Gold and Oil leading the recession

As of this week, Gold topped $1,840 an ounce on Wednesday, near its highest levels in six months amid general dollar weakness, as investors awaited the latest minutes from the Federal Reserve that could provide clues on its tightening policy.

MARKETS

Major US stock indexes failed to sustain early gains and closed in the red on Tuesday, the first trading day of the year, amid lingering concerns the Federal Reserve will continue to raise interest rates and hurt growth to reduce inflation. to your goal. The Dow erased a gain of nearly 200 points to close below the flatline and the S&P 500 lost 0.4% as the 4% drop in crude prices pressured energy giants.

Meanwhile, the Nasdaq 100 underperformed and fell 0.7%, remaining under pressure after falling 33% in 2022, as aggressive monetary tightening continues to hit the rate-sensitive tech sector. Tesla collapsed a 12, 4% after the EV maker missed its 2022 delivery target, and Apple fell 3.7% after reports the tech giant will cut production due to weak demand. Investors' attention now turns to the minutes of the Fed's latest policy meeting on Wednesday, which may give an idea of where the pain threshold lies for Fed officials.

COMMODITIES

Gold and Oil:Gold topped $1,840 an ounce on Wednesday, near its highest levels in six months amid general dollar weakness, as investors awaited the latest minutes from the Federal Reserve that could provide clues on its tightening policy. Economic concerns in the US also supported the metal, with former New York Fed Chairman William Dudley saying a US recession is on the cards but probably not serious, while former Fed Chairman Alan Greenspan said a recession is the “most likely outcome.” for the world's largest economy. In addition, IMF Director Kristalina Georgieva warned that 2023 will be a difficult year as the main drivers of growth, namely the US, Europe and China,

On the other hand, WTI crude oil futures held below $77 a barrel on Wednesday after falling more than 4% in the previous session, pressured by a weakening demand outlook amid mounting recession fears in the United States and the uncertainties related to Covid in China.

Rising Covid cases and rising death tolls in China have also hurt near-term demand prospects in the world's top crude importer, but the country's continued reopening is seen as a positive for its economy in the long run. term. Meanwhile, investors remain wary of further retaliatory actions by Russia after it banned oil exports to foreign buyers who adopted the G7 price cap.

FOREIGN EXCHANGE

And in:The Japanese yen appreciated to $130 to the dollar in early January, reaching its strongest levels in seven months on mounting speculation that the Bank of Japan may soon move away from ultra-easy policy. Such a view was recently spurred by a Nikkei report that said the central bank was considering raising its inflation forecasts in January to show price growth close to its 2% target in fiscal 2023 and 2024.

Meanwhile, originally expectations of an aggressive trend were instigated. after the BOJ unexpectedly raised the upper limit of its tolerance band on 10-year government bonds to 0.5% from 0.25% in December. However, BOJ Governor Haruhiko Kuroda clarified that the move was not an indication of the start of a massive stimulus exit, but rather was intended to improve the functionality of the bond market. The yen lost around 14% in 2022 as the US Federal Reserve tightened aggressively to curb rising inflation, while the BOJ kept interest rates ultra-low.

Chilean Peso: A hard session was seen yesterday in the dollar peso as it was struggling not to deepen the fall below the $850 area, despite the fact that it was at $849 it was able to bounce and end yesterday's session close to the area of the $860. For now we are waiting for this movement and with a view to going to look for $886 as a target resistance or looking for resistance in the bearish trend that has been dragging for some time now. For now, the weakening of the dollar index as well as the strengthening of commodities are causing the currency to fall and we could see it perhaps this year return to the $800 area.

CRYPTO MARKET

Sam Bankman-Fried pleads not guilty to all charges in federal court. The former CEO of FTX faces eight criminal charges in the United States that could get him up to 115 years in prison if convicted. Former FTX CEO Sam Bankman-Fried has pleaded not guilty to all criminal charges he faces in connection with the exchange's collapse, including wire fraud, securities fraud, and violations of funding laws. of campaigns.

On the other hand, FTX co-founder Gary Wang and former Alameda CEO Caroline Ellison have already pleaded guilty to related charges, with the latter claiming that FTX was a “line of credit” for Alameda from 2019 to 2022. John Ray took over as CEO of FTX amid bankruptcy proceedings and also spoke to lawmakers at a December hearing exploring the firm's collapse.