Positive commodity trading…USD is still weak
Positive commodity trading…USD is still weak
Positive commodity trading : Today, markets open their doors on the first trading days of the New Year,
amid a worsening epidemic situation and economic growth remains weak.
Evest reviews with you market’s movement on 4th of January,
and how it may be affected by the events expected today and tomorrow.
Oil is at its highest levels in 10 months
Oil prices rose today on the first trading days of the New Year,
as investors are waiting OPIC’s today decision of production in February.
Brent crude recorded an increase of 1.35%, increasing by $ 0.7 as it recorded $ 52.5 per a barrel.
As for US West Texas Intermediate crude, it rose by 1.36% increasing by $ 0.6, and recording $ 49.2 a barrel.
With these numbers, oil broke new records,
as these are the highest levels since last year’s February.
Mohamed Barkendo, Secretary-General of OPIC said last Sunday that expectations are still differentiated regarding oil demand during the first half of this year noting that the participating countries of the organization and their allies also evaluate many potential risks in this market.
OPIC’s ministers are supposed to meet today to determine production levels during February 2021,
which ministers are expected to keep at January levels as 500.000 barrels of oil were added everyday starting from this month and it was agreed to meet monthly to decide on the levels of production in next month according to market conditions.
The organization is witnessing internal disputes among member states as some countries see that it is time to increase production, while others see that the market is not qualified to receive any new increase at the present time.
The world is still witnessing a slowdown in demand for oil as the epidemic situation in the world is worsen.
British Prime Minister, Boris Johnson has announced the possibility of more hard restrictions in the country,
as other countries such as Japan, consider the possibility of imposing a state of emergency.
Vaccination operations seem slow than expected. This increases pressures on the commodity.
Gold gets support from the worsening epidemiological situation.
In contrast, gold prices also rose today by more than 1% to reach their highest levels through 7 weeks.
Investors of the precious metal returned to a state of optimism about getting more monetary support
in the first trading days of the New Year as the epidemic situation worsened around the world and the number
of infections increased dramatically during the first days of 2021.
Gold rose by 1.3% as an ounce recorded $ 1922 after reaching its highest level
since November 9th 2020 at $ 1925 for an ounce.
US dollar index fell to its lowest level in two and a half years at 89.65,
as it appears that the spread of the virus in this way, increases expectations about more liquidity.
US set a new record in the number of the cases of Covid-19 as it reported 291384 injuries through the second day of the new year.
This means more support for the yellow metal.
On the other hand, there were indications that the world economic recovery would not be as fast as a survey showed that the pace of expansion in industrial sector in China had slowed in last month.
Traders are waiting the run-off in Georgia US, tomorrow as this round will decide who will control the Senate.
In the event that Democrats win, gold will rise as they follow a fiscal policy that pursues monetary easing.
Dollar is in a new danger…US currency is declining against all currencies
In foreign exchange market, Evest is following up the movement of currencies as dollar
fell again and this led to a rise in many currencies in front of it as there is a current increasing talk
about the need to approve the stimulus package especially after US recorded new records in infections
with Corona virus after the New Year holiday.
US dollar fell against yen by 0.2% to reach 103.4,
and also fell against Chinese Yuan by 0.9%, to hit dollar at 6.4458 Yuan.
Euro rose against US dollar by 0.2% recording 1.2243,
while sterling rose 0.20% recording 1.3689.
Australian dollar rose 0.36% against its counterpart to 0.7721.
New Zealand dollar rose 0.4% to 0.7208.
On the other hand, the electronic currency Bitcoin fell by 2.8% but it is still at its highest level of records in its history,
surpassing the barrier of $ 32.000.
Nikkei falls alone in Asia…Positive expectations for European indices
In Asian stock market, South Korean and Australian shares got a new boost,
while Japanese Nikkei index was affected by what Prime Minister,
Yoshihide Suga said that the country is considering declaring a state of emergency in Tokyo so as to limit the spread of Corona virus.
In China, stock market ignored the decision of New York Stock Exchange to write off
the three largest telecom companies in China from stock market as indices continued
to rise while shares of the three companies, “China Mobile, China Telecom and China Unicom” declined.
Nikkei index fell by 0.68% recording 27.258.38 points while Hang Seng index rose by 0.87% recording 27.468.32 points,
Shenzhen index rose 2.4% registering 1.4827.47 points and Australian S&P/ASX 200 index rose by 1.47% recording 6684.20 points.
In Europe, expectations indicate the start of trading in the green area especially with the start of vaccinations
of Oxford AstraZeneca vaccine today in United Kingdom.
Expectations refer to the rise of German DAX index by 0.9%,
in addition to French CAC index rising by 0.8% and British FTSE index by the same rats as well.
Today we are waiting the start of trading in US stock market after the holiday as the three indices were in the green zone on the last trading day before the close of stock exchanges because of the New Year holiday.