The asylum dollar held close to a 14-month high against the euro on Thursday as rising energy prices heightened fears that inflation could limit economic growth as well as prompt the Federal Reserve to act faster to normalize policy.

 

The U.S. currency remained stable at $1.1558 per euro after strengthening to $1.1529 on Wednesday, the first time since July last year.

 

The dollar index, which measures the dollar against a basket of six competitors, has changed little since Wednesday to 94.188, after nearly 0.5% growth over the past two sessions. Last week, the index hit an annual high of 94.504.

 

The Japanese yen, another safe haven, has largely remained at 111.375 per dollar, roughly halfway through its range over the past week and a half.

 

Overnight, crude oil rose to a seven-year high before catching its breath from the recent booming growth, while natural gas jumped to a record peak in Europe and coal prices from major exporters also hit all-time highs.

 

"All the talk on (market) platforms, on social media and in broad markets was around Nat Gas, and it was deafening," wrote Chris Weston, head of research at pepperstone broker in Melbourne. a client note called "OMGas".

 

"Traders feared that the risks of stagflation were mounting and wondered how central banks were coping with the stagflation caused by the supply shock?"

 

Investors also remained on the strain over negotiations over the U.S. debt ceiling, even as the top Republican in the U.S. Senate, Mitch McConnell, said his party would extend the debt ceiling until December, averting a historic default with dire economic consequences.

 

The Federal Reserve, which has so far largely argued that inflationary pressures will prove temporary, said it would likely begin to cut its monthly bond purchases as early as November before interest rate hikes followed.

 

Economists expect further improvement in the labor market, with the consensus forecast suggesting that 473,000 jobs were created in September, a Reuters poll showed.

 

The number of U.S. private sector jobs rose more than expected in September as Covid-19 infections began to weaken, allowing Americans to travel, visit restaurants and re-engage in other activities that require more contact, the ADP National Employment Report showed Wednesday.

 

Meanwhile, Bitcoin, the world's largest cryptocurrency by market value, hovered around the nearly five-month high of $55,800 reached on Wednesday and last traded around $54,881.

The U.S. dollar rose for the second straight session on Monday, boosted by rising Treasury yields ahead of a number of Federal Reserve speakers this week, which could confirm expectations that asset purchases will begin to decline before the end of the year.

 

The yield on 10-year U.S. Treasuries hit a three-month high of $1.516% on Monday.

 

On Monday, Fed officials, including one influential board member, linked the reduction in the Fed's monthly bond purchases to continued job growth, with the September jobs report now a potential trigger for the central bank's bond "winding down."

 

Fed Chairman Jerome Powell, who joins Treasury Secretary Janet Yellen, will address Congress on Tuesday.

 

The dollar index, which measures the U.S. currency against six major peers, rose 0.1 percent to 93.37.

 

The dollar also continued to rise after data showed that new orders and shipments of major U.S. capital goods rose strongly in August, rising 0.5 percent in August on strong demand for computers and electronic goods.

 

But the market was more focused on the U.S. Treasury bond market.

 

U.S. yields rose to their highest levels since late June in anticipation of a tightening of monetary policy after the Fed announced last week that it could begin winding down stimulus as early as November and noted that an interest-rate hike could come sooner than expected. 

 

"The winding-down process itself is not a surprise, but an earlier end to the program will reinforce the perception that downside risks to the U.S. dollar have diminished," Mazen Issa, senior currency strategist at TD Securities, wrote in a research note.

 

TD expects the Fed to end its quantitative easing program by June 2022.

 

"If the last cycle of winding down the program was any indication, about half of the cyclical rise in the U.S. dollar was seen three months after winding down the program," he added.

 

The euro was down 0.1 percent against the dollar to $1.1698, largely ignoring developments in Germany's weekend election, where the Social Democrats are projected to defeat the conservative CDU/CSU bloc.

 

The dollar rose 0.3 percent against the yen to 110.99 yen, after earlier rising to a nearly three-month high. It rose 0.2 percent against the Swiss franc to 0.9259 franc.

 

"The buck has no real reason to decline from where it is, so we'll be looking to see what can make a difference as we hear news this week from different sides: from the new German leadership, the new head of Japan and the U.S. Congress," said Juan Perez, a currency strategist and trader at Tempus Inc. in Washington.

 

The risk-sensitive Australian dollar rose 0.4 percent to US$0.7289 as worries about widespread market contagion from debt-laden China Evergrande Group eased.

 

Fears that Evergrande, China's second-largest real estate developer, could default on $305 billion in debt have marred trading in recent weeks, but some of those concerns are receding.

 

The People's Bank of China injected a net 100 billion yuan ($15.5 billion) into the financial system Monday, adding to last week's net 320 billion yuan, the most since January.

European stocks fell sharply Monday as global markets faced worries about the U.S. Federal Reserve's timetable for cutting lending and worries around struggling real estate developer China Evergrande Group.

 

The pan-European Stoxx 600 index was down about 2.2% early in the second half of the day, with the main fallers being the underlying resources, which are heavily linked to China. European banking sector stocks also fell an average of 4% and were poised for their worst session of the year. The German Dax index was down about 2.9%, which also led to its worst trading session of the year.

 

The decline in the European open came as global equities continued to struggle in September, traditionally a weak month for markets, and the Dow Jones Industrial Average suffered its first loss in 2021 for three straight weeks.

 

Hong Kong's Hang Seng Index led losses among Asia-Pacific markets in overnight trading Sunday, with shares of struggling Chinese property developer China Evergrande Group continuing to fall. Markets in mainland China, Japan and South Korea were closed Monday due to the holidays.

 

Global markets are also feeling some nervousness ahead of the much-anticipated September Federal Reserve meeting, which begins Tuesday. Fed Chairman Jerome Powell will hold a news conference Wednesday at the conclusion of the two-day meeting, and investors will be eager to catch any signs that the Fed will be winding down its loose monetary policy.

 

Powell has said a cut could happen this year, but investors are waiting for more specifics, especially after mixed economic data released after Powell's latest comments. U.S. stock futures were mixed in overnight trading Sunday.

European stocks rallied Thursday morning as investors prepare for the next reading of US nonfarm payrolls data due Friday.

 

Pan-European Stoxx 600 added 0.3% by mid-morning, with tourism and leisure stocks up 1.1%, while fixed assets fell 0.6%.

 

Investors around the world are watching closely the release of data from the US in the next few days. Markets await the weekly initial jobless claims report on Thursday and the Labor Department's nonfarm payrolls report on Friday.

 

Dow Jones estimates the non-farm jobs report for August is expected to add 720,000 new jobs and drop the unemployment rate to 5.2%.

 

The data could influence when the US Federal Reserve starts to cut its asset purchase program, as well as the direction of central bank policy in Europe. US stock futures remained largely unchanged on Wednesday night.

 

Recent statements from the central bank indicate that it is likely to slow the pace of monthly bond purchases if job growth continues at a rapid pace.

 

Meanwhile, stocks in the Asia-Pacific region were mixed overnight as investors reacted to trade data and corporate news from the region; Australia had a trade surplus of A $ 12.117 billion (about $ 8.93 billion), according to figures released Thursday by the country's Bureau of Statistics.

 

Stocks in mainland China were mixed after Chinese regulators called and interviewed 11 companies calling on passengers to correct “illegal behavior.”

 

Regarding the development of a vaccine against Covid, Moderna and Takeda Pharmaceutical announced Wednesday that they are working with Japanese authorities to recall several shipments after stainless steel contaminants were found in some vials.

 

In terms of individual share price movements, Sweden's Orphan Biovitrum gained more than 24% after US venture capital firms Advent International and Aurora Investment offered to buy a biopharmaceutical company from Stockholm at SEK 235 (US $ 27.30 ) per share.

 

At the bottom of the European blue-chip index, mining giant BHP fell 6% trading without dividends.

Oil prices rose on Friday, expecting a significant rise for the week due to concerns about short-term supply disruptions as energy companies began to stop production in the Gulf of Mexico ahead of a forecast of a potential hurricane over the weekend.

 

Futures for WTI crude oil rose 16 cents, or 0.2%, to $67.58 a barrel at 01.01 GMT, after recovering a 1.4% drop on Thursday. WTI is aiming for a weekly gain of more than 8%, which will be the strongest growth since the beginning of February.

 

Brent crude futures also rose 16 cents, or 0.2%, to $71.23 a barrel after falling 1.6% on Thursday.

 

The price of Brent crude will rise more than 9% this week, the biggest weekly jump since June 2020, largely due to relief that China has contained the delta variant flare-up.

 

On Thursday, the companies began moving workers from oil production platforms in the Gulf of Mexico, and BHP and BP said they had begun to stop production on offshore platforms as a storm brewed in the Caribbean Sea that is forecast to pass through the Persian Gulf over the weekend.

 

Offshore wells in the Gulf of Mexico account for 17% of U.S. crude oil production and 5% of dry natural gas production. More than 45% of all U.S. refining capacity is located on the Gulf Coast.

 

The prospect of supply disruptions in the Persian Gulf helped the market recover from losses on Thursday, which were partly caused by the resumption of production on the Mexican oil platform after a deadly fire.

 

"The market may have more serious concerns about the hurricane in the Caribbean. It is expected to become a powerful hurricane and potentially cause damage to the Gulf of Mexico and Texas early next week," ANZ Research said in a statement.

 

Analysts also expect the dollar movement to be an important factor on Friday after the long-awaited speech by US Federal Reserve Chairman Jerome Powell. Markets expect it to make some recommendations on plans to curtail bond purchases in the fourth quarter.

 

"If we see an earlier decline in prices, we expect the US dollar to rise and this will put pressure on oil and other commodities," said Commonwealth Bank commodities analyst Vivek Dhar.

Gold prices fell on Thursday as a stronger dollar and rates on imminent tightening by the US Federal Reserve weighed on sentiment, although losses for the safe-haven metal were limited by concerns that rising COVID-19 cases would slow global growth.

 

Spot gold fell 0.5% to $ 1,778.65 an ounce by 2:21 pm ET. US gold futures are down 0.1% to $ 1,783.1

 

Putting pressure on gold, the US dollar surged to nine-month highs after July Fed minutes showed that officials largely expected they would be able to ease stimulus this year, although consensus on other key issues seemed elusive.

 

"The only thing that is unclear is when this (cut) might happen. However, the cut has become the price of gold again," said Commerzbank analyst Daniel Breesemann.

 

Earlier data showed that the number of Americans filing new jobless claims fell to a 17-month low last week, underlining recent Fed officials' views of a labor market recovery.

 

Market attention is currently focused on the annual meeting of central bankers in Jackson Hole, Wyoming on August 26-28.

 

Talk of narrowing and fears of rising delta COVID-19 cases have heightened risk sentiment in broader financial markets, pushing investors towards safe haven assets.

 

“Gold certainly benefits from its safe haven status. While stock markets are dropping hard, gold is in demand again. Obviously, COVID's nerves are on edge, ”said OANDA analyst Craig Earlam.

 

"Going above $ 1,800 looks more achievable," added Earlam. "Gold will be under downward pressure in the medium term, but that won't stop it from taking advantage of the nervousness."

 

Gold prices are up about 6% from the more than four-month low of $ 1,684.37 hit last week.

 

Elsewhere, silver fell 1.4% to $ 23.15 an ounce.

 

Platinum fell 2.5% to $ 969.88 an ounce and palladium fell 4.8% to $ 2311.19 an ounce, hitting its lowest level since mid-March at $ 2299.57.

European markets rallied on Friday, aiming to end their tenth straight positive session as investors gauged global economic data and the rise in Covid-19 cases.

 

Asia-Pacific stocks fell in trading on Friday, with South Korea's Kospi leading major markets as the stocks are tied. The Samsung conglomerate fell after the release of the company's heir from prison.

 

In the United States, stock futures have not changed much in the premarket after the S&P 500 climbed to a new all-time high on Thursday and US investors digest the economic uncertainty.

 

Weekly jobless claims were in line with expectations - 375,000, which was the third consecutive decline, while producer prices in July rose by 0.9% against the forecast of 0.5%, which casts doubt on reaching a peak in inflation.

 

Overnight cumulative performance of MSCI global equity markets reached a new all-time high.

 

“The markets may be more focused on the state of affairs with regard to Covid right now, in particular the proliferation of the Delta variant,” Xian Chang, chief investment officer of wealth management at HSBC, said in a memo.

 

“But no matter where you look, the general consensus (and hope) is that the widespread success of vaccination programs will allow the recovery story to continue into the second half of this year.”

 

In Europe, Adidas sold Reebok for up to $ 2.5 billion to Authentic Brands as the German sportswear giant decided to focus on its central brand. Adidas shares up 2.6% on Friday.

 

Ipsen shares fell more than 11% to the bottom of the Stoxx 600 after a French pharmaceutical company withdrew a US drug application.

 

At the top of the European blue-chip index, Vestas Wind Systems rallied 3.8%.

Robinhood shares soared again on Wednesday, bringing the new public stock trading app to nearly 120% weekly growth.

 

Robinhood is up 65% Wednesday to about $ 77.00 a share. Stocks are currently on hold due to volatility.

 

Robinhood Stock makes up for its failed Nasdaq debut last week. The share price was $ 38 per share, which is the lower end of the offer range. It opened at that price on Thursday, but then fell 8% on the first day and mostly traded below that price until Tuesday, when it rose more than 24%.

 

It is unclear what exactly drove the shares higher on Wednesday; however, the attention of popular investor Katie Wood tends to benefit rising stocks.

 

On Tuesday, ARK Invest Wood acquired 89,622 HOOD shares in the ARK Fintech Innovation ETF, which is approximately $ 4.2 million based on Robinhood's closing price of $ 46.80. This position adds to the roughly 3.15 million shares Wood has bought from Robinhood since the company debuted last week.

 

Robinhood is also gaining attention from retail investors. HOOD is the number one ticker on WallStreetBets tracker Swaggy Stocks, with over 700 mentions on Reddit chat.

 

"Unpopular opinion: Robinhood still has the best mobile experience," says one post with 4600 interactions.

 

"This is the story of order flow payments with cryptocurrencies as a kick-start," Stephanie Link, chief investment strategist at Hightower, said Wednesday in an interview with CNBC's "Squawk Box". “In the second quarter, total revenue was up five to ten percent over the first quarter. But if you look at the payment data for the flow of orders, in the second quarter, that figure fell 23%. So that tells me that the payment for the order flow is very competitive, but the crypto kicker is probably helping Robinhood and they are probably gaining share. "

 

"For all that, it is very expensive. It is difficult to understand the estimate at 11 times the price-to-sales ratio," added Link. Online brokerage Charles Schwab is trading at 7x.

 

HOOD was also one of the most traded stocks on Fidelity on Tuesday.

 

Robinhood is a five-time CNBC Disruptor 50 and topped the list this year.

European stocks fell on Friday after the previous session closed at record highs as investors reacted to another flood of corporate earnings and economic data.

 

The Stoxx 600 pan-European index was previously down 0.4%, with most major stock exchanges and sectors in negative territory. Travel and leisure stocks fell 2.5%, resulting in losses, while chemicals were up 1%.

 

Asia Pacific stocks fell again on Friday, approaching their worst month since March 2020, as volatile trading in Chinese tech stocks continued amid regulatory action in China and the fall of Hong Kong's Hang Seng.

 

In the US, stock futures fell on the back of a fall in Amazon stock, but the S&P 500 is still on track for its sixth positive month in a row.

 

Rapid spread of delta Covid-19 and regulations in China continued to weigh on European sentiment, but European stocks continued to rise for the sixth straight month.

 

Profits continued to be at the center of: BNP Paribas, Renault, Air France-KLM and IAG among the big companies reporting on Friday.

 

BNP Paribas reported 26% annual net income growth in the second quarter to 2.9 billion euros ($ 3.44 billion), exceeding market expectations amid recovery in business activity. The French lender's shares fell 1.2%

 

Renault reported a quarterly net profit of € 354 million for the first half, compared with a significant loss of almost € 7.3 billion in the same period last year when the pandemic halted production across the industry. The French automaker predicts full profits in 2021, despite the challenges posed by the global semiconductor shortage. Renault shares fell 3%, however.

 

L'Oréal said Thursday that sales growth accelerated in the second quarter, due in part to a surge in cosmetics sales in the US after restrictions eased. Shares are up 0.3%.

 

At the top, the Stoxx 600 Euronext added 5.3% after its income statement. Italy's UniCredit rose 3.1% after a sharp fall in profits in the second quarter.

 

At the bottom of the index, UK quality assurance firm Intertek is down 8% after first half results.

 

In terms of data, the eurozone economy showed a sharper-than-expected recovery in the second quarter and grew 2% qoq, according to the statistics office of Eurostat.

 

Eurozone inflation rises to 2.2% in July, the highest since October 2018 and above the European Central Bank's target of 2%. However, ECB politicians have indicated that they expect temporary deviations.

 

Germany's annual consumer price inflation jumped to 3.1% in July, the highest level since August 2008, prompting a leading service sector union to call for an immediate and substantial wage increase.

Bitcoin is in a narrow range as attention is focused on the US Federal Reserve's statement on monetary policy on Wednesday, which could provide clues about the central bank's course of action and cause volatility in financial markets.

 

The cryptocurrency is trading in a narrow range of $39,400 to $41,300 from Monday's European trading hours, data from CoinDesk 20 show.

 

"The market is completely neutral ahead of the Fed meeting with small spot purchases," said Brian Tehako, IT director at Warwick Capital Management. "Traders are waiting for the Fed's announcement."

 

According to singaporean company zCP Capital, this event is likely to cause a reaction of the binary market. Binary events are dramatic events that cause large movements in any direction.

 

"If the Fed remains "pigeon" (continued the bias towards stimulus), cryptocurrencies will have the greatest growth potential, at least until September, given the oversold that we have seen compared to other macro markets since the publication of the consumer price index in May," the company said in a Telegram channel.

 

Bitcoin dropped from $58,000 to nearly $30,000 in the eight days to May 19. The sell-off comes after official data released on May 12 showed the U.S. consumer price index rose to its highest level in nearly three years. This renewed fears about the Fed's premature winding down - the gradual winding down of incentives to increase liquidity.

 

However, while bitcoin fell due to fears of Fed tightening, traditional markets remained resilient, while gold rose by 7.8% in May. Shares also remained in value.

 

As a result, bitcoin and cryptocurrencies in general look relatively cheap before the Fed meeting, which can bring them the greatest benefit in the case of a "pigeon" decision.

 

On the other hand, the "hawkish" surprise can negatively affect the prices of assets. If they are "hawkish" on Wednesday, all bets will be made, and we expect that the market will return to recent lows," - said in the "CCP Capital.

 

According to Patrick Heusser, head of trading at Crypto Broker AG, "painful" trading can be a reaction to risk reduction, leading to the growth of safe currencies such as the franc, yen and US dollar, and the sale of commodities and stocks. "Reducing risk can also bring losses to bitcoin," Heusser said.

 

The cryptocurrency market seems to have tuned in to a surge in volatility after the Fed meeting." "The cryptocurrency market looks like a long range before this event," Denis Vinokurov, head of research at Synergia Capital, told CoinDesk.

 

Gamma refers to the rate of change in the option delta - the sensitivity of the option price to changes in the price of the underlying asset. That is, the gamma measures the rate at which the price of the option changes in the spot market changes.

 

Being a long range means holding an optional position with a net range of more than zero. Simply put, the position will benefit from increased volatility in the price of the underlying asset.

Asia-Pacific stocks mostly fell on Tuesday as investors reacted to the release of revised first-quarter Japanese gross domestic product data.

 

Japan's Nikkei 225 fell 0.19% to close at 28,963.56, while the Topix rose about 0.1% on the day to 1,962.65.

 

Revised government data released on Tuesday showed that Japan's economy contracted 3.9% in the first quarter, an improvement from an initial estimate of a 5.1% contraction. Revised gross domestic product versus economists' median forecast for 4.8% contraction in Reuters poll.

 

“We expect the economy to experience another contraction in the second quarter, given the expanded restrictions, which will put severe pressure, especially on the services sector,” Makoto Tsuchiya, an assistant economist at Oxford Economics, wrote Tuesday. “However, we remain optimistic that the pace of recovery will pick up in the second half as domestic demand recovers, supported by increased vaccinations, while external demand should continue to support the manufacturing sector.”

 

Mainland China stocks closed lower, with the Shanghai composite shedding 0.54% to 3,580.11 and the Shenzhen component dropping 0.98% to 14,716.98. In Hong Kong, the Hang Seng Index fell about 0.1% in the last hour of trading.

 

Elsewhere, South Korea's Kospi fell 0.13% to close the day at 3,247.83. Australia's S&P / ASX 200 closed 0.15% higher at 7,292.60

 

MSCI, the largest stock index in Asia Pacific, fell 0.23%.

 

The US Dollar Index, which tracks the dollar against a basket of peers, was at 90.158 after an earlier low of 89.955.

 

The Japanese yen traded at 109.48 against the dollar, above levels above 110 against the dollar last week. The Aussie changed hands at $ 0.7741, largely holding up after rising below $ 0.768 last week.

 

Oil prices were lower in Asian afternoon trading and international benchmark Brent crude oil futures fell 0.62% to $ 71.05 a barrel. US oil futures fell 0.61% to $ 68.81 a barrel.

Deutsche Bank, Germany's largest lender, said the U.S. may expect one of the worst inflation periods in history, arguing that higher government spending and soft monetary policy could combine to create conditions similar to previous episodes of the 1940s and 1970s.

 

According to a report released Monday, the pressure is compounded by the roughly $2 trillion in "excess savings" that consumers have accumulated over the past year, when many businesses have been closed and travel has mostly closed.

 

"Consumers will definitely spend at least some of their savings when the economy reopens," wrote Deutsche Bank chief economist David Falkerts-Landau, along with Peter Hooper, head of global economic research, and Jim Reed, head of case studies. a very real spectre of inflation driven by consumers."

 

Inflation is closely watched by investors in cryptocurrency, who consider bitcoin as a means of protection against the depreciation of the dollar.

 

But bitcoin has also sometimes traded in sync with risky traditional assets such as equities, and Deutsche Bank's authors have warned that when inflation eventually emerges, the Fed may have to react strongly, which could "cause a significant recession and trigger a chain of financial disasters around the world."

 

The warning stands in stark contrast to the repeated assurances by Federal Reserve Chairman Jerome Powell that higher inflation is likely to be "temporary" and will stabilize over time as the economy recovers from the recession caused by last year's pandemic.

 

"The lack of preparation for the return of inflation is a cause for concern. Even if some inflation is temporary today, it can affect expectations as it did in the 1970s," the report says. "Even if they are implemented for only a few months, these expectations can be difficult to contain with such a strong stimulus."

• One signal to be drawn to is the output gap, which measures the imbalance between supply and demand as a percentage of the economy's gross domestic product.
• Deutsche Bank expects the U.S. output gap to exceed 2 percent, the highest in more than two decades as demand exceeds supply, leading to higher prices.
• After the 2008 financial crisis, "the amount of U.S. stimulus was insufficient to close the output gap, and the recovery was unnecessarily slow."
• But the widening output gap in the 1960s preceded high inflation in the 1970s, which was exacerbated by a series of oil price spikes.

 

Deutsche Bank estimates that legislative stimulus packages amounted to more than $5 trillion, or more than 25% of gross domestic product. The U.S. federal budget deficit is likely to be between 14% and 15% of GDP in both 2020 and 2021, up from about 10% in 2009.

 

During World War II, economists said, the U.S. deficit remained between 15% and 30 percent for four years.

 

"While there are many significant differences between the pandemic and world war II, we should note that annual inflation was 8.4% in 1946, 14.6% in 1947 and 7.7% in 1948 after the economy returned to normal and deferred demand was released," the report says.

 

The current political climate means that job growth may be a higher priority in the coming years than containing inflation.

 

Unlike in the early 1980s, when then-President Ronald Reagan supported Fed Chairman Paul Volcker, who "put the economy to the test to suppress inflation, today this problem is seen as much less important than unemployment and broader goals of achieving greater equality in income and wealth," the report said.

 

"The Fed's retreat from pre-emptive action under the new policy is the most important factor that increases the risk that it will be far behind schedule and late to effectively deal with the problem of inflation without major disruptions," the authors write.