WIKIFX REPORT: U.S. oil output rises 1.7% June to highest since April 2020

U.S. crude oil production rose in June by 1.7% to its highest since April 2020, according to a monthly report from the U.S. Energy Information Administration on Wednesday last week

HEADLINES

• Dollar dips, but on track for third-straight monthly gain

• Rate hike rush pushes gold to longest monthly losing streak in 4 years

• U.S. oil output rises 1.7% June to highest since April 2020 -EIA

• Wall Street struggles for direction on rate hike jitters

• Treasury yields are little changed after ADP reports hiring slowdown in August

• EUR/USD to retest the 0.9900/10 zone on a sustained push under 0.9985 – Scotiabank

• GBPUSD Near Term: Downside favored

Dollar dips, but on track for third-straight monthly gain

The dollar dipped against a basket of peer currencies on Wednesday, but was on track for its third-straight monthly rise, as traders brace for more oversized interest rate hikes from the U.S. Federal Reserve.

The dollar index , which measures the greenback against a basket of six currencies, was last down 0.184% at 108.56, after earlier having come within a whisker of Monday's two-decade peak of 109.48.

The index is on track for a rise of over 3% in August, and its highest end-of-month closing level since May 2002.

COMMODITIES

Rate hike rush pushes gold to longest monthly losing streak in 4 years

Gold slipped on Wednesday en route to its longest run of monthly losses since 2018, pressured by aggressive rate hikes by major central banks across the world.

Spot gold fell 0.5% to $1,715.79 an ounce by 09:55 a.m. ET (1355 GMT). Bullion has lost about 3% so far in August, and was set for its fifth straight month of declines.

U.S. gold futures shed 0.6% to $1,726.70.

Its getting much more clearer that central banks are going to be aggressive with tightening due to unprecedented inflationary pressure, which is not good for gold, said Edward Moya, senior analyst with OANDA.

ENERGY

U.S. oil output rises 1.7% June to highest since April 2020 -EIA

U.S. crude oil production rose in June by 1.7% to its highest since April 2020, according to a monthly report from the U.S. Energy Information Administration on Wednesday.

Oil production rose to about 11.8 million barrels per day in June from about 11.6 million bpd the month prior, the report showed. Producers cut back drastically on output in 2020 after pandemic lockdowns slashed demand, and companies have been gradually boosting production.

Production in North Dakota rose 3.4% to about 1.1 million barrels per day in June, highest since March, the report showed.

STOCKS

Wall Street struggles for direction on rate hike jitters

U.S. stock indexes struggled for direction on Wednesday and were set for sharp monthly declines as investors worried how much the Federal Reserve will hike interest rates to tame inflation, while chipmakers slid after tepid forecasts from Seagate and HP Inc.

The three main indexes were on pace for their worst August performance since 2015, with the tech-heavy Nasdaq (.IXIC) down 3.9% after Fed Chair Jerome Powell's blunt and hawkish remarks on Friday about keeping monetary policy tight “for some time” quashed hopes of more modest rate hikes.

Treasury yields are little changed after ADP reports hiring slowdown in August

U.S. Treasury yields were little changed on Wednesday after ADP reported a slowdown in hiring for the month of August

The yield on the 10-year note rose was less than 1 basis point higher at 3.117%, after beginning the month at about 2.6%. The yield on the 30-year Treasury bond was up 1 basis point to 3.231%.

Meanwhile, the yield on the 2-year Treasury note moved 2 basis points lower to 3.438%, after it reached a near-15-year high the previous day. Yields move inversely to prices, and a basis point is equal to 0.01%.

ANALYSIS

EUR/USD to retest the 0.9900/10 zone on a sustained push under 0.9985 – Scotiabank

“After another failed test of 1.0050 earlier in the session (minor double top), a sustained push under 0.9985 (neckline trigger) will tilt risks towards a retest of the 0.9900/10 area.”

“Swaps are not yet fully priced for a 75 bps hike, reflecting 67 bps of tightening at the Sep meeting, but the trend is leaning towards the risk of a more aggressive hike which may provide the EUR with some underpinning below 1.00 for now.”

CHART

GBPUSD Near Term: Downside favored

Technical View: Short position below 1.168. Target 1.1595. Conversely, break above 1.168, to open 1.17.