the short term.

The main reason for the smaller-than-expected crude oil gain is that both sides, Israel, and Palestinian-controlled territories such as Gaza are not any major crude oil producers-players on the global energy scene, or the current conflict does not directly put any major source of oil supplies in danger (pipelines, maritime chokepoints).

However, the military conflict has a proximity with the most important oil-producing and exporting area, the Persian Gulf, and next of some of the most neuralgic maritime checkpoints in the world, the Canal Suez in Egypt, the Strait of Aden in Yemen, and indirectly, with the Iranian-controlled Strait of Hormuz in Persian Gulf.

Safe-haven bids on the dollar, gold, and yen:

The conflict in Israel that erupted during the weekend has prompted a move into safe-haven assets of the U.S. dollar, gold, and Japanese Yen, on the back of the rising geopolitical risk, and the risk aversion sentiment.

History taught us that investors prefer the safety of those traditional haven assets to hedge against international turmoil while moving away from risk and growth-sensitive assets, such as stocks, Euro, Pound Sterling, and Australian and New Zealand dollars.

In this context, the DXY-U.S. dollar index gained 0.50% to 106.60, the Japanese Yen rose across the board, while gold and silver added nearly 1% to $1,850/oz, and $22/oz respectively.

U.S. dollar and bond yields rally on a resilient labour market

Posted on by Vrasidas Neofytou

The market participants are concerned that the surging interest rates would freeze the business activity and housing market, which could potentially tip the U.S. economy into a hard or soft landing.

In this context, traders dumped the risk and growth-sensitive stocks for the safety of the dollar, sending the major indices of Dow Jones, Nasdaq Composite, and S&P 500 to 4-month lows, and the dollar-denominated Gold down to nearly $1,820/oz.

The market participants are concerned that the surging interest rates would freeze the business activity and housing market, which could potentially tip the U.S. economy into a hard or soft landing.

The yield curve inversion indicator rung correct for four of the five last recessions (excl. CoViD) and it most recently inverted in June 2022 (which means we’re due for a major contraction leading up to and within the next 9mos).

In this context, traders dumped the risk and growth-sensitive stocks for the safety of the dollar, sending the major indices of Dow Jones, Nasdaq Composite, and S&P 500 to 4-month lows, and the dollar-denominated Gold down to nearly $1,820/oz.

The market participants are concerned that the surging interest rates would freeze the business activity and housing market, which could potentially tip the U.S. economy into a hard or soft landing.

The yield curve inversion indicator rung correct for four of the five last recessions (excl. CoViD) and it most recently inverted in June 2022 (which means we’re due for a major contraction leading up to and within the next 9mos).

In this context, traders dumped the risk and growth-sensitive stocks for the safety of the dollar, sending the major indices of Dow Jones, Nasdaq Composite, and S&P 500 to 4-month lows, and the dollar-denominated Gold down to nearly $1,820/oz.

The market participants are concerned that the surging interest rates would freeze the business activity and housing market, which could potentially tip the U.S. economy into a hard or soft landing.

Another recession warning is the inversion of the 2-year and 10-year Treasury yield curve (5.16% > 4.88%) a phenomenon that has historically been a reliable recession predictor (It typically takes 1.5-2 years for a recession to occur).

The yield curve inversion indicator rung correct for four of the five last recessions (excl. CoViD) and it most recently inverted in June 2022 (which means we’re due for a major contraction leading up to and within the next 9mos).

In this context, traders dumped the risk and growth-sensitive stocks for the safety of the dollar, sending the major indices of Dow Jones, Nasdaq Composite, and S&P 500 to 4-month lows, and the dollar-denominated Gold down to nearly $1,820/oz.

The market participants are concerned that the surging interest rates would freeze the business activity and housing market, which could potentially tip the U.S. economy into a hard or soft landing.

Another recession warning is the inversion of the 2-year and 10-year Treasury yield curve (5.16% > 4.88%) a phenomenon that has historically been a reliable recession predictor (It typically takes 1.5-2 years for a recession to occur).

The yield curve inversion indicator rung correct for four of the five last recessions (excl. CoViD) and it most recently inverted in June 2022 (which means we’re due for a major contraction leading up to and within the next 9mos).

In this context, traders dumped the risk and growth-sensitive stocks for the safety of the dollar, sending the major indices of Dow Jones, Nasdaq Composite, and S&P 500 to 4-month lows, and the dollar-denominated Gold down to nearly $1,820/oz.

The market participants are concerned that the surging interest rates would freeze the business activity and housing market, which could potentially tip the U.S. economy into a hard or soft landing.

Investors are also concerned that a ballooning federal budget deficit might lead to more supply of bonds to meet obligations but also require higher yields to clear the market.

Another recession warning is the inversion of the 2-year and 10-year Treasury yield curve (5.16% > 4.88%) a phenomenon that has historically been a reliable recession predictor (It typically takes 1.5-2 years for a recession to occur).

The yield curve inversion indicator rung correct for four of the five last recessions (excl. CoViD) and it most recently inverted in June 2022 (which means we’re due for a major contraction leading up to and within the next 9mos).

In this context, traders dumped the risk and growth-sensitive stocks for the safety of the dollar, sending the major indices of Dow Jones, Nasdaq Composite, and S&P 500 to 4-month lows, and the dollar-denominated Gold down to nearly $1,820/oz.

The market participants are concerned that the surging interest rates would freeze the business activity and housing market, which could potentially tip the U.S. economy into a hard or soft landing.

Investors are also concerned that a ballooning federal budget deficit might lead to more supply of bonds to meet obligations but also require higher yields to clear the market.

Another recession warning is the inversion of the 2-year and 10-year Treasury yield curve (5.16% > 4.88%) a phenomenon that has historically been a reliable recession predictor (It typically takes 1.5-2 years for a recession to occur).

The yield curve inversion indicator rung correct for four of the five last recessions (excl. CoViD) and it most recently inverted in June 2022 (which means we’re due for a major contraction leading up to and within the next 9mos).

In this context, traders dumped the risk and growth-sensitive stocks for the safety of the dollar, sending the major indices of Dow Jones, Nasdaq Composite, and S&P 500 to 4-month lows, and the dollar-denominated Gold down to nearly $1,820/oz.

The market participants are concerned that the surging interest rates would freeze the business activity and housing market, which could potentially tip the U.S. economy into a hard or soft landing.

The 2-year yield also jumped to near monthly highs of 5.16%, while the 30-year Treasury yield touched the critical 5% mark, its highest yield since May 2009, fuelling fears that the U.S. economy would tip into recession.

Investors are also concerned that a ballooning federal budget deficit might lead to more supply of bonds to meet obligations but also require higher yields to clear the market.

Another recession warning is the inversion of the 2-year and 10-year Treasury yield curve (5.16% > 4.88%) a phenomenon that has historically been a reliable recession predictor (It typically takes 1.5-2 years for a recession to occur).

The yield curve inversion indicator rung correct for four of the five last recessions (excl. CoViD) and it most recently inverted in June 2022 (which means we’re due for a major contraction leading up to and within the next 9mos).

In this context, traders dumped the risk and growth-sensitive stocks for the safety of the dollar, sending the major indices of Dow Jones, Nasdaq Composite, and S&P 500 to 4-month lows, and the dollar-denominated Gold down to nearly $1,820/oz.

The market participants are concerned that the surging interest rates would freeze the business activity and housing market, which could potentially tip the U.S. economy into a hard or soft landing.

The 2-year yield also jumped to near monthly highs of 5.16%, while the 30-year Treasury yield touched the critical 5% mark, its highest yield since May 2009, fuelling fears that the U.S. economy would tip into recession.

Investors are also concerned that a ballooning federal budget deficit might lead to more supply of bonds to meet obligations but also require higher yields to clear the market.

Another recession warning is the inversion of the 2-year and 10-year Treasury yield curve (5.16% > 4.88%) a phenomenon that has historically been a reliable recession predictor (It typically takes 1.5-2 years for a recession to occur).

The yield curve inversion indicator rung correct for four of the five last recessions (excl. CoViD) and it most recently inverted in June 2022 (which means we’re due for a major contraction leading up to and within the next 9mos).

In this context, traders dumped the risk and growth-sensitive stocks for the safety of the dollar, sending the major indices of Dow Jones, Nasdaq Composite, and S&P 500 to 4-month lows, and the dollar-denominated Gold down to nearly $1,820/oz.

The market participants are concerned that the surging interest rates would freeze the business activity and housing market, which could potentially tip the U.S. economy into a hard or soft landing.

10-year U.S. Treasury yields, Daily chart

The 2-year yield also jumped to near monthly highs of 5.16%, while the 30-year Treasury yield touched the critical 5% mark, its highest yield since May 2009, fuelling fears that the U.S. economy would tip into recession.

Investors are also concerned that a ballooning federal budget deficit might lead to more supply of bonds to meet obligations but also require higher yields to clear the market.

Another recession warning is the inversion of the 2-year and 10-year Treasury yield curve (5.16% > 4.88%) a phenomenon that has historically been a reliable recession predictor (It typically takes 1.5-2 years for a recession to occur).

The yield curve inversion indicator rung correct for four of the five last recessions (excl. CoViD) and it most recently inverted in June 2022 (which means we’re due for a major contraction leading up to and within the next 9mos).

In this context, traders dumped the risk and growth-sensitive stocks for the safety of the dollar, sending the major indices of Dow Jones, Nasdaq Composite, and S&P 500 to 4-month lows, and the dollar-denominated Gold down to nearly $1,820/oz.

The market participants are concerned that the surging interest rates would freeze the business activity and housing market, which could potentially tip the U.S. economy into a hard or soft landing.

10-year U.S. Treasury yields, Daily chart

The 2-year yield also jumped to near monthly highs of 5.16%, while the 30-year Treasury yield touched the critical 5% mark, its highest yield since May 2009, fuelling fears that the U.S. economy would tip into recession.

Investors are also concerned that a ballooning federal budget deficit might lead to more supply of bonds to meet obligations but also require higher yields to clear the market.

Another recession warning is the inversion of the 2-year and 10-year Treasury yield curve (5.16% > 4.88%) a phenomenon that has historically been a reliable recession predictor (It typically takes 1.5-2 years for a recession to occur).

The yield curve inversion indicator rung correct for four of the five last recessions (excl. CoViD) and it most recently inverted in June 2022 (which means we’re due for a major contraction leading up to and within the next 9mos).

In this context, traders dumped the risk and growth-sensitive stocks for the safety of the dollar, sending the major indices of Dow Jones, Nasdaq Composite, and S&P 500 to 4-month lows, and the dollar-denominated Gold down to nearly $1,820/oz.

The market participants are concerned that the surging interest rates would freeze the business activity and housing market, which could potentially tip the U.S. economy into a hard or soft landing.

10-year U.S. Treasury yields, Daily chart

The 2-year yield also jumped to near monthly highs of 5.16%, while the 30-year Treasury yield touched the critical 5% mark, its highest yield since May 2009, fuelling fears that the U.S. economy would tip into recession.

Investors are also concerned that a ballooning federal budget deficit might lead to more supply of bonds to meet obligations but also require higher yields to clear the market.

Another recession warning is the inversion of the 2-year and 10-year Treasury yield curve (5.16% > 4.88%) a phenomenon that has historically been a reliable recession predictor (It typically takes 1.5-2 years for a recession to occur).

The yield curve inversion indicator rung correct for four of the five last recessions (excl. CoViD) and it most recently inverted in June 2022 (which means we’re due for a major contraction leading up to and within the next 9mos).

In this context, traders dumped the risk and growth-sensitive stocks for the safety of the dollar, sending the major indices of Dow Jones, Nasdaq Composite, and S&P 500 to 4-month lows, and the dollar-denominated Gold down to nearly $1,820/oz.

The market participants are concerned that the surging interest rates would freeze the business activity and housing market, which could potentially tip the U.S. economy into a hard or soft landing.

10-year U.S. Treasury yields, Daily chart

The 2-year yield also jumped to near monthly highs of 5.16%, while the 30-year Treasury yield touched the critical 5% mark, its highest yield since May 2009, fuelling fears that the U.S. economy would tip into recession.

Investors are also concerned that a ballooning federal budget deficit might lead to more supply of bonds to meet obligations but also require higher yields to clear the market.

Another recession warning is the inversion of the 2-year and 10-year Treasury yield curve (5.16% > 4.88%) a phenomenon that has historically been a reliable recession predictor (It typically takes 1.5-2 years for a recession to occur).

The yield curve inversion indicator rung correct for four of the five last recessions (excl. CoViD) and it most recently inverted in June 2022 (which means we’re due for a major contraction leading up to and within the next 9mos).

In this context, traders dumped the risk and growth-sensitive stocks for the safety of the dollar, sending the major indices of Dow Jones, Nasdaq Composite, and S&P 500 to 4-month lows, and the dollar-denominated Gold down to nearly $1,820/oz.

The market participants are concerned that the surging interest rates would freeze the business activity and housing market, which could potentially tip the U.S. economy into a hard or soft landing.

The pledge by the Federal Reserve to keep interest rates at a higher level for longer to curb resilient inflation together with Tuesday’s resilient job data triggered a rally on the T-yields yesterday, with the 10-year Treasury yield surging as high as 4.884%, reaching its highest level in 16 years.

10-year U.S. Treasury yields, Daily chart

The 2-year yield also jumped to near monthly highs of 5.16%, while the 30-year Treasury yield touched the critical 5% mark, its highest yield since May 2009, fuelling fears that the U.S. economy would tip into recession.

Investors are also concerned that a ballooning federal budget deficit might lead to more supply of bonds to meet obligations but also require higher yields to clear the market.

Another recession warning is the inversion of the 2-year and 10-year Treasury yield curve (5.16% > 4.88%) a phenomenon that has historically been a reliable recession predictor (It typically takes 1.5-2 years for a recession to occur).

The yield curve inversion indicator rung correct for four of the five last recessions (excl. CoViD) and it most recently inverted in June 2022 (which means we’re due for a major contraction leading up to and within the next 9mos).

In this context, traders dumped the risk and growth-sensitive stocks for the safety of the dollar, sending the major indices of Dow Jones, Nasdaq Composite, and S&P 500 to 4-month lows, and the dollar-denominated Gold down to nearly $1,820/oz.

The market participants are concerned that the surging interest rates would freeze the business activity and housing market, which could potentially tip the U.S. economy into a hard or soft landing.

The pledge by the Federal Reserve to keep interest rates at a higher level for longer to curb resilient inflation together with Tuesday’s resilient job data triggered a rally on the T-yields yesterday, with the 10-year Treasury yield surging as high as 4.884%, reaching its highest level in 16 years.

10-year U.S. Treasury yields, Daily chart

The 2-year yield also jumped to near monthly highs of 5.16%, while the 30-year Treasury yield touched the critical 5% mark, its highest yield since May 2009, fuelling fears that the U.S. economy would tip into recession.

Investors are also concerned that a ballooning federal budget deficit might lead to more supply of bonds to meet obligations but also require higher yields to clear the market.

Another recession warning is the inversion of the 2-year and 10-year Treasury yield curve (5.16% > 4.88%) a phenomenon that has historically been a reliable recession predictor (It typically takes 1.5-2 years for a recession to occur).

The yield curve inversion indicator rung correct for four of the five last recessions (excl. CoViD) and it most recently inverted in June 2022 (which means we’re due for a major contraction leading up to and within the next 9mos).

In this context, traders dumped the risk and growth-sensitive stocks for the safety of the dollar, sending the major indices of Dow Jones, Nasdaq Composite, and S&P 500 to 4-month lows, and the dollar-denominated Gold down to nearly $1,820/oz.

The market participants are concerned that the surging interest rates would freeze the business activity and housing market, which could potentially tip the U.S. economy into a hard or soft landing.

The jobs reading signaled a strong U.S. labor market, which could prompt the Federal Reserve to raise interest rates further in the next meetings and to keep its hawkish stance for longer. The central bank began hiking rates in March 2022 to ease inflation and cool the economy, including the labor market.

The pledge by the Federal Reserve to keep interest rates at a higher level for longer to curb resilient inflation together with Tuesday’s resilient job data triggered a rally on the T-yields yesterday, with the 10-year Treasury yield surging as high as 4.884%, reaching its highest level in 16 years.

10-year U.S. Treasury yields, Daily chart

The 2-year yield also jumped to near monthly highs of 5.16%, while the 30-year Treasury yield touched the critical 5% mark, its highest yield since May 2009, fuelling fears that the U.S. economy would tip into recession.

Investors are also concerned that a ballooning federal budget deficit might lead to more supply of bonds to meet obligations but also require higher yields to clear the market.

Another recession warning is the inversion of the 2-year and 10-year Treasury yield curve (5.16% > 4.88%) a phenomenon that has historically been a reliable recession predictor (It typically takes 1.5-2 years for a recession to occur).

The yield curve inversion indicator rung correct for four of the five last recessions (excl. CoViD) and it most recently inverted in June 2022 (which means we’re due for a major contraction leading up to and within the next 9mos).

In this context, traders dumped the risk and growth-sensitive stocks for the safety of the dollar, sending the major indices of Dow Jones, Nasdaq Composite, and S&P 500 to 4-month lows, and the dollar-denominated Gold down to nearly $1,820/oz.

The market participants are concerned that the surging interest rates would freeze the business activity and housing market, which could potentially tip the U.S. economy into a hard or soft landing.

The jobs reading signaled a strong U.S. labor market, which could prompt the Federal Reserve to raise interest rates further in the next meetings and to keep its hawkish stance for longer. The central bank began hiking rates in March 2022 to ease inflation and cool the economy, including the labor market.

The pledge by the Federal Reserve to keep interest rates at a higher level for longer to curb resilient inflation together with Tuesday’s resilient job data triggered a rally on the T-yields yesterday, with the 10-year Treasury yield surging as high as 4.884%, reaching its highest level in 16 years.

10-year U.S. Treasury yields, Daily chart

The 2-year yield also jumped to near monthly highs of 5.16%, while the 30-year Treasury yield touched the critical 5% mark, its highest yield since May 2009, fuelling fears that the U.S. economy would tip into recession.

Investors are also concerned that a ballooning federal budget deficit might lead to more supply of bonds to meet obligations but also require higher yields to clear the market.

Another recession warning is the inversion of the 2-year and 10-year Treasury yield curve (5.16% > 4.88%) a phenomenon that has historically been a reliable recession predictor (It typically takes 1.5-2 years for a recession to occur).

The yield curve inversion indicator rung correct for four of the five last recessions (excl. CoViD) and it most recently inverted in June 2022 (which means we’re due for a major contraction leading up to and within the next 9mos).

In this context, traders dumped the risk and growth-sensitive stocks for the safety of the dollar, sending the major indices of Dow Jones, Nasdaq Composite, and S&P 500 to 4-month lows, and the dollar-denominated Gold down to nearly $1,820/oz.

The market participants are concerned that the surging interest rates would freeze the business activity and housing market, which could potentially tip the U.S. economy into a hard or soft landing.

What caused Tuesday’s greenback and bond yield rally was the higher-than-expected U.S. Job Openings and Labor Turnover Survey for August. The survey showed 9.61 million job openings in the month, higher than the 8.8 million that economists previously surveyed by Dow Jones anticipated.

The jobs reading signaled a strong U.S. labor market, which could prompt the Federal Reserve to raise interest rates further in the next meetings and to keep its hawkish stance for longer. The central bank began hiking rates in March 2022 to ease inflation and cool the economy, including the labor market.

The pledge by the Federal Reserve to keep interest rates at a higher level for longer to curb resilient inflation together with Tuesday’s resilient job data triggered a rally on the T-yields yesterday, with the 10-year Treasury yield surging as high as 4.884%, reaching its highest level in 16 years.

10-year U.S. Treasury yields, Daily chart

The 2-year yield also jumped to near monthly highs of 5.16%, while the 30-year Treasury yield touched the critical 5% mark, its highest yield since May 2009, fuelling fears that the U.S. economy would tip into recession.

Investors are also concerned that a ballooning federal budget deficit might lead to more supply of bonds to meet obligations but also require higher yields to clear the market.

Another recession warning is the inversion of the 2-year and 10-year Treasury yield curve (5.16% > 4.88%) a phenomenon that has historically been a reliable recession predictor (It typically takes 1.5-2 years for a recession to occur).

The yield curve inversion indicator rung correct for four of the five last recessions (excl. CoViD) and it most recently inverted in June 2022 (which means we’re due for a major contraction leading up to and within the next 9mos).

In this context, traders dumped the risk and growth-sensitive stocks for the safety of the dollar, sending the major indices of Dow Jones, Nasdaq Composite, and S&P 500 to 4-month lows, and the dollar-denominated Gold down to nearly $1,820/oz.

The market participants are concerned that the surging interest rates would freeze the business activity and housing market, which could potentially tip the U.S. economy into a hard or soft landing.

What caused Tuesday’s greenback and bond yield rally was the higher-than-expected U.S. Job Openings and Labor Turnover Survey for August. The survey showed 9.61 million job openings in the month, higher than the 8.8 million that economists previously surveyed by Dow Jones anticipated.

The jobs reading signaled a strong U.S. labor market, which could prompt the Federal Reserve to raise interest rates further in the next meetings and to keep its hawkish stance for longer. The central bank began hiking rates in March 2022 to ease inflation and cool the economy, including the labor market.

The pledge by the Federal Reserve to keep interest rates at a higher level for longer to curb resilient inflation together with Tuesday’s resilient job data triggered a rally on the T-yields yesterday, with the 10-year Treasury yield surging as high as 4.884%, reaching its highest level in 16 years.

10-year U.S. Treasury yields, Daily chart

The 2-year yield also jumped to near monthly highs of 5.16%, while the 30-year Treasury yield touched the critical 5% mark, its highest yield since May 2009, fuelling fears that the U.S. economy would tip into recession.

Investors are also concerned that a ballooning federal budget deficit might lead to more supply of bonds to meet obligations but also require higher yields to clear the market.

Another recession warning is the inversion of the 2-year and 10-year Treasury yield curve (5.16% > 4.88%) a phenomenon that has historically been a reliable recession predictor (It typically takes 1.5-2 years for a recession to occur).

The yield curve inversion indicator rung correct for four of the five last recessions (excl. CoViD) and it most recently inverted in June 2022 (which means we’re due for a major contraction leading up to and within the next 9mos).

In this context, traders dumped the risk and growth-sensitive stocks for the safety of the dollar, sending the major indices of Dow Jones, Nasdaq Composite, and S&P 500 to 4-month lows, and the dollar-denominated Gold down to nearly $1,820/oz.

The market participants are concerned that the surging interest rates would freeze the business activity and housing market, which could potentially tip the U.S. economy into a hard or soft landing.

DXY-dollar index, Daily chart

What caused Tuesday’s greenback and bond yield rally was the higher-than-expected U.S. Job Openings and Labor Turnover Survey for August. The survey showed 9.61 million job openings in the month, higher than the 8.8 million that economists previously surveyed by Dow Jones anticipated.

The jobs reading signaled a strong U.S. labor market, which could prompt the Federal Reserve to raise interest rates further in the next meetings and to keep its hawkish stance for longer. The central bank began hiking rates in March 2022 to ease inflation and cool the economy, including the labor market.

The pledge by the Federal Reserve to keep interest rates at a higher level for longer to curb resilient inflation together with Tuesday’s resilient job data triggered a rally on the T-yields yesterday, with the 10-year Treasury yield surging as high as 4.884%, reaching its highest level in 16 years.

10-year U.S. Treasury yields, Daily chart

The 2-year yield also jumped to near monthly highs of 5.16%, while the 30-year Treasury yield touched the critical 5% mark, its highest yield since May 2009, fuelling fears that the U.S. economy would tip into recession.

Investors are also concerned that a ballooning federal budget deficit might lead to more supply of bonds to meet obligations but also require higher yields to clear the market.

Another recession warning is the inversion of the 2-year and 10-year Treasury yield curve (5.16% > 4.88%) a phenomenon that has historically been a reliable recession predictor (It typically takes 1.5-2 years for a recession to occur).

The yield curve inversion indicator rung correct for four of the five last recessions (excl. CoViD) and it most recently inverted in June 2022 (which means we’re due for a major contraction leading up to and within the next 9mos).

In this context, traders dumped the risk and growth-sensitive stocks for the safety of the dollar, sending the major indices of Dow Jones, Nasdaq Composite, and S&P 500 to 4-month lows, and the dollar-denominated Gold down to nearly $1,820/oz.

The market participants are concerned that the surging interest rates would freeze the business activity and housing market, which could potentially tip the U.S. economy into a hard or soft landing.

DXY-dollar index, Daily chart

What caused Tuesday’s greenback and bond yield rally was the higher-than-expected U.S. Job Openings and Labor Turnover Survey for August. The survey showed 9.61 million job openings in the month, higher than the 8.8 million that economists previously surveyed by Dow Jones anticipated.

The jobs reading signaled a strong U.S. labor market, which could prompt the Federal Reserve to raise interest rates further in the next meetings and to keep its hawkish stance for longer. The central bank began hiking rates in March 2022 to ease inflation and cool the economy, including the labor market.

The pledge by the Federal Reserve to keep interest rates at a higher level for longer to curb resilient inflation together with Tuesday’s resilient job data triggered a rally on the T-yields yesterday, with the 10-year Treasury yield surging as high as 4.884%, reaching its highest level in 16 years.

10-year U.S. Treasury yields, Daily chart

The 2-year yield also jumped to near monthly highs of 5.16%, while the 30-year Treasury yield touched the critical 5% mark, its highest yield since May 2009, fuelling fears that the U.S. economy would tip into recession.

Investors are also concerned that a ballooning federal budget deficit might lead to more supply of bonds to meet obligations but also require higher yields to clear the market.

Another recession warning is the inversion of the 2-year and 10-year Treasury yield curve (5.16% > 4.88%) a phenomenon that has historically been a reliable recession predictor (It typically takes 1.5-2 years for a recession to occur).

The yield curve inversion indicator rung correct for four of the five last recessions (excl. CoViD) and it most recently inverted in June 2022 (which means we’re due for a major contraction leading up to and within the next 9mos).

In this context, traders dumped the risk and growth-sensitive stocks for the safety of the dollar, sending the major indices of Dow Jones, Nasdaq Composite, and S&P 500 to 4-month lows, and the dollar-denominated Gold down to nearly $1,820/oz.

The market participants are concerned that the surging interest rates would freeze the business activity and housing market, which could potentially tip the U.S. economy into a hard or soft landing.

DXY-dollar index, Daily chart

What caused Tuesday’s greenback and bond yield rally was the higher-than-expected U.S. Job Openings and Labor Turnover Survey for August. The survey showed 9.61 million job openings in the month, higher than the 8.8 million that economists previously surveyed by Dow Jones anticipated.

The jobs reading signaled a strong U.S. labor market, which could prompt the Federal Reserve to raise interest rates further in the next meetings and to keep its hawkish stance for longer. The central bank began hiking rates in March 2022 to ease inflation and cool the economy, including the labor market.

The pledge by the Federal Reserve to keep interest rates at a higher level for longer to curb resilient inflation together with Tuesday’s resilient job data triggered a rally on the T-yields yesterday, with the 10-year Treasury yield surging as high as 4.884%, reaching its highest level in 16 years.

10-year U.S. Treasury yields, Daily chart

The 2-year yield also jumped to near monthly highs of 5.16%, while the 30-year Treasury yield touched the critical 5% mark, its highest yield since May 2009, fuelling fears that the U.S. economy would tip into recession.

Investors are also concerned that a ballooning federal budget deficit might lead to more supply of bonds to meet obligations but also require higher yields to clear the market.

Another recession warning is the inversion of the 2-year and 10-year Treasury yield curve (5.16% > 4.88%) a phenomenon that has historically been a reliable recession predictor (It typically takes 1.5-2 years for a recession to occur).

The yield curve inversion indicator rung correct for four of the five last recessions (excl. CoViD) and it most recently inverted in June 2022 (which means we’re due for a major contraction leading up to and within the next 9mos).

In this context, traders dumped the risk and growth-sensitive stocks for the safety of the dollar, sending the major indices of Dow Jones, Nasdaq Composite, and S&P 500 to 4-month lows, and the dollar-denominated Gold down to nearly $1,820/oz.

The market participants are concerned that the surging interest rates would freeze the business activity and housing market, which could potentially tip the U.S. economy into a hard or soft landing.

The dollar index, a measure of the greenback’s standing against six leading global currencies, climbed as high as 107.30, posting a fresh 11-month high. The strong dollar added pressure on the major peers, driving down the Euro to $1,0440, the Pound Sterling to $1.21, and the Japanese Yen to ¥150, while the growth-sensitive Australian and New Zealand dollars posted fresh yearly lows of $0.6280 and $0.5870 respectively.

DXY-dollar index, Daily chart

What caused Tuesday’s greenback and bond yield rally was the higher-than-expected U.S. Job Openings and Labor Turnover Survey for August. The survey showed 9.61 million job openings in the month, higher than the 8.8 million that economists previously surveyed by Dow Jones anticipated.

The jobs reading signaled a strong U.S. labor market, which could prompt the Federal Reserve to raise interest rates further in the next meetings and to keep its hawkish stance for longer. The central bank began hiking rates in March 2022 to ease inflation and cool the economy, including the labor market.

The pledge by the Federal Reserve to keep interest rates at a higher level for longer to curb resilient inflation together with Tuesday’s resilient job data triggered a rally on the T-yields yesterday, with the 10-year Treasury yield surging as high as 4.884%, reaching its highest level in 16 years.

10-year U.S. Treasury yields, Daily chart

The 2-year yield also jumped to near monthly highs of 5.16%, while the 30-year Treasury yield touched the critical 5% mark, its highest yield since May 2009, fuelling fears that the U.S. economy would tip into recession.

Investors are also concerned that a ballooning federal budget deficit might lead to more supply of bonds to meet obligations but also require higher yields to clear the market.

Another recession warning is the inversion of the 2-year and 10-year Treasury yield curve (5.16% > 4.88%) a phenomenon that has historically been a reliable recession predictor (It typically takes 1.5-2 years for a recession to occur).

The yield curve inversion indicator rung correct for four of the five last recessions (excl. CoViD) and it most recently inverted in June 2022 (which means we’re due for a major contraction leading up to and within the next 9mos).

In this context, traders dumped the risk and growth-sensitive stocks for the safety of the dollar, sending the major indices of Dow Jones, Nasdaq Composite, and S&P 500 to 4-month lows, and the dollar-denominated Gold down to nearly $1,820/oz.

The market participants are concerned that the surging interest rates would freeze the business activity and housing market, which could potentially tip the U.S. economy into a hard or soft landing.

The dollar index, a measure of the greenback’s standing against six leading global currencies, climbed as high as 107.30, posting a fresh 11-month high. The strong dollar added pressure on the major peers, driving down the Euro to $1,0440, the Pound Sterling to $1.21, and the Japanese Yen to ¥150, while the growth-sensitive Australian and New Zealand dollars posted fresh yearly lows of $0.6280 and $0.5870 respectively.

DXY-dollar index, Daily chart

What caused Tuesday’s greenback and bond yield rally was the higher-than-expected U.S. Job Openings and Labor Turnover Survey for August. The survey showed 9.61 million job openings in the month, higher than the 8.8 million that economists previously surveyed by Dow Jones anticipated.

The jobs reading signaled a strong U.S. labor market, which could prompt the Federal Reserve to raise interest rates further in the next meetings and to keep its hawkish stance for longer. The central bank began hiking rates in March 2022 to ease inflation and cool the economy, including the labor market.

The pledge by the Federal Reserve to keep interest rates at a higher level for longer to curb resilient inflation together with Tuesday’s resilient job data triggered a rally on the T-yields yesterday, with the 10-year Treasury yield surging as high as 4.884%, reaching its highest level in 16 years.

10-year U.S. Treasury yields, Daily chart

The 2-year yield also jumped to near monthly highs of 5.16%, while the 30-year Treasury yield touched the critical 5% mark, its highest yield since May 2009, fuelling fears that the U.S. economy would tip into recession.

Investors are also concerned that a ballooning federal budget deficit might lead to more supply of bonds to meet obligations but also require higher yields to clear the market.

Another recession warning is the inversion of the 2-year and 10-year Treasury yield curve (5.16% > 4.88%) a phenomenon that has historically been a reliable recession predictor (It typically takes 1.5-2 years for a recession to occur).

The yield curve inversion indicator rung correct for four of the five last recessions (excl. CoViD) and it most recently inverted in June 2022 (which means we’re due for a major contraction leading up to and within the next 9mos).

In this context, traders dumped the risk and growth-sensitive stocks for the safety of the dollar, sending the major indices of Dow Jones, Nasdaq Composite, and S&P 500 to 4-month lows, and the dollar-denominated Gold down to nearly $1,820/oz.

The market participants are concerned that the surging interest rates would freeze the business activity and housing market, which could potentially tip the U.S. economy into a hard or soft landing.

The DXY-U.S. dollar index climbed above the key 107 level for the first time since mid-November 2022, driven by the ongoing rally of the U.S. Treasury yields and the expectation for higher-for-longer interest rates.

The dollar index, a measure of the greenback’s standing against six leading global currencies, climbed as high as 107.30, posting a fresh 11-month high. The strong dollar added pressure on the major peers, driving down the Euro to $1,0440, the Pound Sterling to $1.21, and the Japanese Yen to ¥150, while the growth-sensitive Australian and New Zealand dollars posted fresh yearly lows of $0.6280 and $0.5870 respectively.

DXY-dollar index, Daily chart

What caused Tuesday’s greenback and bond yield rally was the higher-than-expected U.S. Job Openings and Labor Turnover Survey for August. The survey showed 9.61 million job openings in the month, higher than the 8.8 million that economists previously surveyed by Dow Jones anticipated.

The jobs reading signaled a strong U.S. labor market, which could prompt the Federal Reserve to raise interest rates further in the next meetings and to keep its hawkish stance for longer. The central bank began hiking rates in March 2022 to ease inflation and cool the economy, including the labor market.

The pledge by the Federal Reserve to keep interest rates at a higher level for longer to curb resilient inflation together with Tuesday’s resilient job data triggered a rally on the T-yields yesterday, with the 10-year Treasury yield surging as high as 4.884%, reaching its highest level in 16 years.

10-year U.S. Treasury yields, Daily chart

The 2-year yield also jumped to near monthly highs of 5.16%, while the 30-year Treasury yield touched the critical 5% mark, its highest yield since May 2009, fuelling fears that the U.S. economy would tip into recession.

Investors are also concerned that a ballooning federal budget deficit might lead to more supply of bonds to meet obligations but also require higher yields to clear the market.

Another recession warning is the inversion of the 2-year and 10-year Treasury yield curve (5.16% > 4.88%) a phenomenon that has historically been a reliable recession predictor (It typically takes 1.5-2 years for a recession to occur).

The yield curve inversion indicator rung correct for four of the five last recessions (excl. CoViD) and it most recently inverted in June 2022 (which means we’re due for a major contraction leading up to and within the next 9mos).

In this context, traders dumped the risk and growth-sensitive stocks for the safety of the dollar, sending the major indices of Dow Jones, Nasdaq Composite, and S&P 500 to 4-month lows, and the dollar-denominated Gold down to nearly $1,820/oz.

The market participants are concerned that the surging interest rates would freeze the business activity and housing market, which could potentially tip the U.S. economy into a hard or soft landing.

The DXY-U.S. dollar index climbed above the key 107 level for the first time since mid-November 2022, driven by the ongoing rally of the U.S. Treasury yields and the expectation for higher-for-longer interest rates.

The dollar index, a measure of the greenback’s standing against six leading global currencies, climbed as high as 107.30, posting a fresh 11-month high. The strong dollar added pressure on the major peers, driving down the Euro to $1,0440, the Pound Sterling to $1.21, and the Japanese Yen to ¥150, while the growth-sensitive Australian and New Zealand dollars posted fresh yearly lows of $0.6280 and $0.5870 respectively.

DXY-dollar index, Daily chart

What caused Tuesday’s greenback and bond yield rally was the higher-than-expected U.S. Job Openings and Labor Turnover Survey for August. The survey showed 9.61 million job openings in the month, higher than the 8.8 million that economists previously surveyed by Dow Jones anticipated.

The jobs reading signaled a strong U.S. labor market, which could prompt the Federal Reserve to raise interest rates further in the next meetings and to keep its hawkish stance for longer. The central bank began hiking rates in March 2022 to ease inflation and cool the economy, including the labor market.

The pledge by the Federal Reserve to keep interest rates at a higher level for longer to curb resilient inflation together with Tuesday’s resilient job data triggered a rally on the T-yields yesterday, with the 10-year Treasury yield surging as high as 4.884%, reaching its highest level in 16 years.

10-year U.S. Treasury yields, Daily chart

The 2-year yield also jumped to near monthly highs of 5.16%, while the 30-year Treasury yield touched the critical 5% mark, its highest yield since May 2009, fuelling fears that the U.S. economy would tip into recession.

Investors are also concerned that a ballooning federal budget deficit might lead to more supply of bonds to meet obligations but also require higher yields to clear the market.

Another recession warning is the inversion of the 2-year and 10-year Treasury yield curve (5.16% > 4.88%) a phenomenon that has historically been a reliable recession predictor (It typically takes 1.5-2 years for a recession to occur).

The yield curve inversion indicator rung correct for four of the five last recessions (excl. CoViD) and it most recently inverted in June 2022 (which means we’re due for a major contraction leading up to and within the next 9mos).

In this context, traders dumped the risk and growth-sensitive stocks for the safety of the dollar, sending the major indices of Dow Jones, Nasdaq Composite, and S&P 500 to 4-month lows, and the dollar-denominated Gold down to nearly $1,820/oz.

The market participants are concerned that the surging interest rates would freeze the business activity and housing market, which could potentially tip the U.S. economy into a hard or soft landing.

Lithium prices plunged to a two-year low on bearish fundamentals

Posted on by Vrasidas Neofytou

Rystad Energy Vice President Susan Zou estimates that total lithium mine supply will increase by 30% and 40% year on year in 2023 and 2024 and that miners will continue to develop both existing and greenfield projects amid a “global push to electrify transportation.”

On the supply side, the Lithium market has been becoming oversupplied lately, as more lithium mines and mining exploration projects coming online to meet the projected high demand, with the expectation still is to have a five-fold demand increase by 2030.

Rystad Energy Vice President Susan Zou estimates that total lithium mine supply will increase by 30% and 40% year on year in 2023 and 2024 and that miners will continue to develop both existing and greenfield projects amid a “global push to electrify transportation.”

Automotive lithium-ion (Li-ion) battery demand increased by about 65% to 550 GWh in 2022, from about 330 GWh in 2021, primarily because of growth in electric passenger car sales, while about 60% of lithium demand was for EV batteries vs. around 15% in 2017.

On the supply side, the Lithium market has been becoming oversupplied lately, as more lithium mines and mining exploration projects coming online to meet the projected high demand, with the expectation still is to have a five-fold demand increase by 2030.

Rystad Energy Vice President Susan Zou estimates that total lithium mine supply will increase by 30% and 40% year on year in 2023 and 2024 and that miners will continue to develop both existing and greenfield projects amid a “global push to electrify transportation.”

Automotive lithium-ion (Li-ion) battery demand increased by about 65% to 550 GWh in 2022, from about 330 GWh in 2021, primarily because of growth in electric passenger car sales, while about 60% of lithium demand was for EV batteries vs. around 15% in 2017.

On the supply side, the Lithium market has been becoming oversupplied lately, as more lithium mines and mining exploration projects coming online to meet the projected high demand, with the expectation still is to have a five-fold demand increase by 2030.

Rystad Energy Vice President Susan Zou estimates that total lithium mine supply will increase by 30% and 40% year on year in 2023 and 2024 and that miners will continue to develop both existing and greenfield projects amid a “global push to electrify transportation.”

The electrification of road transport according to the “Net Zero Emissions by 2050” Scenario and the proposed stronger emissions standards has increased the demand for electric vehicles and lithium-ion batteries, but producer lower margins and high inflation have not overwhelmingly helped recently with this push.

Automotive lithium-ion (Li-ion) battery demand increased by about 65% to 550 GWh in 2022, from about 330 GWh in 2021, primarily because of growth in electric passenger car sales, while about 60% of lithium demand was for EV batteries vs. around 15% in 2017.

On the supply side, the Lithium market has been becoming oversupplied lately, as more lithium mines and mining exploration projects coming online to meet the projected high demand, with the expectation still is to have a five-fold demand increase by 2030.

Rystad Energy Vice President Susan Zou estimates that total lithium mine supply will increase by 30% and 40% year on year in 2023 and 2024 and that miners will continue to develop both existing and greenfield projects amid a “global push to electrify transportation.”

The electrification of road transport according to the “Net Zero Emissions by 2050” Scenario and the proposed stronger emissions standards has increased the demand for electric vehicles and lithium-ion batteries, but producer lower margins and high inflation have not overwhelmingly helped recently with this push.

Automotive lithium-ion (Li-ion) battery demand increased by about 65% to 550 GWh in 2022, from about 330 GWh in 2021, primarily because of growth in electric passenger car sales, while about 60% of lithium demand was for EV batteries vs. around 15% in 2017.

On the supply side, the Lithium market has been becoming oversupplied lately, as more lithium mines and mining exploration projects coming online to meet the projected high demand, with the expectation still is to have a five-fold demand increase by 2030.

Rystad Energy Vice President Susan Zou estimates that total lithium mine supply will increase by 30% and 40% year on year in 2023 and 2024 and that miners will continue to develop both existing and greenfield projects amid a “global push to electrify transportation.”

EV sales growth in China slowed to 37% in Q2, 2023, versus a global average of 50%, according to consultancy Counterpoint Research, deteriorating the demand outlook growth in the country, accelerating a downward pressure on Lithium prices.

The electrification of road transport according to the “Net Zero Emissions by 2050” Scenario and the proposed stronger emissions standards has increased the demand for electric vehicles and lithium-ion batteries, but producer lower margins and high inflation have not overwhelmingly helped recently with this push.

Automotive lithium-ion (Li-ion) battery demand increased by about 65% to 550 GWh in 2022, from about 330 GWh in 2021, primarily because of growth in electric passenger car sales, while about 60% of lithium demand was for EV batteries vs. around 15% in 2017.

On the supply side, the Lithium market has been becoming oversupplied lately, as more lithium mines and mining exploration projects coming online to meet the projected high demand, with the expectation still is to have a five-fold demand increase by 2030.

Rystad Energy Vice President Susan Zou estimates that total lithium mine supply will increase by 30% and 40% year on year in 2023 and 2024 and that miners will continue to develop both existing and greenfield projects amid a “global push to electrify transportation.”

EV sales growth in China slowed to 37% in Q2, 2023, versus a global average of 50%, according to consultancy Counterpoint Research, deteriorating the demand outlook growth in the country, accelerating a downward pressure on Lithium prices.

The electrification of road transport according to the “Net Zero Emissions by 2050” Scenario and the proposed stronger emissions standards has increased the demand for electric vehicles and lithium-ion batteries, but producer lower margins and high inflation have not overwhelmingly helped recently with this push.

Automotive lithium-ion (Li-ion) battery demand increased by about 65% to 550 GWh in 2022, from about 330 GWh in 2021, primarily because of growth in electric passenger car sales, while about 60% of lithium demand was for EV batteries vs. around 15% in 2017.

On the supply side, the Lithium market has been becoming oversupplied lately, as more lithium mines and mining exploration projects coming online to meet the projected high demand, with the expectation still is to have a five-fold demand increase by 2030.

Rystad Energy Vice President Susan Zou estimates that total lithium mine supply will increase by 30% and 40% year on year in 2023 and 2024 and that miners will continue to develop both existing and greenfield projects amid a “global push to electrify transportation.”

In this context, the demand for Lithium from the EV and battery manufacturers has surprisingly decreased as they still have plenty of inventory to draw down and to de-stock.

EV sales growth in China slowed to 37% in Q2, 2023, versus a global average of 50%, according to consultancy Counterpoint Research, deteriorating the demand outlook growth in the country, accelerating a downward pressure on Lithium prices.

The electrification of road transport according to the “Net Zero Emissions by 2050” Scenario and the proposed stronger emissions standards has increased the demand for electric vehicles and lithium-ion batteries, but producer lower margins and high inflation have not overwhelmingly helped recently with this push.

Automotive lithium-ion (Li-ion) battery demand increased by about 65% to 550 GWh in 2022, from about 330 GWh in 2021, primarily because of growth in electric passenger car sales, while about 60% of lithium demand was for EV batteries vs. around 15% in 2017.

On the supply side, the Lithium market has been becoming oversupplied lately, as more lithium mines and mining exploration projects coming online to meet the projected high demand, with the expectation still is to have a five-fold demand increase by 2030.

Rystad Energy Vice President Susan Zou estimates that total lithium mine supply will increase by 30% and 40% year on year in 2023 and 2024 and that miners will continue to develop both existing and greenfield projects amid a “global push to electrify transportation.”

In this context, the demand for Lithium from the EV and battery manufacturers has surprisingly decreased as they still have plenty of inventory to draw down and to de-stock.

EV sales growth in China slowed to 37% in Q2, 2023, versus a global average of 50%, according to consultancy Counterpoint Research, deteriorating the demand outlook growth in the country, accelerating a downward pressure on Lithium prices.

The electrification of road transport according to the “Net Zero Emissions by 2050” Scenario and the proposed stronger emissions standards has increased the demand for electric vehicles and lithium-ion batteries, but producer lower margins and high inflation have not overwhelmingly helped recently with this push.

Automotive lithium-ion (Li-ion) battery demand increased by about 65% to 550 GWh in 2022, from about 330 GWh in 2021, primarily because of growth in electric passenger car sales, while about 60% of lithium demand was for EV batteries vs. around 15% in 2017.

On the supply side, the Lithium market has been becoming oversupplied lately, as more lithium mines and mining exploration projects coming online to meet the projected high demand, with the expectation still is to have a five-fold demand increase by 2030.

Rystad Energy Vice President Susan Zou estimates that total lithium mine supply will increase by 30% and 40% year on year in 2023 and 2024 and that miners will continue to develop both existing and greenfield projects amid a “global push to electrify transportation.”

Lithium prices have been trending in a downward momentum as the weaker-than-expected EV sales growth in China- the world’s largest EV market- due to economic uncertainties, the end of government subsidies, and the higher borrowing costs, have increased the stockpiles of EVs and batteries in the country this year.

In this context, the demand for Lithium from the EV and battery manufacturers has surprisingly decreased as they still have plenty of inventory to draw down and to de-stock.

EV sales growth in China slowed to 37% in Q2, 2023, versus a global average of 50%, according to consultancy Counterpoint Research, deteriorating the demand outlook growth in the country, accelerating a downward pressure on Lithium prices.

The electrification of road transport according to the “Net Zero Emissions by 2050” Scenario and the proposed stronger emissions standards has increased the demand for electric vehicles and lithium-ion batteries, but producer lower margins and high inflation have not overwhelmingly helped recently with this push.

Automotive lithium-ion (Li-ion) battery demand increased by about 65% to 550 GWh in 2022, from about 330 GWh in 2021, primarily because of growth in electric passenger car sales, while about 60% of lithium demand was for EV batteries vs. around 15% in 2017.

On the supply side, the Lithium market has been becoming oversupplied lately, as more lithium mines and mining exploration projects coming online to meet the projected high demand, with the expectation still is to have a five-fold demand increase by 2030.

Rystad Energy Vice President Susan Zou estimates that total lithium mine supply will increase by 30% and 40% year on year in 2023 and 2024 and that miners will continue to develop both existing and greenfield projects amid a “global push to electrify transportation.”

Lithium prices have been trending in a downward momentum as the weaker-than-expected EV sales growth in China- the world’s largest EV market- due to economic uncertainties, the end of government subsidies, and the higher borrowing costs, have increased the stockpiles of EVs and batteries in the country this year.

In this context, the demand for Lithium from the EV and battery manufacturers has surprisingly decreased as they still have plenty of inventory to draw down and to de-stock.

EV sales growth in China slowed to 37% in Q2, 2023, versus a global average of 50%, according to consultancy Counterpoint Research, deteriorating the demand outlook growth in the country, accelerating a downward pressure on Lithium prices.

The electrification of road transport according to the “Net Zero Emissions by 2050” Scenario and the proposed stronger emissions standards has increased the demand for electric vehicles and lithium-ion batteries, but producer lower margins and high inflation have not overwhelmingly helped recently with this push.

Automotive lithium-ion (Li-ion) battery demand increased by about 65% to 550 GWh in 2022, from about 330 GWh in 2021, primarily because of growth in electric passenger car sales, while about 60% of lithium demand was for EV batteries vs. around 15% in 2017.

On the supply side, the Lithium market has been becoming oversupplied lately, as more lithium mines and mining exploration projects coming online to meet the projected high demand, with the expectation still is to have a five-fold demand increase by 2030.

Rystad Energy Vice President Susan Zou estimates that total lithium mine supply will increase by 30% and 40% year on year in 2023 and 2024 and that miners will continue to develop both existing and greenfield projects amid a “global push to electrify transportation.”

Lithium carbonate, Daily chart

Lithium prices have been trending in a downward momentum as the weaker-than-expected EV sales growth in China- the world’s largest EV market- due to economic uncertainties, the end of government subsidies, and the higher borrowing costs, have increased the stockpiles of EVs and batteries in the country this year.

In this context, the demand for Lithium from the EV and battery manufacturers has surprisingly decreased as they still have plenty of inventory to draw down and to de-stock.

EV sales growth in China slowed to 37% in Q2, 2023, versus a global average of 50%, according to consultancy Counterpoint Research, deteriorating the demand outlook growth in the country, accelerating a downward pressure on Lithium prices.

The electrification of road transport according to the “Net Zero Emissions by 2050” Scenario and the proposed stronger emissions standards has increased the demand for electric vehicles and lithium-ion batteries, but producer lower margins and high inflation have not overwhelmingly helped recently with this push.

Automotive lithium-ion (Li-ion) battery demand increased by about 65% to 550 GWh in 2022, from about 330 GWh in 2021, primarily because of growth in electric passenger car sales, while about 60% of lithium demand was for EV batteries vs. around 15% in 2017.

On the supply side, the Lithium market has been becoming oversupplied lately, as more lithium mines and mining exploration projects coming online to meet the projected high demand, with the expectation still is to have a five-fold demand increase by 2030.

Rystad Energy Vice President Susan Zou estimates that total lithium mine supply will increase by 30% and 40% year on year in 2023 and 2024 and that miners will continue to develop both existing and greenfield projects amid a “global push to electrify transportation.”

Lithium carbonate, Daily chart

Lithium prices have been trending in a downward momentum as the weaker-than-expected EV sales growth in China- the world’s largest EV market- due to economic uncertainties, the end of government subsidies, and the higher borrowing costs, have increased the stockpiles of EVs and batteries in the country this year.

In this context, the demand for Lithium from the EV and battery manufacturers has surprisingly decreased as they still have plenty of inventory to draw down and to de-stock.

EV sales growth in China slowed to 37% in Q2, 2023, versus a global average of 50%, according to consultancy Counterpoint Research, deteriorating the demand outlook growth in the country, accelerating a downward pressure on Lithium prices.

The electrification of road transport according to the “Net Zero Emissions by 2050” Scenario and the proposed stronger emissions standards has increased the demand for electric vehicles and lithium-ion batteries, but producer lower margins and high inflation have not overwhelmingly helped recently with this push.

Automotive lithium-ion (Li-ion) battery demand increased by about 65% to 550 GWh in 2022, from about 330 GWh in 2021, primarily because of growth in electric passenger car sales, while about 60% of lithium demand was for EV batteries vs. around 15% in 2017.

On the supply side, the Lithium market has been becoming oversupplied lately, as more lithium mines and mining exploration projects coming online to meet the projected high demand, with the expectation still is to have a five-fold demand increase by 2030.

Rystad Energy Vice President Susan Zou estimates that total lithium mine supply will increase by 30% and 40% year on year in 2023 and 2024 and that miners will continue to develop both existing and greenfield projects amid a “global push to electrify transportation.”

Lithium carbonate, Daily chart

Lithium prices have been trending in a downward momentum as the weaker-than-expected EV sales growth in China- the world’s largest EV market- due to economic uncertainties, the end of government subsidies, and the higher borrowing costs, have increased the stockpiles of EVs and batteries in the country this year.

In this context, the demand for Lithium from the EV and battery manufacturers has surprisingly decreased as they still have plenty of inventory to draw down and to de-stock.

EV sales growth in China slowed to 37% in Q2, 2023, versus a global average of 50%, according to consultancy Counterpoint Research, deteriorating the demand outlook growth in the country, accelerating a downward pressure on Lithium prices.

The electrification of road transport according to the “Net Zero Emissions by 2050” Scenario and the proposed stronger emissions standards has increased the demand for electric vehicles and lithium-ion batteries, but producer lower margins and high inflation have not overwhelmingly helped recently with this push.

Automotive lithium-ion (Li-ion) battery demand increased by about 65% to 550 GWh in 2022, from about 330 GWh in 2021, primarily because of growth in electric passenger car sales, while about 60% of lithium demand was for EV batteries vs. around 15% in 2017.

On the supply side, the Lithium market has been becoming oversupplied lately, as more lithium mines and mining exploration projects coming online to meet the projected high demand, with the expectation still is to have a five-fold demand increase by 2030.

Rystad Energy Vice President Susan Zou estimates that total lithium mine supply will increase by 30% and 40% year on year in 2023 and 2024 and that miners will continue to develop both existing and greenfield projects amid a “global push to electrify transportation.”

According to the BNN Bloomberg, the price of lithium carbonate in China fell to 166,500 yuan ($22,814) a ton last Wednesday, posting a loss of almost 50% from the recent peak in early June, and a loss of 70% from its record-high of 598,000 yuan a ton last in November 2022. https://t.ly/ukb4n.

Lithium carbonate, Daily chart

Lithium prices have been trending in a downward momentum as the weaker-than-expected EV sales growth in China- the world’s largest EV market- due to economic uncertainties, the end of government subsidies, and the higher borrowing costs, have increased the stockpiles of EVs and batteries in the country this year.

In this context, the demand for Lithium from the EV and battery manufacturers has surprisingly decreased as they still have plenty of inventory to draw down and to de-stock.

EV sales growth in China slowed to 37% in Q2, 2023, versus a global average of 50%, according to consultancy Counterpoint Research, deteriorating the demand outlook growth in the country, accelerating a downward pressure on Lithium prices.

The electrification of road transport according to the “Net Zero Emissions by 2050” Scenario and the proposed stronger emissions standards has increased the demand for electric vehicles and lithium-ion batteries, but producer lower margins and high inflation have not overwhelmingly helped recently with this push.

Automotive lithium-ion (Li-ion) battery demand increased by about 65% to 550 GWh in 2022, from about 330 GWh in 2021, primarily because of growth in electric passenger car sales, while about 60% of lithium demand was for EV batteries vs. around 15% in 2017.

On the supply side, the Lithium market has been becoming oversupplied lately, as more lithium mines and mining exploration projects coming online to meet the projected high demand, with the expectation still is to have a five-fold demand increase by 2030.

Rystad Energy Vice President Susan Zou estimates that total lithium mine supply will increase by 30% and 40% year on year in 2023 and 2024 and that miners will continue to develop both existing and greenfield projects amid a “global push to electrify transportation.”

According to the BNN Bloomberg, the price of lithium carbonate in China fell to 166,500 yuan ($22,814) a ton last Wednesday, posting a loss of almost 50% from the recent peak in early June, and a loss of 70% from its record-high of 598,000 yuan a ton last in November 2022. https://t.ly/ukb4n.

Lithium carbonate, Daily chart

Lithium prices have been trending in a downward momentum as the weaker-than-expected EV sales growth in China- the world’s largest EV market- due to economic uncertainties, the end of government subsidies, and the higher borrowing costs, have increased the stockpiles of EVs and batteries in the country this year.

In this context, the demand for Lithium from the EV and battery manufacturers has surprisingly decreased as they still have plenty of inventory to draw down and to de-stock.

EV sales growth in China slowed to 37% in Q2, 2023, versus a global average of 50%, according to consultancy Counterpoint Research, deteriorating the demand outlook growth in the country, accelerating a downward pressure on Lithium prices.

The electrification of road transport according to the “Net Zero Emissions by 2050” Scenario and the proposed stronger emissions standards has increased the demand for electric vehicles and lithium-ion batteries, but producer lower margins and high inflation have not overwhelmingly helped recently with this push.

Automotive lithium-ion (Li-ion) battery demand increased by about 65% to 550 GWh in 2022, from about 330 GWh in 2021, primarily because of growth in electric passenger car sales, while about 60% of lithium demand was for EV batteries vs. around 15% in 2017.

On the supply side, the Lithium market has been becoming oversupplied lately, as more lithium mines and mining exploration projects coming online to meet the projected high demand, with the expectation still is to have a five-fold demand increase by 2030.

Rystad Energy Vice President Susan Zou estimates that total lithium mine supply will increase by 30% and 40% year on year in 2023 and 2024 and that miners will continue to develop both existing and greenfield projects amid a “global push to electrify transportation.”

The price of Lithium- a key ingredient in electric vehicle batteries- hit a fresh two-year low last week on growing concerns about the weaker demand outlook from China, and the global EV industry, together with the oversupplied conditions and the surging stockpiles.

According to the BNN Bloomberg, the price of lithium carbonate in China fell to 166,500 yuan ($22,814) a ton last Wednesday, posting a loss of almost 50% from the recent peak in early June, and a loss of 70% from its record-high of 598,000 yuan a ton last in November 2022. https://t.ly/ukb4n.

Lithium carbonate, Daily chart

Lithium prices have been trending in a downward momentum as the weaker-than-expected EV sales growth in China- the world’s largest EV market- due to economic uncertainties, the end of government subsidies, and the higher borrowing costs, have increased the stockpiles of EVs and batteries in the country this year.

In this context, the demand for Lithium from the EV and battery manufacturers has surprisingly decreased as they still have plenty of inventory to draw down and to de-stock.

EV sales growth in China slowed to 37% in Q2, 2023, versus a global average of 50%, according to consultancy Counterpoint Research, deteriorating the demand outlook growth in the country, accelerating a downward pressure on Lithium prices.

The electrification of road transport according to the “Net Zero Emissions by 2050” Scenario and the proposed stronger emissions standards has increased the demand for electric vehicles and lithium-ion batteries, but producer lower margins and high inflation have not overwhelmingly helped recently with this push.

Automotive lithium-ion (Li-ion) battery demand increased by about 65% to 550 GWh in 2022, from about 330 GWh in 2021, primarily because of growth in electric passenger car sales, while about 60% of lithium demand was for EV batteries vs. around 15% in 2017.

On the supply side, the Lithium market has been becoming oversupplied lately, as more lithium mines and mining exploration projects coming online to meet the projected high demand, with the expectation still is to have a five-fold demand increase by 2030.

Rystad Energy Vice President Susan Zou estimates that total lithium mine supply will increase by 30% and 40% year on year in 2023 and 2024 and that miners will continue to develop both existing and greenfield projects amid a “global push to electrify transportation.”

The price of Lithium- a key ingredient in electric vehicle batteries- hit a fresh two-year low last week on growing concerns about the weaker demand outlook from China, and the global EV industry, together with the oversupplied conditions and the surging stockpiles.

According to the BNN Bloomberg, the price of lithium carbonate in China fell to 166,500 yuan ($22,814) a ton last Wednesday, posting a loss of almost 50% from the recent peak in early June, and a loss of 70% from its record-high of 598,000 yuan a ton last in November 2022. https://t.ly/ukb4n.

Lithium carbonate, Daily chart

Lithium prices have been trending in a downward momentum as the weaker-than-expected EV sales growth in China- the world’s largest EV market- due to economic uncertainties, the end of government subsidies, and the higher borrowing costs, have increased the stockpiles of EVs and batteries in the country this year.

In this context, the demand for Lithium from the EV and battery manufacturers has surprisingly decreased as they still have plenty of inventory to draw down and to de-stock.

EV sales growth in China slowed to 37% in Q2, 2023, versus a global average of 50%, according to consultancy Counterpoint Research, deteriorating the demand outlook growth in the country, accelerating a downward pressure on Lithium prices.

The electrification of road transport according to the “Net Zero Emissions by 2050” Scenario and the proposed stronger emissions standards has increased the demand for electric vehicles and lithium-ion batteries, but producer lower margins and high inflation have not overwhelmingly helped recently with this push.

Automotive lithium-ion (Li-ion) battery demand increased by about 65% to 550 GWh in 2022, from about 330 GWh in 2021, primarily because of growth in electric passenger car sales, while about 60% of lithium demand was for EV batteries vs. around 15% in 2017.

On the supply side, the Lithium market has been becoming oversupplied lately, as more lithium mines and mining exploration projects coming online to meet the projected high demand, with the expectation still is to have a five-fold demand increase by 2030.

Rystad Energy Vice President Susan Zou estimates that total lithium mine supply will increase by 30% and 40% year on year in 2023 and 2024 and that miners will continue to develop both existing and greenfield projects amid a “global push to electrify transportation.”

Gold fell to a 6-month low of $1,875/oz on a stronger dollar and yields

Posted on by Vrasidas Neofytou

This is a classic example in the market of how the future trajectory of gold and other bullion prices is largely dependent on the behavior of the U.S. dollar and the bond yields, i.e. the inverse correlation between the dollar-denominated bullion and the U.S. dollar over the last years.

Federal Reserve had raised interest rates 11 times between February 2022 and July 2023 to 5.50%, adding a total of 5.25 percentage points to a prior base rate of just 0.25%, boosting the dollar against gold and bullion.

This is a classic example in the market of how the future trajectory of gold and other bullion prices is largely dependent on the behavior of the U.S. dollar and the bond yields, i.e. the inverse correlation between the dollar-denominated bullion and the U.S. dollar over the last years.

The Fed’s renewed hawkish stance together with the rising bond yields and the resilient U.S. economy have pushed the greenback to levels it hasn’t seen since last March against major peers, making dollar-denominated gold and silver more expensive for buyers with foreign currency.

Federal Reserve had raised interest rates 11 times between February 2022 and July 2023 to 5.50%, adding a total of 5.25 percentage points to a prior base rate of just 0.25%, boosting the dollar against gold and bullion.

This is a classic example in the market of how the future trajectory of gold and other bullion prices is largely dependent on the behavior of the U.S. dollar and the bond yields, i.e. the inverse correlation between the dollar-denominated bullion and the U.S. dollar over the last years.

The Fed’s renewed hawkish stance together with the rising bond yields and the resilient U.S. economy have pushed the greenback to levels it hasn’t seen since last March against major peers, making dollar-denominated gold and silver more expensive for buyers with foreign currency.

Federal Reserve had raised interest rates 11 times between February 2022 and July 2023 to 5.50%, adding a total of 5.25 percentage points to a prior base rate of just 0.25%, boosting the dollar against gold and bullion.

This is a classic example in the market of how the future trajectory of gold and other bullion prices is largely dependent on the behavior of the U.S. dollar and the bond yields, i.e. the inverse correlation between the dollar-denominated bullion and the U.S. dollar over the last years.

The recent jump of the crude oil prices to over $97/b due to strong demand and after the OPEC+ supply cuts have increased the worries that the inflation rate would resume its rally, driving central banks and especially the Federal Reserve to maintain their interest rates higher for longer to curb inflation.

The Fed’s renewed hawkish stance together with the rising bond yields and the resilient U.S. economy have pushed the greenback to levels it hasn’t seen since last March against major peers, making dollar-denominated gold and silver more expensive for buyers with foreign currency.

Federal Reserve had raised interest rates 11 times between February 2022 and July 2023 to 5.50%, adding a total of 5.25 percentage points to a prior base rate of just 0.25%, boosting the dollar against gold and bullion.

This is a classic example in the market of how the future trajectory of gold and other bullion prices is largely dependent on the behavior of the U.S. dollar and the bond yields, i.e. the inverse correlation between the dollar-denominated bullion and the U.S. dollar over the last years.

The recent jump of the crude oil prices to over $97/b due to strong demand and after the OPEC+ supply cuts have increased the worries that the inflation rate would resume its rally, driving central banks and especially the Federal Reserve to maintain their interest rates higher for longer to curb inflation.

The Fed’s renewed hawkish stance together with the rising bond yields and the resilient U.S. economy have pushed the greenback to levels it hasn’t seen since last March against major peers, making dollar-denominated gold and silver more expensive for buyers with foreign currency.

Federal Reserve had raised interest rates 11 times between February 2022 and July 2023 to 5.50%, adding a total of 5.25 percentage points to a prior base rate of just 0.25%, boosting the dollar against gold and bullion.

This is a classic example in the market of how the future trajectory of gold and other bullion prices is largely dependent on the behavior of the U.S. dollar and the bond yields, i.e. the inverse correlation between the dollar-denominated bullion and the U.S. dollar over the last years.

Like gold, the price of silver also slid by 1.5% to near multi-month lows of $22.50/oz, retesting for a fourth time this year the key support level of $22/oz, while the prices of Palladium and Platinum fell as low as $1,220/oz and $895/oz respectively.

The recent jump of the crude oil prices to over $97/b due to strong demand and after the OPEC+ supply cuts have increased the worries that the inflation rate would resume its rally, driving central banks and especially the Federal Reserve to maintain their interest rates higher for longer to curb inflation.

The Fed’s renewed hawkish stance together with the rising bond yields and the resilient U.S. economy have pushed the greenback to levels it hasn’t seen since last March against major peers, making dollar-denominated gold and silver more expensive for buyers with foreign currency.

Federal Reserve had raised interest rates 11 times between February 2022 and July 2023 to 5.50%, adding a total of 5.25 percentage points to a prior base rate of just 0.25%, boosting the dollar against gold and bullion.

This is a classic example in the market of how the future trajectory of gold and other bullion prices is largely dependent on the behavior of the U.S. dollar and the bond yields, i.e. the inverse correlation between the dollar-denominated bullion and the U.S. dollar over the last years.

Like gold, the price of silver also slid by 1.5% to near multi-month lows of $22.50/oz, retesting for a fourth time this year the key support level of $22/oz, while the prices of Palladium and Platinum fell as low as $1,220/oz and $895/oz respectively.

The recent jump of the crude oil prices to over $97/b due to strong demand and after the OPEC+ supply cuts have increased the worries that the inflation rate would resume its rally, driving central banks and especially the Federal Reserve to maintain their interest rates higher for longer to curb inflation.

The Fed’s renewed hawkish stance together with the rising bond yields and the resilient U.S. economy have pushed the greenback to levels it hasn’t seen since last March against major peers, making dollar-denominated gold and silver more expensive for buyers with foreign currency.

Federal Reserve had raised interest rates 11 times between February 2022 and July 2023 to 5.50%, adding a total of 5.25 percentage points to a prior base rate of just 0.25%, boosting the dollar against gold and bullion.

This is a classic example in the market of how the future trajectory of gold and other bullion prices is largely dependent on the behavior of the U.S. dollar and the bond yields, i.e. the inverse correlation between the dollar-denominated bullion and the U.S. dollar over the last years.

Gold price, 4-hour chart

Like gold, the price of silver also slid by 1.5% to near multi-month lows of $22.50/oz, retesting for a fourth time this year the key support level of $22/oz, while the prices of Palladium and Platinum fell as low as $1,220/oz and $895/oz respectively.

The recent jump of the crude oil prices to over $97/b due to strong demand and after the OPEC+ supply cuts have increased the worries that the inflation rate would resume its rally, driving central banks and especially the Federal Reserve to maintain their interest rates higher for longer to curb inflation.

The Fed’s renewed hawkish stance together with the rising bond yields and the resilient U.S. economy have pushed the greenback to levels it hasn’t seen since last March against major peers, making dollar-denominated gold and silver more expensive for buyers with foreign currency.

Federal Reserve had raised interest rates 11 times between February 2022 and July 2023 to 5.50%, adding a total of 5.25 percentage points to a prior base rate of just 0.25%, boosting the dollar against gold and bullion.

This is a classic example in the market of how the future trajectory of gold and other bullion prices is largely dependent on the behavior of the U.S. dollar and the bond yields, i.e. the inverse correlation between the dollar-denominated bullion and the U.S. dollar over the last years.

Gold price, 4-hour chart

Like gold, the price of silver also slid by 1.5% to near multi-month lows of $22.50/oz, retesting for a fourth time this year the key support level of $22/oz, while the prices of Palladium and Platinum fell as low as $1,220/oz and $895/oz respectively.

The recent jump of the crude oil prices to over $97/b due to strong demand and after the OPEC+ supply cuts have increased the worries that the inflation rate would resume its rally, driving central banks and especially the Federal Reserve to maintain their interest rates higher for longer to curb inflation.

The Fed’s renewed hawkish stance together with the rising bond yields and the resilient U.S. economy have pushed the greenback to levels it hasn’t seen since last March against major peers, making dollar-denominated gold and silver more expensive for buyers with foreign currency.

Federal Reserve had raised interest rates 11 times between February 2022 and July 2023 to 5.50%, adding a total of 5.25 percentage points to a prior base rate of just 0.25%, boosting the dollar against gold and bullion.

This is a classic example in the market of how the future trajectory of gold and other bullion prices is largely dependent on the behavior of the U.S. dollar and the bond yields, i.e. the inverse correlation between the dollar-denominated bullion and the U.S. dollar over the last years.

Gold price, 4-hour chart

Like gold, the price of silver also slid by 1.5% to near multi-month lows of $22.50/oz, retesting for a fourth time this year the key support level of $22/oz, while the prices of Palladium and Platinum fell as low as $1,220/oz and $895/oz respectively.

The recent jump of the crude oil prices to over $97/b due to strong demand and after the OPEC+ supply cuts have increased the worries that the inflation rate would resume its rally, driving central banks and especially the Federal Reserve to maintain their interest rates higher for longer to curb inflation.

The Fed’s renewed hawkish stance together with the rising bond yields and the resilient U.S. economy have pushed the greenback to levels it hasn’t seen since last March against major peers, making dollar-denominated gold and silver more expensive for buyers with foreign currency.

Federal Reserve had raised interest rates 11 times between February 2022 and July 2023 to 5.50%, adding a total of 5.25 percentage points to a prior base rate of just 0.25%, boosting the dollar against gold and bullion.

This is a classic example in the market of how the future trajectory of gold and other bullion prices is largely dependent on the behavior of the U.S. dollar and the bond yields, i.e. the inverse correlation between the dollar-denominated bullion and the U.S. dollar over the last years.

The non-yielding gold lost the strong support level of $1,900/oz a few days ago, triggering further technical selling and several stop-loss trades among bullion investors, after seeing the yields on both 2-year and 10-year Treasury bills climbing to 16-year highs of 5.15% and 4.65% respectively on hawkish Fed.

Gold price, 4-hour chart

Like gold, the price of silver also slid by 1.5% to near multi-month lows of $22.50/oz, retesting for a fourth time this year the key support level of $22/oz, while the prices of Palladium and Platinum fell as low as $1,220/oz and $895/oz respectively.

The recent jump of the crude oil prices to over $97/b due to strong demand and after the OPEC+ supply cuts have increased the worries that the inflation rate would resume its rally, driving central banks and especially the Federal Reserve to maintain their interest rates higher for longer to curb inflation.

The Fed’s renewed hawkish stance together with the rising bond yields and the resilient U.S. economy have pushed the greenback to levels it hasn’t seen since last March against major peers, making dollar-denominated gold and silver more expensive for buyers with foreign currency.

Federal Reserve had raised interest rates 11 times between February 2022 and July 2023 to 5.50%, adding a total of 5.25 percentage points to a prior base rate of just 0.25%, boosting the dollar against gold and bullion.

This is a classic example in the market of how the future trajectory of gold and other bullion prices is largely dependent on the behavior of the U.S. dollar and the bond yields, i.e. the inverse correlation between the dollar-denominated bullion and the U.S. dollar over the last years.

The non-yielding gold lost the strong support level of $1,900/oz a few days ago, triggering further technical selling and several stop-loss trades among bullion investors, after seeing the yields on both 2-year and 10-year Treasury bills climbing to 16-year highs of 5.15% and 4.65% respectively on hawkish Fed.

Gold price, 4-hour chart

Like gold, the price of silver also slid by 1.5% to near multi-month lows of $22.50/oz, retesting for a fourth time this year the key support level of $22/oz, while the prices of Palladium and Platinum fell as low as $1,220/oz and $895/oz respectively.

The recent jump of the crude oil prices to over $97/b due to strong demand and after the OPEC+ supply cuts have increased the worries that the inflation rate would resume its rally, driving central banks and especially the Federal Reserve to maintain their interest rates higher for longer to curb inflation.

The Fed’s renewed hawkish stance together with the rising bond yields and the resilient U.S. economy have pushed the greenback to levels it hasn’t seen since last March against major peers, making dollar-denominated gold and silver more expensive for buyers with foreign currency.

Federal Reserve had raised interest rates 11 times between February 2022 and July 2023 to 5.50%, adding a total of 5.25 percentage points to a prior base rate of just 0.25%, boosting the dollar against gold and bullion.

This is a classic example in the market of how the future trajectory of gold and other bullion prices is largely dependent on the behavior of the U.S. dollar and the bond yields, i.e. the inverse correlation between the dollar-denominated bullion and the U.S. dollar over the last years.

The price of the yellow metal fell as low as $1,875/oz, or down 1.3% on Thursday morning, posting the lowest level since mid-March 2023 on a surging U.S. dollar and bond yields, reflecting the prospects of higher-for-longer U.S. rates and fewer rate cuts next year.

The non-yielding gold lost the strong support level of $1,900/oz a few days ago, triggering further technical selling and several stop-loss trades among bullion investors, after seeing the yields on both 2-year and 10-year Treasury bills climbing to 16-year highs of 5.15% and 4.65% respectively on hawkish Fed.

Gold price, 4-hour chart

Like gold, the price of silver also slid by 1.5% to near multi-month lows of $22.50/oz, retesting for a fourth time this year the key support level of $22/oz, while the prices of Palladium and Platinum fell as low as $1,220/oz and $895/oz respectively.

The recent jump of the crude oil prices to over $97/b due to strong demand and after the OPEC+ supply cuts have increased the worries that the inflation rate would resume its rally, driving central banks and especially the Federal Reserve to maintain their interest rates higher for longer to curb inflation.

The Fed’s renewed hawkish stance together with the rising bond yields and the resilient U.S. economy have pushed the greenback to levels it hasn’t seen since last March against major peers, making dollar-denominated gold and silver more expensive for buyers with foreign currency.

Federal Reserve had raised interest rates 11 times between February 2022 and July 2023 to 5.50%, adding a total of 5.25 percentage points to a prior base rate of just 0.25%, boosting the dollar against gold and bullion.

This is a classic example in the market of how the future trajectory of gold and other bullion prices is largely dependent on the behavior of the U.S. dollar and the bond yields, i.e. the inverse correlation between the dollar-denominated bullion and the U.S. dollar over the last years.

The price of the yellow metal fell as low as $1,875/oz, or down 1.3% on Thursday morning, posting the lowest level since mid-March 2023 on a surging U.S. dollar and bond yields, reflecting the prospects of higher-for-longer U.S. rates and fewer rate cuts next year.

The non-yielding gold lost the strong support level of $1,900/oz a few days ago, triggering further technical selling and several stop-loss trades among bullion investors, after seeing the yields on both 2-year and 10-year Treasury bills climbing to 16-year highs of 5.15% and 4.65% respectively on hawkish Fed.

Gold price, 4-hour chart

Like gold, the price of silver also slid by 1.5% to near multi-month lows of $22.50/oz, retesting for a fourth time this year the key support level of $22/oz, while the prices of Palladium and Platinum fell as low as $1,220/oz and $895/oz respectively.

The recent jump of the crude oil prices to over $97/b due to strong demand and after the OPEC+ supply cuts have increased the worries that the inflation rate would resume its rally, driving central banks and especially the Federal Reserve to maintain their interest rates higher for longer to curb inflation.

The Fed’s renewed hawkish stance together with the rising bond yields and the resilient U.S. economy have pushed the greenback to levels it hasn’t seen since last March against major peers, making dollar-denominated gold and silver more expensive for buyers with foreign currency.

Federal Reserve had raised interest rates 11 times between February 2022 and July 2023 to 5.50%, adding a total of 5.25 percentage points to a prior base rate of just 0.25%, boosting the dollar against gold and bullion.

This is a classic example in the market of how the future trajectory of gold and other bullion prices is largely dependent on the behavior of the U.S. dollar and the bond yields, i.e. the inverse correlation between the dollar-denominated bullion and the U.S. dollar over the last years.

Pound Sterling hit a fresh 6-month low of $1.2220 on dovish BoE and a worsening outlook

Posted on by Vrasidas Neofytou

On the flip side, the greenback is getting support from the hawkish stance of the Federal Reserve, which has warned investors that it could hike rates further, and likely hold rates higher for longer in 2024.

The BoE-Fed monetary policy divergence has been a negative catalyst for the price of the Sterling to the U.S. dollar. Investors are currently pricing in a 75% probability that the BoE will keep the rate steady in November, while they lowered terminal rate projections to 5.25% from 5.5%.

On the flip side, the greenback is getting support from the hawkish stance of the Federal Reserve, which has warned investors that it could hike rates further, and likely hold rates higher for longer in 2024.

Hence, the worsening UK economic outlook (Manufacturing PMI at 44.2), the loosening labor market, and the falling business sentiment were additional confirmations for the central bankers to hold the rate steady, the BoE’s policy statement showed.

The BoE-Fed monetary policy divergence has been a negative catalyst for the price of the Sterling to the U.S. dollar. Investors are currently pricing in a 75% probability that the BoE will keep the rate steady in November, while they lowered terminal rate projections to 5.25% from 5.5%.

On the flip side, the greenback is getting support from the hawkish stance of the Federal Reserve, which has warned investors that it could hike rates further, and likely hold rates higher for longer in 2024.

Hence, the worsening UK economic outlook (Manufacturing PMI at 44.2), the loosening labor market, and the falling business sentiment were additional confirmations for the central bankers to hold the rate steady, the BoE’s policy statement showed.

The BoE-Fed monetary policy divergence has been a negative catalyst for the price of the Sterling to the U.S. dollar. Investors are currently pricing in a 75% probability that the BoE will keep the rate steady in November, while they lowered terminal rate projections to 5.25% from 5.5%.

On the flip side, the greenback is getting support from the hawkish stance of the Federal Reserve, which has warned investors that it could hike rates further, and likely hold rates higher for longer in 2024.

The British policymakers decided to pause rate hikes last Friday, which was against the market expectation of a 25-bps rate hike, adding pressure to the Sterling, a day after official data showed UK’s CPI inflation rate in August unexpectedly softened to 6.7%, down from 6.8% in July, contrary to expectations of an increase to 7.2%.

Hence, the worsening UK economic outlook (Manufacturing PMI at 44.2), the loosening labor market, and the falling business sentiment were additional confirmations for the central bankers to hold the rate steady, the BoE’s policy statement showed.

The BoE-Fed monetary policy divergence has been a negative catalyst for the price of the Sterling to the U.S. dollar. Investors are currently pricing in a 75% probability that the BoE will keep the rate steady in November, while they lowered terminal rate projections to 5.25% from 5.5%.

On the flip side, the greenback is getting support from the hawkish stance of the Federal Reserve, which has warned investors that it could hike rates further, and likely hold rates higher for longer in 2024.

The British policymakers decided to pause rate hikes last Friday, which was against the market expectation of a 25-bps rate hike, adding pressure to the Sterling, a day after official data showed UK’s CPI inflation rate in August unexpectedly softened to 6.7%, down from 6.8% in July, contrary to expectations of an increase to 7.2%.

Hence, the worsening UK economic outlook (Manufacturing PMI at 44.2), the loosening labor market, and the falling business sentiment were additional confirmations for the central bankers to hold the rate steady, the BoE’s policy statement showed.

The BoE-Fed monetary policy divergence has been a negative catalyst for the price of the Sterling to the U.S. dollar. Investors are currently pricing in a 75% probability that the BoE will keep the rate steady in November, while they lowered terminal rate projections to 5.25% from 5.5%.

On the flip side, the greenback is getting support from the hawkish stance of the Federal Reserve, which has warned investors that it could hike rates further, and likely hold rates higher for longer in 2024.

The struggling GBP/USD pair lost another 1% last week, continuing a bearish trend that began in mid-July (peaked at $1.31), after the Bank of England (BoE) held interest rates at 5.25%, bringing a pause to a series of interest rate hikes that have been in effect since December 2021 to curb surging inflation in the big island.

The British policymakers decided to pause rate hikes last Friday, which was against the market expectation of a 25-bps rate hike, adding pressure to the Sterling, a day after official data showed UK’s CPI inflation rate in August unexpectedly softened to 6.7%, down from 6.8% in July, contrary to expectations of an increase to 7.2%.

Hence, the worsening UK economic outlook (Manufacturing PMI at 44.2), the loosening labor market, and the falling business sentiment were additional confirmations for the central bankers to hold the rate steady, the BoE’s policy statement showed.

The BoE-Fed monetary policy divergence has been a negative catalyst for the price of the Sterling to the U.S. dollar. Investors are currently pricing in a 75% probability that the BoE will keep the rate steady in November, while they lowered terminal rate projections to 5.25% from 5.5%.

On the flip side, the greenback is getting support from the hawkish stance of the Federal Reserve, which has warned investors that it could hike rates further, and likely hold rates higher for longer in 2024.

The struggling GBP/USD pair lost another 1% last week, continuing a bearish trend that began in mid-July (peaked at $1.31), after the Bank of England (BoE) held interest rates at 5.25%, bringing a pause to a series of interest rate hikes that have been in effect since December 2021 to curb surging inflation in the big island.

The British policymakers decided to pause rate hikes last Friday, which was against the market expectation of a 25-bps rate hike, adding pressure to the Sterling, a day after official data showed UK’s CPI inflation rate in August unexpectedly softened to 6.7%, down from 6.8% in July, contrary to expectations of an increase to 7.2%.

Hence, the worsening UK economic outlook (Manufacturing PMI at 44.2), the loosening labor market, and the falling business sentiment were additional confirmations for the central bankers to hold the rate steady, the BoE’s policy statement showed.

The BoE-Fed monetary policy divergence has been a negative catalyst for the price of the Sterling to the U.S. dollar. Investors are currently pricing in a 75% probability that the BoE will keep the rate steady in November, while they lowered terminal rate projections to 5.25% from 5.5%.

On the flip side, the greenback is getting support from the hawkish stance of the Federal Reserve, which has warned investors that it could hike rates further, and likely hold rates higher for longer in 2024.

GBP/USD pair, Daily chart

The struggling GBP/USD pair lost another 1% last week, continuing a bearish trend that began in mid-July (peaked at $1.31), after the Bank of England (BoE) held interest rates at 5.25%, bringing a pause to a series of interest rate hikes that have been in effect since December 2021 to curb surging inflation in the big island.

The British policymakers decided to pause rate hikes last Friday, which was against the market expectation of a 25-bps rate hike, adding pressure to the Sterling, a day after official data showed UK’s CPI inflation rate in August unexpectedly softened to 6.7%, down from 6.8% in July, contrary to expectations of an increase to 7.2%.

Hence, the worsening UK economic outlook (Manufacturing PMI at 44.2), the loosening labor market, and the falling business sentiment were additional confirmations for the central bankers to hold the rate steady, the BoE’s policy statement showed.

The BoE-Fed monetary policy divergence has been a negative catalyst for the price of the Sterling to the U.S. dollar. Investors are currently pricing in a 75% probability that the BoE will keep the rate steady in November, while they lowered terminal rate projections to 5.25% from 5.5%.

On the flip side, the greenback is getting support from the hawkish stance of the Federal Reserve, which has warned investors that it could hike rates further, and likely hold rates higher for longer in 2024.

GBP/USD pair, Daily chart

The struggling GBP/USD pair lost another 1% last week, continuing a bearish trend that began in mid-July (peaked at $1.31), after the Bank of England (BoE) held interest rates at 5.25%, bringing a pause to a series of interest rate hikes that have been in effect since December 2021 to curb surging inflation in the big island.

The British policymakers decided to pause rate hikes last Friday, which was against the market expectation of a 25-bps rate hike, adding pressure to the Sterling, a day after official data showed UK’s CPI inflation rate in August unexpectedly softened to 6.7%, down from 6.8% in July, contrary to expectations of an increase to 7.2%.

Hence, the worsening UK economic outlook (Manufacturing PMI at 44.2), the loosening labor market, and the falling business sentiment were additional confirmations for the central bankers to hold the rate steady, the BoE’s policy statement showed.

The BoE-Fed monetary policy divergence has been a negative catalyst for the price of the Sterling to the U.S. dollar. Investors are currently pricing in a 75% probability that the BoE will keep the rate steady in November, while they lowered terminal rate projections to 5.25% from 5.5%.

On the flip side, the greenback is getting support from the hawkish stance of the Federal Reserve, which has warned investors that it could hike rates further, and likely hold rates higher for longer in 2024.

GBP/USD pair, Daily chart

The struggling GBP/USD pair lost another 1% last week, continuing a bearish trend that began in mid-July (peaked at $1.31), after the Bank of England (BoE) held interest rates at 5.25%, bringing a pause to a series of interest rate hikes that have been in effect since December 2021 to curb surging inflation in the big island.

The British policymakers decided to pause rate hikes last Friday, which was against the market expectation of a 25-bps rate hike, adding pressure to the Sterling, a day after official data showed UK’s CPI inflation rate in August unexpectedly softened to 6.7%, down from 6.8% in July, contrary to expectations of an increase to 7.2%.

Hence, the worsening UK economic outlook (Manufacturing PMI at 44.2), the loosening labor market, and the falling business sentiment were additional confirmations for the central bankers to hold the rate steady, the BoE’s policy statement showed.

The BoE-Fed monetary policy divergence has been a negative catalyst for the price of the Sterling to the U.S. dollar. Investors are currently pricing in a 75% probability that the BoE will keep the rate steady in November, while they lowered terminal rate projections to 5.25% from 5.5%.

On the flip side, the greenback is getting support from the hawkish stance of the Federal Reserve, which has warned investors that it could hike rates further, and likely hold rates higher for longer in 2024.

The Pound Sterling hit a fresh six-month low of $1.2220 per dollar on Monday morning, heading for a more than 3% decline in September so far, its worst monthly performance this year, on the back of the Bank of England’s pause on its rate-hike cycle.

GBP/USD pair, Daily chart

The struggling GBP/USD pair lost another 1% last week, continuing a bearish trend that began in mid-July (peaked at $1.31), after the Bank of England (BoE) held interest rates at 5.25%, bringing a pause to a series of interest rate hikes that have been in effect since December 2021 to curb surging inflation in the big island.

The British policymakers decided to pause rate hikes last Friday, which was against the market expectation of a 25-bps rate hike, adding pressure to the Sterling, a day after official data showed UK’s CPI inflation rate in August unexpectedly softened to 6.7%, down from 6.8% in July, contrary to expectations of an increase to 7.2%.

Hence, the worsening UK economic outlook (Manufacturing PMI at 44.2), the loosening labor market, and the falling business sentiment were additional confirmations for the central bankers to hold the rate steady, the BoE’s policy statement showed.

The BoE-Fed monetary policy divergence has been a negative catalyst for the price of the Sterling to the U.S. dollar. Investors are currently pricing in a 75% probability that the BoE will keep the rate steady in November, while they lowered terminal rate projections to 5.25% from 5.5%.

On the flip side, the greenback is getting support from the hawkish stance of the Federal Reserve, which has warned investors that it could hike rates further, and likely hold rates higher for longer in 2024.

The Pound Sterling hit a fresh six-month low of $1.2220 per dollar on Monday morning, heading for a more than 3% decline in September so far, its worst monthly performance this year, on the back of the Bank of England’s pause on its rate-hike cycle.

GBP/USD pair, Daily chart

The struggling GBP/USD pair lost another 1% last week, continuing a bearish trend that began in mid-July (peaked at $1.31), after the Bank of England (BoE) held interest rates at 5.25%, bringing a pause to a series of interest rate hikes that have been in effect since December 2021 to curb surging inflation in the big island.

The British policymakers decided to pause rate hikes last Friday, which was against the market expectation of a 25-bps rate hike, adding pressure to the Sterling, a day after official data showed UK’s CPI inflation rate in August unexpectedly softened to 6.7%, down from 6.8% in July, contrary to expectations of an increase to 7.2%.

Hence, the worsening UK economic outlook (Manufacturing PMI at 44.2), the loosening labor market, and the falling business sentiment were additional confirmations for the central bankers to hold the rate steady, the BoE’s policy statement showed.

The BoE-Fed monetary policy divergence has been a negative catalyst for the price of the Sterling to the U.S. dollar. Investors are currently pricing in a 75% probability that the BoE will keep the rate steady in November, while they lowered terminal rate projections to 5.25% from 5.5%.

On the flip side, the greenback is getting support from the hawkish stance of the Federal Reserve, which has warned investors that it could hike rates further, and likely hold rates higher for longer in 2024.

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