US STOCKS REBOUND ACCELERATES AS REAL YIELDS TURN NEGATIVE

US STOCKS REBOUND ACCELERATES AS REAL YIELDS TURN NEGATIVE

American stocks started the month on a positive note as investors focused on the performance of the bond market. The ten-year bond yield dropped to 2.63% while the 30-year fell to 2.961%. At the same time, real yields, which represent what investors earn in government bonds after adjusting for inflation, moved to the negative territory. This implies market expectations that the Federal Reserve will be less hawkish than expected considering that the US has already moved into a recession. Data published by the ISM and S&P Global showed that the manufacturing sectors continued struggling.

Natural gas prices rose as investors focused on the ongoing challenges in Europe. On Sunday, Russia’s Gazprom stopped shipments to Latvia.

It has already slashed supplies to Europe by about 20%. Another challenge facing the gas market in Australia. According to the Wall Street Journal, Australia may soon stop shipments abroad to avoid shortages at home.

With exports rising, there are concerns that some parts of the country could see shortages in 2023. Europe is buying as much LNG from countries like the US and Qatar as possible.

The Australian dollar continued falling after the latest interest rate decision by the Reserve Bank of Australia (RBA).

The bank decided to hike interest rates by another 0.50%, bringing the year-to-date gains to 175 basis points.

It also hinted that it would continue hiking interest rates in a bid to fight inflation. Data published last week showed that the country’s inflation rose by 5.1% in the first quarter.

The next key events to watch on Tuesday will be the national house price index from the UK and the Swiss consumer climate estimate data.
The US will also publish the latest JOLTs job openings numbers.

US STOCKS REBOUND ACCELERATES AS REAL YIELDS TURN NEGATIVE

USDCHF

The USDCHF price continued its bearish trend as the dollar sell-off continued. It has moved below the 25-day and 50-day moving averages.

At the same time, the pair has moved to the important support level at 0.9495 while the DeMarker indicator has moved to the neutral point.

Therefore, the pair will likely keep falling as sellers target the next key support level at 0.9400.

EURUSD

The EURUSD pair rose to a high of 1.0272, which was the highest level since July 22. On the four-hour chart, the pair moved above the upper line of the descending channel shown in yellow.

It has also moved along the upper side of the Bollinger Bands while the Relative Strength Index (RSI) has moved above the descending trendline shown in yellow.

Therefore, the pair will likely keep rising as bulls target the key resistance at 1.0300.

XNGUSD

The XNGUSD pair rose slightly in the overnight session as supply concerns continued.

The pair rose to a high of 8.10, which was higher than this month’s low of 7.75. It has formed a descending channel shown in yellow.

It has moved slightly below the 25-day moving average while the MACD and the momentum indicator have continued falling.

The pair will likely keep rising as bulls target the key resistance at 8.60.

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