Oil
Crude prices are lower on disappointment with the size of cuts with China’s key lending rates. Oil seems locked in on anything and everything that has to do with China. Last week, oil was supported by improving Chinese refiner quotas. This week, energy traders are seeing oil weakness emerge on disappointing stimulus efforts. WTI crude looks like it is starting to find some decent support at the $68 region and that should hold as long the Fed does spook markets that they might be ready to deliver more than two additional rate hikes.
Gold
The gold bears are in control and momentum selling doesn’t seem to care that stocks are softer and as Treasury yields come down. Wall Street is still thinking that the Fed will only deliver one more quarter-point rate rise but no one wants to be long gold before what will likely be a shortened week of hawkish Fed speak.
Fed Chair Powell will defend his FOMC performance. Fed’s Waller will stick to his stance of supporting further hikes. Fed’s Goolsbee might be closer to supporting a pause. A temporary rebound in housing data might push Fed’s Bowman might wait to see if that impacts the trend of lower rents. Fed’s Mester has been a true hawk and probably won’t say she sees a reason to pause rate hikes. Fed’s Bullard will likely confirm he still supports two more rate hikes.
If gold selling accelerates, it could get ugly as major support won’t appear until the $1900 region.
Bitcoin
Bitcoin is slightly higher as the cryptoverse embraces BlackRock’s ETF filing and as EDX crypto exchange goes live. Given the risk-off start to the trading week, Bitcoin’s slight gain is a positive sign. Bitcoin still seems poised to consolidate here but it could start to muster up a rally if gold remains under pressure and if investors grow cautious with the potential headwinds for the stock market.