U.S. Treasury yields rose to decade highs while the dollar index retreated against its major counterparts amid expectations that central banks could keep rates higher for longer. U.S. Federal Reserve’s Jackson Hole, Wyoming, symposium starting on Friday also added volatility.
The minutes of the Fed’s July policy meeting revealed disagreement among officials on the necessity of more rate increases last month, emphasising the risks to the economy if rates were raised too high.
Bullions were able to gain slightly yesterday while base metals found some ground and settled green. People’s Bank of China cut its one-year loan prime rate by 10 basis points, to 3.45% from 3.55%, earlier Monday, but kept five-year rates, which mortgages are largely based on, unchanged at 4.20%.
On Monday, as it struggled with potential hikes in US interest rates and uncertainty on future Chinese demand, crude oil entered the negative territory.
Gold Future settled at 58490, up 0.20%. Silver futures settled at 71662, up 2.02%. Crude oil at 6730, down 0.62%, Copper gained 0.42% at 728.70, dollar index down 0.10% at 103.176.
Economic data and events scheduled today
Japan
At 10.30 am – BOJ Core CPI y/y. Data is foreseen at 2.9% from the previous 3.0%.
Above data could have a positive impact on the Yen.
U.K.
At 11.30 am – Public Sector Net Borrowing. Data is foreseen at 3.8B from the previous 17.7 B.
At 3.30 pm – CBI Industrial Order Expectations. Data is foreseen at -11 from the previous -9.00.
Above data could have a neutral impact on the pound.
Eurozone
At 1.30 pm- Current Account. Data is foreseen at 10.2B unchanged from the previous 9.1B.
Above data could have a neutral impact on the Euro.
U.S.
At 7.30 pm-
Existing Home Sales. Data is foreseen at 4.15M from the previous 4.16M.
Richmond Manufacturing Index. Data is foreseen at -10 from the previous -9.00
Above data could have a negative impact on the dollar.