US30 D1 03 07 2022 1527

 

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Goldman Sachs expects a rise in the prices of commodities that Russia is a major producer of and lifted its short-term Brent crude forecast as the West stepped up political and economic sanctions on Moscow for its invasion of Ukraine.

"The range of near-term price outcomes for commodities has become extreme, given the concern of further military escalation, energy sanctions or potential for a cease-fire." Goldman said in a note to clients on Sunday. Further, "we expect the price of consumed commodities that Russia is a key producer of to rally from here - this includes oil, European gas (and hence aluminum), palladium, nickel, wheat and corn," Goldman said. read more

Oil prices have surged this Tuesday as concerns grow about supply disruptions as Western sanctions against Russia, who are currently in the process of invading Ukraine, start to bite, outweighing chatter about coordinated oil reserve releases. Front-month WTI futures have surged to their highest levels since July 2014 above $101 per barrel, with the bulls eyeing a test of the next key area of resistance in the $107.50 area, which marks the 2014 highs. The rally is being driven by concerns of supply disruptions as Western sanctions against Russia start to bite.

 USOil D1 03 01 2022 2013

 

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XAGUSD D1 02 23 2022 2047

 

Silver (XAG/USD) prices broke out to fresh monthly highs on Wednesday, surging beyond Tuesday’s highs in the $24.30 per troy ounce area to hit the $24.50 mark, boosted as fears of a Russian invasion into Ukraine rose. At current levels near highs of the day in the $24.40s, silver prices currently trade with on the day gains of nearly 1.5%, with the bulls now eyeing a test of annual highs printed back in mid-January in the $24.70s.

The latest upside, much of which has come since the US open on press reports that the US had warned Ukraine that a Russian invasion could begin within 48 hours, saw XAG/USD break above a key downtrend that has been capping the price action going all the way back to July 2021. If the bullish breakout can last (signified if silver holds and closes near $24.50), that would be a bullish sign in the near-term. Some short-term speculators might even target a test of the Q4 2021 highs just under $25.50.

 

 

 

Australia concluded its quantitative easing program, leaving the Reserve Bank with more than 40% of government bonds on issue and raising questions about what it will do with the pile of assets.

The RBA on Thursday conducted its final A$1.6 billion purchase of securities under a program that tripled its balance sheet to about A$650 billion ($465 billion). Indeed in 2021 it bought more than three times more debt than the government issued, the largest ratio across the world’s six largest developed bond markets.

EURAUD D1 02 15 2022 1731

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Reserve Bank of Australia governor Philip Lowe has warned investors local financial markets were at risk of an “abrupt adjustment” if surging US inflation forced the Federal Reserve to raise interest rates faster than expected. Dr Lowe also said when local interest rates begin to rise, possibly later this year, he hoped the RBA cash rate would eventually hit at least 2.5 per cent over coming years.

The RBA governor affirmed his willingness to be patient before increasing the official 0.1 per cent cash rate, in contrast to money market traders pricing in five RBA interest rate rises this year.

AUDUSD W1 02 11 2022 1530

GBPUSD D1 02 10 2022 1805

 

Chief economist pushes back against half-point increases. Misguided market perceptions ‘can shape reality,’ he warns

Bank of England Chief Economist Huw Pill pushed back against the prospect of bigger-than- usual interest-rate rises as he made the case for a “measured rather than activist approach” to policy making. Addressing the Society of Professional Economists, Pill signalled that the BOE was likely to continue with quarter-point hikes, despite four members of the central bank’s rate-setting committee voting for a half-point rise this month. 

GBPUSD W1 02 10 2022 1719

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EURJPY D1 02 07 2022 1658

Money markets price 50bps of interest-rate hikes this year. Goldman Sachs, Deutsche Bank also lift rate forecasts to 0%. 

EURJPY W1 02 07 2022 1659

 

 

 

 

Bank of England Governor Andrew Bailey said he favored moving interest rates gradually instead of delivering an unexpected shock to get inflation under control. 

GBPUSD D1 02 03 2022 1958

 

 

Investors should buy the dip in US stocks, according to JPMorgan quant-guru Marko Kolanovic. He believes the market will be able to absorb the rise in interest rates, but favors value over growth stocks. "The pullback in risk assets in reaction to the Fed minutes is arguably overdone," Kolanovic said.
"Higher bond yields should not be disruptive for equities, but rather support our call for a growth to value rotation," he said, before recommending investors buy the dip in US stocks. 

 

US30 D1 01 12 2022 1908

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