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



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

Notes: JPMorgan expects the Fed to cut rates 2X this year, a major change from its previous forecast that rates will stay on hold until the end of Y 2020.

The benchmark 10-yr Treasury yield fell to its lowest mark since September 2017 overnight, coming within reach of the 2% threshold after St. Louis Federal Reserve President James Bullard said a rate cut “may be warranted soon” given the rising risk to economic growth posed by global trade tensions as well as weak US inflation.

Saudi Energy Minister Khalid al-Falih said Monday that a consensus was emerging among producers to continue working “to sustain market stability” in 2-H of this year.

Holdings of SPDR Gold Trust (GLD), the world’s largest gold-backed exchange-traded fund, rose 2.2% Monday, its biggest 1-day percentage gainer since July 2016, as investors sought safe havens.

In Asia

Gold: Gold prices steady Tuesday, hanging near 3-month highs hit Monday, as global slowdown worries driven by trade conflicts amid expectations of a US interest rate cut drives safe-haven investors towards the precious Yellow metal.

  • Spot gold was down 0.1% at $1,323.81 oz, as of 0525 GMT,
  • US gold futures were steady at $1,328.30 oz.

Weak sentiment around the breakdown in U.S.-China trade relationship has seen investors seek safe-haven assets. Also, weakness in equity markets and clearly the indications of a rate cut in the US has seen gold come forward, which has driven investors back into to the gold market.

Energy: Crude Oil prices were pressured Tuesday by an economic slowdown that has started to impact fuel consumption, although some support came from a Saudi statement that consensus was emerging with other producers over extending supply cuts.

  • Front-month ICE Brent Crude Oil futures were at $61.06 bbl at 0200 GMT, -22c, or 0.4%, below Monday’s close
  • NYMEX WTI Crude Oil futures were at $53.08 bbl, -17c, or 0.3%, from Monday’s NY settlement

Crude Oil futures are around 20% below Y 2019 highs reached in late April, with falls in May the sharpest monthly decliner since November. That has come as financial traders sell out of Crude Oil futures on growing concerns about the outlook for the world economy and Crude Oil consumption.

Equities: Asian shares fell Tuesday, following a volatile Wall Street session as weak economic indicators and an intensifying US-China trade dispute drives concerns about global growth, supporting safe-haven assets such as bonds.

 MSCI’s broadest index of Asia-Pacific shares sans Japan was down 0.3%, after earlier rising as much as 0.18%.

The broad index was pulled lower by Chinese shares. China’s blue-chip CSI300 index was 1.17% lower, and the Hang Seng lost 0.65%.

Seoul’s Kospi gave up 0.16%.

Australian shares were up 0.1% ahead of the expected interest rate cut by the Reserve Bank of Australia, as the bank hopes to revive growth.

Japan’s Nikkei gave up early gains and turned down 0.42%.

Currencies: USD traded down 0.1% at 107.980 JPY after tapping 107.860, its lowest since 10 January

.DXY Vs a basket of 6 peer currencies was steady at 97.153 after shedding 0.6% Monday.

USD is falling Vs EUR, as participants have found an incentive to finally cover EUR shorts on the sharp fall in US Treasury yields.

EUR nudged up 0.1% to $1.1251 after rallying 0.7% overnight to $1.1262, its highest since 13 May, it has drawn support from a weaker USD, but analysts remain cautious on its longer term prospects.

GBP was flat at $1.2666 off a 5-month low of $1.2560 set Friday on USD’s under-performance.

Aussie (AUD) held steady at $0.6974, giving up brief gains of 0.2% to a 3-week peak of $0.6975 after the nation’s central bank cut rates.

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

NYMEX Crude Oil »53.21 USD-0.04-0.08%Jun 192:02AM EDT
ICE Brent Crude »61.09 USD-0.19-0.31%Jun 192:02AM EDT
NYMEX RBOB Gasoline »1.74 USD-0.00-0.14%Jun 192:00AM EDT
Dubai Crude Spot »59.43 USD-0.10-0.17%Dec 022:12AM EDT
ICE Gas Oil »557.50 USD-4.25-0.76%Jun 192:02AM EDT
NYMEX No2 Heating Oil »1.81 USD-0.00-0.01%Jun 192:02AM EDT
NYMEX Nat Gas »2.41 USD+0.01+0.50%Jun 192:02AM EDT
ICE NBP Nat Gas »26.76 GBP+0.000.00%Jun 197:00PM EDT
Gold Spot »1,325.76USD+0.99+0.07%Dec 022:18AM EDT
COMEX 100oz Gold »1,322.20USD-0.50-0.04%Jun 1912:09AM EDT
Silver Spot »14.75USD-0.03-0.17%Dec 022:18AM EDT
Platinum Spot »816.51USD-3.99-0.49%Dec 022:18AM EDT
Palladium Spot »1,320.75USD-2.75-0.21%Dec 022:18AM EDT
COMEX Copper »2.66USD+0.01+0.21%Jun 1912:00AM EDT
CBOT Corn »431.75USC+7.50+1.74%Jul 192:16AM EDT
CBOT Wheat »521.00USC+1.25+0.24%Jul 192:15AM EDT
KCBT Wheat »485.00USC-1.75-0.36%Jul 192:14AM EDT
MGE Spring Wheat »563.50USC+0.000.00%Jul 192:08AM EDT
Euronext Milling Wheat »185.25EUR+0.000.00%Sep 1912:29PM EDT
CBOT Soybean »890.25USC+11.25+1.26%Jul 192:16AM EDT

Stay tuned…


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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.