The US$ & oil is up, equity markets are down while US yields are up. US 10-year bond pushed through 1.5% sending the US$ higher. Fed Kaplan & Rosengren resigned after trading scandal exposed. Powell admitted to holding some Muni-bonds during the Fed buy back program but said they were purchased prior to Fed’s action. Powell & Yellen to testify before Senate Banking committee. A further shake-up at the Fed could affect market confidence. In other news, South Korea recently tested its first submarine-launched ballistic missile, while North Korea replied by firing a short-range missile off its east coast. Oil prices at a nearly 3-year high as natural-gas futures jump 11%. COVID, Biden took Pfizer’s booster. NY fires/suspends staff who refuse to get vaccinated. Courts ruled that NY city can order teachers to get vaccinated. India records smallest rise in death since March. Pfizer begins study on an oral drug to prevent COVID. In currency markets, JPY fall to a 3-month low. Australian dollar gained helped by high resource prices and the blistering pace of vaccinations.
Hopes of pre-pandemic energy demand propel oil prices towards yearly peak. Goldman & Bank of America calling for higher oil price. No major economic data today so market will look to Powell’s testimony, Evergrande news and China’s power crunch for direction. Support remains at 1.2625, while resistance holds at 1.2720.
EUR/USD tumbles to five-week low on rising US yields, energy crisis. ECB Council member and Bank of France Head said the inflation forecast justifies keeping loose central bank’s policy. “There is no doubt that inflation will be below 2% target in 2023” ECB’S Lagarde to speak this morning. Support is at 1.1660, while resistance resets to 1.1725.
EURGBP jumped higher in early trading reaching a high of .8575-80 level. Support holds at .8500 (1.1765) while resistance resets to .8600 (1.1628) if breached look to .8650 (1.1560).
GBP broke through the 1.3660 level and is hovering at July’s lows. U.K. to issue thousands of temporary truck driver visas to ease supply-chain problems. Support holds at 1.3600 (July 15 & August 17th low) and while resistance resets at 1.3685.