Mohicans markets：Risk Aversion Boosted Dollar Draft of Iran Nuclear Deal Released

Financial Events Today

On Monday, August 15, spot gold fell sharply since the Asian session, falling below the $1,800 mark and once fell nearly $30, and finally closed down 1.25% at $1,779.87 per ounce; spot silver fell with gold, closing down 2.65 %, at $20.27 an ounce.

The U.S. dollar index rose sharply, stood above 106 again, and finally closed up 0.77% at 106.49; the 10-year U.S. bond yield expanded its decline during the U.S. session and fell 2.8%, finally closing at 2.793%. In terms of crude oil, crude oil dived in the European session last night. WTI crude oil fell to the US$90 mark, and once fell more than 5% in the session. In the US session, some lost ground was recovered, and finally closed down 4.37% at US$87.85 per barrel. Brent crude oil It finally closed down 4.36% at $93.57 a barrel. U.S. stocks opened lower and moved higher. The Dow closed up 0.45%, the S&P 500 rose 0.4%, and the Nasdaq rose 0.62%. The monkeypox concept stocks and new energy vehicle sectors were among the top gainers, while oil and gas and precious metals sectors generally fell. Disney closed up 2.24%, achieving a four-day winning streak. European stocks generally closed up. Germany's DAX30 index closed up 0.15% at 13,816.61 points; the UK's FTSE 100 index closed up 0.11% at 7,509.15 points; the European Stoxx 50 index rose 0.34% to 3,789.62 points. In terms of cryptocurrencies, Bitcoin fluctuated around $24,000, and Ethereum fluctuated around $1,900.

Precious Metal

In the early trading hours of Tuesday, August 16, in the early Asian market, spot gold was hovering below the 1780 mark, and it was currently trading around $1777.35 per ounce. The US dollar index rose sharply overnight, hitting a new high in a week. Falling to the vicinity of the 1770 mark, the daily K-line chart shows a “bearish engulfing” top signal at a relatively high level, and investors need to beware of further downside risks in gold prices.

On this trading day, we need to pay attention to the initial value of the annualized total number of construction permits in the United States in July, the annualized total number of new housing starts in the United States in July, and the monthly rate of industrial output in the United States in July.

Fundamentals are mostly bullish

[U.S. home builder confidence and New York state manufacturing activity plummet, economy slows further amid rate hikes]

[U.S. Treasury yields fall]

[TD Securities: If the global economic momentum picks up, the strength of the dollar will face challenges]

[Ukraine calls for new sanctions against Russia after shelling near Zaporozhye nuclear power plant]

Fundamentals are bearish

[The dollar index rose sharply on Monday]

[U.S. stocks extend recent gains, S&P 500 hits another three-month high]

[Iran officially responds to the text of the nuclear deal proposed by the EU, and the Iran nuclear deal may be reached]

On the whole, worries about the global economic recession have increased, and at the same time, the safe-haven demand for the US dollar has rebounded sharply, which has significantly suppressed the price of gold. It may further test the support near the 1750 mark in the middle rail of the Bollinger Bands. However, the geopolitical situation is still tense, and it is still necessary to pay attention to the support of safe-haven buying and bargain-hunting buying, and pay close attention to the changes in the market's expectations for the Fed to raise interest rates.

Crude

In early trading on Tuesday, August 16, U.S. oil was now at $88.39/barrel. Oil prices fell more than 4% on Monday, hitting a new low of $86.81/barrel for more than half a year, affected by concerns about a global economic recession, which will reduce fuel demand. In addition, Iran officially responded to the text of the nuclear agreement proposed by the European Union, and the Iran nuclear agreement may be reached, and the return of Iranian crude oil to the market is expected to affect.

During the day, we will focus on the initial monthly rate of construction permits in the United States in July and the monthly rate of industrial output in the United States in July.

Bullish factors affecting oil prices

[Ukraine calls for new sanctions on Russia] 

[Saudi oil giant's second-quarter profit increased by 90% year-on-year] 

[Growth stock giant boosts U.S. stocks higher]

Bearish factors affecting oil prices

[Iran officially responded to the text of the nuclear agreement proposed by the EU, and the Iran nuclear agreement may be reached] 

[From September 1, the Russian oil export tax will be reduced by 1 USD to 52 USD per ton]

[Germany applies to EU for VAT exemption on gas surcharge]

[U.S. home builder confidence and New York state manufacturing activity plummet] 

[South Africa confirms fourth monkeypox case]

Foreign Exchange

In early trading on Tuesday, August 16, the dollar was trading around 106.47. The safe-haven dollar rebounded on Monday, while commodity-sensitive currencies including the Australian dollar fell after a wave of disappointing economic data from Asia fueled fears of a global recession.

The U.S. dollar index has retreated from a 20-year high of 109.30 hit on July 14 on expectations that the Federal Reserve will slow its aggressive pace of interest rate hikes and that the worst of rising inflation may be over. The U.S. dollar index closed up 0.77% at 106.50 on Monday. Data on Monday showed U.S. single-family home builder confidence and New York state manufacturing activity fell in August to near their lowest levels since the start of the pandemic, further reflecting the lack of interest rate hikes by the Federal Reserve. The euro closed down 0.96% against the dollar on Monday at 1.0158 Euro zone economic risks clouded the outlook for the euro. Economic risks in the euro zone clouded the outlook for the euro. NZD/USD closed down 1.38% at 0.6363 on Monday. At 10:00 on August 17, Beijing time, the New Zealand Federation will announce the interest rate decision and monetary policy statement. The market's interest rate hike expectations from the New Zealand Federal Reserve helped the New Zealand dollar to stop falling. The British economy is struggling under the weight of soaring gas bills and rising interest rates, weighing on the pound. GBP/USD closed down 0.67% at 1.2053 on Monday. The Bank of England had previously predicted that the British economy would enter a recession in the fourth quarter, and the CPI would exceed 13% during the same period. The outlook for the UK economy looks dire, with households about to be hit by a sharp rise in energy prices.

International News

1. Iran said in the early hours of this morning Beijing time that it has issued an official response to the draft text of the nuclear agreement proposed by the European Union.

2. The U.S. New York Fed manufacturing index released last night recorded -31.3, the lowest since May 2020, the expected value was 5.5, and the previous value was 11.1, the second largest decline on record. Financial blog Zero Hedge commented that the data strongly suggest a hard landing recession is inevitable. In addition, the NAHB housing market index in the United States fell by 6 points in August, the largest decline since the collapse of the US housing market in 2007, and the eighth consecutive month of decline.

3. US President Biden plans to sign the 2022 Inflation Reduction Act on August 16.

4. Russia's Kommersant Daily said that Russia's average daily oil production in August fell by 3% month-on-month. It is reported that Russia will lower its oil export tax to $52/ton from September 1.

5. According to the Syrian News Agency, on the 15th local time, the United States illegally stationed 100 oil tankers in Syria, full of oil resources stolen from northeastern Syria, and transported them to the US military base in Iraq in batches through the illegal crossing point of Mahamodi. . This month, the United States has stolen and transported Syrian oil resources at least five times, and the Syrian government has repeatedly condemned the United States.

6.On the 15th, it was reported that Kazakhstan plans to transport 1.5 million tons of oil through the “Baku-Tbilisi-Ceyhan” pipeline this autumn. The Kazakh energy minister denied the news and said the quantity of 1.5 million tons of oil The idea of being able to help Kazakhstan with export routes is absurd.

7.European natural gas prices exceeded $2,400 per thousand cubic meters for the first time since March.

8. Germany plans to impose a surcharge on all gas users, which will take effect from October 1 and last until April 2024.

9. US polls: Biden and Trump have minority support from voters in both parties.

Institutional Currency View

1. Financial website Fxstreet: USD/JPY is still limited below 133.50, a bear market cross is underway

① Financial website Fxstreet analyst Dhwani Mehta pointed out that the US dollar against the yen has suspended its two-day recovery momentum and is in a state of late-moving in Asian trading. The sluggish trade in U.S. Treasury yields did not give bulls much momentum. Also, earlier in the day, the yen gained bids, hitting an intraday high against the dollar, despite Japans second-quarter GDP growth of 0.5% q/q, which was below expectations of 0.6%.

②The US-Japan bulls need to be recognized above 133.89 to prolong the recovery. The pair's next key resistance is at 135.00, which is the confluence of the round-figure mark and the bearish 21-day moving average.

2. TD Securities: If global economic momentum picks up, the strength of the dollar will face challenges

①Mark McCormick and Ray Ng, foreign exchange strategists at TD Securities, said that the recovery of global economic momentum will hit the dollar's performance hard. “A key factor in the aggressive bearishness of the dollar is the pickup in global growth momentum,” they noted after analysing surprises and trends in global data.

② “It turns out that surprises and data that are both 'positive' will make the dollar the worst performer.” Rising price pressures and tightening financial conditions are strengthening the dollar, making the overall environment supportive of the greenback. Even so, global data surprise indicators have continued to improve over the past few weeks and could soon turn positive. Combined with inflation peaking and the Feds terminal rate, this could change FX market dynamics and drivers again in the fourth quarter. In short First, don't get too complacent.

3. HSBC: The Bank of England is expected to cut interest rates in the second half of 2023, and premature easing may lead to another interest rate hike

① The Bank of England is expected to cut interest rates in the second half of 2023, but if it eases policy prematurely, it may need to raise interest rates again eventually. HSBC economists said in a research note that if the Bank of England cuts rates before inflationary pressures dissipate, it could “reignite the fire” and force the central bank to change its approach. Inflation is likely to remain elevated for a longer period of time, and Brexit is also one of the factors that will sustain inflation, in addition to the policy stance of Truss, the favourite to become UK prime minister.

②Brexit pushes up input costs for companies, restricts immigration to the UK and reduces labor supply.

4. Morgan Stanley: Euro zone economy will slip into recession in Q4

① Morgan Stanley chief global economist Carpenter said that the euro zone economy is bound to fall into recession. By the end of the year, the euro area economy is expected to grow weakly. The euro area economy is expected to experience a recession in the fourth quarter of this year.

② Moreover, with the ECBs almost single-minded focus on inflation, the ECB may not stop raising interest rates until there is solid data showing that the economy is contracting or inflation is normalizing. This means that the economic headwinds of high inflation and tight liquidity will not dissipate in the euro area anytime soon.

Statement | Disclaimer

Disclaimer: The information contained in this material is for general advice only. It does not take into account your investment goals, financial situation or special needs. Mohicans Markets has made every effort to ensure the accuracy of the information as of the date of publication. Mohicans Markets makes no warranties or representations regarding this material. The examples in this material are for illustration only. To the extent permitted by law, Mohicans Markets and its employees shall not be liable for any loss or damage arising in any way, including negligence, from any information provided or omitted from this material.The features of Mohicans Markets products, including applicable fees and charges, are outlined in the product disclosure statements available on the Mohicans Markets website and should be considered before deciding to deal with these products. Derivatives can be risky and losses can exceed your initial payment. Mohicans Markets recommends that you seek independent advice.

Mohicans Markets, (Abbreviation: MHMarkets or MHM, Chinese name: Mai hui), Australian Financial Services License No. 001296777.