The dollar strengthened, oil cheapened, gold rose along with bonds, and the Nasdaq 100 stock market hit an all-time record high.
Today, ahead of the release of the minutes of the latest FOMC meeting, which may highlight a hawkish turn in US monetary policy, US index futures were little changed. However, investors are slowly beginning to understand that the rapid economic growth caused by the recovery from the pandemic may be coming to an end.
The ISM index for services in the United States fell to 60.1 points in June from a record high of 64 points in May, and market forecasts called for a reading of 63.5 points. Data released last week showed an unexpected rise in the U.S. unemployment rate, despite solid job gains.
The yield on the 10-year U.S. Treasury note fell to a 20-week low of 1.353 percent on Tuesday, which may clearly show that the market no longer believes in maintaining the economy's excellent performance. Thus, it may also be pushing back expectations for interest rate hikes.
Much depends on behind-the-scenes talks
In the oil market, after yesterday's sharp discount, prices seem to have stabilized at levels last seen in 2018. However, talks on oil production and scale by OPEC+ countries remain at an impasse.
The United Arab Emirates has blocked an agreement by the leading producers: Saudi Arabia and Russia. It provided for an increase in production by 2 million barrels of oil in the second half of the year.
No date has been set for a re-meeting, though delegates said OPEC+ members continue to hold behind-the-scenes consultations to negotiate a deal between the Gulf neighbors, but also emerging new rivals.
Gold prices twitch, silver potential to break out
In the metals market, gold has clearly risen - above $1,800 per ounce. The range of fluctuation in silver prices is getting smaller and is currently limited in the space of USD 25-29 per ounce. Thus, as time passes, the chances for a breakout from the consolidation and the start of another impulse seem to be growing. Demand for silver seems to be supported all the time by the global shift towards green energy and the production of photovoltaic panels, for which silver is used, among other things.
Daniel Kostecki, Chief Analyst Conotoxia Ltd.
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