SMM news: small non-farmers broke through the $1340 mark to a 15-week high; oil prices fell 5 per cent when it tried to rescue the market, but American oil still fell into the technical bear market range.
Gold rose sharply on Wednesday, driven by a weaker dollar and the flow of money to safe havens, surpassing the $1340 mark to a 15-week high of nearly $20, but then narrowed its gains to close up 0.35 per cent as the dollar rebounded. On the crude oil side, due to an unexpected surge in EIA crude oil stocks, the US oil market once plummeted 5%, and the distribution oil also fell to 4%. WTI crude oil closed at its lowest level since January, down 22% from its high on April 23. It is the third time since the beginning of 2017 that it has entered the range of technical bear markets.
The May ADP employment data for the United States recorded an increase of only 27000 jobs, the worst performance since March 2010. The agency noted that May ADP data suggested that non-farm payrolls to be released by the Labor Department on Friday could be lower than expected, prompting investors to place further bets on the Fed's interest rate cut this year. A series of weak reports on US retail sales, factory orders and home purchases suggest that economic growth is slowing as trade divisions weigh on companies. After the data, the federal funds rate showed that traders thought the Fed was 64% likely to cut interest rates by 75 basis points by the end of the year, up from 14% a week ago.
2 some Fed officials made a partial dove speech again. Fed Evans said there was some nervousness about low inflation. Analyst Adam Button believes that Evans's statement this time is more dovish than his latest statement. Fed Governor Bernard Brainard also pointed out that in the next downturn, interest rates are likely to be lower than people are used to, to remain open to other policies, hoping to avoid a decline in inflation expectations. Fed Kaplan said there was a need to defend the "symmetrical 2 per cent inflation target" very forcefully.
The Fed's Brown Book on the state of the economy said that US economic activity expanded at a moderate rate from April to mid-May and that the economic outlook was positive but weak in the coming months. In terms of sectors, the overall agricultural situation in the United States remained weak, with manufacturing reports generally positive, but some regions said there were signs of a slowdown in production activity. In addition, prices continue to rise at a moderate rate, and wage pressures remain relatively subdued. The national employment rate continued to rise, and consumer expenditure showed a generally positive trend.
Us crude stocks rose 6.771 million barrels in the week to May 31, far exceeding expectations and previous values, according to EIA data. The market fell into fears of a rise in crude oil stocks and supply amid weak demand, with the United States and Brazzaville plummeting, falling more than 4 percent at one point. Brennock, an analyst at PVM Oil Co., Ltd., believes that sales pressure has returned and crude oil bulls are under great threat. With US crude stocks at their highest level since August 2017, well above the five-year average, some analysts are beginning to wonder whether this also heralds a further decline in US consumer spending.
Amid the deep fall in oil prices, there was overnight news that OPEC was determined to reduce its crude stocks and restructure its investment, and that OPEC + was determined to balance the oil market in 2019 and beyond, and would take flexible and agile action in the coming months. This has led to the recovery of some of the lost ground in oil prices.
During talks at the White House on Wednesday, the United States and Mexico did not reach an agreement on immigration and tariffs, according to CNBC. Affected by the news, the dollar against the Mexican peso rose sharply in the short term, up 1.21%. Us President Donald Trump says negotiations with Mexico will resume tomorrow. Fitch and Moody's both downgraded Mexico, Fitch downgraded Mexico to BBB (previously BBB+), and Moody's downgraded Mexico's outlook to negative from stable.
It is reported that the European Union has launched a disciplinary process against Italian public debt. The European Union has warned of Italy's debt growth because of the "snowball effect". The European Commission expects Italy's debt share to rise in 2019 and 2020, or above 135 per cent. Italy's capacity growth is at a low level, limiting the potential for economic growth and unable to control the rise in the share of public debt. EU Commissioner for Economic and Financial Affairs Moscovici said that if Italy wants to avoid disciplinary procedures, the European Commission's door is open to Italy.
Australia's GDP grew at an annualised rate of 1.8 per cent in the first quarter, the slowest pace since the global financial crisis, reinforcing the RBA's case for further monetary easing and more government stimulus. The analysis points out that the natural resources industry has made a great contribution to the Australian economy. A gradual rebound in Australian mining investment and strong export demand for the country's commodities will contribute to broader economic growth next year, according to senior economists at the RBA.
8 the executive meeting of the State Council proposed on Wednesday to do a good job in the production of soybeans and other oil crops, ensure the supply of fruits and vegetables, and stabilize the price level. The Ministry of Commerce said that this year's fruit prices, especially apples, pears and other varieties affected by short-term supply and demand changes, weather and other factors fluctuate greatly, and the later prices are expected to gradually fall back to a reasonable range with the batch listing of fruits in the corresponding season. The Ministry of Commerce will continue to strengthen market monitoring, guide all localities to actively promote the convergence of production and marketing, and effectively ensure the market supply of fruits and vegetables and other daily necessities.
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The European Central Bank will announce an interest rate resolution at 19:45 on Thursday, and markets expect the ECB to stand still and release the final details of its targeted long-term financing operation. Current money market pricing suggests that the ECB will cut interest rates by 10 basis points by July 2020.