the most important events

Less than three days after the government shutdown

Jerome Powell’s testimony

High yield on bonds

Statements by members of the US Federal Reserve

With the beginning of the European session’s trading session today, Tuesday, the general index of the US dollar continues to rise for the second session in a row, and is trading at 93.56 levels, an increase of about 0.18%, and after increases by about 0.10% in the opening session of the week yesterday, Monday, benefiting from the rise in the yield on US Treasury bonds.

The yield on US Treasury bonds for ten years is trading at its highest level in three months, as it trades this morning at 1.54 levels, an increase of about 4%, the highest level since mid-June, while the two-year yield rises by about 3.75%, coinciding with the rise in expectations that The US Federal Reserve begins to shift to a more hawkish policy and begins to reduce bond purchases, followed by an increase in interest rates.

The comments of the members of the US Federal Reserve (Lyle Brainard – John Williams – Charles Evans – Neil Kashkari) during the opening session were almost the same as the four members confirmed that the US Federal Reserve is close to reducing bond purchases, but three of the members emphasized that they prefer not to rush to raise interest rates.

The markets are awaiting during the American session today, Tuesday, the testimony of US Federal Reserve Chairman Jerome Powell before the Senate Banking Committee in a speech published by the media in advance on Monday, in which Powell talked about the economic recovery from the epidemic, employment difficulties, and measures to limit the rise in inflation, if necessary.

On the other hand, market concerns about threats to shutdown the US government rise after Republicans in the Senate blocked legislation to launch the discussion on raising the US government debt ceiling and avoiding a new closure with 48 votes, while 50 members opposed it, while the legislation needs 60 members to pass, as the opportunity will end at midnight Thursday 30th From September, and if an agreement is not reached between the two parties, the US government will enter a partial shutdown for the first time since January 2019.

Janet Yellen, the US Treasury Secretary, had warned of the possibility of the country defaulting on debt if the government debt ceiling was not raised by October 1, at the beginning of the new fiscal year.

The rise of the US dollar and the yield on US bonds raises the appetite for fears in the markets, and thus the assets of safe havens such as gold, the yen and the Swiss franc are damaged.

The yellow metal, in turn, is trading down more than 0.50% at levels of $1,738 per ounce, affected by the rise of the US dollar, to trade at its lowest level since early August.

The most affected, as we mentioned, is the Japanese yen and the Swiss franc, as the Japanese yen is trading at 111.40 levels, down 40 pips during the session, while the Swiss franc is losing about 38 pips and trading at 0.9290 levels against the US dollar.