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Gold prices slip back below 1770, as dollar and treasury yields rise – Daily Market Brief, August 3, 2022

After four Federal Reserve presidents sounded the alarm about the need to curb inflation, the gold price fell. Treasury rates rose, real yields rose, and the US dollar strengthened as a result of the message.

Equity markets have risen as a result of investors’ belief that the market was about to turn. Therefore, the tightening of monetary conditions was made possible by the narrowing of business credit spreads. The Fed’s stated goal is the exact reverse of this.

Going forward, it is reasonable to expect similar comments from Fed Presidents reiterating that the tightening cycle is not done should markets get ahead of themselves and price in too much easing of policy.

Key Factors for Today

– Euro Zone, UK & US Composite/Services PMI
– German Trade Balance, Swiss CPI, Euro Zone Retail Sales
– US Factory Orders & ISM Services PMI
– OPEC+ meeting
– Speeches from Fed’s Barkin, Harker & Kashkari

China bans 2,000 Taiwanese foods and sand exports.

China has restricted imports from hundreds of Taiwanese food producers and suspended natural sand exports in what Taipei regards as an economic punishment for a visit by US House Speaker Nancy Pelosi. Since Monday night, when US and Taiwanese officials confirmed Pelosi’s trip to Taiwan, the China Customs Administration has stopped imports of more than 2,000 of 3,200 Taiwanese food products.

A two-day loss streak for the main American stock markets.

On an up-and-down day, the major US indices closed yesterday’s session with losses for the day. Mainly Due to Caterpillar’s disappointing earnings release, Caterpillar’s share price fell sharply on the Dow index. Shares of Caterpillar dropped $11.35 or 5.82% to $183.51.

Iran’s oil exports to East Asia have been targeted by new US sanctions.

The US announced fresh sanctions against Iran on Monday, targeting oil and petrochemical exports to East Asia. Three Chinese businesses and one UAE company face new US sanctions for allegedly doing business with Persian Gulf Petrochemical Industry Commercial Co.

Biden’s administration seems uninterested in renewing the Iran nuclear deal by implementing new sanctions. Secretary of State Antony Blinken avoided questioning Monday and blamed Iran.

WTI falls after a Surprisingly Large inventory build.

Oil prices rose slightly on Tuesday ahead of the OPEC+ meeting scheduled for today. When OPEC+ meets on Wednesday, analysts are pessimistic that the group would respond to President Joe Biden’s demand for greater oil supply, anticipating the coalition to preserve its residual capacity for another time. Speculation about a third world war sent oil prices higher but then fell as Fed speakers sneered at the prospect of a Fed Pivot anytime soon, reigniting concerns about slowing economic growth.

Robinhood announces 2Q profits and a 23% staff cut.

Vlad Tenev, CEO of Robinhood, announced a 23 per cent workforce cut on Tuesday. Layoffs will impair operations, marketing, and programme management. Inflation is at 40-year highs and the crypto market is falling, Tenev said. Robinhood reduced its personnel by 9% in April. Robinhood’s second-quarter net revenue climbed to $318 million from $299 million thanks to cryptocurrency activity and net interest. This was below Q2 2021’s $565 million. Monthly active users and assets dropped.

Disclaimer: This article is not investment advice or an investment recommendation and should not be considered as such. The information above is not an invitation to trade and it does not guarantee or predict future performance. The investor is solely responsible for the risk of their decisions. The analysis and commentary presented do not include any consideration of your personal investment objectives, financial circumstances, or needs.

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