Last Monday, as Pfizer made major advances in its vaccine research, risk assets around the world went on a binge, while safe-haven assets like gold suffered heavy losses. Spot gold plunged more than $100 that night, falling from above $1,950 to $1,850; in the following days, spot gold rebounded slightly, but the overall performance was weak, consolidating in the range of 1,855 to 1,895, with an overall decline of 3.18% last week. Spot silver also plunged more than $2 last Monday, once falling to $24 below, a weekly decline of 3.67%.
International oil prices last week was up before falling, in the vaccine news stimulated by the United States, cloth two oil last Monday, Tuesday ushered in a surge, or more than 10%, WTI crude oil stood at the $ 43 mark. Subsequently, the two oils fell for three consecutive trading days, the U.S. oil fell back to $ 40 near, last week’s cumulative gains also narrowed to about 7%.
In the currency market, the dollar index fell after a strong rebound last week, from last week to Wednesday, the dollar index rose continuously, once stood at the 93 mark, then two trading days fell back. Under the pressure of the strong dollar, the euro suffered heavy setbacks in the first half of last week, last Monday plummeted 100 points to 1.18 below, last Wednesday and refresh the low point of the week 1.1745, and then rebounded slightly, last week a small decline of 0.39%; the pound because of the good news on the Brexit trade talks, last Monday rose sharply, but last Tuesday and Wednesday fell sharply, down to 1.31 near, then some Pickup.
[This week’s events at a glance]
1) A number of senior central bank officials have been speaking intensively
This week, a number of central bank officials will make an intensive appearance to speak.
On Monday, ECB President Lagarde spoke at the opening of the World Economic Forum’s “Pioneers of Change” summit.
On Tuesday, Fed Vice Chair Clarida speaks on the economic outlook, followed by Bank of England Governor Bailey speaking at CityUK’s 2020 National Conference. On the same day the Australian Federal Reserve publishes the minutes of its November monetary policy meeting.
On Wednesday, FOMC permanent vote member and New York Fed President Williams hosted an online conference organized by the Economic Club of New York. In addition, Australian Federal Reserve President Lowell addresses the 2020 Australian Strategic Forum.
A packed appearance by Federal Reserve officials on Thursday, with a speech by FOMC Permanent Vote member and New York Fed President Williams; followed by a speech by 2020 Vote member and Dallas Fed President Kaplan; followed by opening remarks and introductory remarks by 2020 FOMC Vote member and Cleveland Fed President Mester at the 2020 Financial Stability Online Conference organized by the bank.
On Friday, Cleveland Fed President Mester and Dallas Fed President Kaplan will speak in quick succession. On the same day, ECB President Lagarde speaks at the European Banking Conference in Frankfurt.
(ii) There are two major points to watch at JMMC this week
The OPEC+ Joint Ministerial Monitoring Committee (JMMC) meeting will be held on November 17-18. According to two OPEC+ sources, OPEC+’s October production cuts were implemented at 101%. This OPEC+ negotiation will focus on whether to postpone the oil production increase scheduled to begin next year by 3-6 months.
Saudi Arabia and Russia have already publicly stated they are considering plans to ease production cuts in January, as a resurgence of the epidemic has hit fuel demand. The Russian president and OPEC leaders have even mentioned further production cuts.
The meeting may also mention the surge in Libya’s production capacity, with the oil producer’s current output estimated at 1.2 million barrels per day, up 100,000 bpd from the past few months. This could mean that OPEC+ may face a tough decision at the OPEC General Meeting, which takes place from November 30-December 1.
(iii) UK-EU trade talks continue this week, with UK representatives hoping for a comprehensive deal
Investors will still need to keep an eye on the progress of UK-EU trade talks this week, with sources saying that Brexit is temporarily on the agenda for the ambassadors’ meeting on November 18 as there was little progress in negotiations last week. The deadline for EU-Brexit negotiations may be postponed from Nov. 19 to Nov. 23, said Beth Rigby, editor of Sky News’ political news department.
The EU is reportedly hoping to reach a draft agreement in the coming days so that it can be discussed at the EU Council meeting on 19 November. However, based on current developments, it will be difficult to reach an agreement before that date, and negotiations between the two sides could continue until early December.
So far, the two sides in the fisheries and other key areas of the impasse seems to have made little progress. The UK “Brexit” negotiations chief representative David Frost said on the 15th, hoping that the UK and the EU both sides can reach a comprehensive agreement.
- 13F position reports have been released.
This week, the financial markets are due for another 13F report. According to the previous schedule, Berkshire Hathaway, hedge fund Paulson & Co. may file a quarterly 13F report with the SEC today (Nov. 16) to disclose their positions.
A number of funds and institutions have already disclosed their third-quarter positions over the weekend. For example, Soros reduced its holdings of Citi and Google in the third quarter, liquidated its positions in JPMorgan Chase and Goldman Sachs, and opened long positions in QQQ and Disney. JPMorgan Chase built a position in the third quarter to do more Snowflake, clearing the fight fish, increased holdings of Amazon, AMD, NVIDIA, Facebook, etc., reduced holdings of Chevron, Citi, Verizon, heavy position in stocks including Microsoft, Apple and Amazon.
【Hot Species Outlook】
With risk aversion making a comeback, can gold prices return to $1,900 this week?
After briefly boosting risk sentiment with positive vaccine news, risk aversion is back in the market as investors face the harsh realities of record new coronavirus cases, more restrictions and no new stimulus measures. Analysts said gold prices have been on a rebound after falling $100 early last week, which will continue into this week.
Peter Hug, head of global trading at Kitco Metals, said they remain bullish on gold and silver even after last week’s plunge.
Metals senior analyst Jim Wyckoff said the neo-crown virus raging in the U.S., the uncertainty surrounding it and the possibility of more economic disruptions in the coming months all favor gold market bulls.
Bart Melek, head of global strategy at TD Securities, remains bullish on gold, arguing that last week’s Pfizer vaccine news didn’t change the trend.Melek sees a floor of $1,850 and a ceiling of $1,930 for gold prices this week.
Charlie Nedoss, senior market strategist at LaSalle Futures Group, on the other hand, says that gold prices will be the first to challenge the 20-day moving average of $1,898 this week, approaching the psychological mark of $1,900.
Oil markets focus on JMMC this week, U.S. oil keep an eye on the $39.3-$40 range
On the oil market front, investors are focusing on the OPEC+ Joint Ministerial Monitoring Committee (JMMC) meeting this week, keeping an eye out for any intentions from OPEC+ to reach an agreement on postponing the production increase plan.
Although last week’s positive news on the vaccine front boosted oil prices, the current situation is not encouraging, with outbreaks still raging in Europe and the US, hitting crude oil demand expectations, and on the other hand, Libya’s production is increasing.
Daiichi Commodities Co Ltd analyst Koichi Murakami said that after the sharp rise in oil prices last week, the bulls chose to see the good news as a sharp increase in new crown cases led to the re-imposition of travel restrictions in many countries and a gloomy global economic outlook dampened market sentiment. If the new wave of the epidemic continues to accelerate in some parts of the world, oil prices will continue to be under downward pressure this week.
Citi analysts are also cautious on oil prices, despite a breakthrough in vaccine research and development, but still a long way to go. The epidemic is still spreading further, and at the same time, industries such as aviation and tourism, even with a vaccine, are difficult to recover immediately in a short period of time after being hit hard, which will be a long-term drag on crude oil demand.
DailyFX analysts point out that, as seen on the 4-hour K chart, WTI crude oil is blocked at $43 and then steps into a retracement trend, so the likelihood of oil prices returning to the $39-43 range for consolidation increases. In the short term, $39.3-$40 may improve favorable support for oil prices. If WTI crude oil can stabilize above $39.3, it is expected to extend the rally since November and later to test $43 again or even challenge $45.
Can the pound get another boost this week if external pressure or the dollar weakens?
Last week, the dollar bounced back and continued to weaken, with recent rallies being smaller at a time.Alex Jekov and other FAB Bank strategists said in a report released last Friday that negative real yields have slowed foreign purchases of U.S. bonds, which could weaken the dollar.
DailyFX analyst Jack said, the dollar index, if the market fell below 92.13, you need to be wary of it down to test 91.75. If further loss of 91.75, fear that the U.S. index to open more downside space.
In the euro, this week less economic data as well as events can influence its trend, but with the coronary virus-related restrictions are increasing and longer-lasting, which may affect the euro’s trend. Karen Jones, head of currency, commodities and bond technical analysis at Commerzbank, said the EUR/USD’s rise so far is still limited by its current November high of 1.1920 and 78.6% retracement of the 1.1926 level.
The movement of GBP/USD is largely dependent on the progress of the Brexit trade talks and Credit Agricole Research says it will remain cautiously bullish on the pound in the near term. Although the investment bank expects the two sides to reach a trade deal, which will boost the pound. However, only a partial Brexit agreement between the two sides remains a risk that cannot be ignored, and that is a possibility at this stage, with the remainder likely to extend into 2021 before negotiations continue. In short, the next week will be unusually volatile for the pound.
Analysts say the pound could rise towards 1.35 if an agreement is reached, but if the chances of not reaching an agreement increase, the pound could fall back below 1.25. Until then, however, there could be support for GBP/USD at 1.3001 and 1.2915.
Karen Jones says that GBP/USD recently rallied to the 78.6% retracement of the 1.3310 retracement and is under pressure around that level.The 55-day moving average at 1.3001 and the 5-month uptrend line at 1.2915 would provide support for the pound.
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