Financial Breakfast on June 9: The number of people filing for unemployment benefits in the United States increased more than expected, gold prices climbed, and the market focused on the Fed’s decision
Beijing time on Friday (June 9), the U.S. dollar fell on Thursday after data showed that the number of Americans filing for unemployment benefits rose more than expected last week, although the market generally believes that the U.S. dollar will not be released before the release of key inflation data and the Federal Reserve’s interest rate decision next week. , the dollar consolidated, gold climbed more than 1 percent and oil settled lower, but recovered from earlier losses after both the U.S. and Iran denied reports the two were close to an interim nuclear deal
Commodity closing situation:U.S. gold futures settled up 1 percent at $1,978.60. Brent crude futures settled down 1.3% at $75.96 a barrel, while U.S. crude futures settled down 1.7% at $71.29.
U.S. stocks closed:The Dow Jones index closed up 0.50% at 33833.28 points; the S&P 500 index closed up 0.61% at 4293.50 points; the Nasdaq composite index closed up 1.02% at 13238.52 points.
friday preview
precious metal
Gold climbed more than 1% on Thursday, while the dollar and U.S. Treasury yields fell after data showing a surge in U.S. jobless claims last week cemented expectations that the Federal Reserve will pause its rate hike cycle.
The number of Americans filing new claims for jobless benefits jumped last week, pointing to a slowing labor market amid growing risks of a recession.
Edward Moya, senior market analyst at OANDA, said: “This data shows that the U.S. economy is softening further, which is good news for gold. Send a strong signal that the next meeting will raise interest rates, then gold has a reason to climb.”
The dollar fell 0.7 percent to hit a two-week low after the jobless claims data, with benchmark U.S. 10-year Treasury yields tumbling sharply. Money market participants now see a 71% chance the Fed will skip raising interest rates at its policy meeting next week, according to CME’s Fedwatch tool.
A report on U.S. consumer inflation for May, due on June 13, may give a clearer message on the health of the world‘s largest economy.
Silver jumped 3.4% to $24.24 an ounce, while platinum fell 0.7% to $1,010.93. Palladium slumped 2.7% to $1,351.90, having earlier hit $1,348.74, its lowest since June 2019.
Oil prices ended lower on Thursday, but recovered from earlier losses after both the United States and Iran denied reports that the two countries were close to an interim nuclear deal. Oil prices fell more than $3 at one point on reports that the United States would lift sanctions on Iranian oil exports in exchange for Tehran reducing its uranium enrichment activities.A spokesman for the White House National Security Council said of an article on the Middle East Eye website that “the report is false, misleading and any reports of an interim agreement are false.”
John Kilduff, partner at Again Capital LLC, said: “If there is no deal with Iran, then we will go back to where we were before and focus more on fuel demand.”
Oil prices fell earlier after U.S. gasoline inventories reported a larger-than-expected build on Wednesday, raising concerns about U.S. fuel demand as the peak summer driving season begins.
Oil prices could rise if the Federal Reserve does not raise interest rates at its next meeting on June 13-14, said Tamas Varga of PVM brokerage firm.
foreign exchange
The dollar fell on Thursday after data showed that the number of Americans filing new claims for jobless benefits rose more than expected last week, although the greenback was widely seen as consolidating ahead of key inflation data and the Federal Reserve’s interest rate decision next week.
Initial claims for state unemployment benefits surged to their highest level in a year and a half last week, rising by 28,000 to a seasonally adjusted 261,000. Economists polled by Reuters had forecast 235,000.
“Applications are a little bit higher than expected, but we’re still in a consolidation … now we’re stuck,” said Marc Chandler, chief market strategist at Bannockburn Global Forex.
The dollar was supported by expectations that the Federal Reserve would raise interest rates in July, even though the U.S. central bank is widely expected to pause rate hikes at the end of its June 13-14 meeting. But deteriorating economic data could also limit the number of further rate hikes the Fed can make, even if inflationary pressures remain high.
“The window of opportunity for the Fed to raise rates again is very small, whether it’s June or July, and now the market is leaning towards July … the market doesn’t think it will do more because the economy looks like it’s going to turn around,” Chandler said. weak.”
EUR/USD was last up 0.75% at $1.0779. The euro rose to as high as $1.07870, its highest since May 24, despite data showing the euro zone economy is in a technical recession in the first three months of 2023. USD/JPY fell 0.87% to 138.94.
The U.S. dollar index , which measures the greenback against six major currencies, fell 0.67% to 103.33, with an intraday low of 103.29, the lowest since May 23.
The Canadian dollar edged higher after the Bank of Canada surprised traders on Wednesday by raising interest rates to a 22-year high of 4.75%. USD/CAD was down 0.09% at C$1.3358 late Thursday.
The Australian dollar also rose after the Reserve Bank of Australia raised the cash rate to an 11-year high of 4.1% on Tuesday, and was up 0.91% at $0.6714 late on Thursday.
The ECB is expected to raise rates by 25 basis points when it meets next Thursday, followed by another 25 basis points in July, taking rates to 3.75 percent.
USD/CHF fell 1.20% to 0.899 Swiss franc, the weakest since May 23. SNB President Jordan reiterated his commitment to fighting “stubborn” inflation in his final public appearance before the central bank’s next interest rate decision on Thursday. The dollar fell 1.45% against the Norwegian krone to 10.89 crowns, its weakest since May 22.
market news
Iran, U.S. close to tentative deal on nuclear enrichment, oil exports
According to foreign media reports, two sources said that Iran and the United States are close to reaching an interim agreement to ease some sanctions on Iran in exchange for a reduction in Iran’s uranium enrichment activities. The negotiations took place directly on U.S. soil, according to an Iranian official and a person familiar with the talks, marking a notable development in the diplomatic process. However, they said the United States remained reluctant to rejoin the 2015 nuclear deal. Significant progress has been made in the talks, the sources said, with the two sides agreeing on an interim agreement under the terms of which Iran would commit to halting enrichment of uranium to a purity of 60 percent and above and would continue to cooperate with the International Atomic Energy Agency to monitor and Check out its nuclear program. In exchange, Tehran will be allowed to export up to 1 million barrels of oil per day and access its foreign revenues and other frozen funds.
Deutsche Bank cuts UK growth forecast for 2024
Deutsche Bank senior economist Sanjay Raja and strategist Shreyas Gopal said in a report that the British economy is expected to grow at a slow pace of 0.4% in 2024. The new forecast is well below Deutsche Bank’s previous forecast for growth of 0.8%, as well as the Bank of England’s forecast. Analysts say higher interest rates will weigh on the economy in the coming months. Despite the short-term optimism and the fact that the UK’s domestic economy goes into 2023 stronger than they initially expected, there could be a larger offset.
US scientists confirm El Niño has started
El Niño has officially returned and could cause extreme weather later this year, which could lead to tropical cyclones hitting vulnerable Pacific islands, heavy rainfall in South America and drought in Australia,media reported. After a three-year La Niña climate pattern ended, El Niño is back in play, according to a report released today by the National Oceanic and Atmospheric Administration’s Prediction Center (NOAA). “In May, a weak El Niño was observed as sea surface temperatures in the equatorial Pacific moved further above average sea surface temperatures,” the report said. The last El Niño event was in 2016, when the world experienced its hottest year on record . Combined with warming from climate change, global temperatures could reach new highs by 2023 or 2024.
U.S. initial data may weigh on U.S. bond yields and support the view of a pause in interest rate hikes
Last week, U.S. initial jobless claims climbed 28,000 to 261,000, and U.S. Treasury yields plummeted. The yield on the 10-year U.S. Treasury note fell to 3.781% from 3.816% at one point, while the yield on the two-year Treasury note fell to 4.496% from 4.555% at one point. Markets had been ruling out a policy shift by the Fed as data continued to show strength in U.S. employment and economic activity. Today’s labor data, however, appeared to show some cracks in the labor market, which could support the Fed’s pause in raising interest rates next week.
Russia plans to increase oil pipeline capacity by 32 million tons by 2026
Russian Deputy Prime Minister Novak wrote in a column of the Ministry of Energy’s “Energy Policy” magazine that Russia plans to increase the capacity of oil pipelines by 32 million tons by 2026. To this end, Russia will build 600 kilometers of pipelines. In December, Russia approved a plan to develop Russia’s crude oil export infrastructure by 2026. Last year, Russian oil transportation company Transneft has increased the oil loading capacity of the Pacific Kozmino Port to 42 million tons to increase crude oil supply to countries in the Asia-Pacific region.
Continued wildfires in Canada have caused serious pollution in many places in the United States, New York’s air quality is the worst in decades
Parts of the U.S. East Coast and Midwest have suffered from severe air pollution due to the ongoing wildfires in Canada. On the 7th, the air quality in many places in New York once reached the worst situation since the 1960s, forcing the New York authorities to issue an air quality alert. New York City Mayor Adams held a press conference that day, urging people to stay indoors as much as possible. It is also recommended that the elderly and residents with heart and respiratory problems wear masks when going out. New York City officials said this may be the first time in decades that the city has advised residents to wear masks outdoors due to air quality concerns.