The dollar index (DXY00) on Monday was little changed. The dollar saw support from hawkish comments on Saturday from Fed Governor Bowman but was undercut by the -3 bp decline in the 10-year T-note yield.
Meanwhile, the yen saw weakness after a former BOJ member predicted the BOJ won't be able to raise interest rates again this year.
On Saturday, Fed Governor Bowman said, "The progress in lowering inflation during May and June is a welcome development, but inflation is still uncomfortably above the FOMC's 2% goal."
The markets are discounting the chances at 100% for a -25 bp rate cut at the Sep 17-18 FOMC meeting and at 51% for a -50 bp rate cut at that meeting.
EUR/USD (^EURUSD) on Monday rose slightly by +0.13% on support from slightly higher 10-year German bund yields. However, the euro was undercut by concern that Monday's rally in European nat-gas prices to an 8-month high may weigh on Eurozone economic prospects.
Swaps are discounting the chances of a -25 bp rate cut by the ECB at 94% for the September 12 meeting.
USD/JPY (^USDJPY) rose by +0.33%. The yen fell on dovish comments from former BOJ board member Sakurai, who predicted the BOJ won't raise interest rates again this year due to financial market turmoil.
Swaps are pricing in the chances for a +10 bp rate hike by the BOJ at 0% for the September 20 meeting and +11% for the October 30-31 meeting.
December gold (GCZ24) on Monday closed up +30.60 (+1.24%), and September silver (SIU24) closed up +0.427 (+1.53%). Gold and silver prices rallied on safe-haven demand as an attack by Iran on Israel may be imminent in retaliation for the recent assassination of a Hamas political leader in Tehran. Precious metals prices also received a boost from dovish comments from former BOJ board member Sakurai, who predicted the BOJ won't be able to raise interest rates again this year due to financial market turmoil.
Precious metals prices were undercut by hawkish comments from Fed Governor Bowman on Saturday, who said, "inflation is still uncomfortably above the FOMC's 2% goal."
On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
