Powell released "dove" remarks to "extinguish" market hopes, and the three major US stock indexes closed down sharply.
Last night, Federal Reserve Chairman Colin Powell warned the bond market at the jobs summit. Mr Powell said the resumption of the economy could "put some upward pressure on prices" and acknowledged that the recent rapid rise in US bond yields had attracted his attention, but he said the Fed needed to see a bigger rise before it took action. Powell also stressed that the economic recovery may push up inflation, but that is a temporary rebound, and the Fed will "wait patiently" before changing its policy.
Powell also said he would be worried if the market environment was disorderly or if the financial environment continued to tighten, threatening to meet inflation and employment targets.
Influenced by Powell's speech, the yield on US 10-year Treasuries broke through 1.5% on Thursday, rising as high as 1.548%, close to the high of 1.6% set last week, and gold futures fell below the $1700 / ton mark. As of the early morning close, the yield on the 10-year Treasury note was up 8.63%.
Analysts believe that Powell did not say what measures would be taken to disappoint some traders if he wanted to hold down long-term yields.
Krishna Guha, vice chairman of Evercore ISI, said: "Powell maintains a 'dovish' position, but not 'pigeon' enough to stop yields from rising further."
As of the early morning close, the three major US stock indexes closed down, with the Nasdaq down 2.11%, the S & P 500 down 1.34% and the Dow down 1.11%.
Notably, Goldman Sachs raised its forecast for 10-year Treasury yields again yesterday, which is expected to rise to 1.9 per cent by the end of 2021.
OPEC+ continues to tighten oil supply, Saudi Arabia voluntarily cut production by 1 million barrels per day in April
Yesterday, the crude oil market again heavy positive. The oil market was shocked by the decision of Saudi Arabia and its OPEC+ allies to continue to control oil supplies.
Saudi Arabia continued to voluntarily cut production by 1 million b / d in April, with the exception of Russia and Kazakhstan being allowed to open separate stoves, OPEC said in a statement. Other countries extended production levels from March to April. Russia and Kazakhstan are allowed to increase production by 130000 b / d and 20, 000 b / d respectively, taking into account seasonal consumption.
Affected by this news, international oil prices rose sharply. As of the early morning close, WTI April crude oil futures closed up $2.55, or 4.16%, at $63.83 per barrel. Brent April crude oil futures closed up $2.67, or 4.17%, at $66.74 a barrel.
Li Yunxu, a senior energy analyst at CIC Anxin Futures, told Futures Daily that the output adjustment at the ministerial meeting of the OPEC March meeting was in line with the trend of decreasing production during the year and was a small step in the OPEC + step-by-step process of increasing production. The three main reasons for the current round of stronger oil prices are the weaker-than-expected improvement in demand, the easing of US sanctions on Iran and the collective weakening of risk appetite caused by expectations of tighter liquidity.
"as OPEC + currently follows the principle of increasing production step by step and keeping a close eye on demand, managing market expectations through high-frequency meetings and policy fine-tuning has greatly reduced the risk of oversupply in the crude oil market. Market fluctuations before and after a single meeting are magnified but it is difficult to reverse the long-term trend." Li Yunxu believes that in the post-epidemic era, global demand has gradually recovered, the demand for oil for transportation has gradually increased, and the expectation of the market for the balance between supply and demand of crude oil in recent months has shown the characteristics of "tight balance in the far month, but the contradiction between supply and demand in recent months is relatively prominent." the fluctuation of crude oil price mainly reflects the expected deviation in the conversion process from far-month contract to recent-month contract.
The Prev is close to 3500 points, and the gem index is down nearly 5%.
Recent A-share weakness has fallen sharply. From February 18 to March 4, the Shanghai Composite Index, the CSI 300 and the CSI 500 have fallen 4.15%, 9.07% and 4.50%. In terms of the plate, the pro-cyclical plate and the undervalued plate are restless. Over the past 20 trading days, iron and steel, mining, real estate and other stocks have led the rise, while food and beverage, pharmaceutical biology, household appliances and other holding stocks have fallen at the top.
Us bond yields have continued to rise since February, with 10-year Treasury yields hitting a new high of 1.45 per cent since February last year, narrowing sharply to 183 basis points, causing US stocks to fall sharply that day. After several days of small correction, the yield on the 10-year treasury note soared again to 1.476% on march 3, leading to a sharp correction in technology stocks.
On March 4, A shares fell sharply across the board. As of the close, the Prev index fell 2.05% to close at 3503 points; the Shenzhen Composite Index fell 3.46% to close at 14416 points; and the gem index fell 4.87% to close at 2851 points. Analysts believe that in the long run, the change in risk appetite brought about by the impact of US bond interest rate volatility on global stock indices is still one of the important factors affecting capital market valuations, which is the main reason why funds prefer undervalued sectors.
Jia Tingting, a futures financial analyst at Shenyin Wanguo, believes that the current market style has changed significantly, and there are three main reasons for the recent weakening of the A-share market:
First, as the current domestic and foreign economies show a good momentum of recovery, the market is worried about the gradual tightening of monetary policy, the upward interest rate on US Treasuries and the more neutral open market operations of the people's Bank of China have exceeded market expectations.
Second, commodity prices continue to soar and the market is worried about inflation. Commodities have been hot since 2021, cyclical stocks have performed brightly, and rising raw material prices upstream may be transmitted to the middle and lower reaches, leading to inflation expectations. However, the current rise in commodities is mainly related to China's economic recovery, which is a phased performance. At the macro level, the entry of commodities into the "supercycle" in history is often closely related to the emergence of new growth momentum in the global economy. however, the macroeconomic background of this rally is more of a rebound from last year's trough. rather than the emergence of new forces that can support long-term sustainable development; in terms of supply and demand, there is uncertainty on both sides. The "temperature difference" between the expected and actual global economic recovery, the supply-side response and changes in the demand structure will all affect the future trend of commodity prices.
Third, there is a need for adjustment in the high valuation sector that has risen too much in the previous period, and at the same time, the stock fund also has a certain adjustment of positions and shares in the stock market, withdrawing part of the funds from the hugging stocks with more profits to the undervalued and pro-cyclical sectors.
"at present, overseas risks have intensified and the market is worried about tighter monetary policy. After a series of sharp pullbacks, the stock index still has the opportunity to oversell and rebound, but the upward space is limited. On the one hand, there is uncertainty about the strength of the follow-up economic recovery, on the other hand, the withdrawal of various positive policies may have an impact on the market. On the whole, under the prudent monetary policy, it is expected that the stock market is still dominated by slow bulls and long bulls. Technically, the trend of A-shares is weak, and there is still uncertainty in the short term. It is recommended to wait and see first and wait for a clear signal of stabilization. " Jia Tingting said.
Renni fell 8.7% more than LME non-ferrous metals fell across the board.
Last night this morning, LME non-ferrous metal futures continued to weaken sharply. Lun Nickel fell 8.77%, Lun Copper fell 5.36%, Lun Aluminum closed down 3.18%, Lun Xi closed down 2.76%, Lun Zinc closed down 2.58%, and Lun lead closed down 2.49%.
Renni plummeted as a drag on domestic non-ferrous metal futures prices. Yesterday, all the listed contracts of Shanghai and Nickel were closed to the limit. Both shanghai tin and shanghai zinc fell more than 3%, while shanghai copper and international copper both fell nearly 2%.
It is understood that recently, Qingshan Industry and Huayou Cobalt, Zhongwei shares signed a high ice nickel supply agreement. The three parties jointly agreed that Qingshan Industries will supply 60,000 tons of high matte nickel to Huayou Cobalt Industry and 40,000 tons of high matte nickel to Zhongwei shares within one year from October 2021. Castle Peak began its commissioning test in July 2020 and was successfully trial-produced by the end of 2020.
Cao Yang, a senior non-ferrous metals analyst at the East Securities Futures Derivatives Research Institute, believes that in the short term, the first batch of pilot production capacity of about 75000 metal tons, about 7 Mel 8 NPI production lines. Referring to the estimate of new NPI production lines or more than 54 lines in Indonesia in 2021, it will play a limited role in alleviating NPI overcapacity in the second half of the year. However, for the current production situation of less than 400000 metal tons of nickel salt in the world, the conversion of production will break through the supply bottleneck in the short term and have a great impact on the supply of nickel salt. In the medium and long term, the opening of the secondary nickel to the primary nickel channel means that the secondary nickel that cannot be digested in the stainless steel market can be transferred to the downstream battery, and the primary nickel supply pressure will increase in a short time.
"from the cost point of view, with reference to the cash cost of the Vale Indonesian nickel-sulfur project, it is estimated that the cash cost of producing nickel-sulfur by the pyrometallurgical process is US $7000,000 per ton, and there is room for further pressure drop. Considering the marginal cost from the point of view of gross profit margin, the incentive for the transformation from NPI production to nickel-sulfur production has emerged, but it needs to wait for production construction and commissioning. For wet projects, the competition between fire and wet projects in the upstream raw materials of nickel sulfate will be more intense in the future. From the pricing point of view, the anchors of secondary nickel and primary nickel pricing will be bound together again, and the anchor of industrial chain pricing will return to the metal value of the ore. From this point of view, the inherent price difference between primary nickel and secondary nickel will converge in the future. the long-term bottleneck of supply has shifted from smelting to the mine side. " Cao Yang said.
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