Noor Capital | Interview with Mohammad Hashad on Dubai TV – June 5

Mohammed Hashad, Head of Research and Development Department at Noor Capital, Member of the US Association of Technical Analysts, commented and analyzed the most prominent developments across markets as well as the performance of the most important assets, in an interview on Dubai TV.

As investors, analysts and traders are awaiting the decisions by the European Central Bank meeting, amid a lot of speculations and expectations, Hashad indicated that he believes that the President of the European Central Bank, Christine Lagarde, will be more cautious and duly wise regarding the future course of monetary policy and the interest rate path.

Hashad said: “I believe that the European Central Bank will closely monitor the economic data, especially the data and indicators related to the interest rate reduction cycle, as inflation is still hovering around two percent and the target inflation is at two percent. I rule out, from my personal point of view, that there will be a rate cut on tomorrow’s meeting, even if there is a rate cut, it could be only by twenty-five basis points. This does not mean that if the ECB reduces the interest rate, it will end the tightening cycle, but monetary policy will remain restricted even if it reduces the interest rate by twenty-five basis points. I believe that Christine Lagarde has a lot of important considerations including, notably the moves by the US Federal Reserve regarding interest rates.”

As for the developments in the performance of the US stock market, which declined strongly, and similar declines were observed in the European stocks before the levels we see now, and asked “To what extent may these declines continue in the American market and where are European stocks also headed?”, Hashad noted that “the US stock market is significantly declining, and the three main indices have suffered losses amid uncertainty about the future of interest rates, thus risk appetite has declined significantly.

In the United States of America, some negative economic data was issued, such as the JOLTS job openings index and the labour turnover rate, these figures came Negative for the second month in a row, and was below expectations or much worse than expectations. According to Hashad, this indicator provides insight into the state of the American labour market.

Hashad agrees with the opinion that stock investors want a calmer labour market than it is now, but not to such a degree that has raised fears of a recession in the markets. As for European stocks, they tried to recover during today’s trading session, but yesterday they declined significantly. Large, led by the German DAX index, which suffered losses of more than one percent under pressure from the construction and industrial sectors.

Regarding oil prices, and how their declines can be justified despite the OPEC+ alliance maintaining the voluntary production reduction plan, Hashad answered: “Oil is one of the investment tools that moved most significantly during the week’s transactions, and its prices fell to their lowest level in four months; ignoring the decision to continue the voluntary reduction in production by OPEC and its allies by 2.2 million barrels per day until next year.

Hashad also noted that there are some negative reasons that put pressure on oil prices, perhaps the most important of which is the slowdown in economic growth in the United States of America in conjunction with the slowdown in the manufacturing sector and the slowdown in basic personal consumer spending. which declined, but at a slow pace, meaning that inflationary pressures are still continuing.

According to Hashad, the factor that had the greatest impact was the decline in the energy stocks sector significantly, by more than 0.17%, as a result of the current high levels of interest rates, which in turn affects economic activity and limits demand. In addition to the return of concerns in the markets about a supply glut.

In light of all these data, Hashad spoke about his expectations for gold prices, since they are today high, trading within the green territory, the range seen today is still sideways and inclined to the uptrend, and the precious metal recorded its highest level yesterday at $2352 per ounce.

Hashad also noted gold prices benefited from a significant decline in the US dollar and rose on the shoulders of US Treasury bond yields, which fell to their lowest level in three weeks. In light of the inverse relationship whenever the US dollar declines, gold investors find a good opportunity to buy bullion.