2023-10-19 05:10

Copyrighted Image by: Reuters. Bitcoin's price remained stable at $28,300 on Wednesday, despite a 1% dip in both the S&P 500 and Nasdaq as U.S. Treasury bond yields surged to levels not seen since the summer of 2007. Other cryptocurrencies such as Solana, Polygon, and Litecoin also experienced declines, according to the CoinDesk Market Index. The U.S. 30-year Treasury bond yield rose nine basis points to 5.02%, while the 10-year Treasury note yield increased by seven basis points to 4.905%. This rise in interest rates has led to a decrease in stock market indices, marking a notable shift in the financial landscape. In contrast to the broader market trend, Bitcoin's stability is drawing attention as expectations for a spot Bitcoin ETF approval are high within the crypto market. This comes despite a misleading tweet about BlackRock (NYSE:BLK)'s application receiving approval. The general market consensus suggests an imminent approval is likely. Notable industry figures have also weighed in on the matter. Galaxy Digital CEO Mike Novogratz, in partnership with Invesco, anticipates their spot bitcoin ETF application will receive approval in 2023. Similarly, ARK Invest CEO Cathie Wood has reported positive feedback from the SEC regarding their proposal. SEC Chair Gary Gensler has confirmed that evaluations of multiple Exchange Traded Products (ETPs) are underway but has not provided further details on these proceedings. The potential impact of an expected ETF approval on Bitcoin's price is being closely monitored. Despite doubling in price this year, Bitcoin is still significantly below its all-time high from two years ago. CryptoQuant predicts that if spot ETFs are approved, they could result in a $155 million inflow into Bitcoin, potentially tripling its current price. https://www.investing.com/news/cryptocurrency-news/bitcoin-holds-steady-amid-market-volatility-and-etf-approval-anticipation-93CH-3202595

2023-10-19 04:43

Copyrighted Image by: Reuters. Investing.com - Gold kept its upward charge for a third day in a row Thursday as the dollar tumbled on the lack of any immediate support from Federal Reserve Chair Jerome Powell for a rate in November, despite the continued threat of inflation. The risk that war in the Middle East could get bigger, impacting more of the world economy, also drove more investors towards safe havens, propelling the yellow metal. Gold’s most-active futures contract on New York’s Comex, December, settled up $12.20, or 0.6%, at $1,980.50 per ounce. With the three-day rally, December gold has gained more than 2% for the current week, adding to the prior week’s advance of more than 5%. At the time of writing, the benchmark gold futures contract showed a session peak of $1,990.20 -- the highest a front-month contract on Comex had gotten to since mid-July. The spot price of gold, more closely watched by some traders than futures, was at $1,977.20 by 15:30 ET (19:30 GMT), up $29.52, or 1.5%. The spot price, which reflects real-time trades in bullion, is up just over 2%, extending last week’s gain of almost 5.5%. Spot gold's session peak at the time of writing was $1,977.73, the highest since mid-July. While gold was boosted by Powell’s comments that weighed on the dollar, support was also evident from the escalating Israel-Hamas conflict, said Ed Moya, analyst at online trading platform OANDA. “Volatility in the region is mostly expected to remain elevated and that should keep gold’s trajectory heading towards the $2,000 level,” Moya added. Powell delivers a boon to gold longs The dollar fell, making commodities denominated in the US currency more affordable to international buyers, after Powell failed to signal a hike for the Fed at its Nov. 2 rate decision. “Inflation is still too high,” Powell said during a speech and responses to questions raised at an event at the Economic Club of New York. He added: “Right now the risk is still high inflation. It's possible we are going into a more inflationary period, but it's hard to know. It may be that rates haven't been high enough long enough.” But the Fed chair could not mask his wonder on how well the US economy itself was doing despite the central bank’s aggressive rate hikes — and the relative problem of inflation caused by that. To fight inflation, the Fed hiked interest rates 11 times between March 2022 and August 2023, raising them by 5.25% from a base rate of just 0.25%. Despite that, the Atlanta Fed, a division of the central bank, estimates that the economy grew by an annual rate of 5.4% in the third quarter of this year versus a mere expansion of 2.1% in the second quarter. Inflation, meanwhile, was higher than expected for a third month in a row as consumer prices grew by an annual rate of 3.7% in September, the same as in August, and higher than the 3.6% forecast by Wall Street economists. “Economy is a story of stronger demand. The economy is very resilient, growing strongly. Growth is running above its longer run trend. That is a surprise,” he said, adding, however, that “it is very hard to know how the economy can grow with higher rates”. As the Fed chair spoke, the selloff in US bonds accelerated on expectations that US interest rates will remain higher for longer, with the yield on the benchmark 10-Year Treasury note rising to the key psychological mark of 5% — a level last reached in June 2007. But Powell’s disinclination to outrightly signal another rate hike also kept federal funds futures — which is an indicator of Fed rate decisions — unchanged at the prevailing 5.25%-5.50% range. That pushed down the US Dollar Index — an instrument that pits the US currency against six of its major rivals — on the notion that the dollar will be disadvantaged in an environment where the Fed might just hold on to rates without raising them further. (Ambar Warrick contributed to this item) https://www.investing.com/news/commodities-news/gold-prices-pull-back-as-fed-jitters-offset-safe-haven-demand-3202585

2023-10-19 04:43

Copyrighted Image by: Reuters. Investing.com-- Gold prices retreated from over two-month highs on Thursday as caution before a speech by Federal Reserve Chair Jerome Powell somewhat offset safe haven demand fueled by the Israel-Hamas war. The yellow metal appreciated sharply this week as an escalation in the Israel-Hamas conflict spurred concerns over a spillover into the broader Middle East region, which in turn fueled demand for conventional safe havens. But this trade was cut short by a recovery in the dollar, while U.S. Treasury yields shot back up to multi-year highs as markets positioned for higher interest rates. Still, gold prices remained within sight of an over two-month peak hit earlier this week, as markets awaited fresh developments in the Israel-Hamas conflict. The cancellation of a summit between U.S., Egyptian and Palestinian leaders had also spurred more safe haven demand for the yellow metal. Spot gold fell 0.1% to $1,946.51 an ounce, while losses in gold futures were more pronounced, with futures down 0.5% at $1,958.35 an ounce by 00:31 ET (04:31 GMT). Rate risks in play as Powell speech looms But whether gold could push higher remained in doubt, especially before a speech by Powell where the Fed chair is widely expected to reiterate his stance on higher-for-longer interest rates. A surge in Treasury yields this week indicated that markets are also pricing in higher interest rates, especially as recent data pointed to an unexpected upswing in U.S. inflation. Overnight comments from other Fed officials also reiterated the bank’s hawkish outlook. The dollar benefited from this speculation, rising 0.3% overnight and cutting short a rally in most commodity markets, including gold. Higher interest rates bode poorly for non-yielding assets such as gold, given that they increase the opportunity cost of investing in such assets as compared to relatively safe Treasuries. The dollar also benefits from such a scenario, which directly weighs on the price of gold. Copper slips as China property woes offset GDP cheer Among industrial metals, copper prices fell on Thursday, coming under pressure from renewed fears of a property market meltdown in China. Copper futures fell 0.3% to $3.5713 a pound. While the red metal saw some gains on stronger-than-expected Chinese gross domestic product data, this was largely offset by concerns over a massive default in China’s property market. Beleaguered developer Country Garden (HK:2007) appeared to have missed a key repayment on its offshore bonds, likely pointing to a default for most of the firm’s foreign debt. This is expected to spark a string of defaults for the firm, as it struggles to restructure its oversized debt obligations. Any headwinds to China’s property market bode poorly for copper demand, given that the country is the world’s biggest copper importer. The property market also accounts for a large portion of China’s copper appetite. https://www.investing.com/news/commodities-news/gold-prices-pull-back-as-fed-jitters-offset-safe-haven-demand-3202585

2023-10-19 03:56

Copyrighted Image by: Reuters. Investing.com-- Most Asian currencies were muted on Thursday, nursing steep overnight losses as the dollar firmed tracking a spike in Treasury yields before a closely-watched address by Federal Reserve Chair Jerome Powell. Sentiment remained frail amid little signs of deescalation in the Israel-Hamas war, which kept traders wary of risk-driven assets. This was exacerbated by a rout in the bond market, as traders positioned for higher interest rates. The dollar benefited from this uncertainty, with the dollar index and dollar index futures gaining slightly in Asian trade. Both instruments rose about 0.3% in overnight trade, and were within sight of a 11-month peak. Focus is now squarely on a speech by Fed Chair Powell at the Economic Club of New York later in the day. Given the recent rise in inflation, Powell is widely expected to reiterate his stance on higher-for-longer interest rates. In Asia, the Japanese yen was muted on Thursday after tumbling close to the 150 level against the dollar- which markets believe could attract currency market intervention by the government. The yen took little support from data showing an unexpected improvement in Japan’s trade balance, given that imports also plummeted past expectations. Focus this week is now on Japanese consumer inflation data, due Friday, which is likely to factor into the Bank of Japan’s plans to tighten monetary policy. The Australian dollar was the worst performer for the day, losing 0.6% as data showed some cooling in the country’s labor market. Any further cooling is likely to give the Reserve Bank of Australia less impetus to raise interest rates. The South Korean won shed 0.2% as the Bank of Korea kept interest rates on hold for a fifth straight meeting. The Indian rupee was flat, but trading within sight of record lows as a spike in oil prices pressured the South Asian currency. Chinese yuan frail as property market jitters offset GDP cheer The Chinese yuan traded sideways on Thursday after the People’s Bank made no changes to its daily midpoint from the prior session. While the currency had taken some support from data showing that China’s economy grew more than expected in the third quarter, it had swiftly reversed course amid growing concerns over a property market default in the country. The yuan was trading close to annual lows, comfortably above the 7.3 level against the dollar. Beleaguered developer Country Garden Holdings (HK:2007) appeared to have missed a key coupon payment on its offshore bond holdings, potentially heralding a default on its foreign debt. Such an event could trigger a string of defaults for the developer and trigger a massive debt restructuring for China’s property market. A massive default in China's property market bodes poorly for the economy, given that the market accounts for roughly a quarter of local economic activity. Focus this week is also on a loan prime rate decision by the PBOC, although the bank is widely expected to keep rates unchanged. https://www.investing.com/news/forex-news/asia-fx-nurses-steep-losses-as-dollar-firms-before-powell-speech-3202574

2023-10-19 00:27

Copyrighted Image by: Reuters Investing.com - Oil prices rose for a third day in a row as Federal Reserve Chair Jerome Powell’s disinclination to suggest another rate hike despite worrying US inflation tamped down the dollar, handing commodity bulls, including those betting on higher crude prices, a win. Thursday’s 1% rise brought the week-to-date gain in oil to just over half a percent, after accounting for Monday’s drop of more than 2%. Adding support to the recovery has been the worsening Israel-Hamas war, which raised concerns over the potential for disruption in crude production or transportation out of the Middle East, despite no immediate signs of either happening. Earlier in the session, crude prices fell more than 1% as the United States gave a six-month waiver on the sanctions imposed on Venezuelan oil, in return to the South American country’s promise to hold free and fair elections. A sanctions waiver would theoretically allow more Venezuelan barrels on the market though actual new production of oil would take longer. Powell throws oil bulls another lifeline by playing down rate hike prospects New York-traded West Texas Intermediate, or WTI, crude for delivery in November settled up $1.05, or 1.5 %, at $89.37 per barrel. Week-to-date, the US crude benchmark rose 0.6%. London-traded Brent crude for the most-active December contract finished Wednesday’s session at $92.38, up 88 cents, or nearly 1%. For the week, the global crude benchmark showed a gain of 2.3%. Crude prices rose as the dollar fell, making commodities denominated in the US currency more affordable to international buyers, after Powell failed to signal a hike for the Fed at its Nov. 2 rate decision. “Inflation is still too high,” Powell said during his speech and responses to questions raised at an event at the Economic Club of New York. He added: “Right now the risk is still high inflation. It's possible we are going into a more inflationary period, but it's hard to know. It may be that rates haven't been high enough long enough.” But the Fed chair could not hide his wonder on how well the US economy itself was doing despite the central bank’s aggressive rate hikes — and the relative problem of inflation caused by that. To fight inflation, the Fed hiked interest rates 11 times between March 2022 and August 2023, raising them by 5.25% from a base rate of just 0.25%. Despite that, the Atlanta Fed, a division of the central bank, estimates that the economy grew by an annual rate of 5.4% in the third quarter of this year versus a mere expansion of 2.1% in the second quarter. Inflation, meanwhile, was higher than expected for a third month in a row as consumer prices grew by an annual rate of 3.7% in September, the same as in August, and higher than the 3.6% forecast by Wall Street economists. “Economy is a story of stronger demand. The economy is very resilient, growing strongly. Growth is running above its longer run trend. That is a surprise,” he said, adding, however, that “it is very hard to know how the economy can grow with higher rates”. As the Fed chair spoke, the selloff in US bonds accelerated on expectations that US interest rates will remain higher for longer, with the yield on the benchmark 10-Year Treasury note rising to the key psychological mark of 5% — a level last reached in June 2007. But Powell’s disinclination to outrightly signal another rate hike also kept federal funds futures — which is an indicator of Fed rate decisions — unchanged at the prevailing 5.25%-5.50% range. That pushed down the US Dollar Index — an instrument that pits the US currency against six of its major rivals — on the notion that the dollar will be disadvantaged in an environment where the Fed might just hold on to rates without raising them further. Earlier in the day, crude prices fell after the United States issued a six-month license authorizing transactions in Venezuela's energy sector after a deal was reached between the Maduro administration there and its political opposition to ensure fair 2024 elections. The deal is not expected to quickly expand Venezuela's oil output but could boost profits by returning some foreign companies to its oilfields and providing its crude to a wider set of cash-paying customers, experts said. https://www.investing.com/news/commodities-news/oil-rally-cools-as-focus-remains-on-israelhamas-war-more-fed-cues-3202538

2023-10-19 00:27

Copyrighted Image by: Reuters. Investing.com-- Oil prices fell in Asian trade on Thursday after a strong run of gains this week as markets awaited more developments in the Israel-Hamas war, while upcoming signals from the Federal Reserve were also in focus. An escalation in the conflict, after the deadly bombing of a Gaza hospital and the cancellation of a summit between U.S., Egyptian and Palestinian leaders greatly boosted oil prices this week as markets feared that other Arab countries could join the fray. Such a scenario is expected to disrupt supplies in the oil-rich region, potentially tightening global crude markets. Iranian ministers urged for an oil embargo on Israel, although the Organization of Petroleum Exporting Countries said it had no action planned at the moment. Signs of tighter supplies were furthered by U.S. inventories logging a bigger-than-expected draw in the week to October 13. A sustained drop in gasoline and distillate inventories indicated that U.S. fuel demand remained robust. Oil markets were also encouraged by data showing better-than-expected economic growth in world no.1 oil importer China, although growth still remained below pre-COVID levels. Crude prices jumped around 2% on Wednesday. But this rally now appeared to have paused as the dollar rose, while a steep sell-off in bond markets also rattled sentiment. The U.S. also eased sanctions on Venezuela's oil sector after the government and opposition parties reached a deal for a 2024 election. But analysts said any supply unlocked from such a move would be unlikely to help ease tighter oil markets this year. Brent oil futures fell 0.2% to $91.13 a barrel, while West Texas Intermediate crude futures fell 0.2% to $87.12 a barrel by 21:23 ET (01:23 GMT). The prospect of tighter supplies, following steep production cuts by Russia and Saudi Arabia, have been a major boost to oil prices this year. But the rally somewhat cooled in recent weeks, as fears of higher-for-longer U.S. rates crept back into markets. Powell speech awaited, dollar strength curbs oil rally Fed Chair Jerome Powell is set to speak at the Economic Club of New York later in the day, potentially offering up more cues on the path of interest rates. A string of strong U.S. data releases, particularly inflation and retail sales, ramped up bets that the Fed will have enough headroom to keep rates higher for longer. This notion boosted the dollar, which came within sight of a 11-month peak this week. Markets fear that higher interest rates will stymie economic activity this year, potentially denting crude demand. A stronger dollar also weighs on oil demand by making crude more expensive for international buyers. Powell has largely maintained the rhetoric of higher-for-longer interest rates, and is expected to reiterate his stance later in the day. The Fed is also expected to cut rates by a smaller margin in 2024. https://www.investing.com/news/commodities-news/oil-rally-cools-as-focus-remains-on-israelhamas-war-more-fed-cues-3202538