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On September 11th, Futures News reported that data released by the China Futures Association on September 10th showed that, calculated unilaterally, the national futures market saw a trading volume of 1.087 billion lots and a turnover of 85.04 trillion yuan in August, representing year-on-year increases of 29.05% and 30.67%, respectively. Looking at the first eight months, the national futures markets cumulative trading volume reached 7.194 billion lots, with a cumulative turnover of 654.02 trillion yuan, representing year-on-year increases of 20.36% and 37.37%, respectively. 1. Wei Gang, chief economist at Hengtai Futures, told reporters that the August futures market saw a "simultaneous increase in both volume and price," mainly driven by three factors: First, both volume and price increased in non-ferrous metals and precious metals. Second, the crude oil and energy sectors saw a significant increase in trading volume due to geopolitical factors. Third, the chemical and agricultural futures sectors showed a strong trend and high trading activity due to cost transmission and supply-demand disturbances. Hongyuan Futures analyst Wang Jiangnan stated that, judging from the performance of various commodities, commodity futures were generally strong in August, with most major contracts closing higher. Coking coal saw a cumulative increase of over 45% in August, the energy and chemical sector generally rose, and the precious metals sector also strengthened. Looking ahead to September, Wang Jiangnan believes that the Federal Reserves monetary policy expectations are a key macroeconomic variable, with the probability of a September rate hike rising to 60%, which will suppress the performance of precious metals and risk assets. The ferrous metals sector is entering its traditional peak season, and actual demand will be the main factor determining whether the sectors performance can be sustained. Non-ferrous metals may exhibit a pattern of "structural recovery and product differentiation," maintaining high-level fluctuations in the short term. Wei Gang added that, in addition to the Federal Reserves monetary policy path, the evolution of geopolitical conflicts in the Middle East is also an important factor affecting futures market trading.On September 11th, Edmond de Rothschild Asset Management believes that the recent rise in the yen signals a broader correction of the currencys long-term undervaluation. Michael Nizad, the firms head of strategy, wrote that for many years, the yens movements have been primarily driven by the US-Japan interest rate differential and its role as a funding currency for global carry trades; now, the yen is beginning to trade more based on its own fundamentals. He wrote, "The yen may be beginning to trade as a fundamentally-driven currency again. Any pullbacks in yen cross rates should increasingly be seen as opportunities to rebuild or increase long yen positions."The Euro Stoxx 50 index fell 0.3%, German DAX futures fell 0.3%, and UK FTSE futures fell 0.1%.Market news: Next week, SpaceXs AI team will start a company from scratch and broadcast the entire process live.According to data from South Korean customs, semiconductor exports increased by 270.1% year-on-year from September 1 to 10.

GBP/USD seeks to regain 1.2300 as higher UK CPI strengthens the case for a rate hike by the Bank of England and the USD retreats

Alina Haynes

Mar 23, 2023 15:00

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During the Asian session, the GBP/USD pair attempts to reclaim the resistance level at 1.2300. Following a vertical correction, the Cable has recovered to near 1.2260 as the market anticipates that the absence of hawkish interest rate guidance from Federal Reserve (Fed) chair Jerome Powell while addressing the economy at the monetary policy meeting indicates that the Fed is close to ending its policy-tightening spell.

 

S&P500 futures have generated some gains in the Asian session following a decline on Wednesday as a result of Fed Powell's confirmation that the fight against intractable U.S. inflation will continue. Chairman of the Federal Reserve Jerome Powell has ruled out rate cuts in 2023, citing the difficulty of controlling inflation. In addition, US Treasury Secretary Janet Yellen's statement that the government "does not plan to insure all uninsured bank deposits" heightened fears of a banking sector collapse.

 

Following a recovery move, the US Dollar Index (DXY) has retreated on expectations that additional credit tightening to protect banking institutions will reduce overall demand, economic activity, and inflation. In the interim, the demand for US government bonds has increased as a result of expectations that US Janet Yellen will end further policy restrictions and reduce support for all bank deposits.

 

On the front of the United Kingdom, the Pound Sterling is likely to maintain its strength as the Bank of England (BoE) is scheduled to raise rates for the eleventh consecutive time. Governor Andrew Bailey of the Bank of England is expected to raise interest rates by 25 basis points (bp) in response to rising food and non-alcoholic beverage prices, as well as rising energy costs, which have contributed to inflation in the United Kingdom.

 

In the midst of global banking turmoil, the Bank of England's (BoE) interest rate decision will be difficult, as policymakers were divided over whether to raise rates further or maintain them at their present level.


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