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(Wallace Refiners) – After bouncing off the lows during yesterday’s session gold and silver are back in negative territory on Wednesday. The yellow metal trades 0.22% lower at $1734//oz, while silver trades around flat.
After inheriting a negative tone from Wall Street bourses in the Asia Pac area turned it around to push higher. The Nikkei 225 (0.51%), ASX (0.82%) and Shanghai Composite (1.95%) all closed in the black.
FX markets were a bit flat overnight, the dollar index traded just under flat and the biggest mover was GBP/USD which moved higher by 0.19%. Looking at some of the other commodities, copper trading half a percent in the red but oil has pushed higher once again by 0.85%.
There was lots of data to digest overnight, Caixin Services PMI (Feb) 51.5 m/m (prior) 52.0, this shows that the services sector in the nation is still in expansion.
Australia GDP for Q4 2020 +3.1% q/q (expected +2.5%), Australia AiG Construction PMI for February 57.4 (prior 57.6), Australia, Markit Services 53.4 and Composite 53.7 PMI for February (final)
In New Zealand, ANZ Commodity Price index for February +3.3% m/m (prior +3.6%) and New Zealand Building Permits for January +2.1% m/m (prior +5.1% m/m)
There were reports overnight that Goldman Sachs has forecast a jump for US inflation, but to subside by year-end. Many analysts are predicting a rise in inflation as commodities prices soar but interestingly the investment bank feel like it could subside earlier than some other forecasts.
In China, the financial press reported that the PBOC may (targeted) cut the RRR this month. The PBoC have stated they could use rates rather than QE to ease policy so maybe this is one signal towards that change.
Today is the UK budget and it has been reported that UK chancellor Rishi Sunak will extend the furlough for UK workers through the summer, to the end of September. Big questions remain about if the chancellor will raise taxes.
Looking at developments with the coronavirus, US President Biden says every American can get vaccinated by the end of May. Sticking with COVID-19, German Chancellor Angela Merkel proposed a four-step lockdown easing strategy
Looking ahead to the rest of the session highlights include services and composite PMI’s from the major nations, OPEC meeting, EU PPI, US ADP NFP, weekly DoE’s and comments from RBNZ’s Orr, ECB’s Schnabel, de Guindos Panneta, Fed’s Bostic, Evans, BoE’s Tenreyro and German Buba President Weidmann.
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