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Japans overtime pay rose 1.2% year-on-year in November, up from 1.5% in the previous month.Japans November labor cash income rose 0.5% year-on-year, below the expected 2.30% and the previous figure revised from 2.60% to 2.50%.1. The three major U.S. stock indexes closed mixed. The Dow Jones Industrial Average fell 0.94% to 48,996.08 points, the S&P 500 fell 0.34% to 6,920.93 points, and the Nasdaq Composite rose 0.16% to 23,584.27 points. Caterpillar fell more than 4%, and Nike fell more than 3%, leading the decline in the Dow Jones. The Wind U.S. Tech Big Seven Index rose 0.56%, with Google rising more than 2%, Microsoft rising more than 1%, and Intel rising more than 6%. Most Chinese concept stocks fell, with Melco Resorts & Entertainment falling more than 7% and Full Truck Alliance falling more than 7%. 2. European stock indices closed mixed. The German DAX rose 0.92% to 25,122.26 points, the French CAC40 fell 0.04% to 8,233.92 points, and the UK FTSE 100 fell 0.74% to 10,048.21 points. German stocks rose, benefiting from strong infrastructure investment and the industrial sector. French stocks were dragged down by declines in luxury goods stocks such as Kering and LVMH. UK stocks fell due to a pullback in energy and metal stocks, coupled with expectations that the Bank of England would maintain high interest rates. 3. US Treasury yields were mixed. The 2-year Treasury yield rose 1.45 basis points to 3.470%, the 3-year yield rose 0.28 basis points to 3.525%, the 5-year yield fell 0.52 basis points to 3.703%, the 10-year yield fell 2.16 basis points to 4.147%, and the 30-year yield fell 3.17 basis points to 4.829%. 4. The WTI crude oil futures contract closed down 1.28% at $56.4 per barrel; the Brent crude oil futures contract fell 0.51% to $60.39 per barrel. 5. International precious metals futures generally closed lower. COMEX gold futures fell 0.65% to $4467.1 per ounce, and COMEX silver futures fell 3.77% to $77.98 per ounce. 6. Most London base metals fell. LME tin rose 0.34% to $44650.0 per tonne, LME lead fell 0.60% to $2058.5 per tonne, LME aluminum fell 1.60% to $3083.5 per tonne, LME zinc fell 2.63% to $3160.0 per tonne, LME copper fell 2.93% to $12866.0 per tonne, and LME nickel fell 4.21% to $17655.0 per tonne.According to US financial media Semafor: US Treasury Secretary Bessant, US Commerce Secretary Lutnick, and US Energy Secretary Wright will attend the Davos World Economic Forum together with US President Trump.U.S. Republican Senator Lindsey Graham: Following my meeting with President Trump on Wednesday, I have approved the bipartisan Russia sanctions bill.

Forecast for Silver Price: XAG/USD to fall to $25.00 as supply concerns subside and risk aversion increases

Daniel Rogers

Apr 20, 2023 13:46

 截屏2022-06-06 下午5.54.42.png

 

During the early hours of Thursday, the price of silver (XAG / USD) falls to $25.20, a new intraday low. In doing so, the precious metal records its first daily loss in three days, as concerns of a supply crisis subside and a risk-averse mood prevails.

 

Wednesday, Reuters cited the Silver Institute's annual prognosis report, which stated that global silver demand increased by 18% to a record high of 1.24 billion ounces last year, resulting in a massive supply deficit. According to the report, "The Silver market was undersupplied by 237.7 million ounces in 2022, the institute said in its most recent World Silver Survey, calling this 'possibly the largest deficit on record'."

 

On the other hand, higher inflation indicators from the United Kingdom, the Eurozone, and the United States, along with hawkish comments from the Bank of England (BoE), European Central Bank (ECB), and Federal Reserve (Fed), increase the likelihood of rate increases and dampen investor sentiment. John Williams, president of the Federal Reserve Bank of New York, is one of the Fed's most recent policy advocates. In May, he voiced support for an interest rate hike of 0.25 percentage points and said, "We will use monetary policy tools to restore price stability." Before him, the president of the Federal Reserve Bank of Chicago, Austan Goolsbee, highlighted the strength of the credit market as one of the most important catalysts to monitor prior to the next Fed monetary policy meeting.

 

With this, market participants increase their wagers on the central bank's 0.25 percentage point rate hike in May to at least 85 percent and reduce the likelihood of a rate cut in 2023.

 

It should be noted that the UK's allegations of China's hidden motive to clamp down on Western infrastructure and the US House China Committee's discussion on the Taiwan invasion scenario rekindle the West vs. China conflict narrative and impact on sentiment. On the same line are the concerns surrounding the probable drag on the US debt ceiling decision as a result of US President Joe Biden's reluctance to raise debt limits.

 

In addition, Reuters reported that US consumers are falling behind on their credit card and loan payments as the economy weakens, which also puts pressure on the XAG/USD exchange rate.

 

In this context, S&P 500 Futures have recorded their first daily loss in four days, falling 0.25 percent intraday to 4,168 as of press time. However, the US 10-year and 2-year Treasury bond yields hover around 3.60 percent and 4.25 percent, respectively, after reaching new monthly highs the day before. The US Dollar Index (DXY) fluctuates around 102.000 after rectifying its adverse bias from the previous day.

 

Considering the future, the recent emphasis on qualitative news highlights them as the most important risk indicator. Nonetheless, the US Weekly Initial Jobless Claims, Philadelphia Fed Manufacturing Survey, and Existing Home Sales should be monitored for fresh impulses.


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