• Crude oil price[1] chart continues to warn of an emerging top
  • Monthly IEA report, EIA inventory data may inspire selling
  • Gold prices[2] testing critical support after Fed-linked decline

A sharp US Dollar rally[3] weighed on crude oil and gold prices alike. Swelling Fed rate hike bets drove the currency higher alongside front-end bond yields. The spread between rates on two- and ten-year Treasury bond rates tellingly steepened and the 2019 policy path implied in Fed Funds futures reflected a hawkish shift in the markets’ expectations.

The WTI benchmark succumbed to de-facto selling pressure since prices are denominated in USD[4] terms on global markets, but managed to claw back most of the loss to finish the day little-changed. The yellow metal was not so lucky, suffering the largest daily drop in ten months as demand for anti-fiat and non-interest-bearing assets evaporated.


From here, a lull in top tier US news flow might allow for a bit of consolidation in Fed-linked volatility. Scheduled comments from Raphael Bostic and James Bullard – presidents of the US central bank’s Atlanta and St Louis branches, respectively – seem unlikely to be groundbreaking enough to stoke lasting volatility. That might allow gold a bit of a corrective bounce as yesterday’s losses are digested.

Meanwhile, crude oil will turn its attention to a monthly report from the IEA as well as EIA weekly inventory flow data. The former will inform global supply and demand expectations and may help establish the

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