Steel price holds lower ground near the monthly low, reversing the previous day’s bounce, as risk-aversion joins hawkish bias on the Fed’s next moves and pessimism surrounding China to weigh on the metal prices. That said, the mixed clues and anxiety ahead of the top-tier data/events seem to restrict the quote’s latest moves during Wednesday’s Asian session.
That said, the most active contract of steel rebar on the Shanghai Futures Exchange (SFE) drops to 3,658 yuan per tonne at the latest.
“Most base metals in Shanghai slid on Wednesday, dragged by a stronger dollar and a bearish demand outlook amid worries about a recession in major economies,” per Reuters.
Alternatively, growing fears of economic slowdown, amid the energy crisis and China’s covid woes, join the firmer US data and hawkish Fed bets to weigh on the metal prices. That said, US ISM Services PMI rose to 56.9 versus 55.1 market forecast and 56.7 prior. However, the S&P Global Composite PMI and Services PMI eased to 44.6 and 43.7 respectively versus 45.0 and 44.1 initial forecasts in that order. Even so, the US Dollar Index (DXY) rose after the release and refreshed a 20-year high.
That said, the DXY stays firmer around the highest levels in 20 years, up 0.22% intraday near 110.50 at the latest. Recently, the CME’s FedWatch Tool signals 72.0% chance of 50 basis points (bps) Fed rate hike in September versus 57% one-day ago.
Moving on, China’s trade numbers for August will precede the Fedspeak to direct short-term moves in steel prices.
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EUR/USD has lost its bullish momentum and declined below 1.0050 in the early American session. As focus shifts to Fedspeak ahead of the blackout period, the US Dollar Index rebounds from 10-day lows, not allowing the pair to gather bullish momentum.
Although GBP/USD erased a portion of its daily gains in the early American session, it holds comfortably in positive territory above 1.1550. The Bank of England announced on Friday that it postponed next week's rate decision to September 22, causing investors to turn cautious.
Gold reversed its direction and dropped below $1,720 after having touched its highest level in over a week near $1,730. Nevertheless, with the benchmark 10-year US Treasury bond yield losing nearly 2% on the day, XAU/USD manages to hold in positive territory.
Vasil hard fork is scheduled for September 22. Analysts evaluated Cardano’s potential to climb above all-time highs of $3.01 ahead of the massive event.
Equities moved higher on Wednesday in apparent aloofness at what was happening in the rest of the market. Oil prices fell sharply, and the dollar gained again.
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