[Market Review].
The U.S. stimulus package has changed again. The dollar index rose slightly. The UK epidemic triggered a rise in risk aversion. However, the U.S. Congress passed a new round of stimulus package, limiting the dollar’s gains. The U.S. Congress approved a government spending bill totaling about $2.3 trillion, including a stimulus package of about $900 billion to fight the epidemic and a $1.4 trillion federal spending plan. This new bill is awaiting Trump‘s signature to take effect. However, the latest news says that Trump asked Congress to modify the program. He wants to raise the “check to pay” amount from $600 to $2000. Data showed that the final annualized quarterly rate of U.S. real GDP in the third quarter recorded a record high of 33.4%.
Gold is shaking to the downside. Next, let’s focus on gold. Gold has shaken to the downside during the day and is currently trading near $1,860. Some analysts say that after the dollar moved higher, many investors chose to take profits and sell gold. Gold prices are likely to hover in the $1,850 to $1,860 range in the short term.
Silver fell nearly 4%. Like gold, silver also ushered in a decline, from near $26.5 all the way down to near $25, an intra-day decline of nearly 4%.
The British pound oscillated broadly. In non-U.S. currencies. The British pound was broadly oscillating during the day. The pound came under pressure after the newly discovered new strain of crown virus spread in the UK and subsequently several countries cut off major trade routes with the country. And news about the UK-EU negotiations also added to the pound’s volatility. It is reported that the EU has rejected the fisheries package proposed by the UK. EU chief negotiator Barnier said a deal could be reached by Christmas if the UK is prepared to give in. However, he said that his team is willing to continue negotiations with the country after the end of the transition period for Britain’s exit from the EU on December 31, if necessary.
The euro is under significant pressure. Let’s look at the euro again. Against the backdrop of the dollar’s recovery, the euro saw a drop against the dollar after hitting a high of 1.2257, dropping more than 100 points. The pair is currently hovering around 1.2170.
U.S. oil fell below the $47 mark. Finally, a look at the oil market. The emergence of a new toxic strain in the UK has heightened the risk of a wider global embargo and travel restrictions. This will slow down the recovery in global oil demand and put pressure on oil prices. In addition, U.S. API crude oil inventories recorded an increase of 2.7 million barrels, compared to expectations for a decrease of 3.25 million barrels. This also put pressure on U.S. oil. U.S. oil has now fallen below the $47 mark.
The Buna oil is down more than 1%. Likewise, BOP also came under pressure to the downside, dropping 1.6 percent during the day and falling back below the 50 mark again.
▼Bond Market
Overnight, the yield on China’s 10-year Treasury note fell 0.73 percent, while the yield on the U.S. 10-year Treasury note fell 1.47 percent and the yield on the U.S. 3-month Treasury note fell 2.39 percent.
▼On the stock market
U.S. stocks closed mixed, with the S&P 500 down 0.21 percent, the Nasdaq up 0.51 percent and the Dow Jones down 0.67 percent; by this morning, Chinese stocks opened mixed, with the Shanghai Composite Index up 0.17 percent, the Growth Enterprise Market Index up 0.37 percent and Hong Kong’s Hang Seng Index down 0.14 percent.
[Risk Warning
Gold: investors profit taking Gold may correct to 1850 area
Some analysis pointed out that after the dollar went higher, many investors chose to take profits and sell gold. Short-term gold prices may correct to $1850 to $1860 per ounce, as the market has largely accounted for all the good news. However, some analysts are optimistic about the long-term trend of gold.
Sterling: Even if a Brexit deal is reached, it is difficult for the pound to rise sharply
The Bank of Tokyo-Mitsubishi UFJ said that even if a final agreement is reached in the negotiations between the U.K. and the European Union, the pound will at best rise to 1.35 against the U.S. dollar. if the U.K. leaves the European Union without a deal at the end of the year, the pound could go back down to 1.30 or even 1.25 or even the 1.20 mark.
Euribor: Swiss central bank intervention is expected to continue Euribor may rise to 1.09
Danske Bank believes that as the ECB will maintain interest rates and choose other easing tools, the Swiss policy rate will also remain unchanged for a longer period of time. In the first quarter of 2021, the euro may rise against the dollar will also boost the euro against the Swiss franc to 1.09. If the European macroeconomy gets better, so much so that the market starts talking about an ECB rate hike, for the first quarter, the basic expectation is that the euro will rise again against the Swiss franc.
Key Forecast
21:30 U.S. November PCE data is difficult to make a big change
The first thing to focus on is the PCE data that will be released in the U.S. Since August, the annual rate of PCE has been gradually moving downward, falling to 1.4% in October. in November, the data is difficult to rebound significantly. The data for November can be found, non-farm payrolls far less than expected, retail sales also fell sharply, while the CPI rose slightly.
Currently, the market expects the U.S. core PCE price index for November at an annual rate of 1.5%, if the published value is better than expected, or good for the dollar; if the published value is less than expected, or negative for the dollar.
Also pay attention to the monthly rate of PCE price index and monthly rate of personal spending released at the same time. You need to pay attention to the impact of this set of data on the dollar index.
23:30 EIA crude oil inventories may increase
Next, let’s take a look at the upcoming EIA crude oil inventories. Last week’s EIA crude oil inventories decreased by 3.135 million barrels, a larger than expected drop. Early this morning, API crude oil inventories have been released, increasing by 2.7 million barrels, much more than expected.
According to past experience, API inventory data and EIA inventory data have a relatively strong positive correlation, so EIA crude oil inventories may also increase.
Even so still need to pay attention to the current market expectations, the United States to the week of December 18 EIA crude oil inventory or reduce 3.25 million barrels, if the release of data more than expected, oil prices may short term dip; if the inventory data is less than expected, oil prices are expected to strengthen.
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