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Japanese Prime Minister Sanae Takaichi: If the ruling coalition fails to win a majority of seats in the House of Representatives election, I will resign immediately.The main fuel oil contract surged 6.00% intraday, currently trading at 2770.00 yuan/ton.On January 26, Hong Kong Chief Executive John Lee stated at the Asian Financial Forum that Hong Kongs RMB bond market remains active, with its market size expected to exceed RMB 1 trillion in 2024 and maintain this level in 2025. As Hong Kong serves as a gateway connecting the world with the prosperity and development of the mainland, Lee emphasized that Hong Kong will continue to explore measures to deepen the interconnectivity between the mainland and Hong Kongs financial markets, including launching offshore government bond futures in Hong Kong and expanding interest rate derivatives business under the Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect programs.Hong Kong-listed Jiufang Zhitou Holdings (09636.HK) continued to decline in the afternoon, with the current drop widening to 30%.1. Precious Metals Market: Spot silver briefly broke through $109/oz, rising over $5 intraday, a gain of nearly 6%; spot gold broke through the $5000/oz mark for the first time in history. 2. Exchange Regulation: The Shanghai Futures Exchange discovered that 16 clients in 3 groups were suspected of failing to declare their actual control relationships in tin and silver futures trading, and decided to impose regulatory measures on these clients, restricting them from opening new positions for one month and restricting withdrawals. 3. Position and Inventory Data: CFTC data shows that as of the week ending January 20, COMEX gold speculative net long positions increased by 2614 contracts, while silver net long positions decreased by 3719 contracts. As of January 23, COMEX silver inventories decreased significantly by 396 tons. 4. Macroeconomic and Geopolitical Dynamics: Market news indicates that after Trump withdrew his tariff threats against some European countries, the EU postponed retaliatory tariffs; a US aircraft carrier entered a sensitive area, increasing the probability of a US government shutdown before the end of January; Trump may announce the new Federal Reserve Chairman soon. 5. Forexlives view: Gold breaking through $5,000 is a significant milestone. The anticipated profit-taking did not materialize, and coupled with global instability, this means the precious metals market is in a rare period of momentum trading. 6. Saxo Banks view: Momentum has become a crucial component of the market, with FOMO (fear of missing out) playing a significant role; prices are entering uncharted territory. 7. Metals Focuss view: Continued tariff concerns and tight physical liquidity in the London market will provide additional support for silver. 8. Xinhu Futures view: In the short term, market focus may shift from geopolitics to the announcement of the Fed Chair and the risk of a US government shutdown; in the medium to long term, continued central bank gold purchases combined with the de-dollarization trend will continue to support the upward movement of precious metals. 9. Everbright Futures view: Although US economic data makes a January rate cut unlikely, its impact is weakened by market expectations. Geopolitical factors such as the Greenland situation have shaken market confidence in the dollar, becoming a strong driver for gold. Golds rise opens up space for silver, but the rapid decline in the gold-silver ratio indicates increased divergence, and high volatility is expected to persist in the short term. (The above content is compiled from publicly available market data and is for reference only. It does not constitute investment advice.)

NZD/USD falls toward 0.6100 as Vice President Joe Biden aims to raise taxes on the rich and China's CPI is in focus

Daniel Rogers

Mar 09, 2023 14:01

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The NZD/USD pair was unable to recapture the crucial resistance level of 0.6120 during the Asian session. The New Zealand dollar is falling toward the round-number support of 0.6100 as the news that US President Joe Biden has proposed increasing the corporate tax rate from 21% to 28% has bolstered bearish market sentiment.

 

US Vice President Joseph Biden proposes a 25% tax on billionaires and steep levies on affluent investors. He has also proposed a 39.6% tax on incomes over $400,000 in the budget. The United States' fiscal policy appears to be kicking in to prevent the Consumer Price Index (CPI) from flexing its muscles further. By diminishing market liquidity, higher taxes may have a significant effect on consumer spending.

 

As a consequence of the news that wealthy Americans will be taxed more heavily, the S&P 500 futures are also under duress. The futures for the 500 largest U.S. stocks are falling during the Asian session. It appears that market participants will use Wednesday's insignificant recovery move as a selling opportunity.

 

In response to Vice President Biden's proposal for higher tariffs, the US Dollar Index (DXY) may experience some upward movement. The USD Index is presently hovering above 105.20 and is anticipated to resume its upward trend.

 

This week, the US Nonfarm Payrolls (NFP) data will remain in the spotlight. According to the consensus, the US economy added 203K new employment in February, which is less than the previous record-breaking release of 517K. The unemployment rate is anticipated to remain unchanged at 3.4%. Investors are concerned about the Average Hourly Earnings data, which is expected to increase to 4.8% on an annual basis from the previous release of 4.4%. An increase in the labor cost index will increase the likelihood of the Federal Reserve raising interest rates more significantly (Fed).

 

Investors are keeping an eye on China's Consumer Price Index (CPI) data. China's CPI is anticipated to decrease to 1.9% from the previous annual rate of 2.1%. The monthly CPI is expected to decrease to 0.2% from the previous release of 0.8%. If inflation declines, the Chinese government and the People's Bank of China (PBOC) may be forced to infuse more liquidity into the economy.

 

Notably, New Zealand is one of China's primary trading partners, and an increase in liquidity in the Chinese economy will increase demand for the New Zealand Dollar.


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