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Sanders is out of the election. American stocks are high again! Congressman of the United States sent a letter to the Crown Prince of Saudi Arabia asking for a reduction in oil prices in the future. Tonight's meeting is the key.
translation
08:11AM
Apr 9,2020
Source:Futures daily
The content below was translated by Tencent automatically for reference.

SMM: three major U. S. stock indexes closed higher on Wednesday, after U. S. Senator Sanders announced his withdrawal from the U. S. presidential election, U. S. stocks expanded in late trading. By the end of the day, the Dow was up 3.44 per cent at 23433.57, the S & P was up 3.41 per cent at 2749.98 and the Nasdaq was up 2.58 per cent at 8090.9.

Us President Donald Trump said on Wednesday that he must return to work and return to labor when the curve of new confirmed cases of pneumonia goes down, possibly in stages across the country, possibly ahead of schedule.

According to statistics from Johns Hopkins University in the United States, as of 06:40 Beijing time on April 9, a total of 1504971 cases had been confirmed and 87984 deaths had been diagnosed worldwide.

International oil prices rose sharply on Wednesday. By the end of the day, NYMEX May crude oil futures were up $1.46, or 6.18 per cent, at $25.09 a barrel, while Brent June crude oil futures were up 97 cents, or 3.04 per cent, at $32.84 a barrel. Earlier, Algeria said OPEC+ had discussed a substantial reduction in crude oil production, which would reach 10 million barrels a day.

The 48 members of the US House of Representatives sent a joint letter to the Crown Prince of Saudi Arabia on Wednesday, calling for a cut in production, a level of political pressure that had not been seen in Saudi Arabia in the run-up to the OPEC+ meeting. In a letter to the Saudi Crown Prince, the US congressman said that if the energy crisis is not resolved, the economic and military cooperation between the United States and Saudi Arabia will be damaged. If it does not succeed in reversing the oil crisis, the House of Representatives will encourage the United States Government to take any response.

Us crude oil inventories rose a record 15.177 million barrels to 484.37 million barrels last week as refinery capacity utilization fell to its lowest level since September 2008 and inventory levels hit their highest level since June 2019, according to data released by the (EIA) on Wednesday.

OPEC+ is scheduled to hold a videoconference at 22:00 Beijing time on Thursday. After that, Saudi Arabia will chair an emergency meeting of G20 energy ministers at 20:00 Beijing time on Friday to ensure the stability of energy markets. Russia confirmed its participation in Thursday's OPEC+ meeting, and US Energy Secretary Bruette will attend the G20 meeting of energy ministers on Friday.

Sanders withdraws from the primaries, U. S. stocks expand in late trading

The three major U.S. stock indexes closed up on Wednesday, with the Dow up nearly 780 points, expanding in late trading after Senator Sanders (Bernie Sanders) announced his withdrawal from the presidential election. By the end of the day, the Dow was up 3.44 per cent at 23433.57, the S & P was up 3.41 per cent at 2749.98 and the Nasdaq was up 2.58 per cent at 8090.9. Raytheon technology rose more than 8%, leading the Dow. Apple rose 2.56%. Chinese stocks fell 6.84% in the future, 6.16% from who, and 4.57% from iQiyi. The S & P 500 and the Dow have rebounded more than 20 per cent since their lows on March 23.

On Wednesday, the Fed released minutes of its March 2 and March 15 meetings, giving reasons for the Fed's emergency rate cut, showing that all FOMC members believed that the outlook for the US economy had deteriorated sharply in recent weeks and became extremely uncertain, so it cut interest rates to 0 per cent-0.25 per cent, while zero interest rates will remain until the impact of the epidemic on the economy has receded. At the March 15 meeting, a small number of members proposed a 50 basis point cut in interest rates as the short-term financing market "deteriorated sharply" and the new crown pneumonia epidemic dominated the economic outlook. Members hoped to take a "strong" monetary policy response to the epidemic.

At the same time, FOMC members expect US and overseas economic activity to be weaker in the first quarter of this year than expected at the January meeting, with consumer confidence, the housing market and business confidence all undermined, with a particular impact on jobs. The speed of economic recovery will depend on the speed with which measures to contain the epidemic and fiscal measures are implemented.

Us President Donald Trump said on Wednesday that he must return to work and return to labor when the curve of new confirmed cases of pneumonia goes down, possibly in stages across the country, possibly ahead of schedule.

Investors are watching carefully about the development of the coronavirus epidemic. There are reports that the U. S. government is still considering restarting economic activities that have been shut down by the epidemic. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, said that now that the new crown pneumonia epidemic in the United States has seen a decline in the number of new daily deaths, there should be an inflection point after this week, but he also stressed that epidemic prevention should be strengthened. New confirmed cases in the United States have fallen since Friday, according to Johns Hopkins University. This will provide some support for market sentiment.

Over the same period, new cases around the world also showed signs of slowing down. Jim Paulson, an investment strategist, told the media that if there is an inflection point in the epidemic curve for the first time, the next focus will be on when the economy will restart, when and which sectors will restart, and how long the recession we are going through will last. Early trading, for example, ushered in data on the impact on McDonald's global performance. The international chain giant said same-store sales tumbled 22% in march, while the company withdrew its previously released 2020 outlook and long-term forecast. As more companies begin to release operational data for March, Wall Street will make a clearer assessment of the impact of the outbreak on individual stocks.

The World Trade Organization (WTO) forecast on the 8th that global trade will shrink by 13% to 32% this year as a result of the new crown pneumonia epidemic. The World Trade Organization (WTO) released its annual report on Global Trade data and prospects on the same day. The report stresses that given the uncertainty about the impact of the "unprecedented" epidemic on the global economy, global trade is likely to shrink more this year than it did during the international financial crisis in 2008. The report shows that the volume of global trade in goods has fallen by 0.1 per cent in 2019 as a result of trade tensions and slowing economic growth. In 2020, the volume of trade in virtually all regions of the world will experience double-digit declines, with exports from North America and Asia to be hit hardest. In terms of the industry, trade in the electronics and car manufacturing industries will shrink even more.

Major European stock indexes rose and fell on Wednesday. By the end of the day, the FTSE 100 index in London closed at 5677.73, down 26.72 points, or 0.47%, from the previous session. The CAC40 index in Paris, France, closed at 4442.75, up 4.48 points, or 0.10%, from the previous day. The DAX index in Frankfurt, Germany, closed at 10332.89, down 23.81 points, or 0.23%, from the previous session.

After 16 hours of deliberation and discussion, EU finance ministers have yet to reach an agreement on measures to deal with the epidemic, and Euro Group Chairman Sentno said the meeting would continue the following day. Doubts about the EU's ability to withstand the crisis have dampened market sentiment to some extent.

French Finance Minister Lemmel continued on Wednesday to call on the European Union to reach an agreement on a plan to deal with the crisis within the next 24 hours and not to fail. Lemmel said that the European Union must be able to activate the European Stability Mechanism, because many European countries need funding from the mechanism. Although last night's discussions were inconclusive, France, Germany and some countries have agreed that we all need EU funds to help the economy recover and to cope with the rising debt caused by the crisis.

It is understood that at present, finance ministers are discussing three main proposals to solve the crisis: the use of the European Stability Mechanism (ESM), the euro zone rescue fund, to provide a credit line equivalent to 2 percent of the economic output of member countries; the establishment of a pan-European guarantee fund, managed by the European Investment Bank, which could raise more than 200 billion euros of liquidity for the company; and a job reinsurance program worth 100 billion euros.

International oil prices rise sharply, OPEC+ will hold a videoconference tonight

International oil prices rose sharply on Wednesday. By the end of the day, NYMEX May crude oil futures were up $1.46, or 6.18 per cent, at $25.09 a barrel, while Brent June crude oil futures were up 97 cents, or 3.04 per cent, at $32.84 a barrel. Earlier, Algeria said OPEC+ had discussed a substantial reduction in crude oil production, which would reach 10 million barrels a day.

In the run-up to the OPEC+ meeting, Iran's oil minister said Iran would not agree to hold any OPEC+ meeting without a clear proposal and expected results.

The 48 members of the US House of Representatives sent a joint letter to the Crown Prince of Saudi Arabia on Wednesday, calling for a cut in production, a level of political pressure that had not been seen in Saudi Arabia in the run-up to the OPEC+ meeting. In a letter to the Saudi Crown Prince, the US congressman said that if the energy crisis is not resolved, the economic and military cooperation between the United States and Saudi Arabia will be damaged. If it does not succeed in reversing the oil crisis, the House of Representatives will encourage the United States Government to take any response.

Us President Donald Trump said last week that he expected and wanted Saudi Arabia and Russia to cut oil production by 10 million-15 million barrels a day, accounting for 10-15 per cent of global supply. Trump did not promise any action by American companies.

The market is still worried about whether the United States will join the production cuts. The US Department of Energy said on Tuesday that the White House insisted on non-intervention in private markets, that US crude oil output had fallen without intervention and that the decline would be slow over the next two years.

OPEC+ is scheduled to hold a videoconference at 22:00 Beijing time on Thursday. After that, Saudi Arabia will chair an emergency meeting of G20 energy ministers at 20:00 Beijing time on Friday to ensure the stability of energy markets. Russia confirmed its participation in Thursday's OPEC+ meeting, and US Energy Secretary Bruette will attend the G20 meeting of energy ministers on Friday.

Us crude oil inventories rose a record 15.177 million barrels to 484.37 million barrels last week as refinery capacity utilization fell to its lowest level since September 2008 and inventory levels hit their highest level since June 2019, according to data released by the (EIA) on Wednesday. In the week, Oklahoma's Cushing crude oil stocks rose 6.417 million barrels to 49.241 million barrels, an all-time high.

Yesterday, Indian refiner officials said oil demand in India, the world's third-largest importer of crude oil, had tumbled 70 per cent because of India's current first-tier blockade. Officials also said demand for crude oil in April could fall by about 50 per cent from last year's average if India ends the blockade on April 15 as planned. According to agency estimates, this is equivalent to a reduction of 3.1 million barrels per day in India's oil demand in April. In the long run, this means that falling oil demand in India alone will offset 1/3 of the 10 million barrels a day that OPEC+ intends to cut production.

At present, oil prices are mainly affected by the expectations of the OPEC+ production reduction meeting. Pan Xiang, crude oil researcher at Huatai Futures Research Institute, said that the market was concerned about the comments of the participants and the differences on the content of the agreement, and that international oil prices had fallen again after the recent rebound in international oil prices. "differences between the two countries over the benchmark for production cuts have led to the postponement of the meeting and uncertainty about the outlook for production cuts, as well as a five-day contract extension operation by USO, the largest US oil ETF fund, on Tuesday, all of which have contributed to the recent fall in oil prices." Pan Xiang told Futures Daily.

According to him, USO ETF has had a net inflow of nearly $3 billion since the start of the year (the continued inflow of funds into USO reflects the enthusiasm of retail investors and some investment institutions), which now accounts for about 20 per cent of crude oil holdings in recent months and is currently the largest long position in the market. Contracts have been gradually cleared in recent months, "contributing to the short-term fall in oil prices".

Jin Xiao, senior analyst at the East Securities Derivatives Research Institute, also believes that the recent marked rebound in oil prices is mainly driven by expectations of production cuts in oil-producing countries. A few days ago, the U.S. Department of Energy said the United States will not join the OPEC+ production cuts because U. S. crude oil production is already falling and the government is reluctant to intervene in the free market. Affected by this and superimposed on the United States stocks and other risky asset prices fell, the outer plate oil prices also fell significantly.

It is worth noting that yesterday, the Asian market opened, SC opened low after the continued rise, so that the internal and external price gap once again widened to a very high level. In Jin Xiao's view, the inner crude oil can not actually get out of the trend independent of the outer plate, the internal and external price difference to maintain such a high level is not sustainable. "SC short-term independent of the outer disk, mainly due to the domestic speculative bottom of the force is too strong, and the liquidity of SC itself is not particularly high. The release of domestic over-the-counter link SC products has led to the overcrowding of SC long trading, so that although there are physical delivery factors, but also failed to suppress speculative allocation demand. " Jin Xiao expects oil prices to continue to maintain very high volatility in the short term.

In his view, the bottoming of demand means that oil prices are really bottoming out. "at the production cut meeting on Thursday, if the scale of the cut is not as large as expected or if the final cut agreement is not reached at all, it is likely to have a very big impact on the market. Because the market is in a highly volatile environment, it is necessary to maintain very low leverage. " Jin Xiao suggested.

Regarding the OPEC+ production reduction meeting, Pan Xiang said that if an agreement is reached at this meeting, it will help oil prices rebound, but given that the cut in production will only take effect in May, a weak spot market will limit the room for oil prices to rise, and it is expected that the top of short-term Brent crude oil will be $3540 / barrel, making it more difficult to rise further.

Pan Xiang said that for some time to come, we should also pay attention to the development of the global epidemic. As governments introduced social alienation measures to prevent and control the epidemic, resulting in nearly 4 billion people being quarantined at home around the world, the significant reduction in the number of traffic travelers suppressed oil demand, and global demand fell nearly 30 percent in April from a year earlier. Recently, there has been a decline in the number of new infections in countries such as Italy, focusing on the inflection point of the epidemic and whether social alienation measures will be relaxed. At the same time, we need to pay attention to the development of the epidemic in India, the United States and Africa.

"in addition, given the utilization rate of global oil storage capacity and the global accumulation caused by a severe short-term oversupply, the only 1.4 billion remaining storage capacity in the world in the near future is expected to be exhausted around June (and some institutions predict that it will be at the end of May or even the end of April). At present, producers and traders are doing everything they can to find non-traditional alternative storage methods, such as tankers, pipelines, tank trains, etc., if the global tank capacity is close to the limit, Oil prices will face a new round of decline. " Pan Xiang thinks.

Operationally, "in the current fundamentals have not significantly improved, spot prices have not yet stabilized, copy the bottom need to be cautious." Pan Xiang reminded, especially with the inner disk SC crude oil bottom investors, the current inner disk to the outer disk rising water is too high, resulting in the inner disk rising water is too high, the main reason is that the domestic retail investors are too enthusiastic about bottoming out, resulting in the false and solid offer ratio is too large. As of April 8, the number of disk positions and warehouse receipts is still around 4:1, but in the future, with the successive generation of warehouse receipts and the expiration of natural person investors, it is expected that by the middle and late April, the driving force for the return of internal and external prices will be stronger, and the time will be more unfavorable to the bulls. It is recommended that natural person customers who hold long positions in recent months close their positions or move their positions as soon as possible.

Financial Commission of the State Council: relax and abolish controls that do not meet the needs of Development and enhance Market activity

On April 7, the Financial Stability and Development Board of the State Council (hereinafter referred to as the Financial Commission) held its 25th meeting to summarize the progress of recent financial support for epidemic prevention and control and economic and social development, and to deploy key tasks in the next phase. Liu he, member of the political Bureau of the CPC Central Committee, vice premier of the State Council, and director of the Financial Commission, presided over the meeting. Responsible comrades of all member units and relevant units of the Financial Committee attended the meeting.

The meeting pointed out: since the outbreak of the Xinguan pneumonia epidemic, in accordance with the decision-making arrangements of the CPC Central Committee and the State Council on promoting epidemic prevention and control and economic and social development as a whole, the Financial Committee has taken supporting epidemic prevention and control as the most important task at present, and has held ten meetings to determine the working principle of "stabilizing expectations, expanding total volume, classifying grasping, resuming, and creating tools," and comprehensively using a variety of policy tools to maintain reasonable and adequate liquidity. We will persist in the normal opening of the stock market, broaden the low-cost financing channels for enterprises, provide differentiated financial services to regions, industries and enterprises that are greatly affected by the epidemic, effectively prevent and control the epidemic, support the resumption of work and production, and maintain the overall situation of stable economic development.

The meeting stressed: at present, global economic growth has been seriously impacted by the epidemic situation, and economic and financial development is facing greater challenges. China's epidemic prevention and control is facing the situation of external defense input and internal defense rebound, and is in the critical stage of resuming work and resuming production. In the next stage, the Financial Commission should continue to make arrangements in accordance with the decisions of the CPC Central Committee and the State Council, strengthen the implementation of policies, and solidly promote the restoration of the order of economic and social development to normal. First, we should step up the implementation of macro policies, make prudent monetary policies more flexible and appropriate, and put support for the resumption and development of the real economy in a more prominent position. Second, we should guide credit resources to support more small and medium-sized enterprises and private enterprises that have been hit hard by the epidemic. Third, we should give full play to the pivotal role of the capital market, constantly strengthen the building of basic systems, resolutely crack down on all kinds of counterfeiting and fraud, relax and abolish controls that do not meet the needs of development, and enhance market activity. Fourth, we should take a variety of effective ways to increase the capital replenishment of small and medium-sized banks and enhance their ability to resist risks and put in credit. Fifth, we should attach great importance to the study and response of the international epidemic situation and the economic and financial situation, and prevent the transmission of overseas risks to the territory.

Other matters were also considered at the meeting.

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