Industrial Forex: Gold prices hit their lowest level in nearly a month, with European risk-sensitive currencies falling on worsening global outlook

On August 9, the dollar rose across the board on Tuesday, gaining safe-haven buying, European risk-sensitive currencies fell on the worsening global outlook, gold prices fell to their lowest level in nearly a month, investors took refuge in the dollar after weak trade data from Asian giants, and at the same time, caution clouded the market ahead of the release of U.S. inflation data later this week.

Beijing time on Wednesday (August 9), the dollar rose across the board on Tuesday, gaining safe-haven buying, European risk-sensitive currencies fell due to the worsening global outlook, gold prices fell to the lowest in nearly a month, investors in the weak Asian major trade data after the release of safe-haven dollars, while Industrialforeign exchangeInvestors are reminded to be cautious ahead of the release of U.S. inflation data later this week.

Commodity closing situation:U.S. gold futures closed 0.5% lower, settling at $1,959.9 an ounce. Brentcrude oilFutures rose $0.83 to settle at $86.17 a barrelcrude oilFutures rose $0.98 to $82.92.

US stock market closing:The Dow Jones index closed down 0.45% at 35,314.49; the S & P 500 index closed down 0.43% at 4,499.13; and the Nasdaq Composite index closed down 0.79% at 13,884.32.

Wednesday Forward

Precious metal

Gold prices fell to their lowest level in nearly a month on Tuesday as investors piled into the safe-haven dollar on the back of weak trade data from Asian giants, while caution gripped markets ahead of US inflation data later this week.

Edward Moya, senior markets analyst for the Americas at OANDA, said: "People are nervous about the outlook for global economic growth, which may be much weaker than expected, driving inflows into the dollar."

All eyes will be on the U.S. Consumer Price Index (CPI) data released on Thursday. Accept Industrialforeign exchangeEconomists predict that U.S. inflation may pick up slightly in July, with CPI growth expected to be 3.3% year-on-year, and core CPI growth likely to be flat at 4.8% year-on-year.

"The US inflation report is important, but the inflation report we will see next month is even more important, which could suggest we see some volatility in gold in the short term," Moya said.

Federal Reserve Governor Bowman on Monday outlined the reasons why further rate hikes may be needed to drive inflation down to its 2 percent target, while New York Fed President Williams predicted that rates could start falling next year.

The SPDR Gold Trust, the world's largest gold-backed exchange-traded fund (ETF), saw its holdings drop to a five-month low on Monday, reflecting market pessimism about gold.

Silver fell 1.7% to $22.76 an ounce; platinum fell 2% to $901.51 an ounce; and palladium fell 1.5% to $1,220.99 an ounce.

crude oil

Oil prices climbed Tuesday and a U.S. government entity forecast a more optimistic economic outlook, but the Asian powerhousecrude oilPoor import and export data are a drag.

Oil prices turned from lower to higher on Tuesday after the U.S. Energy Information Administration (EIA) released its monthly report projecting GDP growth of 1.9 percent in 2023, up from a previous forecast of 1.5 percent.

EIA also forecasts that in the second half of 2023, Brentcrude oilThe average price is expected to be $86, which is about $7 higher than the previous forecast.

The report also claims that in 2023, the United Statescrude oilProduction is expected to increase by 850,000 barrels per day to a record 12.76 million barrels per day, surpassing the previous record of 12.3 million barrels per day in 2019.

According to the EIA,crude oilPrices have been rising since June, mainly due to Saudi Arabia's extension of voluntary production cuts and growing global demand.

"We expect these factors to continue to reduce global oil inventories and put upward pressure on oil prices in the coming months," the EIA said.

However, data showed that China's oil imports fell 18.8% in July from the previous month, and daily imports were the lowest since January, but still up 17% from the same period last year. This weighed on oil prices.

Leon Li, analyst at CMC Markets, said the peak season for construction and manufacturing activity started in September and petrol consumption should benefit from summer travel demand, adding that demand was expected to taper off after October. Investors are also waiting for weekly US oil and refined product inventory data.

foreign exchange

The dollar rallied across the board on Tuesday, gaining safe-haven buying as risk-sensitive European currencies fell on the worsening global outlook.

The dollar index rose 0.4 percent to 102.52, further away from a one-week low hit on Friday after a mixed U.S. jobs report showed a cooling but resilient labor market.

Moody's downgraded the credit ratings of a number of small and medium-sized US banks late on Monday and signalled a possible downgrade of some of the country's largest lenders, warning that the sector's credit strength could be tested by funding risks and weaker profitability.

Marc Chandler, chief global strategist at Bannockburn Forex, said: "Weak Asian data, coupled with Moody's downgrades of US banks, are weighing on risk appetite. Currently inforeign exchangeIn the market, the way to express concern about the outlook for economic growth is that the US dollar (Australian, New Zealand and Canadian dollars) and the Scandinavian bloc (Norwegian and Swedish krona) have not performed well against the US dollar. "

The Australian dollar touched $0.6497, its lowest level since June 1, and ended trading at $0.6539, down 0.5 per cent. The Australian dollar, a proxy for risk-sensitive currencies, hit a two-month low of $0.6035, down 0.7 per cent.

There was little early trading volatility in Asian currency markets, but US stocks sold off as risk sentiment became fragile and the dollar extended gains in European and North American trading.

Sterling fell 0.3% to $1.2745 against the dollar after an earlier survey showed UK retail sales grew at their slowest pace in 11 months in July.

The euro fell 0.4 per cent to $1.0957 against the dollar. The risk-sensitive Swedish krona and Norwegian krona both fell against the dollar. The dollar rose 0.7 per cent to 143.40 against the yen.

Jefferies Globalforeign exchangeBrad Bechtel, director, said: "We are definitely on the dollar smile curve, with US fundamentals outperforming the rest of the world. Overall, this is an environment conducive to the dollar's continued gains."

Data on Tuesday showed that real wages in Japan fell for a 15th straight month in June as prices continued to rise, but nominal wage growth remained strong, wages for high-income workers continued to rise, and the scope of labor shortages widened.

All eyes are now on Thursday's U.S. inflation data, with core consumer prices expected to rise 4.8% year-on-year in July.

Market News

UBS: Italy's bank tax shows European countries are cutting deficits

Emmanouil Karimalis, interest rate strategist at UBS, said Italy's newly announced levy on bank "extra profits" could be a concrete step in European countries' efforts to cut budget deficits. "I think this will be the trend of the future," he said. "European countries'can't continue to run huge budget deficits' because it creates problems." The strategist expects European countries to start undoing some of the facilitations they have offered and to start raising taxes "slowly". He expects Italy's debt-to-GDP ratio to fall to 140.8 per cent this year, with less risk to the country's debt sustainability in the short term.

The Russian ruble fell to a more than 16-month low against the dollar

The Russian rouble fell more than 2 per cent to a more than 16-month low against the dollar on strong local demand for foreign currencies. It had rallied on Monday to record its first one-day gain since August. The rouble tends to weaken at the start of each month after losing the support of a month-end tax period. Market participants also attributed the rouble's nervousness to the withdrawal of western companies from Russia, which may require a lot offoreign exchangeSelling and selling, and intensifyingforeign exchangeMarket volatility. Alor Broker's Alexey Antonov said they are still waiting for the ruble to strengthen, but before that, the pair is likely to break through the 100 level.

The report says the number of corporate bankruptcies in Japan rose by 53% year-on-year in July.

The Tokyo Institute of Commerce and Industry, a private enterprise credit investigation agency in Japan, released a report on the 8th saying that due to factors such as shortage of manpower and high prices, the number of bankrupt enterprises in Japan reached 758 in July, an increase of 53.4% year-on-year. The report shows that as of July, the number of bankrupt enterprises in Japan has increased year-on-year for 16 consecutive months. The total debt of bankrupt enterprises in July was 162.10 billion yen (1 US dollar is about 143 yen), an increase of 91.7% year-on-year. The report believes that as the preferential loans during the COVID-19 pandemic have expired one after another, under the pressure of loan repayment, shortage of manpower and high prices, the capital situation of small and medium-sized enterprises has continued to deteriorate. The report predicts that the number of bankruptcies caused by difficult performance recovery and excessive debt burden will From an industry perspective, among the top ten industries surveyed, the number of bankruptcies in eight industries increased year-on-year, with the bankruptcy problems in the service industry and the construction industry being the most prominent.

The European inflation risk indicator flashes red, causing the European Central Bank a headache

A measure of future inflation in Europe closed on Monday at its highest level since 2010, showing an average inflation rate of 2.67% between 2028 and 2033. Meanwhile, yields on longer-dated bonds are climbing faster than those on shorter-dated bonds, reflecting the risk that inflation could remain high. This is a potential conundrum for ECB officials, who will struggle to find a reason to end interest rate hikes if markets are betting that inflation will stay above the central bank's 2% target. Piet Christiansen, chief strategist at Danske Bank, said indicators such as inflation swaps and forecasters' surveys were "key" for ECB rate-setters, but none of them were consistent with the view that interest rate hikes were on hold in September, and inflation expectations remained a concern.

World Meteorological Organization: This July was the hottest month on record

The World Meteorological Organization said on the 8th that July this year was the hottest July on record and the hottest month on record. According to the European Union's Copernicus Climate Change Service, the global average monthly temperature in July this year was 16.95 ° C, higher than the previous record. The previous warmest month on record was July 2019, with an average temperature of 16.63 ° C. In addition, the global average sea surface temperature has continued to rise since April 2023 and reached an all-time high in July. The Antarctic sea ice area also hit the lowest value in July since satellite observations.

Due to Saudi Arabia's production cuts, OPEC +crude oilProduction fell to its lowest level since August 2021

The Platts survey revealed that as a major voluntary production cut by Saudi Arabia took effect, OPEC ++ in Julycrude oilProduction cut to a near two-year low. Recent Saudi cuts and supply disruptions in Kazakhstan and Nigeria offset increases in Iran and Iraq, leading to a month-on-month decline in OPEC + output of nearly 1 million barrels per day. The survey found that OPEC's 13 members produced 27.34 million barrels per day, while Russia and eight other allies produced 13.06 million barrels per day, for a total of 40.40 million barrels. This is the lowest level in the group since August 2021. In addition, Saudi production fell to 9.05 million barrels per day, the lowest level since June 2021.