Senior Relationship Manager
Summary: Flash-Crash Precious Metals
Good Morning,
A strong Nonfarm payroll on Friday left equities at record levles while yields rose and put pressure on precious metals. Over night gold and Silver dropped further to 1684 and 22.50 (see Ole`s comment below). 10 year yields rose to 1.30, Bitcoin trades at 43500 US Index rises to 92.80EURUSD trades at 1.1760 and GBPUSD at 1.3890
US Equities closed at all-time highs on Friday, but give up a little ground this morning on tapering fears and some nervousness spilling over from the FX Market.
China's factory gate inflation in July rose at a faster clip from the previous month at 9% vs 8.8% expected
Ole Hansen comments on Gold and Silver:
Gold (XAUUSD) and silver (XAGUSD) already under pressure following Friday’s stronger than expected US jobs report, suffered a flash crash during the early parts of the Asian session. Following the weak close on Friday both metals had been left vulnerable into the opening, with the Sunday evening / Monday morning opening often offering a very limited amount of liquidity. Within minutes gold dropped more than 4% while silver slumped 7%, before pairing losses ahead of the European opening. Traders have been rattled by golds strange behavior in recent weeks when falling yields failed to boost the price, while last week’s small turnaround in yields triggered an immediate and strong negative response. This sort of capitulation can often coincide with a significant low in the market but for that to happen economic data is required to turn more gold friendly. With the market focus on jobs over for now, the short-term direction of precious metals could be dictated by U.S. inflation – the other part of the Fed’s mandate - with July CPI due on Wednesday
Key events will be the CPI Wednesday, earnings remain in focus with Münchner Rück, Softbank, BionTech, Vestas Baidu Inc Walt Disney China Mobile NIO Palantir.
The US Infrastructure bill and any tapering plans or comments around it will be key. The U.S. Senate on Sunday took two more steps toward passing the bill.
Local Start Date | Local Time | Country/Region | Indicator Name | Period | Reuters Poll |
9 Aug 2021 | 03:30 | China (Mainland) | PPI YY | Jul | 8.8% |
9 Aug 2021 | 03:30 | China (Mainland) | CPI YY | Jul | 0.8% |
10 Aug 2021 | 01:50 | Japan | Current Account NSA JPY | Jun | 779.8B |
10 Aug 2021 | 08:00 | Norway | Consumer Price Index MM | Jul | |
10 Aug 2021 | 08:00 | Norway | Consumer Price Index YY | Jul | 2.8% |
10 Aug 2021 | 08:00 | Denmark | CPI YY | Jul | |
10 Aug 2021 | 11:00 | Germany | ZEW Economic Sentiment | Aug | 57.0 |
10 Aug 2021 | 11:00 | Germany | ZEW Current Conditions | Aug | 30.0 |
10 Aug 2021 | 14:00 | Brazil | IPCA Inflation Index MM | Jul | 0.93% |
10 Aug 2021 | China (Mainland) | Total Social Financing | Jul | 1,700.00B | |
10 Aug 2021 | China (Mainland) | M2 Money Supply YY | Jul | 8.7% | |
10 Aug 2021 | China (Mainland) | New Yuan Loans | Jul | 1,200.0B | |
11 Aug 2021 | 08:00 | Germany | HICP Final YY | Jul | 3.1% |
11 Aug 2021 | 10:00 | Italy | CPI (EU Norm) Final MM | Jul | -1.1% |
11 Aug 2021 | 10:00 | Italy | CPI (EU Norm) Final YY | Jul | 0.9% |
11 Aug 2021 | 14:00 | Brazil | Retail Sales YY | Jun | 9.00% |
11 Aug 2021 | 14:30 | United States | CPI MM, SA | Jul | 0.5% |
12 Aug 2021 | 01:50 | Japan | Corp Goods Price MM | Jul | 0.5% |
12 Aug 2021 | 01:50 | Japan | Corp Goods Price YY | Jul | 5.0% |
12 Aug 2021 | 08:00 | United Kingdom | GDP Est 3M/3M | Jun | 4.8% |
12 Aug 2021 | 08:00 | United Kingdom | GDP Estimate MM | Jun | 0.7% |
12 Aug 2021 | 08:00 | United Kingdom | GDP Estimate YY | Jun | 15.0% |
12 Aug 2021 | 08:00 | United Kingdom | Manufacturing Output MM | Jun | 0.4% |
12 Aug 2021 | 08:00 | United Kingdom | GDP Prelim QQ | Q2 | 4.8% |
12 Aug 2021 | 08:00 | United Kingdom | GDP Prelim YY | Q2 | 22.1% |
12 Aug 2021 | 13:00 | Turkey | CBT Weekly Repo Rate | Aug | 19.00% |
12 Aug 2021 | 13:00 | Turkey | O/N Lending Rate | Aug | |
12 Aug 2021 | 13:00 | Turkey | O/N Borrowing Rate | Aug | |
12 Aug 2021 | 13:00 | Turkey | Late Liquidity Window Rate | Aug | |
12 Aug 2021 | 14:30 | United States | Initial Jobless Clm | 7 Aug, w/e | 373k |
13 Aug 2021 | 08:45 | France | CPI (EU Norm) Final MM | Jul | 0.1% |
13 Aug 2021 | 08:45 | France | CPI (EU Norm) Final YY | Jul | 1.6% |
13 Aug 2021 | 09:00 | Turkey | Current Account Balance | Jun | |
13 Aug 2021 | 09:30 | Sweden | CPI MM | Jul | 0.3% |
13 Aug 2021 | 09:30 | Sweden | CPI YY | Jul | 1.4% |
13 Aug 2021 | 16:00 | United States | U Mich Sentiment Prelim | Aug | 81.2 |
16 Aug 2021 | 01:50 | Japan | GDP QQ | Q2 | 0.2% |
16 Aug 2021 | 01:50 | Japan | GDP QQ Annualised | Q2 | 0.7% |
16 Aug 2021 | 01:50 | Japan | GDP QQ Pvt Consmp Prelim | Q2 | -0.1% |
16 Aug 2021 | 01:50 | Japan | GDP QQ Capital Expend. | Q2 | 1.7% |
16 Aug 2021 | 01:50 | Japan | GDP QQ External Demand | Q2 | -0.1% |
16 Aug 2021 | 04:00 | China (Mainland) | Urban Investment (YTD)YY | Jul | |
16 Aug 2021 | 04:00 | China (Mainland) | Industrial Output YY | Jul | |
16 Aug 2021 | 04:00 | China (Mainland) | Retail Sales YY | Jul | |
16 Aug 2021 | 12:00 | Euro Zone | Reserve Assets Total | Jul |
(refinitv)
2024: The wasted year
Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.
As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.
Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.
With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.
Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.
As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.
Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.
With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.