Mohicans markets : Geopolitical Concerns Help Gold Bulls Oil Prices Rise Slightly, Wary of the Implementation of Iran Nuclear Talks

Financial Events Today

16:00 China's social financing scale in July - single month (RMB 100 million) (0809-0815), previous value 51700, expected value 14250, published value: to be released

16:00 China's July M2 money supply annual rate (%) (0809-0815), previous value 11.4, expected value 11.4, published value: to be released

18:00 Canada July leading indicator monthly rate (%), previous value -0.17, expected value -- , published value: to be released

 Risk Warning:☆18:00 US July NFIB Small Business Confidence Index announced. The U.S. NFIB Small Business Confidence Index hit 89.5 in June, the lowest level since January 2013, as concerns over inflation weighed on sentiment. ☆ At 0:00 on Wednesday, EIA released the U.S. monthly short-term energy outlook report for August, and at 4:30 a.m. on Wednesday, it released the API crude oil inventory report for the week from the United States to August 5. API crude oil inventories in the United States recorded an unexpectedly large increase in the week of July 29, which formed a certain negative for oil prices.

Americans' inflation expectations for the next one and three years fell broadly in July, the New York Fed survey showed.

The new round of talks on the Iran nuclear deal in Vienna has ended.

The governor of the Zaporozhye region signed a decree calling for a referendum on the region's accession to the Russian Federation.

The Ukrainian Stock Exchange announced the resumption of trading on the 8th.

Goldman Sachs remains bullish on crude oil, but its bullishness has weakened.

China discovers new zoonotic virus “Langya”.

The Eastern Theater Command will continue to conduct joint training in actual combat in the sea and airspace around Taiwan Island.

Lhasa's medium and high risk areas will implement static management for 5 days. Yiwu City reported 39 new cases of people who were initially screened positive.

This week will focus on the following key economic data and events:

①Monday Sentix Investor Confidence Index in the Eurozone in August;

②Tuesday China's July M2 money supply annual rate, China's July social financing scale, EIA's monthly short-term energy outlook report, API crude oil inventories;

③Wednesday China's July PPI annual rate, China's July CPI annual rate, the US July CPI annual rate not seasonally adjusted, Chicago Fed President Evans speech, Minneapolis Fed President Kashkari speech, EIA crude oil inventories;

④ Thursday U.S. July PPI annual rate, U.S. initial jobless claims for the week ended August 6, IEA‘s monthly crude oil market report, and OPEC’s monthly crude oil market report;

⑤Last Friday UK June GDP monthly rate, UK June industrial output monthly rate, US July import price index annual rate, US August University of Michigan consumer confidence index initial value, US oil drilling for the week ended August 12 total

Global Perspective

Market News

Institutional View

Global Views - List of Major Markets 

On Monday, August 08, spot gold fluctuated upward, approaching the 1790 mark, and finally closed up 0.79% at US$1,788.83 per ounce; spot silver once again stood at the US$20 mark and finally closed up 3.9% at US$20.68 per ounce. In terms of the two oils, WTI crude oil fell first and then rose, recovering all the lost ground in the day, and stood firm at the 90 mark in late trading, and finally closed up 2.46% at US$90.68 per barrel; Brent crude oil closed up 2.26% at US$96.48 per barrel. The US dollar index fell slightly, successfully holding the 106 mark and closing down 0.19% at 106.37. US stocks closed, the Dow closed up 0.09%, the Nasdaq closed down 0.1%, and the S&P 500 closed down 0.12%. Department stores and hydrogen energy stocks were among the top gainers. Sohu rose about 3% after the results, AMC Cinemas rose about 7%, and Nvidia fell about 6%. European stocks generally closed up, with Germany's DAX up 0.8%, Britain's FTSE 100 up 0.56%, France's CAC 40 up 0.61%, and the European Stoxx 50 up 0.74%. Bitcoin broke through the $24,000/piece mark, and Ethereum returned to the $1,800 mark after nearly two months, but failed to stand firm.

Precious Metal

In the early trading hours on Tuesday, August 9, spot gold fluctuated within a narrow range and is currently trading around $1,787.29 an ounce, holding most of the overnight gains and approaching the 55-day moving average resistance again. There were fewer economic data in the previous trading day. The New York Fed survey showed that US consumers' inflation expectations for the next one and three years fell sharply. The dollar and US bond yields fell, which provided support for gold prices. However, it provided more support for gold prices. It is the geopolitical situation worry. From the technical point of view, the short-term bullish signal of the gold price has increased, and it is expected to test the resistance near the 1800 mark in shock.

There are relatively few data and risk events on this trading day, and continue to pay attention to news related to the geopolitical situation, focus on the market's expected changes in the US July CPI data to be released on Wednesday.

The Fundamentals are Mainly Bearish

There is no definite bad news for the gold market in the short term, but after last week's non-agricultural data, the market's expectations for a 75 basis point rate hike by the Federal Reserve in September have risen sharply, which may still limit the upside of gold prices.

[The probability of the Fed raising interest rates by 75 basis points in September rose to 68%]

[U.S. dollar rose across the board on Friday, and U.S. bond yields generally rose]

Fundamentals are Mostly Bullish

[Ukraine and Russia accuse each other of the shelling of the nuclear power plant, the international community warns that the fighting may lead to disaster]

[The U.S. will provide an additional $4.5 billion in budget support to the Ukrainian government]

[The U.S. has handed over anti-radar missiles to Ukraine]

[New York Fed survey: U.S. consumers' inflation expectations for the next one and three years have fallen sharply]

[The dollar fell slightly on Monday, and U.S. bond yields fell]

On the whole, before the release of the U.S. CPI data on Wednesday, the price of gold may fluctuate, slightly biased towards the resistance near the 1800 mark, and the resistance of the Bollinger Line is also near this position. After falling back slightly, it again oscillated and attacked.

Crude

In early Asian market trading on Tuesday, August 9, U.S. oil traded around $90.46 per barrel. Oil prices rose more than 2% on Monday and rose back above the 90 mark, benefiting from positive economic data. Tensions continued to help the bulls.

Focus of Today: EIA energy report will be released at 00:00 on Wednesday, and API data will be released at 4:30.

Bullish Factors Affecting Oil Prices

[Ukraine and Russia accuse each other of being shelled at nuclear power plants, geo tensions boost oil prices]

[Russia's attack on the “Haimas” system of the Ukrainian army, Ukraine repelled the Russian army's attack]

[USAID will provide Ukraine with an additional $4.5 billion in funding]

[Goldman Sachs expects oil prices to be $110-125 a barrel in the third and fourth quarters]

Negative Factors Affecting Oil Prices

[US consumers' inflation expectations for the next one and three years fell sharply in July]

[US stocks were flat on Monday, focusing on the Fed's policy path]

[EU submits the final text of the Iran nuclear deal negotiation]

On the whole, positive economic data provided support for oil prices. The Russian-Ukrainian conflict further escalated tensions over the nuclear power plant issue, and oil prices maintained a bullish tone. But the EU has handed over the “final text” of the Iran nuclear negotiation , oil prices may be limited by related news in the short-term. Also, keep an eye on the EIA Energy Report.

Foreign Exchange

During the Asian session on Tuesday, August 9, Beijing time, the U.S. dollar index fell slightly and is currently trading around 106.34. The dollar index retreated on Monday, giving back some of the gains following Friday's U.S. non-farm payrolls report, as investors await the release of U.S. CPI data for July on Wednesday, August 10, for more information on the Fed's next move clue.

The U.S. dollar index retreated on Monday, giving back some of the gains after Friday's U.S. non-farm payrolls report, as investors awaited the release of U.S. CPI data for July on Aug. 10 for more clues on the Fed's next move. Britain's economy is likely to contract for the first time since the coronavirus lockdown in early 2021, adding to pressure on the first incumbent to act. Affected by the superposition of multiple pressures, the European economy will still face severe challenges. Energy supply risks in Germany and some other European countries appear to be growing, and the euro's rebound remains hampered.

Stronger-than-expected U.S. non-farm payrolls data for July released last week eased fears that the U.S. economy was slipping into recession. Investors viewed the data as a sign that the Fed may be more aggressive in raising interest rates to combat inflation.

According to CME's “Federal Reserve Watch”: the probability of the Fed raising interest rates by 50 basis points by September is 36.5%, and the probability of raising interest rates by 75 basis points is 63.5%; The probability of a 100 basis point rate hike is 52%, and the probability of a cumulative rate hike of 125 basis points is 27%

On Monday, the Australian dollar closed up 1.03% at 0.6980, while the New Zealand dollar closed up 0.64% at 0.6281.

Sterling rose and fell against the dollar on Monday, and finally closed up 0.02% at 1.2075.

The UK will release the latest GDP data this Friday.

The Bank of England warned last week that the UK economy could enter a recession in the fourth quarter of this year and continue to contract throughout next year.

International News

1. The Kremlin says there is currently no basis for a meeting between Putin and Zelensky.

2. The new round of  Vienna talks on the Iran nuclear deal ended,

3. The Governor of the Zaporozhye Region signed a decree to hold a referendum on the region's accession to the Russian Federation,

4. The Ukrainian Stock Exchange announced the resumption of trading on the 8th.

5. Spot silver rose 4% overnight, hitting a new high since June 30, Ethereum returned to $1,800 after nearly two months.

6. Goldman Sachs is still bullish on crude oil, but the bullishness is weakened as the market supply deficit is still higher than expected.

7. Israeli Prime Minister Lapid had a telephone conversation with Egyptian President Sisi, and expressed gratitude to Egypt for its efforts to mediate the Palestinian-Israeli conflict and promote a ceasefire between the two sides.

8. The third oil storage tank of the Cuban oil reserve base exploded and endangered the surrounding oil storage tanks. The thermal power plant near the explosion accident site was shut down, and the local power supply was tight.

9. Russian President Vladimir Putin signed a presidential decree on August 8, stipulating that if a Russian financial institution cannot conduct foreign exchange operations due to sanctions, the financial institution has the right to stop conducting such foreign exchange business with legal and individual merchants.

10. Lebanese buyers refused to receive more than 26,000 tons of corn from the first grain ship “RAZONI” from Ukraine due to delayed shipments of more than five months, and “RAZONI” was looking for new purchases for this batch of grain. Family.

11. The latest US assistance to Ukraine includes ammunition for high mobility artillery rocket systems.

12. Americans inflation expectations for the next one and three years generally fell in July.

Institutional View

1. National Bank of Canada: The US and Canada will fall towards 1.22 in the next few quarters

2. UOB Singapore: EUR/USD is expected to fluctuate in a range of 1.01-1.03 in the next few weeks

3. ING Bank: Further bearish on EUR/USD

4. Nomura Securities: Rising electricity prices in Europe will push the euro lower against the dollar sooner or later

5. HSBC: Bullish on the dollar as Fed rate hikes are far from over

6. ANZ: The RBA may continue to raise interest rates sharply

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