Yesterday on Monday, the market’s hawkish expectations for the Fed to raise interest rates still occupied the peak, and the US bond yields and the US index rose together.
The 10-year U.S. bond yield stood at the 3% mark; the dollar index has risen above the 109 mark.
Suppressed by this, gold did not rebound above 1750 yesterday and then oscillated downwards, falling to below the 1730 mark in the evening. In today’s Asian session, gold is still difficult to break the suppression of 1740. As of the afternoon, the quotation was at 1737.8 US dollars per ounce.
U.S. index and U.S. bond yields both hit new highs, gold 1740 is just a rebound
Since last week, U.S. bond yields and the U.S. dollar index have risen sharply under the bombardment of hawkish Fed officials.
Specifically, the U.S. dollar index, which measures the U.S. dollar against a basket of currencies, succeeded in four consecutive positives, and yesterday’s close was close to the 109 mark.
In today’s day, the US index has stood firm at 109, returning to near the 20-year high hit in July.
In the U.S. bond market, the 10-year U.S. Treasury yield rose above the 3% mark for the first time in about a month on Monday.
Traders said on Monday they had seen a wave of put buying on U.S. Treasury futures, betting that the price of U.S. Treasury futures would fall.
Last week, the minutes of the Federal Reserve’s July interest rate meeting announced that the Fed would not suspend interest rate hikes. The wording was slightly tougher than the market expected, and several Fed officials made hawkish remarks for two consecutive weeks, stimulating the strength of the dollar and U.S. bond yields.
At the weekend of last week, the remarks of several Fed officials showed that the focus of the Fed is still on inflation, but the decision-making process is no longer preset, and will be fine-tuned according to the economic situation.
The Fed may not consider pausing rate hikes until inflation has fallen sharply. This fully demonstrates the determination of Fed policymakers to keep inflation down to 2%.
On Friday, Richmond Fed President Barkin said the central bank is determined to return inflation to its 2 percent target, even if it means the U.S. economy faces the risk of a recession.
This week’s focus is warmed up in advance, and let’s see Powell’s eagle’s voice
At the beginning of this week, when traders were interpreting market movements, they all turned their attention to a figure who will officially debut on Friday-Federal Reserve Chairman Powell.
It is reported that Powell will deliver a speech on the economic outlook at the Jackson Hole central bank annual meeting at 10 a.m. ET on Friday (22:00 Beijing time on Friday), which is almost the top event in global financial markets this week.
It is clear that from last Friday to the present, almost the vast majority of market participants have regarded Powell’s key speech as a major negative for risk assets.
Some analysts worry that the recent rally in U.S. stocks is based on a miscalculation of the Fed’s policy stance.
Fed Chairman Jerome Powell has a chance to reshape interest rate expectations in financial markets when central bankers gather this week in the small town of Jackson Hole, Wyoming, if he so desires.
For now, traders are divided on whether to raise rates by 50 basis points or 75 basis points on the Fed’s next move.
At the beginning of the week, hawkish expectations were still at the top. Several policymakers have played down recent dovish expectations and emphasized the Fed’s commitment to fighting inflation.
Investors will also be watching for details on the Fed’s plan to shrink its nearly $9 trillion balance sheet, a process that began in June.