Oil scales new multi-month highs

Chris Beauchamp IG

Rising oil prices and higher bond yields are piling on the pressure for equities, says Chris Beauchamp, Chief Market Analyst at online trading and investing platform IG.

Oil prices continue to rocket

It feels like investors worldwide are now waking up to the crisis in oil markets. A world of pain awaits the global economy if this surge isn’t stopped soon, but no one in Washington or Tehran seem keen to talk about peace. With Saudi Arabia’s production sharply lower too, the entire energy market faces a major readjustment, one that is unlikely to be ordered or painless.

Yield surge unnerves investors

Far from attempting to calm the moves in yields, it looks like policymakers in the US and elsewhere are keen to pour petrol on the fire. Faced with poll ratings that are heading southwards at a rapid pace, Trump’s lavish promises underscore how politicians refuse to engage with the scale of the problem. Meanwhile the ECB isn’t helping, expecting higher inflation for an extended period. Equity markets are desperately in need of good news, but it is in short supply right now.

Author

Chris Beauchamp

Chris Beauchamp has been with IG for four years, and in that time has become a regular commentator and analyst for the financial press and TV, with appearances on all the major financial channels as well as the BBC and Sky News.

AUD/USD edges higher as hot CPI inflation and hawkish RBA lift rate hike bets

The AUD/USD pair gathers strength to near 0.7035 during the Asian trading hours on Friday. The Australian Dollar edges higher against the US Dollar as hotter Australian CPI inflation data has bolstered expectations of Reserve Bank of Australia rate hikes.

Japanese Yen stays resilient after BoJ maintains status quo

The Japanese Yen stays resilient against its major rivals on Friday, with USD/JPY trading in negative territory below 157.50. The Bank of Japan (BoJ) decided to leave monetary policy settings unchanged at the October meeting, as expected. In the post-meeting press conference, BoJ Governor Ueda reiterated that they will continue to raise the policy rate and adjust the degree of monetary easing in reponse to economic activity and prices.

Gold bears retain control below $4,000 as hawkish Fed bets back further losses

Gold extends its intraday breakdown momentum below the $4,000 psychological mark through the early European session on Friday, eyeing the monthly swing low amid hawkish US Federal Reserve expectations. US macro data on Thursday pointed to resilient economic growth and persistent price pressures, solidifying bets of an imminent Fed rate hike in December. This is seen as undermining the non-yielding bullion for the second straight day and backing the case for further depreciation.

The hawkish Fed can't lift the US Dollar anymore

About three more Federal Reserve hikes are already priced in, and the central banks behind the Euro, Pound, Yen and Loonie are raising rates or about to. That leaves the US Dollar Index with little to gain if the Fed keeps leaning toward higher rates.

Binance hack shakes crypto, but XRP pullback may not be so bearish

Crypto markets were hit by a big headline overnight. Binance confirmed a security incident in which a compromised engineer's laptop led to unauthorized withdrawals, with an estimated impact of around $6.3 billion. About $3 billion has been frozen so far, Binance says it will cover the losses, and withdrawals were paused while security checks are completed.

A hot US economy is supposed to sink Gold. It didn't. Here's why

Gold (XAU/USD) remains under pressure near $4,000, as stronger-than-expected United States (US) economic data reinforce expectations of another Federal Reserve (Fed) interest rate hike in December. Economic growth is accelerating, inflation remains elevated, and borrowing costs could rise further.