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The onshore yuan closed at 6.7817 against the US dollar at 16:30 on May 27, up 53 points from the previous trading day.On May 27th, local time, the Ukrainian State Electricity Company announced that, as of that morning, several regions in Ukraine experienced civilian power outages due to a new round of drone and artillery attacks by Russia. According to the company, new power outages were reported in Donetsk Oblast, Dnipropetrovsk Oblast, Zaporizhzhia Oblast, Sumy Oblast, and Kharkiv Oblast. Currently, workers are conducting comprehensive power restoration and repair operations in areas where safety conditions have been met.On May 27th, the European Central Bank (ECB) warned that financial markets face the risk of a sudden and sharp correction, and investors may be underestimating a range of threats, including a war with Iran. In its semi-annual Financial Stability Review, the ECB stated on Wednesday that despite recent market adjustments, asset prices remain "high" compared to historical levels. The report noted that downside risks at the geopolitical, fiscal, and macro-financial levels appear to be "underestimated" by the market. ECB Vice President Guindos stated, "This makes the market susceptible to sharp repricing. Once financial markets experience volatility, non-bank financial institutions could amplify this shock." The ECB emphasized that the Eurozone sovereign bond market is currently operating "orderly" with narrow spreads, but warned that the rising proportion of price-sensitive investors such as hedge funds, and fiscal sustainability issues in some countries, including the United States, could trigger or amplify sudden repricing of risky assets. These risks mean that controlling fiscal spending is becoming increasingly important. The ECB also warned of financial stability risks in the private lending market.South Koreas Ministry of Foreign Affairs: It will summon the Iranian ambassador to share the findings of its investigation.ECB Vice President Guindos: We have been telling banks to increase their investment in cybersecurity to address the risks of artificial intelligence.

Gold Price Forecast: XAU/USD maintains rises above $1,900; downside appears bolstered by robust yields

Alina Haynes

Jan 18, 2023 14:56

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During the Asian session, the gold price (XAU/USD) exhibits a sideways auction profile above the round-level support of $1,900.00. The precious metal is able to maintain a price above $1,900.00. Tom Barkin, president of the Richmond Federal Reserve (Fed) Bank, made hawkish remarks that boosted US Treasury yields. However, the downside appears to be supported by the rising yields.

 

According to Fed officials, the economy has passed the inflation peak, but we are still far from the Consumer Price Index median (CPI). Therefore, a premature retreat from interest rate hikes is undesirable. 

 

Meanwhile, market volatility is increasing as risk-perceived assets lose traction. Futures on the S&P 500 have accelerated their losses, indicating that the risk-aversion theme is gaining traction. A drop in market participants' risk appetite has impacted the demand for US government bonds. This has caused 10-year US Treasury yields to rise above 3.54 percent.

 

In the future, investors will pay close attention to the United States Producer Price Index (PPI) (December) and monthly Retail Sales (December) statistics. According to estimates, the headline PPI (Dec) is anticipated to decline to 6.8%, while the core PPI is anticipated to decline to 5.9%. In addition, monthly Retail Sales statistics may indicate a 0.1% growth as opposed to the 0.6% decrease previously reported. A rise in Retail Sales statistics could increase the likelihood of a rebound in inflation estimates.


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