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March 12 - According to foreign media reports, Saudi Arabias largest oil shipping company is chartering tankers at extremely high freight rates, with a massive fleet heading to the Red Sea to load the countrys crude oil, bypassing the Strait of Hormuz. According to charter lists, Saudi National Shipping Company (Bahri) has recently chartered at least six Very Large Crude Carriers (VLCCs) to transport crude oil from the western port of Yanbu. A shipbroker and two shipowners believe the actual scale of the charterings may be even larger, with more deals likely to occur in the coming days. With exports from the Strait of Hormuz effectively halted, Saudi Arabia is accelerating efforts to divert supplies to the Red Sea via a pipeline. Many of the charter deals Bahri has secured are priced at 450 Worldscale points, equivalent to over $450,000 per day. Before the war, the industry benchmark freight rate never exceeded $300,000 per day.On March 12th, a symposium on the work of the Beijing Municipal Economic and Information Technology System was held on March 11th. The meeting emphasized that this year marks the beginning of the 15th Five-Year Plan, and the economic and information technology system must further strengthen its sense of responsibility and earnestly and diligently implement all tasks to the highest standards. The meeting stressed the need to: ensure stable growth, expand the positive momentum of the industrial economy, and strive to achieve a strong start in the first quarter and meet the annual targets; ensure the planning and implementation of major projects to solidify the hard support for industrial development; strengthen the leading role of enterprises in innovation and promote the construction of industrial innovation centers and pilot-scale testing ecosystems; focus on forward-looking planning for future industries, strengthen factor guarantees, and cultivate new economic growth points; promote industrial upgrading and achieve intelligent and green development; leverage artificial intelligence to activate new vitality in the development of the digital economy; promote the construction of the "six chains and five clusters" to deepen industrial synergy in the Beijing-Tianjin-Hebei region; and improve enterprise services to create a first-class business environment.A spokesperson for the European Commission stated that a proposal has been made to send a delegation to Ukraine to inspect the Friendship Pipeline.On March 12th, according to the Guangdong Provincial Development and Reform Commission and the Guangdong Provincial Price Monitoring Center, the average pig-to-grain price ratio in Guangdong Province was 4.67:1 on March 11th, entering the first-level warning range for excessive price declines set by the "Guangdong Provincial Plan for Improving the Governments Pork Reserve Regulation Mechanism and Ensuring the Supply and Price Stability of the Pork Market," jointly issued by the Guangdong Provincial Development and Reform Commission and five other departments. Guangdong Province will initiate the purchase and storage of frozen pork reserves to promote the stable operation of the live pig market. It is recommended that farms (households) make scientific production and operation decisions to maintain overall stability in pig production capacity and a normal pace of slaughtering and restocking.On March 12th, Monex Europe analysts stated in a report that the US dollar is likely to continue to receive support in the short term unless there are credible signs of de-escalation in the Iran-Iraq conflict. The conflict is driving safe-haven flows into the dollar. The war has led to higher oil prices and reinforced market expectations that the Federal Reserve will maintain its tight monetary policy for longer than previously anticipated, thus supporting the dollar. However, in the longer term, the market "underestimates the potential extent of US policy easing after energy price concerns begin to subside, which also means the dollar faces downside risks."

Gold Price Forecast: XAU / USD flirts with $1,850 support convergence; Fed's Powell, US NFP in focus

Daniel Rogers

Mar 06, 2023 14:40

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Gold price (XAU/USD) remains mostly illiquid around $1,855 as traders brace for the key data/events during early Monday in Europe. Adding filters to the XAU/USD movements could be the muddled headlines from China, as well as the US Dollar’s inaction despite a pullback in the Treasury bond yields.

 

The National Development and Reform Commission of the People's Republic of China (NDRC) recently stated that it "Will further discharge the potential for consumption," adding that China's economy is consistently improving, as reported by Reuters. Earlier in the day, market sentiment deteriorated after China's National People's Congress (NPC) annual session appeared to be a gloomy event due to its development target and geopolitical concerns.

 

Elsewhere, San Francisco Federal Reserve Bank President Mary Daly highlighted the significance of incoming data to determine how high the rates can go. Previously, Atlanta Fed President Raphael Bostic renewed concerns about the Fed’s policy pivot while Federal Reserve published a semi-annual Monetary Policy Report on Friday wherein it plainly said, “Ongoing increases in the Fed funds rate target are necessary.” In addition, the report stated that the Fed is committed to restoring inflation to 2%.

 

It should be noted that US 10-year Treasury bond yields rose to their highest levels since November 2022 in the previous week before falling to 3.95% by the end of Friday and circling back to the same level at the latest. More significantly, US two-year bond coupons increased to levels not seen since 2008 before retracting to 4.85% as of press time. That said, the S&P 500 Futures print mild gains, mirroring Wall Street’s movements amid a light sluggish start to the key week, whereas the US Dollar Index (DXY) remains depressed around 104.45, down 0.05% intraday by the press time.

 

Moving ahead, Gold traders may witness further inaction in the market as traders remain cautious before the key events including Fed Chair Jerome Powell’s Testimony, China’s inflation data and Friday’s US employment report for February.


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