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Asia: Gold, USD, Crude Oil, Stocks & Commodities



FLASH: Gold Up, USD Steady, Crude Oil Off, Stocks Mixed

Notes: Fighting to stave off punitive tariffs announced by President, a senior Mexican delegation was set to begin high level talks Monday in Washington, where it will be pushed to do more to hold back Central American migrants.

Factory activity contracted in most Asian countries last month as an escalating trade dispute between Washington and Beijing raised fears of a global economic downturn and heaped pressure on policymakers in the region and beyond to roll out more stimulus.

JPMorgan expects the Fed to cut rates twice this year, a major change from its previous forecast that rates will stay on hold until the end of Y 2020.

Speculators are building up trading positions to bet on a recession. If the upcoming US data such as Monday’s ISM manufacturing survey deteriorates, bearish bets on US stocks should gain momentum.

In Asia

Gold: Gold prices rose Monday to their highest in more than 2 months as heightened US-China trade tensions and Washington’s threat of tariffs on Mexico stoked worries of a global recession and drove investors to seek refuge in safe-haven gold.

  • Spot gold +0.5% at $1,312.37 oz at 0308 GMT,
  • US gold futures rose 0.5% to $1,317.50 oz.

We are seeing a lot of traditional safe-haven hedging in here.

Hedge funds and money managers increased their net long positions in COMEX gold in the week to 28 May, the US Commodity Futures Trading Commission (CFTC) said Friday.

Holdings of SPDR Gold Trust (GLD), the world’s largest gold-backed exchange-traded fund, rose 0.32% to 743.21 tonnes Friday from Thursday.

Energy: Crude Oil prices fell more than 1% Monday, extending losses of over 3% from Friday, when markets slipped to their biggest monthly losses in 6 months due to stalling demand and as trade disputes fanned fears of a global economic slowdown.

  • Front-month ICE Brent Crude Oil futures were at $61.12 bbl at 0444 GMT, -87c, or 1.4%, below Friday’s close,
  • NYMEX WTI Crude Oil futures were at $52.91 bbl, -59c, or 1.1% from Friday’s settlement.

Crude Oil prices slid on fresh trade worries after President Trump stoked global trade tensions by threatening tariffs on Mexico, which is one of the largest US trade partners and a major supplier of Crude Oil.

Equities: US stock futures, Asian share markets and Crude Oil prices slipped to multi-month lows Monday on worries intensifying US-China tensions and Washington’s new tariff threats against Mexico could tip the global economy into a recession.

The E-mini futures for S&P500 dropped 0.5% in early Asian trade to 2,738, near their March low of 2,722 while Japan’s Nikkei skidded 1.1% to a 4-month low.

MSCI’s broadest index of Asia-Pacific shares sans Japan was little changed in early trade, but held barely above last week’s four-month low. The CSI 300 index of Chinese shares advanced 0.9%, but kept within its recent range.

Currencies: The safe-haven JPY held firm, USD changed hands at 108.19 JPY, having dipped to as low as 108.17, its weakest mark since mid-January.

EUR was little moved $1.1171, off last week’s low of $1.1116.

RMB Yuan traded at 6.9418 per USD, near 5.5-month lows of 6.9497 touched on 17 May.

The Mexican Peso, hit by President Trump’s sudden threat to impose tariffs on Friday, regained some stability, trading at 19.6355 to USD, after its 2.5% fall Friday.

Commodities (quotes): Energy, Metals, and Agriculture Grains

NYMEX Crude Oil »53.12 USD-0.38-0.72%Jun 191:43AM EDT
ICE Brent Crude »61.31 USD-0.68-1.11%Jun 191:41AM EDT
NYMEX RBOB Gasoline »1.75 USD-0.02-1.06%Jun 191:40AM EDT
Dubai Crude Spot »62.48 USD+1.47+2.35%Dec 021:52AM EDT
ICE Gas Oil »563.00 USD-14.50-2.58%Jun 191:41AM EDT
NYMEX No2 Heating Oil »1.83 USD-0.01-0.78%Jun 191:41AM EDT
NYMEX Nat Gas »2.46 USD+0.01+0.41%Jun 191:43AM EDT
ICE NBP Nat Gas »27.57 GBP+0.000.00%Jun 197:00PM EDT
Gold Spot »1,311.33USD+6.09+0.46%Dec 021:48AM EDT
COMEX 100oz Gold »1,311.60USD+5.80+0.44%Jun 191:43AM EDT
Silver Spot »14.64USD+0.07+0.45%Dec 021:48AM EDT
Platinum Spot »801.41USD+9.91+1.24%Dec 021:48AM EDT
Palladium Spot »1,344.35USD+19.35+1.44%Dec 021:48AM EDT
COMEX Copper »2.63USD-0.02-0.61%Jun 1912:00AM EDT
CBOT Corn »427.00USC+0.000.00%Jul 191:43AM EDT
CBOT Wheat »508.50USC+5.50+1.08%Jul 191:42AM EDT
KCBT Wheat »482.25USC+9.25+1.92%Jul 191:42AM EDT
MGE Spring Wheat »561.00USC+9.00+1.60%Jul 191:36AM EDT
Euronext Milling Wheat »185.25EUR+0.000.00%Sep 1912:29PM EDT
CBOT Soybean»883.25USC+5.50+0.62%Jul 191:45AM EDT

Have a terrific week

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S. Jack Heffernan Ph.D. Economist at Knightsbridge holds a Ph.D. in Economics and brings with him over 25 years of trading experience in Asia and hands on experience in Venture Capital, he has been involved in several start ups that have seen market capitalization over $500m and 1 that reach a peak market cap of $15b. He has managed and overseen start ups in Crypto, Mining, Shipping, Technology and Financial Services.