Markets continue to remain dicey

By Mithun Girishan|

Published: December 28 2021, 09:08 GMT+0

Markets continue to remain dicey

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Holiday mood, want of major catalysts, and year-end inaction test market optimism, make markets dicey.

Gold price plummeted for the first time from $1,814 after its four-day good run after facing resistances around $1,812. In the given conditions, bears would be eyeing to reach the $1792 mark.

US Treasury yields managed to cling to 1.48% despite the 1.7 base point decline on Monday, failing to extend the pullback that was seen on Monday. However, Fedā€™s rate hike concerns may keep US Treasury yields firmer, thus favouring the US Dollar Index.

On the other side, PBOCā€™s suggestions to sustain the growth of Chinese economy by quantitative easing is making traders rethink, offering some relief to the markets. Through 7-day reverse repurchase agreements, PBOC pumped $31 billion liquid cash into Chinaā€™s financial system.

The Japanese Finance Ministerā€™s comments on inflation also came as a relief but its effects are yet to reflect in the market. Earlier, Mr. Shunichi Suzuki said he does not think the recent inflation will negatively affect the economy. However, USD/JPY remains unfazed at 114.90 despite hearing this comment from the finance minister.

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