Noor Capital | Interview with Mohammad Hashad on Dubai TV – June 12, 2023

Dubai TV interviewed Mohammed Hashad, Head of Research and Development at Noor Capital and member of the US Associaltion of Technical Analysts, to comment and analyze the most important developments in the financial markets during the new trading week.

After ten consecutive increases in the US interest rate, and asked whether he expects the US Fed to fix interest rates at the current level, Hashad replied, “It seems that the Federal Reserve meeting has become the most important headline that investors are waiting for during the current week. Many markets in the markets will influence the Fed’s rate decision, and perhaps the first factor is the recent inflation readings in the United States. We have lately noticed that inflation has begun to respond to raising interest rates as one of the most important tools of monetary policy, and we can describe it as “moderate inflation”, but it is still far from Fed’s target. The Federal Reserve rate is actually targeting 2 percent”.

Hashad added: “On the other hand, the labour market is still strong, and the American economy succeeded in adding 339,000 jobs last May, despite the slowdown in wages, and there is another factor that will also affect the federal decision, so it is no secret to observers that The Federal Reserve is now monitoring the turmoil that is taking place in the banking sector, and from my personal point of view, the stricter the standards, this will lead to a rise in the cost of lending and thus negatively affect inflation. “Higher for Longer” is key for fed’s upcoming decisions, and I think if the inflation data comes in less than the market’s expectations, the Fed may stop raising interest rates, but the basic idea here is the possibility of pausing raising interest rate hikes temporarily, not permanently.”

With regard to gold prices, and asked whether the Fed’s decision on the interest rate is expected to hit gold prices, Hashad indicated that the recent gold moves make all scenarios on the table. Over the past week, there was the first side context confined from the bottom of the curve. The performance of gold recorded above USD 1945 dollars per ounce, and from the top below the level of USD 1977, and perhaps the most important thing that affects gold’s moves if inflation levels decline, will give a great perception to the markets that the Fed may pause raising the interest rate and thus this perception provides an upward momentum for gold prices so we may see it around USD 2000 per ounce.

Now that the US debt crisis is over, where are US stocks headed? This was the last question that Hashad answered, saying: “US stocks showed positive moves, and all the difficult conditions, including the banking crisis or the financial sector crisis, indicate the possibility of a slowdown and the entry of financial markets into a recession.

“Nevertheless, the results and profits of companies during the last period were positive and good”, he added. With the cessation of the monetary policy tightening program approaching at the end of 2023, Hashad says: “I think that stocks have the opportunity to rise further”.

Regarding the upcoming decision of the European Central Bank and whether it will continue to raise interest rates in light of the continued rise in inflation, Hashad believes that “all data indicate that the European Central Bank will continue to raise interest rates, including general inflation in the Eurozone at the level of 6.1, yes, indeed, inflation has declined from its highest level in four decades at 10.6 level, but inflation is still about three times as much as the ECB’s target, and therefore Hashad expects to raise interest by 25 points at the ECB’s next meeting and that this could be followed by raising interest by another 25 points at the next meeting in July.