Mohicans markets：Follow the Speeches of Central Bank Governors

20:00 The Fed's Mester delivered a speech. Mesters speech a few days ago denied the “inflation peaking theory” and supported the Fed to continue raising interest rates before seeing “more convincing” data indicating a slowdown in inflation.

20:15 The US ADP employment numbers (small non-farm payrolls) in August were announced, which is expected to increase by 300,000. FxStreet believes that, considering that the non-farm payrolls data has exceeded expectations six times this year, the small non-farm payrolls data may also be unexpected.

22:30 The U.S. EIA crude oil inventory for the week ending August 26, EIA strategic oil reserve inventory announced. Dennis Kissler, senior vice president of financial trading at the Bank of Korea, said EIA crude oil inventories are expected to fall by another 500,000 to 600,000 barrels this week, which would bring inventories back to their lowest level in three months.

Global Views - List of Major Markets

On Tuesday August 30, spot gold rose and fell, and the U.S. market was close to the 1720 mark, and finally closed down 0.61% at $1727.24 per ounce; Spot silver continued to decline, fluctuating around 18.40 in late trading, and finally closed down 1.7% at $18.43 per ounce.

The U.S. dollar index failed to challenge the 109 mark, giving back some of the intraday gains, and finally closed up 0.028% at 108.83; The 10-year U.S. bond yield jumped above 3.10% in the U.S. market, and finally closed up 0.30% at 3.106%.

In terms of crude oil, WTI crude oil once plunged 6.7% in the US market, and finally closed down 4.83% at $92.23 per barrel; Brent crude oil fell 7% in US trading, falling below the $100 mark, and finally closed down 4.75% at $99.93 per barrel.

The three major U.S. stock indexes opened lower and closed lower. The Dow closed down 0.96%, the Nasdaq closed down 1.12%, and the S&P 500 closed down 1.1%. Baidu closed down more than 6%, and Q2 revenue decreased by 5% year-on-year to 29.647 billion yuan.

European stocks were mixed, Germany's DAX30 index closed up 0.53%, the UK's FTSE 100 index closed down 0.88%, and the French CAC40 index closed down 0.19%, the Stoxx Europe 50 index closed down 0.24%, Spain's IBEX35 index closed down 0.08%, and Italy's FTSE MIB index closed down 0.08%.

Precious Metals

Gold prices fell on Tuesday August 30, Beijing time, as investors braced for a period of high interest rates in the U.S. and elsewhere.“Fed Chair Jerome Powell's speech last week raised expectations for a more aggressive Fed, which continues to weigh on gold. Gold will face more competition as a non-yielding asset.”

At last weeks Jackson Hole symposium in Wyoming, both the Fed and the European Central Bank took a hawkish stance, pledging to go all out to curb high inflation even as growth takes a hit. Most traders now expect the Fed to raise rates by 75 basis points in September.

During the day, the focus will be on the new version of the U.S. ADP employment number in August, as well as speeches by many central banks.

Crude Oil

The U.S. oil plunged nearly $6 on Tuesday, August 30, Beijing time, which was the biggest drop in about a month. The reason was fears that fuel demand may weaken as central Banks raise interest rates to fight rising inflation, and that unrest in Iraq has failed to weaken the countrys crude exports.

Saudi Arabia raised the possibility of a production cut last week. Sources said the production cuts could coincide with increased supply from Iran if it reaches a nuclear deal with the Western countries. The U.S. gasoline futures closed at $2.6944 per gallon on Tuesday,  which was the lowest close since Feb.18. That was before Russia invaded Ukraine. Intra-days main focus is the release of U.S. EIA crude oil inventories and EIA Strategic Petroleum Reserve inventory data for the week ended August 26 at 22:30 p.m.

Foreign Exchange

The dollar advanced on Tuesday, August 30, Beijing time, but it below the 20-year high set a day earlier, while the Euro moved back above parity because markets priced in the expected super-sized rate hikes by the Federal Reserve and the European Central Bank.

The Feds aggressive rate hikes to curb inflation, which is at a multi-decade high, have been supporting the dollar. And economic data released on Tuesday gave the Fed no reason to shy away. A report showed that the U.S. job openings unexpectedly increased in July. And job openings in the previous month were revised sharply upward, indicating a strong economy, despite two consecutive quarters of declining gross domestic product.

Some traders had bet that the Fed would shift to a looser stance in early 2023, but those expectations were dashed on Friday. At the time, Chairman Powell said at the Jackson Hole Conference in Wyoming that the Fed would raise rates and keep them high for some time.

All eyes in the market are currently on the Fridays the U.S. non-farm payrolls data in August, because any cooling in labor demand would ease pressure on the Fed to hold out for a significant rate hike.

Institutional Currency Viewpoint

1. HSBC: Because the dollar and yen are safe-haven currencies, the U.S. and Japanese trends are expected to roughly consolidate

2. Westpac: EURUSD may down to 0.98

3. National Australia Bank: USDJPY is subject to interest rate differentials or tests 140 and may lead to fine tuning the Bank of Japan policy

4. Canadian Imperial Bank of Commerce: Bank of Canada may raise interest rates by 75 basis points in September

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