The entire world laments Stocks Rally amid increased hawkishness, Queen Elizabeth II increased supply risk and a weaker currency for oil, Bitcoin increases as gold prices climb

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Last Updated on September 11, 2022 by Bitfinsider

World leaders honor Her Majesty Queen Elizabeth II for her extraordinary service and leadership as the world mourns her passing. Some events will be postponed or cancelled as the UK enters a 10-day period of grief. The BOE said that they would postpone their decision on interest rates until September 22. Three British trade unions will postpone their planned strike action, which will result in a delay of UK train strikes. The forthcoming economic publications are expected to go forward, according to the Office of National Statistics. This contains information on the UK’s property market, retail sales, unemployment, inflation, and GDP.

Wall Street is ending the week on a high note as the dollar’s rise has fizzled out and there is growing hope that inflation will continue to decline. Forecasts for inflation are being slightly revised downward by economists, which may prevent the Fed from raising interest rates above 4%. Bullard and Waller of the Fed continued their hawkish rhetoric, but they were unable to stop today’s stock market bounce. It appears that traders are growing more convinced that the Fed’s cycle of interest rate increases is about to come to an end. ​

Chinese consumer and producer inflation figures that were softer than anticipated may have opened the door for further easing by the PBOC, supporting the risk-on narrative.

Oil

The currency has tentatively peaked, and supply uncertainties are driving up crude prices. Recently, oil prices have mostly been affected negatively by worries about demand, China’s deteriorating COVID situation, a surprising increase in stocks, and predictions that world leaders will continue to use emergency measures to drive down energy costs. President Biden is considering the fresh releases from the US Strategic Petroleum Reserve, according to Energy Secretary Granholm (SPR).

As Ukraine retakes ground, President Putin’s vow to shut off all energy supplies from Russia poses a greater risk. Oil prices should continue to rise over $90 per barrel as long as there is a high likelihood that some supply interruptions will occur over the coming months.

Gold

As the dollar’s historic uptrend appears to be coming to an end, gold is rising. Wall Street appears to be becoming more at ease with the prospect of another rate increase by the Fed of 75 basis points. Even if next week’s inflation readings show that price pressures continued to diminish, Fed’s Bullard favors a third consecutive 75-bp interest rate increase. Additionally, Fed’s Waller is in favor of this month’s rate increase.

If investors continue to look beyond the aggressive central bank rhetoric, gold may stay above the $1700 mark. The outcome of gold may be decided by the upcoming inflation report. If consumer prices are higher than anticipated, gold may experience selling pressure with the $1680 area as the target. Even a sharp reduction in pricing pressures might only give gold a slight lift upward in terms of policy.

Bitcoin

With the US currency weakening and risk appetite returning, bitcoin is thriving. Cryptocurrencies have been revitalized by the general market recovery, and if investors continue to look past hawkish central bank overtures and persistent recession worries, this trend may continue. ​ ​


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