News of global financial markets 6/9/2022

 




Urgent: Markets are shaking.. the dollar and bonds are exploding up, and stocks and gold are falling


After the US market holiday on Monday on the occasion of Labor Day, and the relative calm that dominated the markets, many indicators and economic data were released that re-ignited the markets.

The Markit Composite Purchasing Managers' Index (August) was released a while ago, which came below expectations to record 44.6 points, against expectations of 45 points, and against an actual reading of 47.7 points in the previous month.

On the other hand, the Services PMI (August) was released, which came below expectations to record 43.7 points, against expectations of 44.3 points, and against the previous reading of 47.3 points.

The non-manufacturing PMI data released by the Institute of Supply Management (ISM) (August) revealed results that are higher than expectations, as it scored 56.9 points, compared to expectations of 55.1 points, while the previous reading came at 56.7 points.

While the index of employment in the non-manufacturing sector issued by the Institute of Supply Management (ISM) (August) rose to 50.2 points compared to the previous reading of 49.1 points.

dollar now


The US dollar index rose against a basket of major currencies during these moments of trading today, Tuesday, by more than 0.65%, reaching levels of 110.3, which is the highest level for the dollar in more than 20 years.

On the other hand, from the rise in the dollar index, the euro fell strongly to its lowest level in more than 20 years, moving away from a new step away from the parity price by 0.6% to reach levels of $0.987, which holds about 57.6% of the relative weight of the dollar index.

While the yen rose strongly by 1.6%, while the sterling fell 0.2%, and the Australian dollar fell to its lowest level in nearly two and a half years, by 0.9%, at levels of $0.673.

gold now


In contrast to the insane rise of the dollar, the yellow metal gave up its limited gains in early trading today, Tuesday, to fall again due to the strength of the dollar and investors' expectations of the interest decision by the US Federal Reserve.

And XAU/USD - the spot contracts for gold, US dollars, decreased in the range of 6 dollars per ounce, down to levels near 1,700 dollars per ounce, down by 0.3%.

While the futures contracts for gold fell during these moments of today's trading to levels near 1710 dollars an ounce, down in the vicinity of 10 dollars, down by 0.6%.

Wall Street


On the other hand, the US indices started the week's trading after a holiday on Monday, with collective declines to complete the violent decline that started since Jerome Powell's speech in Jackson Hole.

The Dow Jones Industrial Average fell around 230 points, or 0.7%, to 31,100 points, while the technology stock index fell at a more violent pace, as it lost 135 points, down 1.1%.

On the other hand, the broader Standard & Poor's 500 Index declined by 0.75%, or 30 points, during these moments of trading today, Tuesday, to levels of 3895 points.

Bonds increase pressure


The losses in gold and US stocks deepened on Tuesday, along with the dollar's rally, a strong run for US Treasury yields that surpassed their May 2011 highs in more than 11 years.

The yield on US Treasury bonds rose to 3.35%, an increase of 0.141 points, during these moments of trading on Tuesday, while the yield on two-year treasury bonds jumped to 3.53%, the highest in 15 years.



Urgent: The US dollar is rising, pushing the Federal Reserve... and the rise continues to higher levels
Today the US dollar is hitting new highs, the strongest in 20 years.


At 13:42 GMT, the index recorded 110.220, and the major currencies fell against it, led by the euro , which is facing a strong energy crisis and recession fears. Gold also gave up its morning gains and retreated.

fed

The Fed has not only raised the interest rate by 225 points since March until now, and it is expected to raise it by 75 basis points on September 22, but it has reduced its easing programs that depended on buying Treasuries and mortgage-backed bonds, and to buy these bonds, the Fed was printing dollars strongly. It also financed some central banks around the world that suffered from stifling reserve crises at the beginning of the Corona crisis 2020.
However, with monetary tightening, the supply of US dollars is declining.

When everyone feels pain

The US dollar is the reserve currency on an international level, and most countries issue their debts in the form of bonds and pay the services of these obligations through the hard currency (dollars) they obtain from global trade and exchange movements.
With global debt rising to $300 trillion, global economies slowing, and the United States no longer supporting the US dollar supply, we are witnessing a violent rise in the US Dollar Index .

safe haven

Everyone considers the dollar a safe haven from global turmoil, and while the flow of funds and stock markets decreases, the dollar index is witnessing a strong push from financial institutions and investors, especially in light of the high interest rate, and the withdrawal of investors from emerging risk markets that witnessed a violent exodus of foreign capital, ravaging the reserves From foreign exchange, and in local currencies, which fell to record levels, the decline in the face of the dollar.
And no other safe haven is as sparkling as the dollar, with gold falling since the beginning of the year to today, unable to rise in a higher interest rate environment, and rising US Treasury yields .

Technical Analysis

We see dollar support levels currently at: 109.257, 109.473, 109.606
Resistance: 110,038, 110,171, 110.387

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