Heavy! Xi Jinping called to congratulate Biden on his election! Biden said: would like to meet with Trump! Us economic data-intensive market style switch at the end of the year?

SMM Network News:

Fed: if the situation changes, it will be allowed to adjust its bond purchase program.

In the early morning of November 26th, the Federal Reserve released the minutes of its November 4-5 policy meeting. Fed officials participated in detailed discussions about its asset purchase program, according to the minutes. Officials believe that careful consideration in buying bonds is appropriate, while expressing concern about the pace of economic recovery.

Currently, the Fed buys $120 billion a month of Treasuries and mortgage-backed securities. The Fed can choose to increase its purchases or extend its bond purchases.

While participants determined that there was no need to immediately adjust the speed and composition of asset purchases they acknowledged that the environment could change to determine that adjustments would be made. They believe that a continuous and careful assessment of asset purchases is an appropriate way to act. Participants were of the view that the current pace of asset purchases helped to maintain a loose financial environment. But they point out that the Fed can speed up bond purchases or extend the maturity of bonds it buys if necessary.

Participants noted that the committee could provide more convenience, where appropriate, by increasing the pace of purchases or moving to longer-term bond purchases without increasing the size of their purchases. Alternatively, the Committee may, as appropriate, make purchases at the same pace and composition over a longer period of time.

Participants generally believed that asset purchases would continue to support the smooth functioning of the market. Several participants concluded that the purchase of asset prices helped to guard against financial market risks that might recur in an environment of high uncertainty. A few participants suggested that asset purchases might also help guard against unnecessary upward pressure on long-term interest rates.

Several participants pointed out that the size of additional easing could be limited by increasing holdings of long-term US Treasuries, and they were concerned that a significant increase in the size of their asset holdings could have unintended consequences. A small number of participants were concerned that maintaining the current pace of buying agency MBS could contribute to potential valuation pressures in the housing market.

At the same time, the minutes show that the Fed is also worried about the pace of economic recovery, believing that the economic outlook is on a downward trend and is much worse than it was before the epidemic. Fed officials do not expect any fiscal support package to be announced by the end of the year, but tax data show that the situation in most states and cities is not as bad as some feared.

After the minutes were released, the two-year yield fell to 0.1544%, a new day low, while the 10-year yield softened to 0.8619% in the short term, approaching the session low of 0.8537% recorded at the beginning of the session. The yield curve of 5-year and 30-year Treasuries steepened slightly; spot gold rebounded from a low of $1804.25 / oz to $1809.28 / oz, but hovered around flat levels as a whole.

The release of data-intensive in the United States is a mixed blessing.

During the day, the United States released a series of heavy economic data, including the third quarter GDP correction, personal consumption expenditure, PCE price index, durable goods orders and first-time jobless claims, but most of them were in line with expectations, so they did not make much waves, and the market reaction was more muted.

First of all, data released by the Bureau of Economic Analysis of the US Department of Commerce show that the revised quarter-on-quarter growth rate of GDP in the United States in the third quarter is the same as the initial value and in line with expectations. Specifically, the actual annualized quarter-on-quarter correction of GDP in the United States in the third quarter is 33.1%, the expected value is 33.1%, and the initial value is 33.1%. It can be seen that the correction in the third quarter remains unchanged, but the itemized data have been adjusted. Among them, the upward revision of business investment, housing investment and exports was offset by the downward revision of state and local government spending, inventory investment and consumer spending. Market analysts believe that the US economy rebounded strongly in the third quarter after recording the worst contraction since records began in 1947 in the second quarter. However, with the resurgence of the epidemic, analysts expect the US economic growth to stall again, and the US is now widely expected to grow at an annualised rate of less than 5 per cent in the fourth quarter.

Second, the latest figures show that the number of people applying for unemployment benefits for the first time in the United States last week was 778000, the highest level in a month and 730000 higher than expected. This shows that with the novel coronavirus epidemic raging, the pace of recovery of the US job market is faltering. At the same time, the number of Americans seeking unemployment benefits fell by 299000 to 6.07 million in the week to November 14, but the number of Americans receiving extended assistance continued to increase, indicating that more and more people are no longer entitled to normal state benefits.

Third, according to the latest figures from the US Department of Commerce, sales of new homes in the United States fell 0.3% month-on-month after the quarterly adjustment in October, falling below the 1.7% increase expected by the market, but this was mainly due to the upward revision of the value from 959000 to 1.002 million before September. After the quarterly adjustment, the total sales of new homes reached an annualized 999000 in October, still higher than the market expectation of 975000. Although the figure is back below the 1 million round mark, it is still close to the 14-year high since September 2006. The analysis pointed out that although sales of new homes in the United States declined slightly from the previous month, they remained stable near the 1 million round mark, far exceeding the level before the novel coronavirus epidemic, mainly reflecting the boosting effect of record low mortgage interest rates on property buyers.

Finally, orders for durable goods in the United States rose 1.3% month-on-month in October, higher than expected and lower than expected; personal consumption expenditure rose 0.5% month-on-month in October, higher than expected, but personal income fell 0.7%, worse than expected, and the savings rate fell for six consecutive months.

As of Wednesday's close, the S & P 500 closed down 5.80 points, or 0.16%, at 3629.63; the NASDAQ closed up 57.60 points, or 0.48%, at 12094.40; and the Dow Jones index closed down 173.80 points, or 0.58%, at 29872.47.

The heat of the gold market has declined and lacks the momentum to rebound sharply.

International gold prices remained low on Wednesday, stabilizing after hitting as low as $1801 an ounce, temporarily slightly above the $1800 / oz round mark.

Guoxin Futures analyst Gu Fengda told reporters that prior to this, Federal Reserve Chairman Powell stressed at a news conference at the November interest rate meeting that he might adjust his asset purchase program upward, and that the US economy would still face challenges in the coming months. the market expects the Fed monetary policy easing to continue, and the economy is still in a slow recovery stage, which is a neutral environment for pro-cyclical assets. In addition, market investors are focusing more on the Fed's clues to control the yield curve and inflation tolerance.

In his view, as the process of economic recovery advances, the market style has changed, the recent gold ETF position has dropped significantly, more funds have been turned to invest in other re-inflationary pro-cyclical assets, the popularity of investment in the precious metals market has declined, and the factors supporting the rise in precious metal prices have been weakened. Without more additional bullish factors (such as a sharp rebound in inflation, the Fed's practical yield curve to control lower real interest rates, etc.) before the end of the year, gold lacks the momentum to rebound sharply, but looks forward to the medium-and long-term precious metal price trend, it needs to be further collated and adjusted, and the high probability is dominated by wide oscillations.

In the medium to long term, he believes that the trend performance of precious metals still needs to focus on the important guidance of the Fed's December meeting, with particular attention to the Fed's statement on yield curve control and inflation tolerance, which may provide further tone for precious metals prices. If the marginal easing of the Fed's monetary policy weakens, the optimistic progress of the vaccine will reduce the size of fiscal stimulus, which will weaken the room for rebound above the precious metals market. Operationally, he suggested that the short-term band should be dominated under the wide-amplitude oscillation pattern, the medium-and long-term focus on the December Fed meeting for more guidance, and the silver fluctuation would be intense and repeated. He suggested that we should watch more, move less and operate cautiously, and pay attention to controlling the position.

Market style switching copper and aluminum market repeatedly broke new highs

Copper for three-month delivery on the London Metal Exchange (LME) surged on Wednesday, hitting $7360 a tonne at one point, the highest level since January 2014. The 2101 contract of domestic Shanghai copper hit a peak of 55100 yuan / ton in midday trading on Wednesday, once setting a new high since January 2018. Recently, it can be seen that the overall non-ferrous market is warm, especially the continued strength of copper and aluminum prices.

Gu Fengda told reporters that since November, the word "pro-cyclical" has become a hot word in the domestic financial market, which drives the "pro-cyclical" industry represented by copper, aluminum and other non-ferrous metals to become the focus of market investors. In essence, the meaning of the so-called pro-cyclical industry is basically the same as that of the traditional strong cyclical industry.

He believes that the popularity of the word "pro-cyclical" reflects the upsurge of optimistic expectations of investors for the global economic recovery after breakthroughs in many uncertain factors, such as novel coronavirus's vaccine research and development and the US election controversy. A large amount of money has poured from traditional safe-haven assets such as precious metals to "pro-cyclical" assets such as non-ferrous metals, and financial markets have ushered in an obvious style shift.

"looking back at the market trends over the past six months, the risk appetite of the financial market swayed rapidly with the global novel coronavirus epidemic situation, economic policy expectations and the political game situation of big powers." In his view, with the current breakthroughs in a number of novel coronavirus vaccines, the systemic risk that the global market is mired in the epidemic crisis has been alleviated, and the high centers of gravity of all kinds of assets, especially stock markets and commodities, have risen. Previously, the traditional non-ferrous cyclical industry, which was lukewarm in the "Golden Nine and Silver Ten" performance, has also begun to break new highs under the pursuit of more and more investors and institutions.

From a fundamental point of view, he said that the reality of the current off-season non-ferrous traditional consumption has been diluted by optimistic economic growth expectations in the future, and copper and aluminum are currently facing the delicate status quo of the "low inventory and tight balance" industrial chain. make its supply and demand balance vulnerable to future incremental changes in market expectations.

Among them, copper price, as an important barometer to measure the expectation of global economic recovery, has strong room and power to rise in the context of sustained monetary policy easing and low economic growth recovery.

On the other hand, under the background of the capacity ceiling set by the domestic supply-side reform, the aluminum industry is faced with the mismatch between the supply and demand structure of the lower-than-expected conversion rate of new capacity and the high growth of terminal consumption potential, such as new energy and new infrastructure. It also has more solid price support and rising potential.

As for the future, he believes that the non-ferrous metals industry such as copper and aluminum has both financial and commodity properties. under the current tight balance between supply and demand, the key guidelines leading the price trend are mainly focused on macro and policy factors. in the medium and long term, we still need to focus on the monetary policy guidance of central banks led by the Federal Reserve and the dynamics of fiscal stimulus policies of various countries. For the majority of physical enterprises and market investors, the trend of copper and aluminum is not overestimated, the operation of copper and aluminum to band-based operation, short-term maintenance of long-term thinking.

The continuous rise of crude oil market is slowly repairing.

International oil prices continued to rise and hit a nine-month high in intraday trading on Wednesday. It was reported on the same day that an oil tanker was attacked while berthing in the Red Sea of Saudi Arabia. As of the close, US WTI crude oil January futures closed up 80 cents, or 1.78%, at 45.71 US dollars per barrel, hitting an intraday high of 46.26 US dollars per barrel, the highest level since March 5. Brent crude oil January futures closed up 75 cents, or 1.57 per cent, to 48.61 US dollars per barrel, the highest level since early March. The crude oil futures 2101 contract of the Shanghai Futures Exchange closed up 1.21% at 292.70 yuan per barrel at night.

On the same day, according to the latest news released by the US Energy Information Administration ((EIA)), EIA crude oil stocks decreased by 754000 barrels, or 0.2%, to 488.7 million barrels in the week ended November 20, with an expected increase of 225000 barrels and a previous increase of 769000 barrels. However, gasoline stocks increased by 2.18 million barrels, a higher-than-expected increase of 1.15 million barrels, bringing the total amount of commercial gasoline stocks in the United States to more than 230 million barrels, the highest seasonal high since 1994. Refinery stocks actually reported a decrease of 1.441 million barrels, expected to decrease by 2.25 million barrels, and the previous value decreased by 5.216 million barrels. The average four-week supply of crude oil products in the United States was 19.315 million barrels per day, a decrease of 9.1 percent compared with the same period last year.

At the same time, previously released (API) data from the American Petroleum Institute showed that API crude oil stocks increased by 3.8 million barrels to 490 million barrels in the week ended November 20, with an expected decrease of 333000 barrels; gasoline stocks increased by 1.3 million barrels; refined oil stocks decreased by 1.8 million barrels; Cushing crude stocks decreased by 1.4 million barrels; gasoline stocks increased by 1.3 million barrels last week; refined stocks decreased by 1.8 million barrels last week. Crude oil imports increased by 237000 barrels a day last week.

Financial blog Zero hedging comments on the week of November 20 in the United States, EIA crude oil inventory data pointed out that EIA crude oil inventory unexpectedly dropped, reversing the increase of 3.8 million barrels recorded by API, and gasoline inventory recorded growth for the second consecutive week, which also surprised the market and is worth worrying about. Before the release of the data, oil prices fell slightly after the release of the data. Recent resurgence of geopolitical tensions have supported oil prices, such as the attack on an oil depot in Jeddah, Saudi Arabia, and today's attack on a cruise ship in the Red Sea.

In addition, Baker Hughes (Baker Hughes), a US energy services company, said in a report on Wednesday that the number of active oil and gas rigs in the US increased by 10 to 320 in the week ended Nov. 25. This week, the number of oil rigs in the US increased by 10 to 241, the highest level since May, while the number of natural gas rigs increased by one to 77, the highest level since June, but the number of multi-purpose rigs fell by one.

It can be seen that international oil prices have risen nearly 10% in the past four days, which market analysts believe is mainly boosted by the optimism that novel coronavirus vaccine is imminent and that global oil demand is expected to rebound quickly.

Fan Chunhua, a Guoxin futures researcher, told reporters that the main reasons for the recent sharp rise in crude oil futures prices include the positive progress made by multiple vaccines around the world to prevent COVID-19, the smooth transition of power after the US presidential election is about to begin, and the sharp decline in uncertainty in the external macro environment has led to a rebound in market risk appetite. At the same time, global monetary conditions continued to be loose, US stocks hit record highs and commodities continued to strengthen in response to inflation expectations.

Sources show that OPEC and its production reduction allies will hold semi-annual ministerial meetings on November 30 and December 1, and may consider delaying the production reduction of 7.7 million barrels per day for at least three months from January next year.

At the same time, geopolitical tensions in the Middle East also support the oil market. The road tou news agency quoted the Houthi group as saying on Monday that it had fired a missile at the Saudi Aramco base in the western Saudi city of Jeddah.

He said that under the influence of this series of advantages, international crude oil prices have continued to rise in the past few days and reached a new high since March 5 this year. In the early stage, due to the high domestic crude oil inventory and the continuous appreciation of RMB, the trend of domestic crude oil futures price is relatively weaker than that of international oil price. Recently, with the decline of domestic crude oil stocks, driven by the continuous rise in international crude oil prices, domestic crude oil futures prices have risen rapidly.

Li Wanying, a senior energy analyst at Donghai Futures, believes that on the supply side, the market is concerned that OPEC will hold its 180th meeting on November 30, while OPEC and its production reduction allies will hold their 12th ministerial meeting on December 1 to discuss oil production policies. In view of the fact that Libya's crude oil production has returned to 1.2 million barrels per day, the change in OPEC's production reduction plan has attracted much attention from the market. She said that at present, the news is optimistic, and the market generally believes that the production cut is expected to be extended.

At the same time, US production has remained stable recently, with the number of Baker Hughes drilling on the low side. Objectively speaking, considering the attenuation characteristics of shale oil, under the premise of cautious upstream investment, US shale oil production is still in decline for some time in the future, which relatively slows down the pressure of global crude oil supply.

From a demand point of view, novel coronavirus's spread is expected to dampen activity in the United States before and after the Thanksgiving holiday on Thursday, thereby weakening the growth in gasoline demand associated with the holiday. Although gasoline prices in the United States have fallen to their lowest level since the same period in 2016, experts estimate that as Thanksgiving approaches, the number of people traveling abroad in the United States will be only 45 percent of that in the same period last year. The trend of cracking price difference is weak, reflecting the weakness of refined oil consumption. However, from the recent changes in the structure of crude oil price spreads, Brent crude oil futures forward discount phenomenon reflects the relative repair of fundamentals.

On the financial side, in the week ended November 17, speculators held a total of 457690 net bulls in US light crude and Brent futures and options on the New York Mercantile Exchange and the London Intercontinental Exchange, an increase of 53749 hands over the previous week; equivalent to an increase of 53.749 million barrels of crude oil.

Li Wanying believes that after the market learned that Biden will smoothly take over the president of the United States and new developments in international vaccines, the overall market sentiment turned positive, pushing up oil prices in the near future. She said that the current oil market fundamentals are slowly repairing, international oil prices are expected to remain strong in the near future, and investors in the inner market are advised to remain cautiously optimistic. She mentioned that the recent surge in sea freight rates will help to repair the price difference between inside and outside, and light positions can be used to participate in the domestic market.

Bank of America released its market outlook for 2021: oil is expected to return to $60 a barrel, lowering the target price of gold.

A few days ago, Bank of America Securities (BoA Securities) released its commodity market outlook report for 2021. In the crude oil market, they said that under the prospect of improved application of the new coronary disease du vaccine, global travel restrictions are expected to be fully relaxed by the summer of 2021 at the latest, which will turn the crude oil market from a previous oversupply to a shortage of demand.

The bank pointed out that the world will have a supply shortfall of 1.6 million barrels of crude oil per day by mid-2021 as the recovery rate of global oil-generating equipment capacity does not keep pace with expectations of a rapid recovery in demand. BofA analysts estimate that Brent crude prices will rise to $60 a barrel by mid-2021, which will basically return to levels last seen before the novel coronavirus outbreak this year.

However, in terms of precious metals, BofA pointed out that the emergence of highly effective vaccines has changed the gold market, making it difficult for gold prices to meet the previously expected target of $3000 an ounce, but sustained fiscal and monetary stimulus will be able to push gold prices back above $2000 an ounce. In its latest forecast, the bank expects gold to average $2063 an ounce in the coming year.

"We are seeing a cyclical recovery in the global economy, which means interest rates are likely to rise," the report said. "We are not entirely bearish on gold. The fiscal stimulus package will keep investors in the gold market, but there will eventually be a big rotation, with precious metals likely to become relatively weak in a cyclical rebound in commodities."

At the same time, the bank also downgraded its outlook for silver, but they believe silver outperforms gold because industrial demand for silver will rise as the global economy recovers. The outlook for silver remains bright and the focus on green energy is likely to increase demand for solar panels, the report added. The agency expects the average price of silver to be around $29.13 an ounce next year.