The Morning Hark - 5 Dec 2023
Today’s focus...Gold carnage, what’s the story? Schnabel does a Waller. RBA holds as expected.
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Overnight Highlights
Prices are at 7.00 GMT/2.00 EST, with changes reflecting movement from midnight GMT
Oil - Oil getting some much needed calm overnight in the Asian session with Brent and Crude February futures steady at 78.10 and 73.40 respectively.
Couple of supportive news stories helped the market stabilise but far from rally.
Yesterday saw the Saudi energy minister banging a drum of support for the OPEC+ decision claiming that the “voluntary cuts” of 2.2m bpd will happen and will only be withdrawn in a phased manner and indeed can be extended beyond March.
US DoE official claimed that the US would take advantage of the low oil price to refill reserves. They will buy back as much as “we possibly can”.
EQ - Asian equity markets softening again in the overnight session with the Hang Seng and Nikkei futures down over one percent at 16,300 and 32,632 respectively. The pair hitting three week lows as the higher US yield environment and the market’s tempering of rate cut expectations starts to weigh on the indices.
The US indices off a touch too in Asia, following yesterday’s fall, with the S&P currently at 4563 whilst the Nasdaq is at 15,805.
Gold - Gold all time highs to one of its biggest drops ever. Well we said we didn’t want to get involved until we had a decisive move above or below 2000 and we certainly have had the volatility we craved since the break.! For now we are holding above 2000 which is good but below the breakout level around 2080 which now becomes the short term trading pivot. Feb gold futures currently sitting at 2051. More below on yesterday’s move.
FI - Global yields reversing some of their moves from yesterday in Asia with the US2y and US10y yields off a touch at 4.62% and 4.23% respectively.
European yields firmed up a touch yesterday with the German 10y closing at 2.36% and the Italian 10y yield similarly at 4.12%.
UK gilt yields remaining firmer than its European peers with the 10y closing at 4.20%.
FX -Quiet Asian session with the USD Index holding onto yesterday’s gains at 103.60. The JPY, EUR and GBP all equally quiet with them currently sitting at 146.90, 1.0835 and 1.2635 respectively and all softer versus the USD.
Others - Bitcoin and Ethereum holding onto the majority of their gains, and in Bitcoin’s case extending the move further. The pair currently sitting at 41,725 and 2230 respectively. Bitcoin has now erased all its losses from the Terra/Luna/3AC debacle from the spring of 2022. Oh what fun!