Gold weak, oil bullish retreat?

[Market Review]

Pfizer’s vaccines have been delivered. Deliveries of Pfizer vaccines are reported. The US state of Alaska has received the first delivery of COVID-19 vaccine, while Texas has received 19,500 doses and more are expected to follow.

The $908 billion stimulus package was split in two. Us economic stimulus. A bipartisan group of Us lawmakers has released details of a 908 billion dollar stimulus plan. This time they split the bill in two, seeking to pass it in both the bipartisan Senate and the House of Representatives. And President Donald Trump over the weekend called for a new round of stimulus checks aimed at American families to be included in the new package. In addition, U.S. congressional negotiators are close to finalizing a $1.4 trillion across-the-board spending bill for fiscal year 2021 to avoid a government shutdown. The dollar hovered near a two-year low on vaccine progress and the prospect of a US aid package.

Gold traded low. The introduction of vaccines boosted investor optimism and risk appetite, while Treasuries, the dollar and gold came under general pressure, with gold trading in a tight range around $1830 on the day.

Silver rose and then fell. Silver has moved in much the same direction as gold. Silver rose to $24.21 an ounce before giving up gains to move back around the $23.8 mark.

The pound rose and then fell. Then there’s the pound. The pound surged as high as 1.3445 against the dollar yesterday as renewed optimism about the prospects for Brexit negotiations after the weekend was given further credence in the European session. The European Union’s chief Brexit negotiator Michel Barnier says there has been limited progress in talks with Britain on a trade enforcement mechanism. By the end of the day, however, the pair had given back some of their gains. It has been suggested that London, UK, may be on its highest alert for the outbreak due to a surge in COVID-19 cases.

The euro traded in a tight range. Sterling soared, driving European currencies higher. The euro rose as high as $1.2176 on the day before falling to around $1.2123, but has since recovered some of its losses and is now trading around $1.2160.

Opec cuts oil demand forecast. Finally, the oil market. Opec cut its oil demand forecast again, saying in its monthly report that it was cutting its global fuel consumption forecast for the first quarter of 2021 by 1m barrels a day. From the first quarter of next year, demand will rise by just 500,000 barrels, the same amount Opec and its Allies have agreed to increase in January. After the release of the monthly report, American oil continued its earlier decline, as low as $45.69. We also need to be aware of the attack on the Saudi tanker. It was the second attack on an oil tanker in nearly two months. It seems that the oil market is variable.

▼ Bond market

Overnight, Chinese 10-year yields rose 1.43 per cent, US 10-year yields fell 1.53 per cent and US three-month yields fell 2.83 per cent.

▼ Stock market

U.S. stocks ended mixed, with the S&P 500 down 0.44%, the Nasdaq up 0.5%, and the Dow down 0.62%. By this morning, The Chinese stock market had opened mixed, with the Shanghai Composite index down 0.08%, the Chinext index up 0.05% and Hong Kong’s Hang Seng index up 0.11%.

【 Key Foresight 】

Sterling: The pound could fall sharply in the absence of a deal between Britain and Europe

Capital Economics said the pound could suffer a “knee-jerk” fall if a new bilateral agreement between the UK and the EU is not reached by the deadline. In extreme cases, it expects sterling to fall to $1.15 and the euro to break parity at $1.04.

Canada day: The Bank of Japan is expected to hold fire or short Canada day

Td securities recommends selling the Canadian dollar against the Yen as the bank of Japan is unlikely to change interest rates and asset purchases and solid Canadian economic data has already been priced in. Td Securities started trading at 81.59 with a target of 78.86 and a stop loss of 83.30. The Canadian dollar has failed to break its multi-year trend line against the Japanese yen and has started to move out of overbought levels, suggesting that risk returns are now skewed to the downside.

Gold: Td Securities bullish on gold prices next year or 2000

Standard Chartered said gold would return to a high of $2,000 an ounce in the coming months, despite short-term obstacles. The vaccine and economic recovery will not have a clear effect until the second half of next year. Td securities says the gold rout is probably over and sees gold continuing to rise above $2,000 an ounce in 2021.

【 Key Foresight 】

17:00 THE IEA may cut its forecast for oil demand growth

First up, the IEA’s report on the oil market. Yesterday, Opec’s monthly report cut global oil demand growth for this year and next and cut its forecast for global fuel consumption in the first quarter of next year by 1m barrels a day. Overall, the report struck a downbeat tone. On this basis, we believe that the IEA monthly report is likely to downgrade global oil demand growth, which could weigh on prices to some extent.

McClum may maintain a cautious stance at 03:30 PM Wednesday

In the early hours of tomorrow morning, The Governor of the Bank of Canada will speak. At the end of last month, he said the vaccine news was encouraging. But inflation is so weak that he expects economic activity to remain below potential until 2023. As a result, the Canadian central bank will keep interest rates very low for a very long time. But negative rates are unlikely. More action will be taken if necessary.

On this basis, we think Mr McClum will emphasise keeping rates low for an extended period, with further easing if necessary.

In addition, he is likely to reiterate that negative rates are off the table for now. On balance, Mr McClum is more likely to maintain a cautious stance.

API crude stocks are expected to fall at 05:30 ON Wednesday

Next up, API crude inventories will be released in the US. Last week, API reported that US crude inventories rose by 1.141m barrels, much more than expected. EIA crude oil inventories subsequently rose by 15.189 million barrels. Gasoline and refined oil production also rose sharply.

By this week, the market was expecting API inventories to fall by 3.5m barrels in the week to December 11th. If the numbers come in higher than expected, oil prices could come under pressure. Conversely, oil prices may rise.

More recently, oil prices have been boosted by the introduction of COVID-19 vaccines, which will boost global fuel demand. But continued blockages by major European countries and warnings from New York of a possible total blockade could revive fears about demand for crude and put prices under renewed pressure.

In addition, some other data to watch today are:

15:00 UK three-month ILO Unemployment rate in October: previous 4.8%, forecast 5.1%.

15:00 UK unemployment rate: previous reading: 7.3%.

15:00 UK Jobless claims for November: Before -29,800.

15:45 French November CPI monthly rate: 0.2% before, 0.2% predicted.

New York Fed Manufacturing Index: FORMER 6.3, forecast: 6.8.

21:30 Monthly rate of Import price index of The United States in November: former value -0.1%, predicted value -0.3%.

22:15 Monthly industrial output rate of The United States in November: 1.1% forecast, 0.3% forecast.