Senior Economic & Technical Adviser
Raising interest rates 100 basis points after the worst-than-expected reading of inflation data?
Inflation in the United States rose to 9.1% year-on-year in June, to its highest level in 40 years, and strongly beat expectations, with the monthly inflation rate rising by 1.3%, the strongest since 2005.
The market is also now experiencing a strong yield curve inversion, the deepest inversion since 2000.
A reversal occurs when the two-year bond yields higher than the 10-year bond yield. This is one of the strongest harbingers of recession in the US economy.
For the dollar index, despite the weakness of the index’s recent price trades, its frequent fluctuations above the 107.50 level increase the chances of it renewing the positive trades, to rebound towards 108.20.
Gold price returned to decline after approaching the 1745.00 level, to settle around the 1730.00 level now, noticing that the stochastic indicator presents a negative crossover signal now, waiting to motivate the price to resume the bearish trend, which its next target is at 1700.00.