Silver is rising and cutting some of its weekly losses, but not enough to end the week up
By The Forex Review - 24 / July / 22 740
Dominick Bell
Silver (XAGUSD) cuts some losses on Thursday at the end of the North American session, but still cannot restore the $19.00 barrier on Friday, despite the weakness of the US dollar, which is inferior to 0.50%, according to the US dollar index, which it stands at 108,093, despite positive US economic data.
XAGUSD is trading up to $18.66, with a 1.36% gain on Friday, in a quiet session in which the white metal fell to $18.17, a new daily low, followed by a jump to a daily high of $18.77
Silver Rises But Hesitates to Beat $19.00
Global stocks are trading profitably, despite the fact that the narrative of high inflation and fears of recession persists. U.S. retail sales in June rose 1% year-on-year, beating forecasts. The May figures were -0.3%, demonstrating consumer resistance. Later, the University of Michigan's consumer sentiment for July reached 51.1, exceeding estimates of 49.9 and exceeding June 50. The UoM survey showed that inflation expectations in the 5-year forecast decreased from 3.1% to 2.8%.
XAGUSD was also supported by a drop in US Treasury yields. The yield on 10-year US Treasury bonds is 2.934%, which is 3 percentage points lower. Meanwhile, the US yield curve for 2 years - 10 years continues to change for the ninth day in a row, which indicates that investors are still pessimistic and discount the recession in the US.
On the other hand, Federal Reserve officials have crossed paths with the news. St. Louis Fed Chairman James Bullard said there would be no difference in an increase of 100 or 75 basis points, adding that the pace could be adjusted before the end of the year. Later, the chairman of the San Francisco Fed, Mary Daly, said that inflation is too high, the US economy is strong, and the labor market remains strong. He added that Michigan's inflation expectations were a "good thing" and that a recession is not its baseline scenario.
Federal funds futures rates for 30 days
At the time of writing, market participants expect a rate increase of 75 basis points, as evidenced by 30-day futures on federal funds rates, and predict that by December 2022 they will end by about 3.45%.
What to keep in mind
Next week, the Canadian agenda will include data on homes started, inflation and retail sales. In the US, the calendar will be filled with data on neglected homes, building permits, existing home sales, initial jobless claims and global PMIs for July.
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