June 16, 2023: BoJ Keeps Rates Low, Tech Stocks Surge, while Oil Prices Dip.

The Bank of Japan maintains low interest rates.

The yen decreased after the Bank of Japan maintained meager interest rates on Friday, June 16, and predicted that inflation would slow later in the current year. This reaffirmed its stance on monetary easing that contradicts the tightening policies pursued by other central banks worldwide.

As widely expected, the Bank of Japan kept the short-term interest rate at -0.1%, and the ten-year bond yields at 0% under its yield curve control policy.

The yen plummeted significantly following the decision, hitting a 15-year low against the euro at 153.97 after dropping over 1% in the previous session. In the latest trading, the Japanese currency declined by 0.25% to 140.66 against the dollar.

Meanwhile, the euro is heading towards its best week in months after the European Central Bank raised borrowing costs to the highest level in 22 years and indicated further interest rate hikes.

In addition to some weak US economic data, this led to a widespread decline in the dollar as traders scaled back their bets on the extent of required interest rate increases in the US.

The euro remained near a one-month high at 1.0942 against the dollar after rising over 1% yesterday, Thursday, following the interest rate hike by the European Central Bank.

The British pound rose to its highest level in over a year, reaching 1.2794 against the dollar in early Asian trading, and was traded at 1.2784 against the dollar in the latest trading. Traders strongly believe that the Bank of England will likely raise interest rates for the thirteenth consecutive meeting next week.

The dollar index fell to a one-month low of 102.08 points against a basket of currencies yesterday, Thursday, after weak US economic data was released. It stabilized in the latest trading at 102.21 points.

The Australian dollar remained stable at 0.6882 against the dollar, and the New Zealand dollar rose by 0.02% to 0.6236 against the dollar.

Gold prices slightly rose but are heading towards recording weekly losses.

Gold prices increased slightly during Friday’s trading as the dollar weakened, approaching its lowest levels in about a month. Meanwhile, silver climbed back to the $24 level.
Currently, traders expect a 74.4% chance that the Federal Reserve may raise interest rates by 25 basis points in July after indicating that borrowing costs still need to increase by up to half a percentage point by the end of the year.

The futures contracts for gold delivery in August rose by 0.31%, or $6.1, to $1,976.8 per ounce. Similarly, the spot price increased by 0.27%, or $5.20, to $1,963.20.

The futures contracts for silver delivery in July also experienced a rise of 0.72% to $24.115 per ounce, while the spot price for platinum remained unchanged at $993.00.

Tech Stocks Surge: Microsoft, Apple Gain $112B, Alibaba Hits 2-Month High.

Microsoft stock jumped by 3.2% in Thursday’s session, closing at a new record high of $348 per share. The company added approximately $80 billion to its market value in a single day, reaching around $2.59 trillion.

Similarly, Apple stock rose by 1.1% in Thursday’s session, closing at a new record high of $186 per share. The company added approximately $32 billion to its market value in a single day, reaching around $2.9 trillion.

Chinese companies listed on the US stock exchange also saw an increase in their stocks after the People’s Bank of China lowered the borrowing costs for medium-term policy loans for the first time in 10 months.

Alibaba stock surged by 3.1% to its highest level in two months after surpassing the $92 per share mark.

Oil prices slightly declined but are heading towards weekly gains.

Oil prices experienced a slight decline during Friday’s trading session, amid expectations of further monetary easing in China, despite concerns about additional monetary tightening in the United States and Europe.

UBS bank anticipates a supply deficit of around 1.5 million barrels per day in June and over two million barrels per day in July. Once this oil inventory deficit becomes apparent, prices will trend upwards.

Yesterday’s data showed a 15.4% increase in oil refinery output in China in May yearly, marking the second-highest overall level recorded.

Brent crude futures for August delivery declined by 0.56% or 42 cents, settling at $75.25 per barrel. Similarly, US crude futures for July delivery decreased by 0.71% to $70.12 per barrel, following a roughly 3.4% increase in the previous session.

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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