[Heavyweight Quotes
Spot gold rose and then fell this week, after testing $1875 in the first two trading days, it fell $45 on Wednesday, and as of Friday night, spot gold was trading near $1839. Spot silver rose 2% at the beginning of the U.S. session on Monday, and began to show declines after standing at a high of $24.85 before the U.S. session on Tuesday, falling to a weekly low of 23.61 during the U.S. session on Thursday, and as of press time on Friday night, spot silver was trading near $23.94.
In the currency market, the U.S. index is on a roller coaster ride, after powering up to touch a weekly high of 91.26 on Monday and coming out of a triple-positive market, it started to slide on Thursday and has now almost wiped out the entire week’s gains.
The British pound against the U.S. dollar is more exciting, affected by the hard Brexit speech, the pound dived 1.6% on Monday, Tuesday again jumped up and down more than 100 points, Wednesday also jumped 90 points, Friday during the European session again plunged more than 1%, once down to 1.3134. the euro against the U.S. dollar is first depressed, out of three negative line, Thursday began to move higher. The offshore yuan continued to move higher against the dollar, with the offshore yuan standing at 6.5 against the dollar on Wednesday, continuing to hit a new high since June 2018, according to Sina’s offer.
In the oil market, U.S. and Bu oil, which had been slightly declining for the first three days, surged 4% in the U.S. market on Thursday, with Bu oil rising through the $50 mark for the first time since March, hitting a high of $51.04 per barrel, and U.S. oil also rising to a high of $47.71 per barrel.
All three major U.S. stock indexes set new all-time highs during trading on Tuesday, with the S&P 500 breaking 3,700 for the first time, but began to reverse on Wednesday, with the Nasdaq closing down 2.15%, its biggest one-day drop in nearly a month.
Bitcoin fell back from its highs this week, losing the $19,000 barrier on Tuesday and testing the $18,000 barrier three times in a row from Wednesday to Friday, and as of press time Friday night, Bitcoin had broken below that barrier.
[Weekly Highlights
U.S. Bipartisan “Dislike” Over Stimulus Bill, Pfizer Vaccine Expected to Be Authorized
U.S. Treasury Secretary Steven Nutsin made a surprise return to the stimulus table Tuesday with a $916 billion proposal, but was opposed by House Democratic Leader Nancy Pelosi, while Senate Majority Leader Mitch McConnell “disliked” the Democrats.
The only bipartisan consensus now is to avoid a government shutdown, and the House has voted to extend the temporary spending bill through December 18 and send it to the Senate, but the Senate has yet to vote on it.
In vaccine news, the U.S. Food and Drug Administration (FDA) New Crown Vaccine Panel recommended approval of Pfizer’s New Crown vaccine on Friday. Authorization is likely to be issued within a few days, and when granted, the vaccine will be distributed throughout the U.S.
British and European heads “pro-quest” still fruitless, set “red line” for Sunday
On Monday, British Prime Minister Johnson once threatened to immediately withdraw from the Brexit negotiations, while the attitude of the European Union is more moderate, Johnson and the European Commission President von der Leyen call after the release of a joint statement, the conclusion is that fair competition, compliance management and fisheries three major differences still exist, but the British government will abandon the controversial provisions that are contrary to part of the Brexit agreement, or help to ease the pressure of negotiations.
Subsequently, the heads of the UK and Europe met in person, but the two sides failed to reach a major consensus and agreed to make a “final decision” this Sunday. The two “big brothers” of the EU, France and Germany, are not optimistic about the outcome of the agreement.
At the EU summit, the issue of the Brexit trade deal was shelved by the EU member states, and less than 10 minutes were given to discuss the topic. In a way, this is a message to the UK that they have other more “important” issues to address than the ongoing concessions on the Brexit trade talks.
On Friday evening, British Prime Minister Johnson said that from the current position, the UK and the EU will probably not reach a Brexit deal.
European & Japanese central banks easing together as EU clears budget proposal hurdle
The European Central Bank announced its interest rate resolution on Thursday, and as expected by the market, the size of the emergency anti-epidemic bond purchase program (PEPP) will be increased by 500 billion euros, and the term will last at least until the end of March 2022.
In addition, the EU convinced the two member states of Poland and Hungary, which previously opposed the long-term budget proposal, not only paved the way for the EU’s seven-year budget to take effect, but also cleared the obstacles to the 750 billion euro (about $909 billion) bailout program.
The Japanese government also joined the “water release” team, announcing a new round of 73.6 trillion yen economic stimulus plan, Japanese Prime Minister Yoshihide Suga said that the new economic stimulus measures will stimulate GDP growth of about 3.6%.
EIA crude oil inventories “cold” surge, North American warm winter or endanger oil prices
EIA crude oil inventories released on Wednesday night for the week to December 4 unexpectedly recorded an increase of 15.189 million barrels, compared to an expected decrease of 1.424 million barrels, with the change in U.S. crude oil inventories hitting a new high for the week of April 17 (34 weeks).
International oil prices dipped only slightly, compared to the much larger boost to oil prices from the happy news on vaccines. But crude bulls cannot ignore a potential change in supply and demand fundamentals – the U.S. is set to experience its third warm winter in history, with falling heating demand already taking the lead in hitting natural gas prices and heating oil demand expected to fall as well, dampening heating oil as well as crude oil prices.
Commodity markets go wild, may see a long bull market
The iron ore market has also been buzzing this week, with the main iron ore contract breaking the $1,000 barrier on Friday morning. On one hand, foreign iron ore inventories are getting tighter and Chinese steel demand is recovering, in addition to the investigation into RioTinto’s bombing of a historic Australian site in May, which could pose a risk to its iron ore production in 2021. Goldman Sachs is bullish on the entire commodities market, including iron ore, and believes that almost all commodities will have a “durable bull market”.
Risk Warning
★ Next week will be another “Super Central Bank Week”.
Next Thursday at 3:00 am the Federal Reserve FOMC announced the interest rate resolution, policy statement and economic expectations. After 3:30 Fed Chairman Powell will hold a press conference.
The minutes of the November meeting show signals that the Fed is about to ramp up easing in three main directions: one is to accelerate the pace of purchases, two increase purchases of long-term bonds, and three in extending the duration of Treasury purchases. These all point to an increase in easing. Some Wall Street analysts predict that the Fed policymakers will adjust its bond-buying program to make Treasury purchases operate more in favor of long-term bonds.
★ U.S. economic data, next Thursday at 21:30 U.S. will be released to December 12 when the week’s initial jobless claims, last week’s initial claims unexpected rebound please pay attention to.
★ Next Thursday at 16:30 the Swiss central bank will also announce its interest rate resolution and hold a press conference, and then at 20:00 pm the Bank of England will announce its interest rate resolution, minutes of the meeting.
Two Bank of England policy makers hinted that they are open to using negative interest rates if the U.K. needs more monetary stimulus at some point in the future. Bank of England member Saunders said there is still room to expand quantitative easing, and that interest rate cuts and quantitative easing may be the best way to stimulate.
★ Next Friday at 11:00 the Bank of Japan announces its interest rate resolution, then at 14:30 BOJ Governor Haruhiko Kuroda holds a press conference.
Japan’s draft stimulus plan shows that the BOJ is expected to provide guidance on monetary policy, while closely monitoring the impact of the epidemic on the economy. It is reported that the BOJ may also consider extending the program for the epidemic this month. For his part, BOJ member Hitoshi Suzuki said that allowing a moderate steepening of the extra-long yield curve is desirable because it will help improve the profits of financial institutions.
★ Next Wednesday at 03:30 am Bank of Canada Governor McCollum speaks.
★In the oil market, two oil reports and one meeting need to be watched next week.
Next Monday OPEC will release its monthly crude oil market report (the exact release time of the monthly report is to be determined, usually released around 18-20pm BST); next Tuesday at 17:00 IEA will release its monthly crude oil market report.
The API crude oil inventories for the week of December 11 will be released at 5:30 am next Wednesday, followed by the EIA crude oil inventories for the week of December 11 at 23:30. API crude oil inventories have been reversing expectations for nearly a month, recording an increase, and last week’s EIA crude oil inventories unexpectedly recorded an increase of 15.189 million barrels. Crude oil investors need to be alert to the possibility of the same situation next week.
Next Saturday the OPEC and non-OPEC oil producers ministerial oversight committees will meet to assess market conditions. OPEC+ agreed last week to start gradually increasing production in January next year. Russian Deputy Prime Minister Novak said oil production by non-OPEC+ members also needs to be monitored.
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