Several largest American companies will publish their financial results this week. BTCUSD and XAUUSD are skyrocketing. What's going on in the markets?
Inflation Is in Focus Again
Weekends are coming. Let’s check the most exciting news for today.
The situation in the developed economies
CNBC: the Dow fell more than 300 points, posting its third day of declines amid worries over high rates and the risk of a government shutdown. S&P500 fell by 1.6%, too. The index dropped to 4330 points. This is the support level for the index. If bears succeed in breaking this line - S&P may move to 4200 (200MA). The trend is changing rapidly.
BoJ decided to leave the rate at -0.1%. The bank will purchase the required amount of Japanese government bonds (JGBs) without setting an upper limit to keep the 10-year JGB yield at around zero percent.
The Bank of England decided to leave the rate at 5.25%. The market thought that the BoE would hike the rate to 5.5%. Goldman Sachs expects the Bank of England to keep rates at 5.25% until the third quarter of 2024. Morgan Stanley does not expect raises until the end of the following year.
Russia decided to ban diesel and gasoline exports. BBG says: Russia's decision to ban diesel and gasoline exports risks disrupting fuel supplies ahead of winter, but how deep the impact will depend on how long the restrictions last.
The situation with inflation is risky. Oil prices are getting higher while OPEC+ cuts oil production. The markets should accept that higher rates will remain for a long time. The US dollar may keep rising while the European and American stock markets may reverse and plummet.
Boston Federal Bank ex. Governor Eric Rosengren says: There has been a shift in the Fed's views as... they are now fighting against a much more robust economy. The Fed will raise rates again this year, which will most likely happen in December because... data received by November will not provide grounds for an increase.
XAUUSD bounced from 200MA and tried to break 100MA. There is still a risk of reversal because the price is approaching 100MA in the H1 timeframe, and Stochastic lines are ready to intersect in the overbought zone.
The Australian dollar is strengthening against the US national currency. AUDUSD bounced from 0.63850 and broke two Fibo correction levels – 23.6% and 38.2%. The pair may continue moving to 50%, where the resistance line is (0.64480). If it breaks it – the next target is at 0.64620.
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