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(Wallace Refiners) – Gold (0.15%) and silver (1.09%) are starting the week on the front foot as sentiment in Asia is positive overnight. Nearly every sector has finished in the green in equity markets as vaccine hopes provided the impetus for the gains. There are still some reasons to be cautious as current US President Donald Trump is still desperately trying to hang on to his post following Joe Biden’s win. Also, it is still not clear how long it will take to get the vaccine around the world to ease the global COVID-19 pandemic.
Sticking with the positive news, data in China showed that new jobs created from January to October reached the annual target ahead of schedule. This is very bullish as China was obviously the epicentre of the pandemic and one of the world largest economies. Elsewhere, Japanese preliminary GDP for Q3 GDP came in at 5.0% for the quarter vs the analyst consensus of 4.4%. Also of note, Chinese Industrial production year on year for October hit 6.9% vs the expected reading of 6.5%.
In FX markets it was once again the NZD that stole the limelight. The Kiwi dollar has been performing very well after the central bank dampened expectations that it would adopt negative interest rates. Also, the current government have handled the coronavirus pandemic much better than most of the other developed nations. Commodities currencies have performed well in general with AUD and CAD up against the greenback overnight.
With the US dollar struggling slightly this also gave base metals a chance to shine. Copper trades over 2% higher and tin (1.13%), nickel (1.00%) and zinc (0.92%) are all trading in the black. It looks like it may be a strong open for commodities trading firms in the EU session.
Looking ahead to the rest of the session highlights include the US NY Empire State manufacturing index, Canadian manufacturing sales. There will also be comments from RBA Governor Lowe, ECB’s De Guindos, German Buba Mauderer, ECB President Lagarde, Fed’s Daly, Fed’s Clarida, ECB’s Mersch, UK MPC Members Tenreyro and Haskel.
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