Currencies
That scenario would make a larger stimulus more likely which would have a downward impact on the dollar but probably a positive impact on consumption and the real economy. Gene comments on stock, bond, dollar, oil & gold markets, with a particular emphasis on monetary policy, technology issues and S&P intraday action. less The rupee (INR) settled last session with a gain of 12 paise, that is, it closed at 73.30 versus preceding day’s close of 73.42 against the dollar (USD).
What comes next hinges on a handful of unpredictable dynamics, ranging from the strength of the global economic recovery to the health of the U.S. dollar. Perhaps, as some say, the most likely candidate for the long-feared final end of the US dollar and the inflationary inferno its collapse is purported to bring about. In global markets, gold prices were higher today supported by a weaker US dollar. As an industrial metal, there’s as much to its price in economy as everyone is told to think about dollar currency.
Though INR looks bullish, it has a critical resistance at 73 and the dollar index is hovering just above a support level.
What comes next hinges on a handful of unpredictable dynamics, ranging from the strength of the global economic recovery to the health of the U.S. dollar. Perhaps, as some say, the most likely candidate for the long-feared final end of the US dollar and the inflationary inferno its collapse is purported to bring about. In global markets, gold prices were higher today supported by a weaker US dollar. As an industrial metal, there’s as much to its price in economy as everyone is told to think about dollar currency.
Though INR looks bullish, it has a critical resistance at 73 and the dollar index is hovering just above a support level.
Metals
Although gold and silver will finish 2020 below their highs for the year, gold is still headed for an annual return of close to 25%; silver around 45%. less Share Photo: david gray/Agence France-Presse/Getty Images By Sebastian Pellejero Close Dec. 31, 2020 5:30 am ET Gold is wrapping up its best annual performance in years. Nonetheless, risk assets have generally benefitted whilst both gold and silver have remained range-bound. Bitcoin is also seen increasingly as an inflation hedge, an alternative to gold and as a more common mainstream payment method.
Gold prices are trading down by 0.2% at Rs 50,052 per 10 grams. Overall, though, the top 20 gold miners will finish 2020 with an estimated 5% drop in output. However, in Indian markets gold prices edged lower. On MCX, gold futures declined 0.1% to Rs 50,097 per 10 grams. His newsletter is a Monday through Thursday email report that trades the S&P, Nasdaq and gold issues. less Gold’s not buying.
Gold prices are trading down by 0.2% at Rs 50,052 per 10 grams. Overall, though, the top 20 gold miners will finish 2020 with an estimated 5% drop in output. However, in Indian markets gold prices edged lower. On MCX, gold futures declined 0.1% to Rs 50,097 per 10 grams. His newsletter is a Monday through Thursday email report that trades the S&P, Nasdaq and gold issues. less Gold’s not buying.
Oil
OPEC agreed supply reductions helping oil prices higher, although Brent Crude remains around 22% lower than it started the year. A massive oil refinery being built by Aliko Dangote, the continent’s richest person, could transform the economy, while currency reform may lure more investment. According to the EIA, crude stocks in the US plunged by 6.07 million bbl in the week ending the 25th of December. Oil prices are showing a year-on-year drop of more than $14/bbl at present, as demand has been impacted negatively by lower economic activity in the wake of coronavirus-related shutdowns.
There is the rising tension with Iran again, which may be behind Oil’s firmness, while of course actual conflict with Iran would not be taken well by markets overall. The OPEC deal may fray at the edges, demand for oil could arrive later than anticipated. They also have to protect oil assets from vandalism, which has hit national output and curbed government revenue in the past.
Nigeria is Africa’s biggest crude producer and its population of about 200 million offers not only a market but also a pool for rapid development. The front month WTI futures contract was trading at $48.22/bbl, down by $0.18/bbl against settlement price. This is similar to Venezuela setting the price of gasoline at 10 cents a gallon.
There is the rising tension with Iran again, which may be behind Oil’s firmness, while of course actual conflict with Iran would not be taken well by markets overall. The OPEC deal may fray at the edges, demand for oil could arrive later than anticipated. They also have to protect oil assets from vandalism, which has hit national output and curbed government revenue in the past.
Nigeria is Africa’s biggest crude producer and its population of about 200 million offers not only a market but also a pool for rapid development. The front month WTI futures contract was trading at $48.22/bbl, down by $0.18/bbl against settlement price. This is similar to Venezuela setting the price of gasoline at 10 cents a gallon.
United States
Supporting Market Functioning: On March 15th, the Fed announced it would support market functioning through boosting QE. Alongside this, the Fed announced a range of funding and liquidity facilities, which also supported the smooth functioning of financial markets and the flow of credit in the economy. A massive surge of investment demand hit the bullion market this spring as panic gripped Wall Street and bargain hunters came out in droves. The stock market has shaken off the pandemic thanks to actions taken by the Fed and stimulus packages from Congress.
These are all good reasons to end the Fed and let the market set rates.
Average Inflation Targeting: Among the more significant changes to the Fed’s policy had been the update to its statement on longer-run goals and monetary policy strategy. Nasdaq Futures are trading up by 9 points (up 0.1%) while Dow Futures are trading up by 20 points (up 0.1%). For example, mortgage loan rates are generally tied to interest rates on 10-year US Treasuries that the Fed does manipulate. US stock futures are trading higher today, indicating a positive opening for Wall Street indices.
However we don’t want to get too comfy with this behavior at yearend, but for sure you have the Fed Put in-essence, and that underpins the market.
These are all good reasons to end the Fed and let the market set rates.
Average Inflation Targeting: Among the more significant changes to the Fed’s policy had been the update to its statement on longer-run goals and monetary policy strategy. Nasdaq Futures are trading up by 9 points (up 0.1%) while Dow Futures are trading up by 20 points (up 0.1%). For example, mortgage loan rates are generally tied to interest rates on 10-year US Treasuries that the Fed does manipulate. US stock futures are trading higher today, indicating a positive opening for Wall Street indices.
However we don’t want to get too comfy with this behavior at yearend, but for sure you have the Fed Put in-essence, and that underpins the market.
China
The deal cemented tariffs as the new normal and set quotas for Beijing s purchases, which have consistently fallen short. But Beijing’s tightening control on the financial hub will add new challenges.
Europe
The consensus view at the beginning of the year was that a trade deal with the EU was very likely to get done.
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