Markets are awaiting Powell’s speech… Gold is still down
Markets are awaiting Powell’s speech… Gold is still down
Markets are awaiting Powell’s speech: Today, traders around the world are awaiting the FOMC meeting,
which will be the most important event for market participants as they are looking forward to Jerome Powell’s speech
on the central bank’s view of the economic outlook, fiscal stimulus besides clues about the future outlook.
In Germany, Consumer Climate Index “GFK” will be published.
France will release data on unemployment in the county.
Today’s main event will be the US Federal Reserve meeting.
Today, decisions on interest rates and monetary policy parameters will become known,
as the FOMC will hold a press conference during which Jerome Powell is expected to speak,
commenting on the economic situation in the United States of America.
Today, Evest is following upmarket developments amid anticipation of today’s important economic events and data.
Oil rises supported by retreating US inventories
Crude oil prices rose today after the release of data from the American Petroleum Institute which showed an unexpected drop in US inventories last week,
in addition to a decrease in Iraq oil production.
Today, Brent crude rose to $ 56.26 a barrel, up to $ 0.35 or 0.63% above the closing price of the last session.
On Tuesday’s session, it rose by $ 0.03 or 0.1%, to trade at $ 55.91 a barrel.
The price of US West Texas Intermediate crude oil for delivery rose to $ 52.95 a barrel
or at a rate of $ 0.34 which reached 0.65% higher than Tuesday’s close.
Crude fell by $ 0.16 at a rate of 0.3%, to trade at $ 52.61 a barrel yesterday.
According to American Petroleum Institute, US oil inventories retreated during the week ending on January 22nd,
by 5.27 million barrels after rising by 2.56 million barrels last week.
Analysts had expected an increase in stocks on average of 0.6 million barrels.
Meanwhile, gasoline stocks increased by 3.1 million barrels while distillates increased by 1.4 million barrels.
Oil inventories at the Port of Kuching decreased by 3.5 million barrels. US Energy Department is supposed
to release an official report on the country’s energy reserves, later on, today.
Last week, experts polled by Standard and Poor’s Global Platts
had expected a moderate drop in US oil inventories by 1.7 million barrels.
Gasoline inventories in the country are expected to have increased by 1.2 million barrels
during this week while distillates declined by 800,000 barrels.
On the other side, Iraq previously announced its intention to reduce its production
from January to February to reach 3.6 million barrels from a daily range of 3.85 million barrels in December.
At the same time, high rates of Coronavirus infections and slower than expected vaccinations in the United States and
Europe cast a shadow over the prospect for oil recovery of demand during the first half of 2021.
Gold is waiting for Powell’s speech
In the context of deteriorating labor market conditions and winter virus waves,
Federal Reserve monetary policy is likely to remain accessible.
This by its turn may help in mitigating the decline in gold prices
which have been continuing for several days at a somewhat slower pace.
Gold decreased by 0.2% to trade at a range of $ 1852 an ounce.
In the Federal Open Market Committee’s December press release,
the Federal Reserve explained that the Committee expects to maintain the current fiscal policy
unchanged as expectations indicate to maintain this policy till 2023.
According to expectations, the Federal Reserve will continue to increase its holdings of Treasury bonds by at least $ 80 billion a month.
It will also continue to increase mortgage-backed securities by at least $ 40 billion monthly.
That would mean supporting Yellow Metal which has long been suffering below $1900 levels for an ounce.
The unemployment rate in the United States had stabilized at 6.77% in December,
representing a long road back to pre-epidemic levels at 3.8%.
Last reading of core personal consumption expenditure inflation was 1.4%, showing few signs of large inflation.
Gold prices were affected by rising yields in United States Treasury bonds
and the potential delay of Biden’s $1.9 trillion fiscal stimulus plan.
According to earlier statements of Senate Majority Leader Chuck Schumer,
it is expected that the new fiscal stimulus plan could be passed by mid-March.
This may by turn lead to disappointing investors who predicted a shorter timetable.
Positive trading in most world indicators
Major stock indexes of the United States of America were closed in different directions yesterday.
At the beginning of the trading session, stock indexes renewed their all-time highs amid strong reports from a number of companies
but declined after that as many investors were concerned about the very high points of the Standard & Poor’s 500 index.
Standard & Poor’s retreated by 0.15% to reach 3849.6 points
while the Dow Jones Industrial index fell by 0.07% to trade at 30937 points.
Nasdaq Composite Index rose by 0.05%, to coherence at a rate of 12490.2 points.
In Europe, stock markets were closed in a positive area.
This rise was supported by corporate reports and Intermediate Monetary Fund (IMF)
projections of the pace of world economic recovery.
At the end of the day, the German DAX index rose by 1.66%,
to trade at 13870.99 points. French CAC index climbed by 0.94% to record 5523.52 points.
British Footsy index increased by 0.23% to record 6654.01 points.
European Regional index STOXX 600 rose by 0.63% and closed at 407.7 points.
In Asian stock markets, a mostly positive trend was noticed as China’s CSI 300 rose up 0.19%.
Japanese Nikkei 225 rose by a rate of +19%, while Hong Kong’s Hang Seng rose by 0.11%,
but Korean Kospi was down to 0.41%.