【TOP 1 Evening】Euro higher, US dollar slips, Gold hits $1920, Cathay Pacific to eliminate 8,500 job posts

Gold

Gold prices rose on Wednesday as optimism that US lawmakers could reach an agreement on a pre-election coronavirus relief package pressured the dollar and bolstered the precious metal's appeal as an inflation hedge.

Spot gold rose 0.68% to $19017.57 per ounce by 18:00 (GMT+8).

Brexit headlines are also garnering attention as U.K. Prime Minister Boris Johnson said over the weekend that Britain should prepare for a "hard" Brexit if the E.U. doesn't approve the free trade agreement. "The next weeks will show whether the two sides are able to meet one another halfway and avoid more substantial damage. Gold should profit from this uncertainty.

Elsewhere, by 18:00 (GMT+8), Silver rose 1.56% to $24.990 per ounce, platinum was up 0.74% to $875.96 per ounce, while palladium fell 0.004% to $2395.05 per ounce.

Forex

The dollar hit a one-month low on Wednesday as investors who are optimistic about a pre-election U.S. stimulus package sought out riskier currencies.

At 18:00 (GMT+8), the US dollar index fell 0.31% to 92.767.

The Australian and New Zealand dollars, which have lagged other majors’ gains on the greenback due to expectations of monetary easing in both countries, each rose about 0.4%.

The EUR/USD hit a one-month high of $1.1853, rose 0.27%;

“U.S. stimulus faith remains in play,” said Sook Mei Leong, ASEAN head of global markets research at MUFG in Singapore.

“This is notwithstanding that the EUR/USD remains vulnerable to the stream of increases in COVID-19 cases and crimped economic activities from the re-introduction of lockdowns.”

Such worries and the drawn-out and oscillating fortunes of the U.S. stimulus bill have held the dollar in its range this month and will determine its next moves.

The Japanese yen has likewise been held in stasis as the brightening mood weakens the greenback, but the simultaneous rise in U.S. yields attracts investment flows from Japan out of yen and into dollars. The yen edged up 0.1% on Wednesday.

“All eyes are on whether a U.S. stimulus bill is agreed upon,” Kim Mundy, currency analyst at the Commonwealth Bank of Australia in Sydney, said in a note.

“Without a more aggressive U.S. fiscal thrust, the U.S. economic recovery is at risk and the dollar is vulnerable to a renewed bout of strength in the short-term.”

Crude Oil

Oil prices fell on Wednesday after a surprise climb in U.S. crude stockpiles added to concerns about a global supply glut as a spike in global Covid-19 cases fuels demand fears and production returns in Libya.

U.S. West Texas Intermediate (WTI) crude was at $41.127 barrel, fell 0.18%, Brent was down to $42.879 a barrel, fell 0.25% by 18:00 (GMT+8).

On the supply side, the Organization of the Petroleum Exporting Countries (OPEC) and its allies, together known as OPEC+, plan on scaling back their production cuts from a current 7.7 million barrels per day (bpd) to roughly 5.7 million bpd in January.

OPEC member Libya, which is exempt from the cuts, is also ramping up production after armed conflict shut almost all of the country’s output in January, pumping more oil into an oversupplied market.

“Hopes for economic stimulus in the United States and other countries to combat a pandemic-led slump in consumption are expected to cap losses but planned reduction in output cuts by OPEC+ will also limit any future gains,” Satoru Yoshida said, a commodity analyst with Rakuten Securities.

Stocks

Stocks in Asia-Pacific closed up on Wednesday trading.

In Japan, the Nikkei 225 rose 72.42 points or 0.31%, close at 23,639.46.

S&P/ASX 200 rose 7.20 points or 0.12% to close at 6,191.80.

South Korea's Kospi rose 12.45 points or 0.53% to 2,370.86. 

Hang Seng Index rose184.88 or 0.75% to 24,754.42.

The weighted index on the Taiwan Stock Exchange (TWSE), or Taiex, rose 14.88 points, or0.12%, at 12,877.25. 

Cathay Pacific Airways will eliminate 8,500 job posts, making 5,900 staff redundant, and shut one of its regional airlines with immediate effect under a global HK$2.2 billion (US$284 million) restructuring to cope with the pandemic fallout, the company revealed on Wednesday.

Shares in Cathay Pacific jumped 3.5% on the opening of the stock market following the job cuts announcement. However, the airline’s stock has fallen 43% since the start of the year.

The scale of the redundancies is smaller than Singapore Airlines’ 20% and 30% for Qantas. Jeffries analyst Andrew Lee said the restructuring details were “broadly in line with expectations”.

Oaktree Capital Group founder Howard Marks said that investment firms have a duty to their clients to stick up for their interests and maximize returns, so they can’t “go easy” on other creditors in distressed negotiations. He also talks about Federal Reserve policy, the credit market, and says some airlines should be smaller. 

By 18:00 (GMT+8):

SP500 fell 0.11% to 3,439.2；

DJ30 fell 0.19% to 28268.0；

TECH100 rose 0.02% to 11,674.9；

GER30 fell 0.55% to 12640.4；

UK100 fell 0.91% to 5820.1；

China A50 rose 0.54% to 16,005.8；

Focus Tonight

20:50 (GMT+8): Fed Brainard Speech；

22:30 (GMT+8): EIA Cushing Crude Oil Stocks Change (16/OCT), Previous: 2.906M;