Dubai TV Interview, June 21, 2021

Speaking to Dubai TV on Monday, Mohamed Hashad, Director of Research and Development at Noor Capital, explained the recent developments impacting global markets, with anticipation for the upcoming events.

Oil

We can say that oil is one of the most important tools that has moved significantly over the past weeks and has received explicit support from the decline in inventories by more than 7 million barrels per day. Some signals indicate an improvement in global demand for oil, but talks between the US and Iran are still the most important influence on oil. On the other hand, the victory of conservative judge Ibrahim Raisi in Iran did not have an actual effect. Still, we may witness some ten-day break regarding lifting the embargo on Iran or not, and if the blockade is lifted, nearly a million barrels will be pumped to markets per day, which may lead to negative pressure on oil prices in the future.

Powell’s speech

Powell’s speech will be watched closely, and the markets are awaiting any hint of an interest rate hike in the short and medium term will give some support to the dollar and put pressure on the gold and stocks. I think that it will go into detail on the QE and the directions of monetary policy in the US economy in the coming periods.

Gold

Gold recorded a loss on a weekly basis that exceeded 6%, and speculation about the Federal Reserve raising interest rates twice during the next year pressured gold heavily. We witnessed gold reaching levels of $ 1760 per ounce, which is a several-month low in addition to high-risk appetite, which pressured gold as well, technically. Breaking critical support levels at 1840 and 1800 and there may be a tendency for a downside correctional targeting 1735 in light of the continued rise of the US dollar.

Bank of England

I don’t think the Bank of England will move interest rates or the \purchase program. More importantly, the BoE’s monetary policy summary about the upcoming monetary policy moves. We believe it will focus on inflationary concerns in the markets and discuss the increasing numbers of Coronavirus in the UK.

US stocks

US stocks are in their worst performance since the beginning of 2021, and this comes after the Fed’s recent decision that it may stop quantitative easing sooner than expected in 2022 instead of 2023. Inflationary pressures force it to do so, and this decision flattened the level of returns. In addition, we are watching short-term bonds on the rise while the longer-term Treasuries are under pressure, which is a sign of lower growth expectations.