Close: London Session | Forex, Metals, Oil, Agriculture June 10, 2021

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Currencies

Any deviation from the forecast will move the dollar, as the market participants became extremely sensitive to inflation data during the last months. She also emphasised the importance of domestic factors behind wider inflation dynamics, when journalists asked about the differences in the inflation outlook in the US and Euro area. But it is unclear if the bid tone behind the euro is due to the ECB’s relative hawkishness or the US dollar’s ongoing weakness.
Photo by Omid Armin on Unsplash The spot ignores broadly firmer US dollar and Treasury yields, as the corrective decline remains at full swing. 2020 candle represents a reversal candle that depicts that the US dollar would crash sooner than later. After every 16 years, the US dollar price reaches its highest point and then declines for the next 8 years continuously. Also, forty-five minutes later, the ECB staff projections on inflation and economic growth are destined to move the euro markets.
Deutsche Bank AG: The company expects to take a 300 million euro hit from a recent court ruling that favours consumers over banking fees, the lender’s finance chief said. Gold prices fell, pressured by a firm dollar. Gold prices fell, pressured by a firm U.S. dollar.

Metals

For instance, the World Gold Council, in its latest Gold Market Commentary, points out that , as net positioning on COMEX futures rose to its highest level since February. US CPI could provide further clues as to the Fed’s monetary policy path amid expectations of tapering and therefore provide clues as to where gold goes from here. Moreover, not only gold ETFs recorded their first monthly inflows since January 2021, but also the highest ones since September 2020.
Falling for the third consecutive session, gold has made new lows for the week near $1876. Gold prices for the latest contract on MCX are trading down by 0.5% at Rs 48,883 per 10 grams. Venturing into the uranium market, which is much smaller than oil or gold markets, is unusual for a firm that typically invests in corporate debt. Gold is heading mildly lower for a third straight day ahead of the all important ECB meeting and US CPI data. Gold could keep its momentum later this year, but a lot depends on the Fed and inflation.
In May 2021, gold prices increased immensely which confirmed the mega bull flag. Let’s go through the technical scenario that can make gold prices hit $2,300.

Oil

US crude inventories that exclude the SPR fell by 5.2 million bbl in the week to June 04 to 474 million bbl, the third consecutive weekly drop. BEFORE THE BELL Futures for Canada s main stock index inched higher as oil prices rose, a day after slipping on data indicating weak U.S. driving season fuel demand. It will list oil and gas firm Independence Energy by merging it with publicly traded Contango Oil and Gas. Crude stocks were meanwhile 5.2 million barrels lower in the week to 474 million barrels.
Gasoline demand fell to 8.48 million bpd in the week to June 04, down from 9.15 million bpd the week prior as per the EIA statistics. On the contrary, a negative or not entirely positive report could affect the barrel of crude oil, causing a price reduction. Crude stockpiles fell more than expected, as the surveyed analysts predicted a drop of 4.1 million barrels, while the American Petroleum Institute reported a fall of 2.1 million barrels. Oil prices rose, a day after slipping on data indicating weak U.S. driving season fuel demand.
The crude oil price is the star of the week so far.
West Texas Intermediate Crude Oil futures dropped by 0.13%, closing the session at the 69.96 level after advancing by 1.18% in the previous session.

United States

At the same time, the US inflation data is expected to increase on a monthly basis by 0.4% on the headline release and by 0.5% on the core data. During the Carter years, baby boomers experienced high inflation and Fed Chairman Volcker instituted 20% interest rates while the Fed tried to get things under control. The US 10-year yield closed below 1.50% for the first time in three months yesterday, and this may have helped underpin the Japanese yen. The ECB’s decision and the US inflation data are issued within a time span of about forty-five minutes, so rising volatility is a given.
If prices continue to rise at an exponential rate, will the Fed really be willing to raise interest rates? The double-digit inflation spikes in 1975 & 1980 prompted Fed Chairman Volcker to dramatically raise interest rates. If that happens, it would fit the Fed’s “transitory inflation” theme that was discussed in the past. Payments processor Marqeta made its Wall Street debut Wednesday, its shares climbing to give the company a market value of $16 billion.
The call came after the President ordered a review of Chinese software apps, TikTok and WeChat, revoking former President Donald Trump’s bans. Bear in mind that the Fed, via QE has been stuffing banks with cash for a year at a rate of about $120 billion a month.

China

Beijing’s contingency plans would always have to recognize this possibility, but the origin of the opaque position was aimed at Taipei, not Beijing. Beijing agreed to buy $80 bln of US agriculture products over two years and, as of April, was estimated to be more than 20% behind. Chinese President Xi Jinping said the government must advance ethnic unity while on a visit to Xinjiang and Tibet. A specific mention of Xinjiang, the region where it has been accused of abuses against Muslim Uyghurs, is still being debated.
This appeared to be an escalation of Beijing’s show of force.

Europe

Lagarde also explicitly referred to buying according to market conditions, taking seasonality into account, implying the pace of purchases is likely to slow amidst lower bond issuance. less The ECB maintained the current pace of bond purchases and pushed forward the decision on scaling down the flow of buying into September. We expect the ECB’s bond purchase volumes to fall clearly already in August, which is customary due receding bond issuance volumes. The ECB could then decide on lower purchase volumes at the September meeting when the starting point is already lower due to the slower August buying.
However, inflation forecasts for 2023 remain low and the ECB retains the view that higher inflation numbers remain transitory (see more below). The EU warned it could impose tariffs and quotas on the U.K. in an escalating Brexit dispute over trade with Northern Ireland after talks ended without a breakthrough. London says the bloc is taking an excessively purist approach to border checks.Brussels warns that the EU could retaliate with quotas and tariffs on trade.
Traders and investors alike have watched financial markets moving in tight ranges, waiting for the European Central Bank (ECB) to deliver its monetary policy and for US inflation data.
Unsplash The ECB is expected to keep rates unchanged at 0.0% and the PEPP bond purchase program unchanged at €1.85 trillion. The U.S. president s camp is briefing that he s worried Brexit trade tensions could imperil peace in the area.

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