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📈Forex Trading, Morning Market movers, Gold, Oil & USD - Intel moves

Morning Brief: Asian Shares Jump as Investors Eye End to Fed Hikes, China Stimulus

Asian shares experienced a bounce, and the safe-haven dollar edged lower on Tuesday as investors hoped for an imminent end to rate hikes in the United States. There was also optimism regarding China's potential economic stimulus to support stalling growth.

Investors are eagerly awaiting U.S. inflation data scheduled for release on Wednesday, which could provide insights into the future interest rate outlook.

Federal Reserve officials' comments on Monday were being digested by investors. While additional rate hikes are deemed necessary to combat inflation, some officials suggested that the current monetary policy tightening cycle may be nearing its end.

Australian shares edged up 1.01%, while Japan's Nikkei stock index rose 0.66%.

China's blue-chip CSI300 index was 0.4% higher in early trade, and Hong Kong's Hang Seng index opened up 1.03%.

Chinese producer prices experienced a steeper-than-expected decline on Monday, indicating that the country's post-COVID rebound may be losing momentum. However, this also heightened expectations that policymakers may need to implement additional measures to bolster demand.

U.S. stocks closed higher on Monday, following last week's losses. The comments from Fed officials reinforced the notion that the central bank may be nearing the end of its tightening cycle.

photo of inside of computer board, black photo except the microchip, intel, in green

In the technology sector, Intel shares rose 2.8%, and the semiconductor index was up 2.1%.

This week, S&P 500 company earnings are set to begin, with reports from major U.S. banks. Analysts anticipate a 6.4% decline in second-quarter earnings year-on-year.

In the U.S. Treasuries market, the yield on 10-year Treasury notes reached 4.0018% compared to its previous close of 4.006% on Monday. The two-year yield, which rises with expectations of higher Fed fund rates, touched 4.8639% compared to a U.S. close of 4.862%.

As a result of the Fed comments, the greenback weakened to a two-month low of 101.88 against a basket of currencies during early Asian trading. Investors scaled back their expectations of further U.S. interest rate increases. The dollar also weakened against other major currencies, while the yen strengthened.

Hedge funds have shifted to an overall bearish dollar position for the first time since March, as they believe the Federal Reserve is nearing the end of its interest-rate hiking cycle.

Crude oil, WTI, Bar chart showing forex and commodities prices, green/red candles depict daily trading trends. Includes moving average, Bollinger bands, and RSI.

WTI crude futures edged above $73 per barrel on Tuesday, recouping losses from the previous session. Supply cuts by major crude exporters Saudi Arabia and Russia are expected to tighten the market. Saudi Arabia recently announced an extension of its 1 million barrels-per-day cut until August, while Russia plans to reduce oil exports by 500,000 bpd next month. Additionally, the U.S. authorities announced plans to purchase approximately 6 million barrels of oil for the Strategic Petroleum Reserve.

Gold, XAU/USD, Bar chart showing forex and commodities prices, green/red candles depict daily trading trends. Includes moving average, Bollinger bands, and RSI.

Gold prices remained steady around $1920 per ounce as investors assessed the potential for further monetary tightening and concerns about a global economic slowdown.

Disappointing consumer and producer prices in China raised concerns about a weakening recovery and deflation risks. In the U.S., a mixed payrolls report indicated a slowdown in job creation but showed strong wage growth and a decline in the unemployment rate.

The upcoming U.S. Consumer Price Index (CPI) report scheduled for Wednesday will provide further updates on inflationary pressures.

Traders have assigned a nearly 92% probability of a 25 basis point increase in the Federal Reserve's fed funds rate this month, although there are doubts about the need for further rate hikes beyond July. Other major central banks, including the European Central Bank, the Bank of England, and the Bank of Canada, are expected to continue tightening their monetary policies.

Today, St. Louis Fed President James Bullard is scheduled to speak.

Forex Trading, Morning Market movers, Gold, Oil & USD.

Disclaimer: The information provided does not constitute financial advice. Traders and investors should conduct their own research and seek professional guidance before making investment decisions.

Kyri Kyriacou CEO of Chump Profit: Has a B.A. in Economics from Liverpool University and an M.S. in Marketing from Surrey University.


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