[Heavyweight Market
Soaring U.S. bond yields this week, the world’s major assets “scared”, Monday, Tuesday, the U.S. 10-year Treasury yield oscillated above 1.3%, Wednesday power touched 1.4%, Friday morning was a surge touched 1.6%, a new high since February last year. However, the 10-year yield slipped during the day on Friday.
Spot Gold this week’s market out of a “parabola”, Monday all the way up, Tuesday Asian trading touched $ 1815.88 per ounce weekly high, after the start of the shock downward, Wednesday before the U.S. market suddenly sharply, once fell to $ 1790 below, Thursday and plummeted nearly $ 40. Spot gold fell through the $1760 mark on Friday, and the decline expanded at the beginning of the U.S. session, falling below the $1750 and $1740 marks for the first Time since June last year.
In fact, gold prices have fallen for the second month in a row as bond yields soared.
Spot silver saw two “mini-peaks” on Tuesday and Thursday, breaking the $28 barrier twice, but also began to underperform on Thursday night and fell 4% intra-day on Friday.
The oil market has performed relatively well this week, with both U.S. and Bu oil rising sharply on Monday, with WTI crude up more than 5% to the $62 mark and Brent crude up to $65.81 per barrel. Oil prices pulled back slightly on Tuesday, and then went up again on Wednesday, with WTI crude rising above $63 and Brent oil breaking through $67. However, near the end of the week, oil prices were also affected by the pressure of the bond market sell-off and fell. However, oil prices are still expected to rise about 20% in February.
In the currency market, the dollar index experienced two more pronounced declines on Monday and Thursday, and rebounded strongly after falling to a weekly low of 89.69 in the U.S. on Thursday, erasing all of this week’s losses as of press time. In non-U.S. currencies, the British pound, euro, and Australian dollar were all outstanding in the first four trading days of the week, with the British pound surging to 1.42 on Wednesday, the Australian dollar standing at 0.8 on Thursday for the first time since February 2018, and Europe and the U.S. also returning to the 1.22 handle, but all saw losses of varying degrees on Friday.
Global stock markets also tumbled, the U.S. stocks, the Nifty fell to the top, the deepest intraday drop of nearly 4% on Tuesday and Thursday, in addition to Wednesday’s rebound to close up, the S&P and the Dow also fell to varying degrees for the rest of the trading day.
Hong Kong stock market, the HSI Monday to Wednesday continued to slump, including Wednesday’s dip is partly due to Hong Kong plans to raise the stamp duty on stock transactions, rebounded on Thursday and then hit hard on Friday, closing down 3.64% and lost 29,000 mark, the largest single-day decline since May last year. The HSI fell 5.43% for the week, recording the biggest one-week drop since March last year.
A-shares were not spared either, with the three major stock indices underperforming for a week, led by the Growth Enterprise Market Index, which fell the deepest by 4%. On the contrary, the domestic commodity market is very hot, especially the non-ferrous metals sector, a number of varieties repeatedly up.
In addition, Petrobras fell 16% on the São Paulo exchange due to the removal of the company’s CEO by Brazilian President Bossonaro, dragging Brazilian stocks down by more than 4.5%.
The worst declines were to be found in cryptocurrencies. After breaking the $58,000 mark early Monday morning, bitcoin fell by more than 15% on Monday, continued to fall by 17% on Tuesday, and then fell again on Friday after shaking out the upside on Wednesday and Thursday, dropping below the $45,000 mark several times this week.
[Weekly Events].
①Bond plunge brought the global stock and currency “double storm”
This week set off a wave of bond plunges, and triggered a global stock and currency “double storm”, gold, silver and bitcoin were also involved. Long-term U.S. bonds have been selling off, causing yields to rise. Conversely, as market participants scrambled to buy short-term Treasury bills, yields on short-term Treasury bills fell and eventually turned negative, further increasing liquidity in the market.
Several Fed officials said this week that this reflects investors’ optimistic expectations for the economic recovery and that there is no need to be alarmed by it. Fed Chairman Jerome Powell reiterated twice this week that Inflation remains below our long-term target of 2% and that the Fed will continue to buy bonds to support the U.S. economy.
But markets clearly don’t think so, and the global stock market selloff is testing the resolve of local central banks to curb rising market interest rates. The Australian Federal Reserve announced an unplanned bond-buying operation on Friday that will see it purchase A$3 billion in Treasuries, underscoring its determination to defend its yield target and becoming the first central bank to do so.
②Stimulus bill expected to pass in the House, but there is a hiccup
In addition to the bond market, the progress of the stimulus bill was the second major focus of the market, as the market expects more fiscal stimulus to accelerate the recovery and further push up U.S. bond yields. The U.S. House Budget Committee continues to move forward on Biden‘s $1.9 trillion Epidemic relief bill, and U.S. House Majority Leader Hoyer said the House will vote on Biden’s stimulus plan on Friday.
More than 160 corporate executives also sent a joint letter to top Congress urging passage of the bailout bill. But there was a hiccup during the period, the U.S. Senate ruled on Thursday local time that Democrats could not include a $15-an-hour minimum wage in a new $1.9 trillion crown relief package.
Some analysts believe that once the stimulus package is scaled down or postponed again, a situation of buying rumors and selling facts cannot be ruled out.
③ Two major news in the cryptocurrency circle: some trading platforms are shouted down and some are preparing to go public
On Tuesday, New York Attorney General Letitia James demanded that cryptocurrency trading platforms Bitfinex and Tether stop all trading activities with New York traders. An investigation by the Attorney General’s office found that Bitfinex’s operator, iFinex, and Tether made false statements to support the stablecoin and were required to pay a fine of $18.5 million .
Meanwhile, this week’s 20% plunge in the price of bitcoin has also sparked a lot of action from the “whales. Coinbase, the world’s largest cryptocurrency platform, announced it was applying for a direct listing on Nasdaq.
But there are plenty of “big players” who are staying cautious. Warren Buffett’s close friend and Berkshire Hathaway vice chairman Munger said bitcoin is actually an artificial substitute for gold, and since he never buys any gold, he never buys any bitcoin either.
④ Retail short-selling forces “resurgent”?
GameStop surged 300% on Wednesday, and the reasons for the surge vary, but it’s worth noting that the most actively traded option on Thursday was a contract betting that GameStop shares would soar to $800 on Friday, with about 52,000 contracts changed hands that day.
But some analysts say it’s now a little harder for retail investors to create a short-selling market, as short positions in the stock are now down about 100 percent from a month ago.
Another equally hot market this year is special purpose acquisition companies (SPACs), with Li Ka-shing planning to raise funds for the deal by listing a SPAC in the U.S., according to people familiar with the matter.
⑤ Stock stamp duty fiasco pits HKEx and SEC against each other
Hong Kong Financial Secretary Paul Chan has announced a one-off 30% increase in the Hong Kong stock stamp duty rate. This decision will be implemented on August 1, and the Hong Kong government expects to increase its revenue by HK$12 billion per year.
This side of Hong Kong increased the stamp duty, the evening of the 24th, the U.S. Securities and Exchange Commission announced a reduction in the “class stamp duty”. The stockholders are crying “no stock morality”.
(6) Wall Street investment banks take turns to raise oil prices this year is expected
Recently the oil market trading is very hot. Goldman Sachs raised its Brent and WTI oil price expectations, expecting Brent Crude Oil prices to reach $69/barrel in 2021, and raised WTI crude oil price estimates to $66/barrel and $67/barrel in 2021 and 2022, respectively. Bank of America also raised its 2021 Brent oil price estimate to $60 from the previous $50.
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