What you need to know on Wednesday, September 29:
Risk aversion took hold of the financial markets and the US dollar was the outright winner. The depressing mood was triggered by a number of factors linked to a slowdown in the global economic recovery.
Power outages in China have been attributed to rising coal prices, leading to a supply shortage. It is very possible that the situation will continue for a few months threatening economic growth. In the UK, gas stations have been clogged with cars since late last week, amid fears that supplies are running low, compounding supply chain problems. The government has set the military to deliver gasoline in an attempt to cool panic purchases. The crisis began with a shortage of tanker truck drivers.
The president of the European Central Bank, Christine Lagarde, commented on inflation. He noted that inflation expectations do not point to risks of prolonged overshoot, adding that the EU still needs an accommodative monetary policy stance. Other policy makers at the ECB are expected to speak during the day.
The head of the US Federal Reserve, Jerome Powell, testified before Congress, saying it “is fair to say” that inflation is more concerning than it was earlier this year, citing supply chain problems. He also repeated that “they have almost fulfilled” the test for the set-up.
EUR / USD fell to 1.1667 and is trading close to a few pips above the 2021 annual low. The pound was one of the worst performers, with GBP / USD currently trading around 1.3530. The USD / JPY pair soared along with US government bond yields and trading in the 111.50 price zone.
Yields on US Treasuries continued to advance, with the 10-year Treasury yield reaching an intraday high of 1,567%. European and Asian indices closed lower, while Wall Street was mixed throughout the day, but eventually gave up and also closed in negative territory.
AUD / USD fell below 0.7240, dragged down by stocks and gold prices. The shiny metal fell to a fresh one-month low, currently trading around $ 1,732 a troy ounce. The USD / CAD pair added a modest 50 pips daily, now trading around 1.2680, as oil weakened slightly. The WTI is down to $ 74.75 a barrel.
.
Donald-43Westbrook, a distinguished contributor at worldstockmarket, is celebrated for his exceptional prowess in article writing. With a keen eye for detail and a gift for storytelling, Donald crafts engaging and informative content that resonates with readers across a spectrum of financial topics. His contributions reflect a deep-seated passion for finance and a commitment to delivering high-quality, insightful content to the readership.
