Financial Breakfast on September 3: The U.S. dollar continues to fall and gold retreats, U.S. oil breaks through the 70 mark, waiting for the guidance of non-agricultural data

On Thursday (September 2), the U.S. dollar hit a new low of 92.20 since August 5. Although the number of first-time jobless claims was slightly higher than expected, the risk appetite brought by the Fed’s dovish signal continued; the euro against the dollar remained at Near the one-month high, the previous ECB policymakers’ speeches made inflation concerns still the focus of the market. The price of gold fell slightly. Even if the yields of the U.S. dollar and U.S. bonds fell, it still failed to support the rise of gold prices; investors are paying attention to the August non-agricultural employment data in the United States to determine the future Fed policy path and gold price trend. Oil prices rose sharply, with U.S. oil and Bursa oil hitting nearly one-month highs to US$70.61/barrel and US$73.47/barrel respectively; the rebound was driven by optimism about global economic growth, and previously released data showed that US crude oil inventories fell more than expected .

Commodity closing, COMEX December spot gold futures closed down 0.3%, at 1811.50 US dollars per ounce. WTI October crude oil futures closed up 1.40 US dollars, or 2.04%, to 69.99 US dollars per barrel; Brent November crude oil futures closed up 1.44 US dollars, or 2.01, to 73.03 US dollars per barrel.

US stocks closed: the S&P 500 index rose 0.3% to 4,536.95 points; the Dow Jones Industrial Average rose 0.4% to 35,443.82 points; the Nasdaq Composite Index rose 0.1% to 15,331.18 points; the Nasdaq 100 index fell 0.1 %, reported 15604.25 points.

Friday preview

List of major global markets

The US stock market closed higher on Thursday, with the S&P 500 index hitting a record high. US non-agricultural employment data will be released on Friday, which will affect the market's bets on the interest rate path and the Federal Reserve's bond purchase plan. Energy and industrial stocks were among the top gainers, while technology stocks underperformed.

Matt Weller, head of global research at Forex.com and City Index, wrote in a client report that most market observers expect the Federal Reserve to announce the reduction plan until the November meeting at the earliest, meaning that after three non-agricultural employment data are released from now on, Nevertheless, traders will still pay attention to Friday's employment report to observe whether the labor market is recovering as expected.

Goldman Sachs strategists said that the market's concerns about economic growth are a bit too much, thus opening the door to potential short-term rises in cyclical assets. Goldman Sachs strategist Zach Pandl and others released a report saying that we believe that the market is too worried about the global cyclical risks brought by the Delta epidemic, and our expectations of the Fed are still more dovish than the market. Therefore, we believe that cyclical assets in the short term It may rebound further-that is, both stock and bond yields will rise.

Precious metals and crude oil

Spot gold fell slightly on Thursday, closing at US$1809.68 per ounce. As investors ignored the weakness of the US dollar and closed their positions, the market is still focusing on Friday’s non-agricultural employment data, which may determine the Fed’s strategy of reducing debt purchases.

Phillip Streible, chief market strategist at Blue Line Futures, said that the gold market is currently consolidating and does not care about anything else until the employment data is released. If the U.S. dollar depreciates more sharply, gold may gain some buying.

Gold investors seem to ignore the fall in the U.S. dollar. The price of gold usually rises as the U.S. dollar weakens, because it is cheaper for people who hold other currencies.

Market participants also evaluated the data. The data showed that despite the surge in the number of new crown infections, the number of Americans who first filed for unemployment benefits decreased last week.

New York crude oil futures closed at around $70 a barrel for the first time in nearly a month. Investors bet that the market can absorb the additional supply of OPEC+ because the US Gulf of Mexico has just been hit by Hurricane Ida; although Hurricane Ida has left, the Gulf of Mexico Nearly 94% of crude oil production capacity remains closed, and the weaker U.S. dollar also supported oil prices.

This wave of rally once pushed US crude oil futures to cross the 50-day moving average for the first time in a month. It is a bullish signal for investors. In addition, the increase in far-month contracts exceeds that of near-month contracts, which is another sign that market participants expect demand to rise as supply declines.

Analysts said that there are good reasons for this rebound: there are still 1.5 million barrels of crude oil production facilities in the Gulf of Mexico that are in a state of suspension. The data released yesterday showed that crude oil inventories fell by 7.2 million barrels, and inventories were at their lowest level since September 2019. .

Bjornar Tonhaugen, head of oil markets at Rystad Energy, wrote in a report that after the OPEC+ meeting ended calmly, oil prices rose. The decline in crude oil inventories boosted market confidence; he added that a weaker U.S. dollar also made commodities Investors are more attractive.

In addition, Hurricane Ida has caused the closure of 80% of oil and gas production facilities in the Gulf of Mexico. Refineries in Louisiana may take several weeks to restart, which will weaken demand for crude oil, but the slow recovery of offshore crude oil production due to damage to critical support facilities may offset this impact.

Foreign exchange

On Thursday, the US dollar index fell to its lowest level since August 5. Although the number of initial jobless claims was slightly higher than expected, the risk appetite caused by the Fed’s dovish signal continued. Traders wait for more data to be released on Friday, including non-agricultural employment in August.
The U.S. dollar fell against all G-10 currencies, with the New Zealand dollar leading the gains, while the Swiss franc and the yen trailed.

The US dollar index fell 0.31% to 92.22, the number of initial jobless claims in the United States fell last week, and the number of layoffs fell to its lowest level in 24 years. However, the rising number of new crown cases in recent weeks has threatened the economic recovery and prevented the Fed from withdrawing its massive stimulus plan.

Friday's non-farm payrolls data will provide more clues about the strength of the US labor market and when the Fed will begin to reduce asset purchases. Markit service industry PMI and ISM service industry data will also be released on Friday.

Dutch bank foreign exchange strategist Georgette Boele said that the recent US economic data was lower than expected. If Friday’s employment report is disappointing, the dollar may fall further.

Marshall Gittler, head of investment research at BDSwiss, said that the data is better than expected, but not enough to change anyone's view of what is happening, or the pace of reducing debt purchases or Friday's data. It is just within the estimated range. The Fed has already made its position clear. They said that unless the situation takes a turn for the worse, they will start to reduce debt purchases this year, so unless the employment data for a certain month, or possibly several months, is far below expectations, they will not postpone the reduction of purchases. debt.

The euro rose 0.3% to 1.1875 against the dollar, hitting a nearly 1-month high of 1.1876 during the session. It was boosted by stop-loss orders and cross-related buying, and there was short covering before the release of the employment report on Friday. Other data released this week showed that inflation in the euro zone rose to 3% in August, pushing the euro to its highest level since August 4. Data released on Thursday showed that manufacturing in the region remains strong, but supply chain issues have pushed up prices.

Recent comments by European Central Bank hawks, including President Holtzmann of the Austrian Central Bank and Weidmann, President of the German Central Bank, also support the euro. European Central Bank President Lagarde said that the region is recovering from the epidemic and only needs "surgical" support.

The pound rose 0.46% to 1.3833 against the dollar. The dollar fell 0.06% to 109.94 against the yen, supported by the euro-yen model buying, as the US stock market rose; the euro against the yen rose 0.2% to 130.53, the highest level in more than a month.

With the surge in oil prices, the U.S. dollar fell 0.53% to 1.2553 against the Canadian dollar, the lowest since August 16; the August 31 low of 1.2569 is the recent support level.

The Australian dollar rose 0.46% to 0.7400 against the US dollar, and hit 0.7409 during the session, the highest level since August 5; the New Zealand dollar rose 0.58% to 0.7111 against the US dollar, breaking through the 200-day moving average for the first time in nearly two months.

International news

[The United States announced a strategic oil reserve transaction, the US Department of Energy will exchange strategic oil reserves with ExxonMobil, and the strategic oil reserve transaction will release 1.5 million barrels of crude oil]

[U.S. Democratic Senator Manchin asks Democrats to "suspend" the US$3.5 trillion tax and spending plan] US moderate Democrat Senator Manchin said that Democratic congressmen’s $3.5 trillion package of US President Biden’s economic agenda should be "suspended" Press the pause button". This poses a clear challenge to Democratic leaders’ efforts to pass the tax and spending plan in the evenly matched Senate in the coming weeks. He said that soaring inflation, coupled with the uncertainty of national security after the U.S. withdrawal from Afghanistan, means that it is necessary to slow down and possibly reconsider the plan. Manchin’s vote is critical, because Republicans unanimously oppose the plan, and all Democrats in the Senate must support the plan before the vice president can cast a tie-breaking vote, which will be passed by 51 votes.

[According to the British Daily Telegraph: It is expected that British Prime Minister Johnson will announce tax increases next week to provide funds for major social security reforms. Johnson will announce an increase in national insurance and approximately 25 million people will pay additional taxes.]

[Non-agricultural employment may show the impact of the delta variant strain] As Fed officials heatedly discuss debt reduction later this year, investors will pay attention to the non-agricultural employment report released on Friday to understand the state of the US labor market. Institutional survey economists predict that the median value shows that the employment population may increase by 725,000 in August, which is slower than the growth rate of the previous two months, but stronger than the growth rate at the beginning of this year. The strong data will show that after months of limited labor supply, companies have achieved more success in recruiting. But the risks associated with the delta strain may mean that non-farm payrolls data is weaker than expected and complicate the Fed's timetable for reducing asset purchases.

[Libor sets new lows and excess cash pressures interest rates] The three-month US dollar Libor fell to a record low on Thursday, and short-term market excess funds continued to put downward pressure on interest rates. Today Libor fell by 0.125 basis points to 0.11763%, which is lower than the previous record low of 0.11775% set on July 30. Money market interest rates are under pressure throughout the year because the central bank has been buying assets and withdrawing funds from the cash account of the US Treasury Department, which increases the banking system's reserves. The supply of short-term tools has been declining. In particular, the U.S. Treasury Department has cut the supply of Treasury bills to create more borrowing space within the debt ceiling, making investors scramble to find a place for cash.

Domestic news

[China Securities Regulatory Commission: Persist in misaligned development and highlight the characteristics of building the Beijing Stock Exchange to better serve the high-quality development of innovative small and medium-sized enterprises] The construction of the Beijing Stock Exchange focuses on achieving the "three goals." The first is to build a set of basic institutional arrangements that fit the characteristics of innovative SMEs, covering issuance and listing, trading, delisting, continuous supervision, and investor suitability management, to complement the shortcomings of the development of inclusive finance in the multi-level capital market. The second is to unblock the Beijing Stock Exchange's role as a link in the multi-level capital market, and form a mutually complementary and mutually promoting direct financing growth path for small and medium-sized enterprises. The third is to cultivate a group of specialized and new small and medium-sized enterprises to form a benign market ecology featuring high enthusiasm for innovation and entrepreneurship, active participation of qualified investors, and responsibility of intermediary agencies.

[DaCom: Starting from the settlement on September 6, 2021 (Monday), the speculative trading margin level of coking coal and coke futures contracts will be adjusted from 11% to 15%, and the price limit and hedging trading margin level will remain 8 %constant】

[Social security funds, QFIIs, and private equity funds have increased their holdings in the second quarter, but their shareholding structure has also been quietly changing] According to data from the semi-annual report, social security funds have appeared among the top ten shareholders of 432 listed companies, including pharmaceutical, biological, chemical, and electronics , Mechanical equipment and electrical equipment each hold more than 30 stocks. The total market value of the shares held by these 5 industries is 100.576 billion yuan, accounting for more than half of the social security fund holdings. From the perspective of relocation trends, the market value of home appliances increased by 6.304 billion yuan from the first quarter, ranking first; the market value of electronic, construction materials, and national defense and military industry positions increased by more than 3 billion yuan, while the market value of real estate, food and beverage, and bank positions increased. Significant shrinkage. QFII (Qualified Foreign Institutional Investor) is a weather vane for global capital investment in China’s securities market. Since the beginning of this year, QFII has increased its positions significantly, and both the number of shares held and the value of the stock market have reached record highs, of which the number of shares held reached 517, surpassing the history of 2013 High; the value of the stock market rose by 53.3% over the same period last year, reaching 314.839 billion yuan, nearly doubled compared to 2019. On the whole, semi-annual private equity funds held a total stock market value of close to 280 billion yuan, a record high in the past three years, indicating that private equity funds are optimistic about the market outlook. (Securities Times)