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Gold closed another 0.80% lower in yesterday's session and this morning the yellow metal has only managed to pare 0.15% of that move but remains under $1700/oz.. Silver is in the red this morning although overnight found some support just ahead of the $25/oz level.
The risk sentiment in the indices has been negative overnight. After inheriting a negative close from Wall Street, the Nikkei 225 (-0.23%), ASX (-0.74%) and Shanghai Composite (-0.04%) all closed lower.
In commodities markets spot WTI (1.23%) and copper (1.69%) have managed to push higher. This comes despite more strength in the greenback. The worst performer overnight is NZD which has dropped 0.45% against the US dollar. Bitcoin also had a tough time heading into the EU session as the cryptocurrency moved under $47K.
Yesterday we heard from Fed Chair Jerome Powell. The market (indices) were generally disappointed as he said he noted the move in yields but would not target one specific rate or price. The 10-year yield continued to climb and hit a high of 1.58% a level not since February last year. So no SLR adjustments or yield curve control (YCC).
BOJ Gov Kuroda says does not think it is necessary to widen the band around long-term yield. Kuroda went on to say that higher yields would reduce the impact of monetary easing
Things look like they could be getting worse for Russia as the US and UK are considering additional sanctions against Russia and there have been some suggestions it could be sovereign debt.
There have been reports overnight that China has set its 2021 GDP growth target at over 6%. Their economic advisor last week said if things remain stable 8-9% is even possible but this has not been talked about since. They have a CPI target of 3% and a budget deficit target of 3.2%.
Yesterday the OPEC+ group agreed to keep production stable and only Russia and Kazakhstan will be moderately increasing production. This will all be addressed again next month.
In terms of data overnight, New Zealand Building work done for Q4 2020 fell to hit -1.5% q/q (expected +3.0% q/q, prior +34.6%). Australia AiG Services PMI for February printed at 55.8 vs the prior reading of 54.3
Looking ahead to the rest of the session the main highlights are the US employment report (NFP), Canadian Ivey PMI and comments from Fed's Bostic and BoE's Haskel.
By Rajan Dhall
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