The 10 year yield has a floor at 2.9%.

The US 10 year yield moved lower this week, helped by flow of funds out of the longer end as the yield curve between 2-10 year moved negative on expectations the Fed would be forced to tighten hard to halt inflation.

Looking at the hourly chart, the high yield for the week reached 3.10% on Monday after closing last week at 3.084%. The lows for the yield came in near 2.9% where there were three separate lows from July 12 twice, July 13 twice and again today (see red numbered circles). That level will be a key barometer for traders. Stay above, and there the yield can move back to the upside. Move below, and there should be more downside momentum.

The current yield is at 2.93% which is down from last week closing level at 3.084% (down -15.4 basis points on the week).

On the topside, the 200 and 100 hour MAs at 2.949% and 2.959% would be the next upside target. A downward sloping trend line at 2.97% would be another level to get to and through for more upside momentum..

Taking a look at the 2 year yield this week below, it is telling a different story. Last Friday, the yield closed the week at 3.11%. The low for the week was on Tuesday at 2.981%. The high was at 3.269% on Thursday. The current yield is at 3.138%. That is up 2.8 basis points on the week.

2 year yield is up marginally this week

The shorter end although off the high is still higher on the week.

With the 10 year yield down -15.4 basis points and the 2 year up 2.8 basis points, the yield curve collapsed by -18.2 basis points this week. Traders once again are anticipating a recession on expectations that the Fed will need to tighten to a hard landing.

This article was written by Greg Michalowski at www.forexlive.com.

The major US stock indices closed sharply higher and near session highs. The major indices for the week still closed lower, but cut into those declines with the sharp gains today. Retail sales came in better-than-expected which helped. Industrial production was lower and Michigan consumer sentiment came in a little better than expectations and showed a lower inflation expectations for one and 5 years which was a relief to market traders.

All 11 sectors of the S&P index closed higher led by financials which rose 3.51%. Healthcare rose by 2.44% and communication services rose 2.14%.

The laggards in the S&P were utilities which rose 0.21%, consumer staples which rose 0.4%, and industrials which rose 1.58%.

The final numbers are showing:

• Dow industrial average rose 655.85 points or 2.14% at 31286.101
• S&P index rose 72.51 points or 1.91% at 3862.80
• NASDAQ index rose 201.25 points or 1.79% 11452.43
• Russell 2000 rose 36.86 points or 2.16% at 1744.37

For the trading week:

• Dow industrial average fell -0.17%
• S&P index fell -0.99%
• NASDAQ index fell -1.56%

This article was written by Greg Michalowski at www.forexlive.com.

• Had a good series of meetings and Saudi Arabia
• opening airspace is a big deal
• we have accomplished has some significant business with Saudi’s
• hopes it will lead to a broader normalization of relations
• hopes opening of airspace 2 flights to and from Israel will lead to a broader normalization and relations
• agreed to work to deepen and extend the Yemen cease-fire
• discussed Saudi defensive needs
• Saudi will partner with US on clean energy initiative
• had good discussion on ensuring global energy security and adequate oil supplies
• I’m doing all I can to increase oil supply for the United States
• the race murder of journalists Khashoggi in meeting made my view crystal-clear
• we discuss human rights and the need for political reform
• have finalize the agreement to connect Iraq’s electric grid to the GCC grid through Kuwait and Saudi Arabia
• we are not going to leave a vacuum in the Middle East for Russia or China to fill
• Crown Prince said he was not personally responsible for Khashoggi’s murder
• gas prices have been coming down every single day
• we’ll see more declines when gas stations start to lower their price consistently
• I’ll use every power I have is present to fulfill pledge on global warming

Meanwhile a Saudi Arabia and official said:

• they are corroborating with OPEC+ to ensure enough supply of oil
• If they see evidence of oil scarcity, they will produce more

/Inflation

This article was written by Greg Michalowski at www.forexlive.com.

The price of WTI crude oil futures are settling at $97.59 that’s up $1.91 or 1.89%

The high price today reached $99.01. The low prices at $94.59.

WTI crude oil is closing near its 100 hour moving average

For the trading week, the contract close last week came in at $104.78. The high price early on Monday reached a high of $104.86. The low price was reached on Thursday at $90.54 before rallying yesterday and again today. The midpoint of the week’s trading range comes in at $97.64. The price closed just below that midpoint level.

Looking at the hourly chart above, the high price today stalled near a topside trend line. The price today did extend back above the 100 hour moving average (blue line in the chart above), but is still well short of the 200 hour moving average currently at $99.74.

Going into next week, those moving averages will be in play and help define the bullish bearish bias. Stay below is more bearish. Move above is more bullish. stay below is more bearish. The price has not traded above its 200 hour moving average since July 5th.

Pres. Biden is in Saudi Arabia. However expectations are not for any material impact on supply. Nevertheless, since the announcement of the President’s trip to Saudi Arabia back in June, the price has move down from around $119.

This article was written by Greg Michalowski at www.forexlive.com.