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



FLASH: Gold Spiked, USD Down, Crude Oil Up, Stocks Up

Notes: The Fed Wednesday signaled interest rate cuts beginning as early as July, saying it is ready to battle growing global and domestic economic risks as it took stock of rising trade tensions and growing concerns about weak inflation.

Expectations the Fed could cut interest rates at its next meeting and confirmation that the chief US trade negotiator will meet his Chinese counterpart before a meeting between President Trump and Chinese President Xi next week are also supporting markets.

In Asia

Gold: Gold prices spiked as much as 1.8% to their highest in more than 5 years Thursday after the Fed signaled possible interest rate cuts later this year, pushing USD and US Treasury yields lower.

  • Spot gold was up 1.4% at $1,378.45 oz as of 0447 GMT, after hitting its highest since 17 March 2014 at $1,383.81,
  • US gold futures spiked 2.5% to $1,382.60 oz.

Wednesday the Fed said it was ready to battle growing global and domestic economic risks with interest rate cuts beginning as early as next month, as it took stock of rising trade tensions and growing concerns about weak inflation.

Lower interest rates decrease the opportunity cost of holding non-yielding gold and weigh on USD, making gold cheaper for investors holding other currencies.

Energy: Crude Oil prices rose over 1% Thursday as official data showed US Crude Oil stocks fell more than expected and as OPEC and other producers agreed a date for a meeting to discuss output cuts.

  • ICE Brent Crude Oil futures had risen 82c, or 1.3%, to $62.64 bbl by 0026 GMT,
  • NYMEX WTI Crude Oil futures were up 79c, or 1.5%, at $54.55 a bbl.

After growing to near 2-year highs, US Crude Oil stocks fell by 3.1-M bbl last week, compared with analyst expectations for a draw of 1.1-M bbl, the Energy Information Administration (EIA) said.

Equities: Asian stock markets rallied Thursday while USD dropped and global bond yields plunged, with the 10-year US T-Bond yield falling below 2%, after the Fed signaled possible interest rate cuts later this year.

MSCI’s broadest index of Asia-Pacific shares sans Japan rose 0.92%, led by gains in China, while Tokyo’s Nikkei advanced 0.67%.

European stock futures point to gains of up to 0.5% for markets there.

The MSCI ACWI, which incorporates readings of 49 equity markets across the world, gained 0.33% on Thursday. It has recovered a large part of its 6.7% losses made after President Trump threatened new tariffs on all of China’s imports last month.

Signs that China and the United States are returning to the negotiating table after a 6-weeks bolstered risk sentiment.

The rally in stocks comes as a host of central banks in Asia and Europe are scheduled to hold policy meetings later in the day, with most expected to flag moves toward looser monetary settings.

On Wall Street: the S&P 500 gained 0.30% to 2,926, just 19 pts off its record closing high marked on 30 April. Its futures rose another 0.42% in Asia. Thursday.

Currencies: The RMB Yuan recovered over the past couple of days on hopes of US-China talks next week on the sideline of the G- 20 Summit.

The offshore RMB Yuan rose 0.3% to at 6.8722 to USD , marking a 1week high of 6.8677 Thursday.

EUR rose 0.3% to $1.1265 after the Fed’s Dovish signals undermined the dollar’s yield attraction.

USD fell 0.5% on JPY to hit a 5-month low of 107.55 JPY extending losses after the Bank of Japan stood pat on policy.

GBP rebounded 0.35% to $1.2688 from Tuesday’s 5.5-month low of $1.2507 as investors trimmed their short bets before the Bank of England’s policy meeting Thursday where it may strike a more Hawkish tone than those of its peers.

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

NYMEX Crude Oil »54.68 USD+0.92+1.68%Jun 191:58AM EDT
ICE Brent Crude »62.98 USD+1.16+1.84%Jun 192:00AM EDT
NYMEX RBOB Gasoline »1.76 USD+0.03+1.53%Jun 191:59AM EDT
Dubai Crude Spot »60.78 USD+0.37+0.61%Dec 022:10AM EDT
ICE Gas Oil »568.00 USD+7.75+1.36%Jul 191:59AM EDT
NYMEX No2 Heating Oil »1.85 USD+0.02+1.17%Jun 192:00AM EDT
NYMEX Nat Gas »2.28 USD+0.01+0.35%Jun 192:00AM EDT
ICE NBP Nat Gas »26.55 GBP+0.000.00%Jun 197:00PM EDT
Gold Spot »1,384.01USD+24.14+1.74%Dec 022:09AM EDT
COMEX 100oz Gold »1,344.60USD+0.000.00%Jun 197:01PM EDT
Silver Spot »15.30USD+0.14+0.95%Dec 022:09AM EDT
Platinum Spot »812.20USD+1.70+0.21%Dec 022:09AM EDT
Palladium Spot »1,505.80USD+5.30+0.35%Dec 022:08AM EDT
COMEX Copper »2.70USD+0.02+0.57%Jun 1912:00AM EDT
CBOT Corn »440.75USC-0.25-0.06%Jul 192:02AM EDT
CBOT Wheat »519.75USC-2.50-0.48%Jul 191:40AM EDT
KCBT Wheat »454.50USC-3.00-0.66%Jul 191:27AM EDT
MGE Spring Wheat »564.00USC-1.25-0.22%Dec 021:00AM EDT
Euronext Milling Wheat »179.00EUR+0.000.00%Sep 1912:29PM EDT
CBOT Soybean »899.25USC-4.00-0.44%Jul 192:02AM 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.