A collective rise in stock markets, gold and oil
A collective rise in stock markets, gold, and oil…Biden supports markets
A collective rise in stock markets, gold, and oil:
Democrat Joe Biden was sworn in as the 46th president in US history in front of the US Capitol Building in Washington yesterday,
amid relative calm against expectations.
In his inaugural speech, Biden called for “unity” in the United States of America. In light of the country’s deep divisions,
the president promised that he would be “president of all Americans”.
Two weeks after Capitol was stormed by extremist supporters of his predecessor Trump,
Biden declared a determined war against racism and domestic terrorism.
He also warned that the United States is now entering the most dangerous phase of the Corona Covid-19 epidemic.
Soon after moving to the White House, Biden implemented several measures, including United States’ return to Paris Climate Protection Agreement,
lifting ban on entry for people from several Muslim-majority countries, and halting the construction of a wall on borders with Mexico.
Evest continues to reverberate in World Trading markets.
US stocks are rising but oil falls
Crude oil prices fell today after the weekly American Petroleum Institute report showed an increase in inventories of last week.
March WTI futures prices were down $ 0.1, while the cost of March WTI futures during the Asian trading session on NYMEX was $ 53.2 a barrel.
This represents a 0.2%, decrease from data of the previous day. Oil had risen by 0.6% yesterday.
Brent crude futures for March delivery were at $ 56 a barrel. This is 0.2% higher than the prices of the previous trading day.
Brent crude fluctuates in the range of $ 55.6 to $ 56.5 a barrel.
This comes in light of the increase in US oil stocks which were announced by the American Petroleum Institute yesterday
in addition to new restrictions and procedures that were approved in China to confront Coronavirus Covid-19.
Data from American Petroleum Institute showed that US crude oil inventories rose by 2.6 million barrels during the week ending on 15 January.
This was higher than the expectations of analysts in a Reuters poll of a 1.2 million barrel drop in stocks.
US Energy Information Administration is expected to announce an official report tomorrow.
In spite of this, the market is awaiting a major stimulus package of $ 1.9 trillion after the official inauguration of Joe Biden yesterday.
This helped to limit oil losses.
Gold records its highest level in two weeks
Fears of inflation supported prices of gold. Traders looked at chances of money flowing from Biden’s stimulus program which made gold rise to nearly $ 1870.
This made it reaches its highest level during 2 weeks.
Gold is considered a hedge against inflation that might result from stimulus measures.
Today, gold is supported by the weakening of the US dollar, besides increased US stimulus expectations,
a rise in Coronavirus cases, and increased tensions between the United States and China.
On the other side, Janet Yellen said that tax cuts in 2017 on large companies should be pushed back.
This will help gold as well.
Yellen also urged lawmakers to “do a lot” on spending money for Coronavirus relief.
She also added that benefits outweigh outlays of the debt burden.
Positive performance on global stock exchanges
Yesterday, three indices of Wall Street rose as investors hoped for more economic stimulus from
recent President Joe Biden due to the damage caused by the Covid-19 epidemic.
Wall Street set new records due to the swearing-in of US President Joe Biden.
Stockbrokers positively assessed that frightening acts of violence did not take place during the ceremony.
Republicans in USA Congress have given indications that they are ready to work with the new president
on his administration’s main priority due to a fiscal stimulus package of about $ 1.9 trillion.
Yesterday, Democrats took control of the Senate but they will still need Republican support to pass the program.
Dow Jones Industrial Average rose by 0.83%, while S&P rose by 1.39% and Technology Nasdaq Composite closed at a rate of 1.97% higher.
After Wall Street indexes closed at record levels, the peaceful transfer of power and expectations of US stimulus spread to Asian markets.
MSCI Asia Pacific Index hit new records, rising by 0.85% as markets in the region rallied.
Chinese blue-chip index rose by 1.2%. The main index in Australia rose by 0.69% and
Hang Seng in Hong Kong crossed the 30,000 marks after rising by 0.31%.
Last week, the Japanese Nikkei index rose by 0.72% to less than 1% from its highest level in 30 years.
A new decline in the US dollar
As stocks rose, hopes of a fresh stimulus affected the US dollar as its index fell 0.1% to reach 90.319 against a basket of major currencies.
Experts expect that US currency will continue to be weak even if the administration of the new President Joe Biden did not aim to weaken the dollar.
Prospects for a new stimulus package should lead to less upward pressure on US bond yields and the dollar as well.
The yield of the US 10-years bond was at a rate of 1.0836%, up slightly from yesterday’s closing level.
The dollar traded unchanged against the Japanese Yen at 103.52, while Euro rose by 0.2% to trade at $ 1.2124.
Sterling recorded an increase of 0.3% against the green currency to reach 1.3695.
The Australian dollar and New Zealand dollar rose against US Dollar by 0.19% and 0.38% to 0.7761 and 0.7200, in a row.
The dollar fell against the Chinese Yuan by 0.07% to reach 6.4618.