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Market News 【TOP1 Morning】 Gold revives while dollar bleakly drops to 91. S&P 500 continues to record highs. Focus on EIA data today

【TOP1 Morning】 Gold revives while dollar bleakly drops to 91. S&P 500 continues to record highs. Focus on EIA data today

Signs of progress in the vaccine distribution race pushed the US stock market higher. The latest positive development is that the new crown vaccine developed by Pfizer PFE.N and BioNTech BNTX.O was approved in the United Kingdom, which was the first Western country to be approved for vaccination. Pfizer surged 3.5%, and BioNTech jumped about 6%.

TOPONE Markets Analyst
2020-12-03
760

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Forex: The US dollar hit a two-and-a-half-year low in volatile trading on Wednesday, dragged down by expectations of further US fiscal stimulus. The U.S. dollar index fell 0.1% to 91.115, hitting 91.094 earlier in the session, marking the fourth in 2018.

The lowest level since the end of the month.

 

The euro rose 0.2% against the U.S. dollar to $1.2098, after hitting $1.2108 earlier in the session, the highest since late April 2018. The European Central Bank will hold a policy meeting next week. Analysts said the euro may be under pressure because investors are worried that the European Central Bank will take action to prevent the euro from rising rapidly.

 

The pound fell because trade negotiations between the United Kingdom and the European Union were soon approaching a decisive moment, and many investors were unsure whether an agreement could be reached. The pound fell 0.5% against the dollar in late trading, to $1.3361.

 

The U.S. dollar rose 0.2% against the yen to 104.52 yen after the Bank of Japan signaled that it was preparing to extend the epidemic response plan.

 

The risk-sensitive Australian dollar rose 0.4% to US$0.7402 against the US dollar, as data showed that Australia’s economy rebounded more than expected in the third quarter.

 

Bitcoin rose 1.6% to $19,061, having hit a record high of $19,918.01 on Tuesday.

 

Precious metals: the metal market is heating up, the price of gold has risen above $1,830, the price of copper has hit a seven-year high, and the price of aluminum has reached its highest level in more than two years.

 

At the end of the US market, spot gold closed at US$1830.71 per ounce, up US$15.72 or 0.87%, hitting the highest level since November 24 at US$1832.52 per ounce, and the lowest hitting US$1806.80 per ounce. The settlement price of US gold futures rose 0.6% to 1,830.20 US dollars per ounce.

 

David Meger, head of metals trading at High Ridge Futures, said: "We are one step closer to the next stimulus package; this weakens the U.S. dollar, erodes the U.S. dollar, and supports the prices of all commodities including gold and silver."

 

Crude oil: Oil prices have fallen slightly. OPEC+ has postponed its production policy meeting earlier, and data from the US Energy Information Administration showed an unexpected increase in inventories.

 

According to data released by the American Petroleum Institute on Tuesday, for the week ended November 27, US crude oil inventories continued their upward trend of 3.8 million barrels last week, unexpectedly increasing by 4.146 million barrels, while the market had expected a decrease of 2.722 million barrels. Analysts believe that with the tightening of restrictions on commercial and social activities across the United States, demand has been hit.

 

At the same time, OPEC+ postponed the twelfth meeting to December 3 (Thursday), which also caused investor concerns. The meeting was originally scheduled to be held on December 1 (Tuesday).

 

In the days to come, investors need to pay close attention to the official US crude oil inventory data released by the US Energy Information Administration (EIA).

 

Bank of America Blanch believes that if OPEC+ fails to reach an agreement, the risk is too high. The basic scenario forecast is that OPEC+ will still reach an agreement to extend the production reduction, and it is expected that the production reduction measures "may be extended by two months or even three months." OPEC+ does not want to see prices rise too much, because they worry that this will lead to too much shale oil supply rebound.

 

Stock market: Although the British government announced on Wednesday that it has approved the emergency use of the vaccine jointly developed by Pfizer and BioNTech, European stock markets generally fell on Wednesday. The European benchmark stock index Pan-European Stoxx 600 index fell 0.23% to 390.98 points.

 

At the same time, U.S. stock index futures also generally fell. As of 20:20 Hong Kong time (07:20 AM Eastern Time), the blue chip-based Dow index futures fell 108 points, or 0.36%, and the S&P 500 index futures fell 7.88 Points, or about 0.22%, the Nasdaq 100 index futures dominated by technology stocks fell 30.75 points, or 0.25%.

 


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