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(Wallace Refiners) – Gold and silver are both looking heavy this morning after dropping in the Asian session. Gold is trading -0.84% lower at $1730/oz while silver lost 2.70% to trade at around $25.50/oz.
Risk sentiment was mixed in the Asia-Pac area as the Nikkei 225 fell 2.07% but the Shanghai Composite (1.14%) and ASX (0.66%) both traded in the black. The drop in the Nikkei was somewhat expected after the BoJ dropped it’s JPY6 tln yen ETF buy target on Friday but they did maintain the JPY 12tln yen ceiling.
In the FX markets, the dollar index once again pushed higher by 0.14% and AUD/USD was the biggest mover from the majors falling 0.30%. It must be noted that the Turkish Lira fell heavily at the open after Turkey’s President Erdogan sacked the finance minister.
In the rest of the commodities complex, copper (-0.28%) and spot WTI (-1.34%) both struggled. Tin, zinc and nickel all traded higher overnight.
Looking at the news, Bank of Japan Governor Kuroda says his 2% inflation target is helping stabilise FX rates. The comments came after the BoJ decision last week.
Sticking with central banks, PBOC Governor Yi Gang says Bank still has space to expand liquidity. He also added, China’s total debt-to-GDP ratio, remains at a stable level, which helps create an environment less likely to spawn financial risks.
From the US, we heard from Fed’s Barkin. He said the dot plot is not FOMC policy and there was still no mention of YCC.
There were some weekend reports that the EU are to limit AstraZeneca exports to the UK. Adding to this it was been rumoured that the EU will even block some ingredients to make the vaccine entering the UK.
Italy are looking for a plan to help businesses with a EUR 30bln rescue package. Italy has been subject to more restrictions that are putting businesses in the country under pressure.
Looking ahead to the rest of the session highlights include comments from Fed’s Powell, Barkin, Daly, Bowman, ECB’s Schnabel and Lane. Data highlights include ECB asset purchase data and US existing home sales.
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