[Market Review].
The U.S. index continued to shake to the downside. Just this past week, the U.S. dollar index continued to shake down, once falling to 89.52, a new low since the end of April 2018, as U.S. President Donald Trump called for a beefed-up version of the stimulus package after unexpectedly signing the anti-epidemic bailout bill, keeping the dollar under pressure. However, the $2,000 check proposal was blocked by Senate Republicans. Some analysts believe that the passage of the proposal is only a matter of time.
Gold surged through the $1,910 mark. Next, let’s focus on gold. Last week, gold rose slightly and once touched the $1,900 mark. President Trump unexpectedly signed a new round of stimulus plans, which depressed the dollar and provided support for gold, and the further deterioration of the New Crown outbreak, especially the spread of mutated new strains, depressed market popularity and provided safe-haven support for gold prices. However, the start of the new crown vaccination, the rise in global stock markets and the end of the year vacation for traders slightly depressed the upside of gold prices. However, by this morning, gold’s rally appears to have accelerated and has now broken above the $1,910 barrier.
Silver has pulled up violently at the open. Silver. Last Monday, silver pulled up quickly by nearly 4% to touch a high of $26.75 per ounce, before moving sideways and oscillating above $26. By this morning, silver pulled up violently again, breaking upwards to $27.
The British pound continued to move higher. On the non-U.S. currency front. After many delays and heavy ups and downs, the UK and the EU finally reached an agreement on their future relationship at the end of 2020. Last week, the pound had touched a high of 1.3686 against the dollar, the highest since May 2018, with a weekly gain of about 0.77%, the third consecutive weekly gain. 2020 pound rose 3.09% against the dollar in aggregate. However, some analysts believe that in the short term, momentum will support the pound forward, but the risk of fundamental re- domination of the market has risen, and the impact of the epidemic will outweigh the short-term benefits of the Brexit deal.
The euro surged higher and retreated. The euro, benefiting from a weaker dollar, touched the 1.23 mark against the dollar last week, but then the pair gave back some of its gains and is now trading above the 1.22 mark.
U.S. oil has largely remained sideways. Finally, let’s take a look at the oil market. Just this past week, U.S. oil basically maintained a sideways consolidation. On the one hand, the U.S. launched a new round of stimulus package, and the U.S. stock market hit a new record high, which boosted market risk appetite; and the EIA crude oil inventories fell, which also provided support to oil prices; however, the new crown epidemic continued to worsen, and OPEC week is expected to raise crude oil production, which put pressure on oil prices; it also happened to coincide with the end of the year traders’ vacation, and oil prices were less volatile.
▼Bond Market
China’s 10-year Treasury yield rose 0.33 percent last Thursday, while the U.S. 10-year Treasury yield fell 1.12 percent and the U.S. 3-month Treasury yield dropped 2.31 percent.
▼On the stock market
U.S. stocks closed in unison, with the S&P 500 up 0.64 percent, the Nasdaq up 0.14 percent and the Dow up 0.65 percent; by this morning, Chinese stocks opened mixed, with the Shanghai Composite Index up 0.05 percent, the Growth Enterprise Market Index up 0.37 percent and Hong Kong’s Hang Seng Index down 0.53 percent.
[Risk Warning].
U.S. dollar: multiple factors weighing on the dollar outlook remains bearish
UBS said that the dollar’s sharp contraction in currency spreads against other major economies, the U.S. fiscal budget and current account deficit, as well as the expansion of the global economic recovery surface, will pressure the dollar index. Bank of America is also bearish on the dollar. But if the U.S. economic recovery is relatively smooth, the U.S. fiscal policy is expected to tighten, the dollar further lower space or limited.
British pound: the United Kingdom gradually vaccination British pound may strengthen in the first quarter
Institutional analysis says that most of the UK is still in a lockdown phase, and although the vaccination program has started, it will take several months for people to complete their vaccinations. Vaccinations will raise expectations that the country could restart its economy by mid-2021. The British pound should benefit from this expectation starting in the first quarter of 2021.
Gold: The central bank will maintain ultra-easy policy Gold may look up to 2300
Most large banks expect the average price of gold this year will be at $ 2009 per ounce. Goldman Sachs, Commerzbank, on the other hand, believes that the gold price will reach $ 2,300 in 2021. Analysts are bullish on gold because central banks will maintain ultra-loose monetary policies in 2021, and the economic recovery in the second half of the year has led to rising inflationary pressures, which are expected to keep real interest rates at low to negative levels.
[Key Outlook].
Monday’s pending OPEC+ or increase in crude oil production
First, let’s focus on the 13th OPEC+ ministerial meeting that will be held today. Since OPEC+ adopted a new plan to gradually increase production in early December, Brent crude oil has averaged about $50 a barrel. The organization will increase production by up to 500,000 barrels per day on a month-by-month basis in 2021.
OPEC+ ministers will meet once a month and will discuss the size of each production increase as more of the epidemic develops. Earlier, Russian Energy Minister Novak said a further 500,000 barrels could be increased in February if the situation stabilizes normally. It is not clear whether Saudi Arabia, the other leader of OPEC+, will support an increase in production.
But one needs to be wary that if OPEC+ agrees to increase crude oil production, oil prices could come under pressure. Also, the magnitude of the production increase is a concern, which will also affect the price of oil.
Wednesday 21:15 ADP employment number fears weak performance
On Wednesday, the U.S. will release the ADP employment figures for December last year. in November, the data increased by 307,000, less than expected. The financial blog Zero Hedge commented that employment in the U.S. goods and services sectors both increased in November, but at a slower pace. Small and medium-sized businesses added the most jobs. Currently, there are signs that the U.S. labor market is rapidly declining.
Some analysts predict that U.S. ADP employment may register 75,000 in December. If the data is less than expected, the dollar index may be under pressure to the downside; if it is better than expected, then the dollar index may strengthen.
It can be seen that the market does not have too high expectations for the U.S. labor market, if the data is much less than expected. The dollar index is afraid of extending its weakness.
Friday 21:30 U.S. non-farm payrolls data is afraid of declining performance
On Friday, the U.S. will release the non-farm payrolls report. Data released last month showed that the U.S. non-farm payrolls increased by 245,000 in November and the unemployment rate fell to 6.7%. Reuters comments that new employment will continue to fall in December or January next year as more jurisdictions impose restrictions on businesses and consumers avoid crowded places like restaurants.
Currently, the market expects that U.S. nonfarm payrolls may increase by 100,000 in December, with an unemployment rate of 6.8%.
In December, the U.S. epidemic did not improve, which caused relatively large pressure on the labor market, this set of data may be very decadent.
Recent Comments