Mohicans markets：Keep An Eye on Employment and Inflation Data

20:30 The number of initial jobless claims for the week from the United States to August 27 was announced. The previous value was 243,000, which was the second consecutive weekly decline.

22:30 EIA natural gas inventories were announced in the week from the United States to August 26. The previous value increased by 60 billion cubic feet, which formed a certain negative for natural gas.

Global Views - List of Major Markets

On Wednesday August 31, spot gold fluctuated downward, falling below the $1,710 mark twice, and finally closed down 0.72% at $1,711.12 per ounce.Spot silver failed to recover the $18 mark, and finally closed down 2.69% at $17.99 an ounce.

The U.S. dollar index fell after hitting a daily high, erasing all intraday gains, and finally closed down 0.138% at 108.68; The two-year U.S. Treasury yield rose to a 15-year high of more than 3.5 percent at one point, and the 10-year U.S. Treasury yield approached 3.2 percent, the highest since the end of June.

In terms of crude oil, WTI crude oil broke through the $90 mark twice, and finally closed down 3.51% at $88.83 per barrel;Brent crude closed down 4.90% at $94.92 a barrel. Oil prices had their longest monthly losing streak since 2020 amid concerns over economic growth.

The three major U.S. stock indexes opened lower and closed lower for three consecutive days. The Dow closed down 0.88%, the Nasdaq closed down 0.56%, and the S&P 500 closed down 0.78%. Snap closed up about 9 percent as the company expects layoffs and other related measures to save $500 million in annual operating costs.

European stocks closed down across the board, with Germany's DAX down 0.97%, France's CAC down 1.37%, Italy's FTSE down 1.22%, Europe's Stoxx 50 down 1.25%, and the UK's FTSE 100 down 1.05% %.

Precious Metals

In the early trading hours of Beijing time on Thursday September 1, spot gold fell on Wednesday, falling for the fifth consecutive month, affected by the aggressive interest rate hikes by major central banks around the world. It is currently trading around $1,705 an ounce in early trading today. Edward Moya, senior analyst at OANDA, said that due to unprecedented inflationary pressures, central banks will aggressively tighten policy, which is not good for gold, which is obvious.

Spot silver fell 2.6% to $18.00 an ounce. It is down 11% so far this month and is on track for its biggest monthly drop since September 2020. Platinum fell 0.6% to $842.30 an ounce. Palladium fell 0.7% to $2,072.53. OANDA's Moya added that activity in the Asian powerhouses' factories in the coming months will be key to industrial metals demand.

Crude Oil

The U.S. oil is now at $89.99 a barrel in the early trading session on Thursday, September 1, Beijing time; oil prices extended their losses on Wednesday, falling nearly 4% to fall below the 90 mark. OPEC+ sees oil demand growth at risk due to concerns that the global economy will slow further and fears that demand across the West will be undermined; meanwhile, the finance ministers from the Group of Seven (G7) will meet on Friday to discuss the Biden administrations proposal to place a price cap on Russian oil.

Intraday focus on the final value of the U.S. Markit manufacturing PMI in August, the U.S. ISM manufacturing PMI in August.

Negative factors affecting oil prices

【The U.S. crude oil inventories fall 3.3 million barrels】

【EU to propose 8th round of sanctions against Russia】

【The U.S. Needs “Stronger Assurances” in Iran Nuclear Deal Resumption Talks】

Positive factors affecting oil prices

【White House says G-7 to discuss capping Russian oil prices on Friday】

【The U.S. stocks post weakest August performance in seven years】 

【 The growth of the U.S. Private employment positions slows in August】

【OPEC+ sees risks to oil demand growth】

In general, although EIA data showed a decline in US crude oil inventories, the global economy further slowed down under the worrying sentiment, especially under the Feds firm pace of interest rate hike factor, and the market is worried about the demand across the West will be damaged. Also OPEC's oil production in August rose to the highest level since the early days of the epidemic in 2020, and OPEC+ sees oil demand growth at risk, reinforcing demand concerns. Oil prices maintain a short term bearish tone.

Foreign Exchange

The dollar index edged up in the early trading session on Thursday, September 1, Beijing time, which is currently trading near 108.76. The dollar index eased on Wednesday, but remained close to the 20-year high set on Monday and traders prepare for more interest rate hikes by the Federal Reserve.

The dollar index had earlier approached Monday's 20-year high of 109.48, and then shook out at highs and closed down 0.15% at 108.67 on Wednesday.

EURUSD rallied back above parity on Wednesday, ending up 0.39% at 1.0052. The outlook for the Euro remains mired in uncertainty due to the energy crisis and recession fears.

Eurozone inflation hit a record high again in August and will soon reach double digits. This signals that the ECB may offer a series of sharp interest rate hikes, despite the growing certainty of a painful recession ahead. A growing number of ECB officials are calling for massive interest rate hikes to counter inflation that could exceed 10% in the coming months. 

GBPUSD closed down 0.29% at 1.1620 on Wednesday. GBPUSD fell 4.61% in August, which is the worst monthly performance since October 2016. Because investors are worried that the U.K. economy is slowing sharply at a time when inflation is accelerating.

The important event to watch on Thursday: The U.S. Treasury Secretary Yellen meets with U.K. Chancellor of the Exchequer Zahawi to discuss the Russian oil price cap.

Institutional Currency Viewpoint

1. Goldman Sachs: ECB to raise rates by 75 bps next week

2. Nordic Union Bank: Inflation has not yet peaked, the ECB will raise rates by 75 basis points, the Euro will strengthen

3. Capitol Macro: Rising core inflation is a concern, the ECB will raise interest rates by 75 basis points

4. Goldman Sachs: The growth of the U.S. GDP is currently below potential levels

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