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Spot Gold has been weak this week as a whole, and after a small move higher on Monday, it continued to move downward, closing down for four consecutive trading days this week. On Thursday night, spot gold dropped sharply, falling below the $1,800 mark to a low of 1,784, and then rebounded. After Friday’s non-farm payrolls announcement, spot gold pulled up briefly and returned above $1,800.
Spot silver this week’s performance is more exciting, Monday directly jumped high, and then all the way up, up more than 10%, once above the $30 mark, but the end of Monday appeared to fall back, closing below $29. Tuesday silver directly to a big reversal, from $ 28.89 down to $ 26.20 near, directly retracted all of Monday’s gains, and fill the gap. In the last few days, silver stumbled and oscillated around $26.
In the oil market, this week, the U.S. and Bu oil were on a one-sided upward trend, and from Monday, the two oils went all the way higher, with WTI crude rising from below $52 all the way to a high of $57; Brent crude rose from below $55 to $59.72, approaching the $60 mark. OPEC’s optimism about future oil market prospects, coupled with Saudi Arabia’s voluntary production cuts of 1 million barrels per day from February, have given support to rising oil prices.
In the currency market, the dollar index has been unusually strong this week, with a unilateral upward trend, closing up for four consecutive trading days, from 90.5 to a maximum of 91.61, a new high since December last year, but began to fall slightly on Friday; the euro against the dollar is under pressure to the downside, falling below the 1.20 mark, down to a low of 1.1952, a low of nearly two months; the pound against the dollar also fell before Thursday, but Thursday After the Bank of England announced its interest rate resolution, the pound rebounded sharply, recovering most of its losses, but still below the 1.37 mark.
[Weekly Highlights
① Retailers forced short war cooled down
Last week’s raging retailer short-selling war continued this week. On Monday, spot silver jumped 10%, once breaking the $30 mark. But it didn’t last long, as on Monday night, Chicagoland raised the margin on COMEX silver futures by 18%, from $14,000 to $16,500 per contract for silver futures trading, effective Feb. 2. Immediately afterwards silver was knocked back on Tuesday, giving back all of Monday’s gains.
Retail holdout stocks such as GME also plunged, with GME shares falling from more than $300 to more than $50. Previously earned a lot of retail investors also vomited back most of the profits, the United States retail investors of the “big brother” this week for two consecutive days of substantial losses, Monday lost more than $ 5 million, and Tuesday lost more than $ 13 million, after the gains have been retracted to only 1000%.
However, the matter did not end there, the U.S. regulators are still conducting a deep investigation into the incident. Since Tuesday, regulation has been intensely vocal and action has been taken regarding the GME incident. U.S. Treasury Secretary Yellen said Thursday that a deeper understanding of the recent stock market turmoil is needed.
“We need to have a deeper understanding of what’s going on before we take action, but there’s no question that we’re looking closely at these events and we need to make sure that our financial markets are functioning properly and efficiently and that investors are protected.”
Yellen believes that it is imperative to preserve the integrity of financial markets and ensure that investors are protected. The House Financial Services Committee (HFC) will hold a hearing on Feb. 18 to investigate Robinhood’s decision to restrict customers from trading stocks such as GameStop (GME) last week, sources said.
Biden‘s Stimulus Plan in Fast Track for Approval as Senate Passes Budget Measure
According to CNBC, the U.S. Senate voted 51-50 after a 15-hour battle to pass a budget bill that would send President Joe Biden’s $1.9 trillion new crown Epidemic relief plan to the House of Representatives for final approval. U.S. Vice President Harris cast a key vote for the first Time to break a tie in a procedural vote on the budget in the Senate.
Judging from the progress of previous negotiations, the two sides have consistently disagreed on issues such as check disbursement. Over the weekend 10 Republican U.S. senators sent a letter to President Joe Biden saying they had proposed an alternative proposal for a new coronary pneumonia stimulus package in the range of $600 billion. On Wednesday, Biden participated in a Democratic Congressional Caucus conference call. Biden told House Democrats that he was willing to consider stricter eligibility requirements for stimulus check disbursements, but was not willing to lower the $1,400 standard outlined in the bailout package.
On Friday, the House will vote again to decide whether to concur with the Senate-filed resolution. Once the House agrees, Democrats will be able to craft a relief bill in the coming weeks and pass it without Republican support under special budget rules.
③U.S. January Non-Farm Payrolls Surprise Slightly Below Expectations
Friday night’s non-farm payrolls report showed that U.S. non-farm payrolls recorded an increase of 49,000 in January, which was lower than the expected increase of 50,000. This data was, arguably, unexpected by most investment banks. The U.S. unemployment rate for January, released at the same time, was recorded at 6.3%, a new low since March last year, compared to the previous and expected 6.7%.
Analyst Olivia Rockeman said that, as expected, unemployment was concentrated in the leisure, hospitality and retail sectors. Until more Americans are vaccinated and the rate of increase in confirmed cases of new crowns decreases significantly, service sector jobs, including tourism and restaurant jobs, are unlikely to grow significantly.
④Bank of England negative interest rates hanging in the balance
On Thursday night, the Bank of England announced its interest rate resolution, keeping the level of interest rates and the scale of asset purchases unchanged, which is largely in line with market expectations.
The Bank of England said Inflation is rising and is expected to return to the 2% target level this spring. The central bank also lowered its economic growth forecast for 2021, from the previous 7.25% to 5%.
The interest rate resolution saw the Bank of England speak more intensively about negative interest rates. The Bank of England said it is appropriate to prepare for negative interest rates if necessary. However, there is an operational risk if negative interest rates are implemented within six months. The Bank of England clearly does not want to give the market a signal that negative interest rates are coming, essentially they are trying to avoid suggesting that negative interest rates will happen, but they also want the banks to be ready if needed.
Governor Bailey also said in a press conference that it was important not to interpret future MPC decisions based on the “contents of the toolbox” and not to draw any signals from negative interest rate preparations.
OPEC+ pledges to accelerate oil market rebalancing
On Tuesday, OPEC+ held a meeting of the Joint Technical Committee (JTC) and the Joint Ministerial Monitoring Committee (JMMC). In a statement issued after the meeting, OPEC+ said it would continue its efforts to quickly remove the surplus oil left by the pandemic, and the ministers, led by Saudi Arabia and Russia, stressed the importance of accelerating the rebalancing of the market as soon as possible against the backdrop of “uncertainty” in the global economy and oil demand.
The JMMC meeting did not mention changes to the current oil production policy, but said that while the economic outlook and oil demand remain uncertain in the coming months, the gradual global release of vaccines is a positive factor for the rest of the year and will drive global economic and oil demand growth.
OPEC+ expects Crude Oil stocks in developed countries to fall back to their 2015-2019 average by August 2021, meaning it will be able to meet the initial target of the production cut coalition.
(6) The Australian Fed will raise A$100 billion when the current QE expires
On Tuesday, the Australian Federal Reserve announced its interest rate resolution, leaving both the benchmark interest rate and the 3-year Treasury yield target unchanged at 0.1%. The Australian Fed also announced that it will buy a further A$100 billion in bonds when the current QE program expires, starting in mid-April at a rate of A$5 billion per week.
The Australian Fed also stressed that it will not raise interest rates until inflation reaches the 2%-3% range, and that inflation and wage growth will both remain below 2% in the coming years.
[Risk Warning].
Next week, the US 13F report will come out. According to the previous schedule, Bridgewater Fund may submit a quarterly 13F report to the SEC to disclose its position.
Next week, investors need to pay attention to the speeches of some central bank officials.
Next Tuesday, ECB President Lagarde participates in the European Parliament debate on the 2019 ECB Annual Report.
Next Wednesday, ECB President Lagarde participates in a newsmaker webinar organized by The Economist.
Next Thursday, Fed Chair Jerome Powell speaks at an online event hosted by the Economic Club of New York.
From Wednesday to Thursday next week, the EIA, IEA and OPEC will release their monthly reports and investors need to pay attention to the descriptions of crude oil demand and supply in these reports. If the reports show an optimistic outlook for the oil market, it may further boost oil prices.
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