Market News Gold trading reminder: "Terrorist data" goes wild! Will the bears make a comeback?
Gold trading reminder: "Terrorist data" goes wild! Will the bears make a comeback?
During the Asian session on November 17, spot gold held steady at around 1852. On Tuesday, the price of gold rose and fell. Because the US retail sales data was better than expected, the rise in the US dollar and US stocks put pressure on the gold price, but high inflation continued to support the gold price to run at a high level.
2021-11-17
10469
On Wednesday (November 17) Asian time, spot gold was trading around 1852. On Tuesday (November 16), the price of gold rose and fell. Because the US retail sales data was better than expected, the rise in the US dollar and US stocks put pressure on the gold price, but high inflation continued to support the gold price to run at a high level.
The main focus of the day is the US real estate data and UK inflation.
[The U.S. dollar hits the highest in 16 months, the US releases strong retail sales data]
The U.S. dollar hit a 16-month high on Tuesday. Previous data showed that US consumers turned a blind eye to price increases. Retail sales in October were higher than expected, while the euro plummeted, affected by growth concerns and another surge of new crown cases in Europe.
(Daily chart of the US dollar index)
U.S. retail sales in October increased by 1.7%, which is estimated to increase by 1.4%. This may be due to the continuing epidemic and Americans eagerly started holiday shopping in advance to avoid empty shelves due to shortage of some goods.
Since last week's data showed that the U.S. Consumer Price Index (CPI) had its biggest rise since 1990, the U.S. dollar has been rising, which has intensified speculation that the Fed may raise interest rates sooner than expected.
The euro expanded its losses against the dollar, falling 0.42% late in trading, setting a new 16-month low.
European Central Bank President Lagarde said on Monday that the current tightening of monetary policy to curb inflation may stifle the recovery of the euro zone, which refutes the calls for tightening policies and market bets.
Marshall Gittler, head of investment research at BDSwiss Holding Ltd, said that the decline in the euro reflects the disappointing performance of the euro zone economy relative to the United States. Compared with the euro zone, the U.S. economy has unexpectedly increased to a greater extent.
He said that the sharp increase in new crown cases in Europe has caused some countries to consider implementing lockdowns again, while the situation in the United States seems to have stabilized.
[U.S. stocks closed higher, as U.S. retail sales increased more-than-expected in October]
US stocks closed higher on Tuesday as Home Depot’s results and retail sales data showed strong consumer spending, alleviating concerns that the Fed may take more aggressive measures amid rising inflation.
Data show that retail sales in October jumped 1.7% from the previous month, the largest increase since March and higher than 1.4% expectations, indicating that Americans have started holiday shopping ahead of schedule to avoid shortages caused by tight supply chains.
Home Depot's share price surged 5.73% to close at a record high, setting the biggest one-day percentage increase since April 2020. The previously released quarterly sales exceeded expectations by nearly $2 billion and easily exceeded earnings per share expectations .
The Dow Jones Industrial Average rose 0.15%, the S&P 500 Index rose 0.39%, and the Nasdaq Index rose 0.76%.
(S&P 500 daily chart)
S&P consumer discretionary stocks climbed 1.38%, the best performance among 11 major sectors, while retail stocks rose 1.24%, setting a record closing high for the second consecutive trading day.
[U.S. retail sales record the largest increase since March]
U.S. retail sales increased for the third consecutive month in October, as rising prices boosted business income, while household demand remained strong.
Data released by the Ministry of Commerce on Tuesday showed that overall retail sales rose 1.7% last month, the largest increase in seven months. The September figure was revised upwards to an increase of 0.8% . Retail sales excluding gasoline and automobiles rose 1.4% in October. These data have not been adjusted for price. Economists’ median estimate of retail sales in October is a 1.4% increase.
The general increase in consumer spending highlights how high savings and rising wages have helped Americans maintain strong spending on goods. Although total retail sales are much higher than before the epidemic, the recent decline in consumer confidence caused by high inflation may curb future demand.
According to a report from the Ministry of Commerce, sales of 11 of the 13 categories have increased. Sales of electronics and home appliances have increased substantially.
The higher-than-expected increase in retail sales may also reflect the forward movement of holiday shopping, as gift buyers are concerned about delayed shipments from merchants.
[U.S. manufacturing output increased more than expected]
The output of US factories in October increased more than expected, rebounding from the impact of Hurricane Ida, and indicated that the manufacturer's material shortage problem has improved.
Data released by the Federal Reserve on Tuesday showed that manufacturing output increased by 1.2% in October; it fell by 0.7% in September . The overall industrial output value, which includes mining and utilities, increased by 1.6% in October.
The economists surveyed predicted the growth rate of industrial output and manufacturing output in October by 0.9%.
Healthy business investment coupled with strong consumer demand has boosted manufacturers’ order growth, but it has also consumed inventory and led to a backlog of reserve orders. The report shows that manufacturers are addressing material shortages, while employment is still lower than before the epidemic.
[Fed Brad urges more hawkish policies]
St. Louis Federal Reserve Chairman Brad said that the Fed should speed up its cuts in monetary stimulus measures to cope with soaring inflation in the United States.
Brad, who has the right to vote on monetary policy in 2022, said in a TV interview on Tuesday, "I think it is necessary for the committee to adopt a more hawkish policy direction in the next few meetings in order to properly manage inflation risks."
The Federal Open Market Committee said earlier this month that it would begin to reduce the $120 billion monthly bond purchase plan it launched last year. The planned rate of reduction makes it hopeful that asset purchases will cease completely by mid-2022.
Official data since then showed increased inflation, prompting some former officials to call on the Fed to speed up the downsizing process. According to a report released by the Department of Labor on November 10, the consumer price index rose 6.2% year-on-year in October, the highest inflation rate since 1990.
"We can speed up the action-we have retained this option, that is, if appropriate, we can speed up the code reduction," Brad said, noting that he had proposed to end the code reduction process before March next year.
Brad said that if the committee wants to speed up the pace of action, it can also choose to raise interest rates during the underweight period.
"Another factor that I will and have put on the table to discuss is that we can allow the scale reduction to start at the end of the reduction, instead of waiting for a while to do so, " Brad said. "I think This will be a way to implement a more hawkish policy."
[U.S. bond 5-year breakeven inflation rate rises to a record high]
US Treasury bonds are under pressure, and the inflation rate of TIPS (TIPS) break-even inflation rate rose to an intraday high, due to better-than-expected retail sales data in October.
US 10-year Treasury bond futures once fell below the intraday low and Monday's low; the 10-year Treasury bond yield was around 1.62%, slightly higher than the previous trading day.
The 5-year TIPS breakeven inflation rate climbed to 3.24%, a record high.
After the data was released, the medium-term government bonds led the decline, the yield curve flattened, and the 5s30s yield gap narrowed to an intraday low of 71.6 basis points. The trading volume of 10-year Treasury bond futures reached approximately 30,000 in 3 minutes.
[Daly calls on the Fed to be patient]
Daly said that as the epidemic cools, price pressures may subside on their own.
In a speech to the California Federal Club, Daly said, “Respond to something that is unlikely to last will move us further, not closer.”
She said that raising interest rates now will not solve supply chain bottlenecks and other temporary problems that push up prices, but will lead to a slowdown in employment growth and recovery.
Daly said that there is uncertainty for how long the epidemic will continue to disrupt the economy, which makes it difficult to predict how long high inflation will last, and it is also difficult to predict how quickly people who leave the workplace due to pandemic concerns will return to the labor market. Daley has the right to vote on the Fed's policy decisions this year.
"In the next few quarters, as the reduction plan is implemented, we will observe the performance of the economy to see if inflation will ease and whether workers will come back," she said. "When we get a clearer signal, we Will be ready to take corresponding actions to continue to provide or cancel the necessary support to ensure economic stability on a sustainable path."
In general, the US dollar index may continue to remain strong, and gold prices may continue to fluctuate at a high level under the support of inflation.
(Spot gold daily chart)
GMT+8 8:22, spot gold was quoted at US$1852.73 per ounce.
The main focus of the day is the US real estate data and UK inflation.
Fundamentals are bad
[The U.S. dollar hits the highest in 16 months, the US releases strong retail sales data]
The U.S. dollar hit a 16-month high on Tuesday. Previous data showed that US consumers turned a blind eye to price increases. Retail sales in October were higher than expected, while the euro plummeted, affected by growth concerns and another surge of new crown cases in Europe.
(Daily chart of the US dollar index)
U.S. retail sales in October increased by 1.7%, which is estimated to increase by 1.4%. This may be due to the continuing epidemic and Americans eagerly started holiday shopping in advance to avoid empty shelves due to shortage of some goods.
Since last week's data showed that the U.S. Consumer Price Index (CPI) had its biggest rise since 1990, the U.S. dollar has been rising, which has intensified speculation that the Fed may raise interest rates sooner than expected.
The euro expanded its losses against the dollar, falling 0.42% late in trading, setting a new 16-month low.
European Central Bank President Lagarde said on Monday that the current tightening of monetary policy to curb inflation may stifle the recovery of the euro zone, which refutes the calls for tightening policies and market bets.
Marshall Gittler, head of investment research at BDSwiss Holding Ltd, said that the decline in the euro reflects the disappointing performance of the euro zone economy relative to the United States. Compared with the euro zone, the U.S. economy has unexpectedly increased to a greater extent.
He said that the sharp increase in new crown cases in Europe has caused some countries to consider implementing lockdowns again, while the situation in the United States seems to have stabilized.
[U.S. stocks closed higher, as U.S. retail sales increased more-than-expected in October]
US stocks closed higher on Tuesday as Home Depot’s results and retail sales data showed strong consumer spending, alleviating concerns that the Fed may take more aggressive measures amid rising inflation.
Data show that retail sales in October jumped 1.7% from the previous month, the largest increase since March and higher than 1.4% expectations, indicating that Americans have started holiday shopping ahead of schedule to avoid shortages caused by tight supply chains.
Home Depot's share price surged 5.73% to close at a record high, setting the biggest one-day percentage increase since April 2020. The previously released quarterly sales exceeded expectations by nearly $2 billion and easily exceeded earnings per share expectations .
The Dow Jones Industrial Average rose 0.15%, the S&P 500 Index rose 0.39%, and the Nasdaq Index rose 0.76%.
(S&P 500 daily chart)
S&P consumer discretionary stocks climbed 1.38%, the best performance among 11 major sectors, while retail stocks rose 1.24%, setting a record closing high for the second consecutive trading day.
[U.S. retail sales record the largest increase since March]
U.S. retail sales increased for the third consecutive month in October, as rising prices boosted business income, while household demand remained strong.
Data released by the Ministry of Commerce on Tuesday showed that overall retail sales rose 1.7% last month, the largest increase in seven months. The September figure was revised upwards to an increase of 0.8% . Retail sales excluding gasoline and automobiles rose 1.4% in October. These data have not been adjusted for price. Economists’ median estimate of retail sales in October is a 1.4% increase.
The general increase in consumer spending highlights how high savings and rising wages have helped Americans maintain strong spending on goods. Although total retail sales are much higher than before the epidemic, the recent decline in consumer confidence caused by high inflation may curb future demand.
According to a report from the Ministry of Commerce, sales of 11 of the 13 categories have increased. Sales of electronics and home appliances have increased substantially.
The higher-than-expected increase in retail sales may also reflect the forward movement of holiday shopping, as gift buyers are concerned about delayed shipments from merchants.
[U.S. manufacturing output increased more than expected]
The output of US factories in October increased more than expected, rebounding from the impact of Hurricane Ida, and indicated that the manufacturer's material shortage problem has improved.
Data released by the Federal Reserve on Tuesday showed that manufacturing output increased by 1.2% in October; it fell by 0.7% in September . The overall industrial output value, which includes mining and utilities, increased by 1.6% in October.
The economists surveyed predicted the growth rate of industrial output and manufacturing output in October by 0.9%.
Healthy business investment coupled with strong consumer demand has boosted manufacturers’ order growth, but it has also consumed inventory and led to a backlog of reserve orders. The report shows that manufacturers are addressing material shortages, while employment is still lower than before the epidemic.
[Fed Brad urges more hawkish policies]
St. Louis Federal Reserve Chairman Brad said that the Fed should speed up its cuts in monetary stimulus measures to cope with soaring inflation in the United States.
Brad, who has the right to vote on monetary policy in 2022, said in a TV interview on Tuesday, "I think it is necessary for the committee to adopt a more hawkish policy direction in the next few meetings in order to properly manage inflation risks."
The Federal Open Market Committee said earlier this month that it would begin to reduce the $120 billion monthly bond purchase plan it launched last year. The planned rate of reduction makes it hopeful that asset purchases will cease completely by mid-2022.
Official data since then showed increased inflation, prompting some former officials to call on the Fed to speed up the downsizing process. According to a report released by the Department of Labor on November 10, the consumer price index rose 6.2% year-on-year in October, the highest inflation rate since 1990.
"We can speed up the action-we have retained this option, that is, if appropriate, we can speed up the code reduction," Brad said, noting that he had proposed to end the code reduction process before March next year.
Brad said that if the committee wants to speed up the pace of action, it can also choose to raise interest rates during the underweight period.
"Another factor that I will and have put on the table to discuss is that we can allow the scale reduction to start at the end of the reduction, instead of waiting for a while to do so, " Brad said. "I think This will be a way to implement a more hawkish policy."
Fundamentals are bullish
[U.S. bond 5-year breakeven inflation rate rises to a record high]
US Treasury bonds are under pressure, and the inflation rate of TIPS (TIPS) break-even inflation rate rose to an intraday high, due to better-than-expected retail sales data in October.
US 10-year Treasury bond futures once fell below the intraday low and Monday's low; the 10-year Treasury bond yield was around 1.62%, slightly higher than the previous trading day.
The 5-year TIPS breakeven inflation rate climbed to 3.24%, a record high.
After the data was released, the medium-term government bonds led the decline, the yield curve flattened, and the 5s30s yield gap narrowed to an intraday low of 71.6 basis points. The trading volume of 10-year Treasury bond futures reached approximately 30,000 in 3 minutes.
[Daly calls on the Fed to be patient]
Daly said that as the epidemic cools, price pressures may subside on their own.
In a speech to the California Federal Club, Daly said, “Respond to something that is unlikely to last will move us further, not closer.”
She said that raising interest rates now will not solve supply chain bottlenecks and other temporary problems that push up prices, but will lead to a slowdown in employment growth and recovery.
Daly said that there is uncertainty for how long the epidemic will continue to disrupt the economy, which makes it difficult to predict how long high inflation will last, and it is also difficult to predict how quickly people who leave the workplace due to pandemic concerns will return to the labor market. Daley has the right to vote on the Fed's policy decisions this year.
"In the next few quarters, as the reduction plan is implemented, we will observe the performance of the economy to see if inflation will ease and whether workers will come back," she said. "When we get a clearer signal, we Will be ready to take corresponding actions to continue to provide or cancel the necessary support to ensure economic stability on a sustainable path."
In general, the US dollar index may continue to remain strong, and gold prices may continue to fluctuate at a high level under the support of inflation.
(Spot gold daily chart)
GMT+8 8:22, spot gold was quoted at US$1852.73 per ounce.
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