Stocks Fall Amid Conflicting Expectations for Inflation!

John Williams, President of the Federal Reserve in New York, believe that the Federal Reserve would not cut the interest rate before 2024. He added in remarks yesterday, Monday, November 28: The bank needs to raise interest rates to a level sufficiently restrictive to push down on inflation and keep them there for all next year. At the same time, he also added that he does not expect a recession in the economy.

US stocks ended yesterday’s trading session, Monday, November 28, in decline, amid uncertainty due to the protests in China, as a result of the government’s adherence to strict closure restrictions.

At the end of the session, the Dow Jones index fell by 1.45%, or 498 points, to 33,849 points, and the S&P500 fell by 1.54%, recording 3,963 points, and the Nasdaq fell by 1.58%, at 11,049 points.

Today, investors are waiting for the CB consumer confidence index in the United States of America, which is expected to increase consumer optimism, so that the estimate will be at 106.50, after it was in the previous reading at 102.50.

Dollar index (USDX)

The dollar has fallen since its biggest two-day sell-off on November 10-11, when consumer inflation (as measured by the Consumer Price Index) rose 7.7% year-on-year in October, its slowest rate since January and below estimates of 8%.

Last week, the dollar fell further, completing a bearish pattern, after the Fed’s meeting minutes revealed a growing consensus to smooth its hawkish path to hike rates.

But technically, the readings are still conflicting even on the intersections of the moving averages (a positive unstable intersection tending to return to the bottom again), and awaiting more data during this week for the dollar to take clear directions.

Pivot point: 106.15

British Pound (GBPUSD)

On Monday, November 28, a survey showed that British Retail Sales fell in November, while stores are preparing for difficult conditions in December amid the cost-of-living crisis weighing on consumers.

The Confederation of British Industry monthly Retail Sales index fell this month to (-19) from (+18) in October, and sales expectations for the next month fell to their lowest since March 2021, when Britain was still subject to widespread health restrictions during the Covid-19 pandemic.

Orders received by suppliers this month have fallen sharply, and retailers see little hope of improvement next month.

Technically, the Sterling is struggling to stay above its pivot point at 1.2000, with a clear overbought on momentum indicators (H1- hourly chart).

Pivot point: 1.2000

Spot Gold (XAUUSD)

Gold prices fell at the settlement of trading on Monday, November 28, with the continuation of the protests in China, and amid anticipation of the release of economic data in America this week.

Upon settlement, gold futures fell by 0.8%, or $13.70 an ounce, to $1,740.30 an ounce.

Over the weekend, China witnessed sporadic protests in a number of cities due to the Corona-related closure restrictions.

The US jobs report for November is expected to be released on Friday, which is an important indicator of the Federal Reserve’s decisions.

Technically, the moving averages on the hourly chart are still bearish and unstable, with a high overbought close to the important resistance levels at $1756 an ounce, as the last EMA reading was negative since yesterday and has not changed to this moment.

Pivot point: 1,748

Crude (USOUSD)

Oil prices rose today, Tuesday, November 29, as the impact of expectations about OPEC + production cuts during the next meeting outweighed concerns about falling demand, after signs that the rate hike rate was not slowing, with traders assessing developments in China after Beijing moved to suppress protests the “zero” policy. – Covid.

After a report stating the Organization of the Petroleum Exporting Countries (OPEC) and its allies may consider deepening supply constraints when they meet on December 4^th, WTI rose above $77 a barrel after closing 1.3% higher on Monday. Senior figures in the US Federal Reserve, including New York Fed Chairman John Williams, have confirmed that they will raise borrowing costs further to curb inflation.

Pivot point: 76.00