Last week, a number of governments around the world reactivated curfews or other epidemic prevention measures due to the spread of mutated viruses such as Delta, as markets worried that the outbreak would hurt the economic recovery and panic spread.
About 400000 people in the UK were infected with novel coronavirus in the most recent week, a sharp increase from the previous week. But Britain has announced that it will no longer implement social alienation measures from July 19. Cases of Delta infection have covered 50 states and Washington, D.C., and some vaccinated people are still unable to withstand the attack of the mutated virus. Pfizer plans to apply for enhanced emergency needle use authorization in the United States in August.
In Asia, last week, Indonesia, Thailand, South Korea and other places reached new highs in a single day; Japan also declared a state of emergency for the fourth time, and the Tokyo Olympic Games may be held in an empty venue. There have been 57737 new cases of COVID-19 in Brazil in the last 24 hours.
In a statement after a meeting of G20 finance ministers and central bank governors in Italy over the weekend, Ms Yellen warned that the spread of Delta and other variants could threaten the economic recovery, which worried the US "very much".
Yellen also hinted at the risks associated with different steps of vaccination. Yellen said that the world is an interconnected economy, and what happens anywhere in the world will affect all countries. It is important to work together to speed up the vaccination process. Countries have done a lot to finance the purchase of vaccines in developing countries, but more and better can still be done.
Mary Daley, chairman of the San Francisco Federal Reserve, said in an interview a few days ago that the Delta strain poses a threat to the global economic recovery, and the premature announcement of victory against novel coronavirus will also become a potential risk to global economic growth. The Fed should be cautious in scaling back its monetary support to the US economy.
In the latest Fed's semi-annual monetary policy report, the Fed said that because the recovery is far from complete, the Fed promised to continue to provide strong support, and there is no need to tighten monetary policy for the time being.
In addition, late on the night of the 11th, Fosun Pharmaceutical issued an announcement and BioNTech SE ("Baiou Entai") announced that Fosun Industrial (Hong Kong) Co., Ltd., a holding subsidiary, formally signed "sales agreements" with TSMC, Hon Hai and Yongling Foundation, and Yuli Pharmaceutical (a pharmaceutical company qualified for imported vaccines). Fosun will sell a total of 10 million doses of mRNA novel coronavirus vaccine to Yuli Pharmaceutical commissioned by TSMC, Hon Hai and Yongling Foundation. The vaccines will be donated by the buyer to the disease control agencies in Taiwan for local vaccination.
Goldman Sachs insists on bullish on gold! Will precious metal prices continue to rise?
A few days ago, Goldman Sachs analyst Mikhail said in an interview that the rise in gold prices has only just begun.
Mr Mikhail said gold was repriced in the face of a sustained global recovery and moderate inflation, so the trading price was at a significant discount to current real interest rates. Assuming that the global recovery continues and inflation remains low, the discount is expected to continue, real interest rates will rise only slightly, and gold prices will rise slightly, driven by continued growth in emerging market wealth.
COMEX August gold futures closed 0.6% higher at $1810.60 an ounce on Friday, up 1.53% last week, the third consecutive week of gains and the biggest weekly gain in the last seven weeks.
It is worth noting that, according to the World Gold Council report, a number of central banks have resumed gold purchases, and big gold buyers, including India, have also opened the "buy" mode, and India's physical gold has regained its premium over the past two months.
Talking about the new epidemic, Zhang Chen, a German futures analyst, told Futures Daily that after the birth of the vaccine, the impact of the epidemic on the market has gradually diluted, the market risk appetite has gradually increased, and precious metals have begun to oscillate and adjust. But since mid-late June, the Delta mutant virus has begun to spread rapidly. In the UK, for example, the number of vaccinations per 100 people has reached 118 doses (indicating that each person has received at least one dose of the vaccine), while the number of new confirmed cases in a single day has surged again, and the market is beginning to have some doubts about the effectiveness of the vaccine. Although authorities have confirmed that several current vaccines are effective against mutated virus strains, they still need to be vigilant against this round of outbreaks, such as re-triggering a global pandemic, especially in the United States (where new confirmed cases are at a recent two-month high), which may reignite risk aversion in the market and provide some support for precious metal prices.
Gu Jiannan, an analyst at Haitong Futures, said that recently, US ten-bond yields have fallen rapidly to their lowest level since February, with falling inflation expectations and maturity premiums as the main reasons, especially maturity premiums. This reflects the market's expectation of a slowdown in economic growth, including the impact of the recent epidemic, as well as the impact of falling data such as employment and PMI. The decline in nominal interest rates also supported the short-term upside of precious metals.
"the Fed expressed expectations of a rise in medium-term interest rates at its June meeting, but with regard to the short-term taper, we believe that monetary policy tightening or easing will not occur when the economy is already overheated, but when there are no significant downside risks. So, although short-term economic data have fallen, it is still working well, and the vaccination rate in the United States is expected to reach 70% of the mass immunization standard in August, and there is room for further recovery in the service industry. The global central bank meeting at the end of August is likely to be the key time for the Fed to propose taper, when US bond yields will rise again and precious metals prices will come under pressure. " Gu Jiannan said.
Zhang Chen believes that the adjustment of the Fed's monetary policy more anchors whether the country's economic growth is potentially threatened. Therefore, we need to focus on the severity of the current outbreak in the United States. The resolution of the FOMC meeting in June stated that it had deleted the relevant language that the epidemic health and public safety incident had put pressure on the economy. If a new round of epidemic begins to spread in the United States, the Federal Reserve may postpone the expectation of guiding the normalization of monetary policy. We can focus on whether there is any change in the wording of the new round of epidemic in the latest resolution statement of the Federal Reserve's FOMC meeting released in the early morning of July 29th in Beijing. At present, precious metal prices will still be suppressed by the Fed's expectation of monetary policy normalization, it will be difficult to strengthen sharply and break through the high in early June, and it is more likely to continue the oscillating downward trend during the year.
With the arrival of a new wave of epidemic, can oil prices hit new highs in the short term?
Oil prices were on a roller coaster last week and rebounded on Friday after falling sharply on Thursday. WTI august crude oil futures closed up 2.22% on Friday, while Brent September crude oil futures closed up 1.93%. The main contract of Shanghai crude oil futures closed up 2.74% at 453.3 yuan per barrel on Friday night.
For the ups and downs of oil prices last week, Haitong futures analyst Yang an said that the core factor of last week's oil price fluctuations was the OPEC meeting. Before the OPEC meeting, the OPEC initially reached a plan to increase production by 2 million barrels per day from August to December, which once pushed oil prices to a new high, but sudden changes occurred during the meeting, and the United Arab Emirates raised objections to increase its own production reduction base. This decision shook the interests of other members of the OPEC alliance and triggered strong dissatisfaction among Saudi Arabia, Russia, and other OPEC members. Investor panic began to spread, oil prices fell sharply, as the demand-side data was strong and the US EIA weekly report showed that inventories continued to fall sharply, the supply side remained significantly tight, and the market realized that although there were differences within OPEC, it was unlikely that a supply-side war would break out again, investor sentiment gradually stabilized and oil prices rebounded again.
Li Jie, a senior researcher at Jianxin Futures Energy and Chemical Industry, also believes that the market is worried that the actions of the United Arab Emirates may lead to its withdrawal from OPEC, the weakening of OPEC cohesion in the medium to long term, and even the emergence of the next price war. Oil prices are under pressure. However, OPEC's demand is still oil prices, and the price war will deal a huge blow to the financial revenue of OPEC member countries. The implementation rate of OPEC production reduction has increased significantly since May 2020. And shale oil production cannot increase significantly this year, OPEC has significantly increased control over the supply side, and it would be unwise to split again in an environment of high oil prices. The trend of demand-side recovery is still clear, and oil prices naturally rebounded again.
In terms of Fed policy, Yang an said that based on the obvious recovery of the US economy in the second quarter, the early market generally believed that the United States would tighten liquidity ahead of time, but the Fed continued to appease the market, repeatedly emphasizing that ensuring employment and economic growth recovery was the preferred goal, which also eased the market's previous liquidity tightening concerns. The recent weakness of the dollar has also indirectly increased market risk appetite.
Looking to the future, Li Jie said that OPEC will not increase production until the new production reduction policy is introduced. The current policy will accelerate the de-stocking of the market and provide obvious support for oil prices, which are still expected to hit 80 US dollars per barrel. It is worth noting that recently, the United States has repeatedly said that it is promoting OPEC negotiations and reaching a compromise solution, and it is expected that the new OPEC agreement will not keep the market waiting for too long.
"based on the available supply and demand data, the supply shortage in the crude oil market has been determined, and it is very difficult to change fundamentally in the short term. If the existing supply pattern is maintained before August and the macro level remains loose, it can be said that the future oil price burst of 80 US dollars per barrel is a high probability event." Yang an said.
