Stocks, bonds, cryptos and gold struggle as yields press higher

We are continuing to see the same type of patterns in the markets where any bounces in equities, bonds, metals and major currencies get sold into after a brief rally. The US dollar remain King of FX. Investors are finding it difficult to justify buying any risk-sensitive assets right now, with rising interest rate expectations driving bond yields higher. All the attention is on Wednesday’s FOMC interest rate decision. HERE is everything you need to know about it. In an environment of rising interest rates around the world, traders continue to prefer selling into assets that have little or no yield, such as low-div stocks and gold.

Ahead of the Fed’s rate decision, the US 10-year broke the 3.5% barrier today to reach its highest level since February 2011, while the 30-year yield hit 3.61%, its highest point since April 2014.

After every bit of a relief rally, whatever opportunity investors get to make profit, they take it. And why wouldn’t they, given everything that’s happening in the world right now? The economic outlook remains grim. Inflation may have eased a little bit; it is still far too high and may remain elevated for longer than expected. This is what happened again this week. US index futures had rallied into the close on Monday, but they started to roll over once the new day started in Asia, before the selling continued after the US cash markets opened. Gold and silver fell, with the former remaining under pressure after it broke to a new low for the year sub $1680 last week as rising interest rate expectations continue to weigh on zero-yielding assets.

Going forward, it is all about when the interest rate hikes are fully priced. Until this happens, it is unlikely that the stock market will be able to shine very brightly. How quick the markets will price in rate hikes depends pretty much on incoming data, especially inflation figures.

The Dow Jones remains inside a bear trend, given those longer-term lower lows and lower highs, with the 200-day average now pointing lower and holding comfortably above the market. Old supports are turning into resistance. One such area is at around 31000, where the index had previously bounced from. But today, this area has turned into resistance, confirming that the sellers remain in full control of price action. From here, the Dow could fall towards the low it had reach in the summer, ahead of a busy week.

How to trade with City Index

You can trade with City Index by following these four easy steps:

Open an account, or log in if you’re already a customer

• Open an account in the UK
• Open an account in Australia
• Open an account in Singapore
Search for the company you want to trade in our award-winning platform
Choose your position and size, and your stop and limit levels
Place the trade

From time to time, StoneX Financial Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.

As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.

City Index is a trading name of StoneX Financial Pty Ltd.

The material provided herein is general in nature and does not take into account your objectives, financial situation or needs.

While every care has been taken in preparing this material, we do not provide any representation or warranty (express or implied) with respect to its completeness or accuracy. This is not an invitation or an offer to invest nor is it a recommendation to buy or sell investments.

StoneX recommends you to seek independent financial and legal advice before making any financial investment decision. Trading CFDs and FX on margin carries a higher level of risk, and may not be suitable for all investors. The possibility exists that you could lose more than your initial investment further CFD investors do not own or have any rights to the underlying assets.

It is important you consider our Financial Services Guide and Product Disclosure Statement (PDS) available at www.cityindex.com/en-au/terms-and-policies/, before deciding to acquire or hold our products. As a part of our market risk management, we may take the opposite side of your trade. Our Target Market Determination (TMD) is also available at www.cityindex.com/en-au/terms-and-policies/.

StoneX Financial Pty Ltd, Suite 28.01, 264 George Street, Sydney, NSW 2000 (ACN 141 774 727, AFSL 345646) is the CFD issuer and our products are traded off exchange.