The Fed may start reducing the QE program next month
Yesterday, the US Treasury Department held an auction on Treasury bonds, which led to a liquidity withdrawal from the banking system and a drop in government bond yields. Gold and silver have an inverse correlation to US government bond yields, so prices of the precious metals have strengthened slightly. Gold added 0.6% and silver increased by 0.39%.
Oil prices stabilized a bit. Gasoline consumption declined for the third week in a row in the US. At the same time, gasoline demand in India remained above pre-pandemic levels in the first half of August. Analysts at Goldman Sachs believe the threat of the Delta strain to the oil market is temporary and stick to their forecast of Brent prices rising to $80 a barrel in the next quarter due to a supply shortage in the market.
Asian stock indices are still under pressure. Asia-Pacific’s broadest stock index outside Japan, the MSCI, decreased by 1.1%, China’s CSI300 blue-chip index lost 1.11%, and the Shanghai Composite index decreased by 1.05%. Australia’s ASX 200 index fell by 0.98%, and Japan’s Nikkei index lost 0.11%. The drop in stock indices was mainly due to the worsening situation with Delta in the region. Markets also monitored the situation in Afghanistan. The Reserve Bank of Australia will continue to review its quantitative easing program, considering the economic conditions and the quarantine restrictions.
S&P 500 (F) 4,479.71 +11.71 (+0.26%)
Dow Jones 35,625.40 +110.02 (+0.31%)
DAX 15,925.73 -51.71 (-0.32%)
FTSE 100 7,153.98 -64.73 (-0.90%)
USD Index 92.61 +0.10 (+0.10%)
News feed for: 2023.07.04
- Australia RBA Meeting Minutes at 04:30 (GMT+3);
- Japan Tertiary Industry Activity Index (m/m) at 07:30 (GMT+3);
- UK Average Earnings Index (m/m) at 09:00 (GMT+3);
- UK Claimant Count Change (m/m) at 09:00 (GMT+3);
- UK Unemployment Rate (m/m) at 09:00 (GMT+3);
- Eurozone GDP (q/q) at 12:00 (GMT+3);
- US Retail Sales (m/m) at 15:30 (GMT+3);
- US Industrial Production (m/m) at 16:15 (GMT+3);
- US Fed Chair Powell’s Speech at 20:30 (GMT+3).
This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.
