Brent: Future is Still Sunny
What happened? Brent returned to the rising channel on Wednesday by gaining 4% during the trading session…
Gold appreciates and looks again at $2000 in a long run
Information is not investment advice
Fibonacci Levels
XAU/USD: Gold facing a further consolidation above 38.2% retracement area. Bulls have returned recently.
Ichimoku Kinko Hyo
USD/JPY: The pair is trading below the cloud. A downward pressure would lead the pair to exit further the cloud, confirming a bearish outlook.
US Market View
U.S. stock futures indicated a flat Wall Street open and world shares slipped on Wednesday after a U.S. inflation leap fuelled expectations of a quicker end to Federal Reserve stimulus, while the dollar held near a three-month high versus the euro. The U.S. consumer price index jumped 0.9% in June, data showed on Tuesday, above market expectations and the largest gain since June 2008. Investors are watching the semi-annual testimony of Fed Chair Jerome Powell to Congress on Wednesday and Thursday for clues on whether the Fed will take more aggressive steps to halt rising inflation.
The U.S. job market "is still a ways off" from the progress the Federal Reserve wants to see before reducing its support for the economy, while current high inflation will ease "in coming months," Fed Chair Jerome Powell said in remarks prepared for delivery at a congressional hearing on Wednesday. "Inflation has increased notably and will likely remain elevated in coming months before moderating," Powell said, restating the U.S. central bank's faith that current price increases, despite the concerns they are raising about unmoored inflation, are tied to the reopening of the economy and will prove fleeting. Meanwhile "there is still a long way to go" in repairing a labor market that is 7.5 million jobs away from its pre-pandemic level, with the burden falling hardest on lower-wage workers and major ethnic and minority groups, and the overall participation rate still depressed, Powell said.
Prices paid to U.S. producers rose in June by more than expected, indicating pressure is mounting on companies to pass along higher costs to consumers. The producer price index for final demand increased 1% from the prior month and 7.3% from June of last year, according to data from the Labor Department on Wednesday. Excluding volatile food and energy components, the so-called core PPI also rose 1%, the most on record, and was up 5.6% from a year ago.
The European Central Bank needs to see higher core inflation before changing its outlook and tightening policy, ECB board member Isabel Schnabel said on Wednesday.
Gold futures on Wednesday were trading higher, with bullion on track for a second straight day of gains, supported partly by softness in the U.S. dollar and a slight pullback in yields for government debt.
Investors in precious metals may be watching for testimony from Federal Reserve Chairman Jerome Powell, who will deliver the first of two days of twice-yearly congressional testimony on the state of the economy in the aftermath of COVID.
USA Key Point
- Fed's Powell: Monetary policy will deliver powerful support until recoveries complete.
- US PPI final demand for June 1.0% vs 0.6% estimate.
- Canada May manufacturing sales -0.6% vs +1.0% expecte
- ECB launches investigation phase of a digital euro projec
- Saudi Arabia, UAE reportedly reach compromise over oil output deal.
- BOE's Cunliffe: It is more difficult to assess inflation outlook in this unprecedented situation.
Gerasimos Papagiannis
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