Ed Moya – Flood Of Bearish Headlines Continue Pressuring Markets And Spiking The US Dollar
Ed Moya, Senior Market Analyst at OANDA, joins us to review the flood of bearish headlines that continues to pressure the US and foreign equity markets, as well as spike the US dollar. We start off discussing the health of the economy, job markets, and consumer, where the risk aversion and defensive posturing has people fleeing to go into the perceived safe haven of the greenback. This move higher in the US dollar is further accentuated by the weakness in other key currencies like the pound, euro, and yen. Ed points out the financial challenges that the Bank of England has faced of late, mimicking the same challenges most of Europe or Japan is also facing.
With inflation continuing to run hot globally, and central banks tightening their monetary policies and continuing to hike rates, most economists and market pundits are expecting to see general markets keep rolling over. We talk about the outlook for Q3 and Q4 earnings looking to be weak, and companies messaging the impact of higher input costs and more expensive labor costs, their focus will be on cost cutting measures to assist shrinking margins and that could mean more layoffs.
Oil has at least started to pull back down, with crude oil in the high $70s, but Ed feels that could be short-lived and that supply still remains tight and should underpin relatively strong energy prices in the medium-term. As for Gold, Ed points out that is remains under pressure with surging interest rates and the strong dollar, and if everything goes wrong and there is a final flush lower, then he mentioned $1550 becomes an attractive area for accumulation.