Cyclical assets stumble on hawkish Fedspeak and BoE recession forecast

US stock Indices were mixed and ultimately little changed overnight with growth concerns taking centre stage after the Bank of England’s sustained recession forecast and Fed governor Mester again reiterating the central banks resolve in bring down inflation. Mester stated that she sees it as not unreasonable to see a 75bps hike in September and expecting rates to continue rising through HI 2023.

Crude Oil tumbled on recession fears spurred by the BoE comments, dropping below it’s 200 day SMA and giving up all the Ukraine invasion gains.

Bitcoin extended the weeks loss, down for a 7^th straight session

A weak US dollar (with Chinese military exercises new Taiwan being a headwind) bond yields dropping and a flight to safety saw Gold outperform, the spot price pushing towards the psychological $1800 USD an Oz level which has provided strong support and resistance in the recent past.

Looking ahead, we have the closely watch Non Farm Payroll employment result from the US today where 250k jobs are expected to be added in July. With the Fed being in a data-dependent, meeting-by-meeting mode traders will use the data to shape expectations of how the Fed will set policy at its September meeting, expect some big moves in the FX market at the release of these figures released at 12:30 PM GMT (10:30 pm AEST)