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Mohammed Hashad, Head of Research at Noor Capital and a member of the American Society of Technical Analysts, dissected Jerome Powell’s recent testimony before the US House of Representatives. Hashad highlighted a shift in the Fed’s approach, prioritizing both inflation control and labor market health for a balanced economic recovery.
Interest Rate Cuts on the Horizon?
While Powell didn’t explicitly mention rate cuts, markets interpreted his focus on achieving balance as a potential signal for easing monetary policy in the future. Hashad personally believes a reduction might come in December, not September.
Gold Market: Lower Inflation May Spark Further Gains
Despite recent gains, Hashad sees gold unlikely to reach $2,500 per ounce due to already priced-in expectations of a September rate cut. However, if upcoming inflation data comes in lower than expected, it could trigger further increases in gold prices.
Oil Markets: OPEC vs. IEA – A Tale of Two Views
The oil market presents contrasting views. OPEC’s focus on managing supply clashes with the International Energy Agency’s demand forecasts. Hashad suggests that Chinese economic recovery and ongoing geopolitical tensions in the Middle East are the bigger drivers for oil prices, not the discrepancy in these reports.
British Pound Soars on Labour Party Victory
The recent jump in the British pound reflects the Labour Party’s landslide election victory, not necessarily conflicting with inflation control efforts, according to Hashad.
Japanese Nikkei Index: Profit-Taking Expected After Recent Surge
The Nikkei index’s recent rise above 42,000 points is likely due to profit-taking and efforts to catch up with US stocks. Positive manufacturing data from Japan further indicates economic recovery. The interview concluded with Hashad’s insights on these developments in the global financial markets.
