The expectations of the American retail trade giant “Wal-Mart”, coinciding with the dollar’s rise, which awaits a decisive decision by the Federal Reserve within the next hours, reflected on the performance of gold and Wall Street shares in the pre-trading period on Tuesday.
The futures indices of the US markets fell during these moments of trading, today, Tuesday, coinciding with a sudden shift in the performance of the dollar index, which began trading with a decline, while the losses of the yellow metal expanded.
This coincides with the outbreak of the gas war between the European Union and Russia, following Gazprom’s decision to reduce gas exports by 33%. The European Union’s response came quickly with a decision to reduce Russian gas imports by 15% during the next eight months, to ignite energy prices during these moments.
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After descending in early trading to levels near 106.2 points, the dollar index returned to rise strongly due to the outbreak of the crisis between Europe and Russia, to exceed the levels of 107 points again.
During these moments, the main dollar index is trading near levels of 107.2 points against a basket of major currencies, with an increase of 0.7% during trading today, Tuesday.
On the other hand, the euro fell 1% to levels near $1.01 per euro, sterling fell by 0.7% to $1.19 per pound, and the yen fell to levels of 136.6 yen / dollar.
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On the other hand, the yellow metal and the safe haven gold declined in the range of $3 to levels near $1714 an ounce, after rising in early trading near levels of $1726 an ounce.
Gold prices rose during early trading on Tuesday, supported by market concerns about slowing global growth, which prompted demand for the precious metal as a safe haven, but expectations of a US interest rate hike remained limiting this rise.
In tandem, the dollar’s strength weakened the 10-year US Treasury yield, falling to levels near 2.74%, 0.064 pips during these moments.
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Wall Street Pre-Trading
At the same time, Wal-Mart’s bleak expectations were reflected in the performance of US indices, as the Dow Jones futures index fell by 0.4%, or 120 points during these moments.
While the Nasdaq index of technology stocks fell in the pre-trading period by 0.45%, or the equivalent of 50 points, and the Standard & Poor’s 500 index fell in the range of 0.35%, or the equivalent of 14 points.
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Markets are awaiting the two-day Federal Reserve policy-setting meeting and the US central bank is expected to raise interest rates by at least 75 basis points in an attempt to curb severe inflation.
However, recession fears and recent economic data have prompted some traders to consider whether or not the Fed might move away from aggressive policy tightening to avoid hurting growth.
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Biden does not believe
US President Joe Biden said he does not expect the United States to enter a recession, before the gross domestic product data to be released next Thursday.
The US gross domestic product data is scheduled to be released next Thursday for the second quarter of this year, after the US economy contracted by 1.6 percent in the first three months of this year.
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In my opinion, we will not enter an economic recession, the unemployment rate is still among the lowest in American history, Americans are still investing, and he expressed his hope that the US economy will shift from rapid growth to stable and steady growth.
If the US economy contracts in the second quarter of this year, it will enter a state of technical recession known as deflation for two consecutive quarters.
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The worst is over
The head of Yardi said that the worst may be over in the US stock market, ahead of an upcoming meeting of the Federal Reserve and the release of business results for major technology companies.
Yardi added that the S&P 500’s drop last month at 3,666.7 points was likely to be the bottom this year, and said the optimistic outlook was due to strong corporate earnings.
“It’s never easy to pick a bottom in the stock market, but I think we’ve already reached it,” Yardi said.
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