© Reuters.
Investing.com – U.S. stock markets opened the trading session, Thursday, with a clear rise, a few hours after Jerome Powell’s speech, the past few hours, which ignited the markets during the past two days.
And on the impact of the unemployment data, which contradicted expectations, which was issued a short while ago, the dollar index declined significantly, which contributed to the rise in gold and the recovery of stocks during these moments of today’s trading.
Before the most important Fed meeting, how will gold, the dollar and treasury bonds interact in light of the flow of data.. What is the golden opportunity before this?
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The market is acting surprised
“The Fed is consistent in its stance that it will raise interest rates further if inflation continues to rise, and now the market is acting in surprise,” said Kara Murphy of Xtra Investment Management.
“The market has realized that interest rates will continue to rise and the idea of a Fed policy shift anytime soon is very optimistic thinking,” said James DeMert of Main Street Research.
Demert continued: “The Fed may insist on raising interest rates, and at the same time, the delayed effect of last year’s rate hike may lead to a slowdown in the economy. In recent weeks, the risks of a recession in the economy have increased, and the delayed effect of the Fed’s austerity policy may soon begin to appear on the economy.” “Economic data is at the same time as doubling interest rate hikes. This combination of weak economic performance and higher interest rates will push the economy into recession.”
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bond curve inversion
The yield curve has inverted at the sharpest pace since the 1980s, indicating pessimistic expectations about the performance of the world’s largest economy.
The yield on US two-year bonds touched 5.08% during trading on Wednesday, the highest level since 2007.
While the yield on 10-year bonds remained less than 4%, pushing the difference between short-term debt and its long-term counterpart to the highest level since 1981.
In a note published by German investment bank Deutsche Bank (ETR:) early Thursday morning, the bank’s analysts commented on the recent close last night of the 10Y2YS index of the US bond market – which reflects the difference between the US 10-year and 2-year yields – lower. 1% at 1.09%, and the bank said that the closing of the 10Y2YS: Exchange index of US bond curves below 100 basis points is an indication that the US economy is entering the recession zone, and the index closed yesterday at its lowest level in 42 years.
The bank added: “In those times when the curve of the difference in US bond yields reversed and closed below 100 points, which included the years: 1969, 1979, 1980 and 1981, the US economy was either in the middle of a recession or witnessed a recession within 8 months as a maximum.” Maximum”.
Unemployment data
It recorded 211,000 applications, higher than the forecast of experts who expected 195,000. Especially since it had recorded 190 thousand the week before last.
Thus, it recorded 197 thousand in 4 weeks, after it recorded 193 thousand the week before last.
The Unemployment Weekly Index provides very timely data, quantifying the amount of individuals who claimed unemployment insurance for the first time during the past week and traders view the unemployment rate as an indicator that gives little indication of the future performance of the economy. The two downtrends have a positive effect on the country’s currency, as working people tend to spend more money.
Wall Street
The industrial index rose 78.43 points, or 0.24 percent, to 32,876.83 points at the open.
The Standard & Poor’s 500 index opened trading, up 6.65 points, or 0.17 percent, to 3,998.66 points.
The Nasdaq Composite Index rose 2.30 points, or 0.02 percent, to 11,578.31 at the open.
Gold and the dollar now
It extended its gains after the unemployment data was released, rising by 1.05% to $1833 an ounce.
US gold futures rose 1% to $1,837.
On the other hand, it decreased to 105.18 points, or by 0.45%.
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