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Fully Regulated Australian Specialist Broker
Wednesday, 1 December 2021
Australian Dollar Forecast: AUD/USD Aims Higher on Third Quarter GDP Beat
Renewed Omicron Concerns Lead To Rebound By Treasuries
Following the pullback seen in the previous session, treasuries showed a strong move back to the upside during trading on Tuesday.
Bond prices gave back some ground after an early upward move but remained firmly positive. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, slid 8.7 basis points to 1.443 percent.
During the session, the ten-year yield fell as low as 1.412 percent, hitting its lowest intraday level in over two months.
Treasuries benefited from their appeal as a safe haven amid renewed concerns about the new coronavirus variant after Moderna's (MRNA) CEO said in an interview that Covid-19 vaccines are likely to be less effective against Omicron.
Moderna CEO Stephane Bancel said in an interview with the Financial Times that it would take a couple of weeks to determine how much the mutations have affected the efficacy of the vaccines currently available in the market.
"Depending on how much it dropped, we might decide on the one hand to give a higher dose of the current vaccine around the world to protect people," Bancel said. "Maybe people at very high risk, the immunocompromised, and the elderly should need a fourth dose."
Regeneron Pharmaceuticals (REGN) has also warned its Covid-19 antibody cocktail and similar drugs could be less effective against the Omicron variant.
However, treasuries pulled back off their best levels after Federal Reserve Jerome Powell suggested the central bank would discuss accelerating the pace at which it reduces its asset purchases during the next monetary policy meeting.
"At this point, the economy is very strong and inflationary pressures are higher, and it is therefore appropriate in my view to consider wrapping up the taper of our asset purchases . perhaps a few months sooner," Powell said during Congressional testimony.
In early November, the Fed announced plans to begin reducing its $120 billion in monthly bond purchases by $15 billion per month.
Powell's comments suggesting accelerated tapering comes as he told the Senate Banking Committee the recent surge in new Covid-19 cases and the emergence of the Omicron variant pose downside risks to employment and economic activity and increased uncertainty for inflation.
"Greater concerns about the virus could reduce people's willingness to work in person, which would slow progress in the labor market and intensify supply-chain disruptions," Powell said.
The potential for the intensification in supply-chain disruptions comes as Powell noted pandemic-related supply and demand imbalances have already contributed to notable price increases in some areas.
Powell also indicated the Fed should retire the word "transitory" when referring to inflation, noting the central bank views it as meaning not leaving a lasting mark on the economy rather than short-lived.
Trading on Wednesday may be impacted by reaction to reports on private sector employment and manufacturing activity.
The material has been provided by InstaForex Company - www.instaforex.com
source http://www.mt5.com/forex_news/quickview/2186381/
Crude Oil Futures Settle Sharply Lower On Demand Worries
Crude oil prices declined sharply on Tuesday amid fresh concerns about the outlook for oil demand after Moderna's CEO said existing vaccines are likely to be less effective against the new Omicron variant of the coronavirus.
The dollar's rebound into positive territory, albeit for a brief while, further weighed on oil prices.
The dollar recovered after Federal Reserve Chairman indicated the central bank could hasten a tightening of monetary policy.
Powell told the Senate Committee that he thinks reducing the pace of monthly bond buys can move more quickly than the $15 billion a month schedule announced earlier this month.
With several countries reporting cases of the new variant, is looks more countries are likely to impose stricter restrictions of movements to curb the spread of the virus.
Possibility of border closures to curb the spread of the infection is likely to result in a significant drop in demand for jet fuel.
West Texas Intermediate Crude oil futures for January ended down by $3.77 or about 5.4% at $66.18 a barrel, the lowest settlement in about three months.
WTI crude futures shed as much as 21% in November, the biggest monthly decline in about 18 months.
Brent crude futures were down $3.70 or 5.05% at $69.52 a barrel a little while ago.
Moderna's CEO Stephane Bancel expressed apprehensions about the effectiveness of existing vaccines against the newly identified Omicron variant.
Bancel said in an interview to the Financial Times that it will take a couple of weeks to determine how much the mutations have affected the efficacy of the vaccines currently available in the market.
"Depending on how much it dropped, we might decide on the one hand to give a higher dose of the current vaccine around the world to protect people. Maybe people at very high risk, the immunocompromised, and the elderly should need a fourth dose," he said.
Meanwhile, markets now expect the Organization of the Petroleum Exporting countries, Russia and their allies, together called OPEC+, will put on hold plans to add 400,000 barrels per day (bpd) of supply in January.
The material has been provided by InstaForex Company - www.instaforex.com
source http://www.mt5.com/forex_news/quickview/2186380/
How to Trade the Impact of Politics on Global Financial Markets
Tuesday, 30 November 2021
*China Manufacturing PMI 50.1 In November - NBS
China Manufacturing PMI 50.1 In November - NBS
The material has been provided by InstaForex Company - www.instaforex.com
source http://www.mt5.com/forex_news/quickview/2186289/
Japan Industrial Production Gains 1.1% In October
Industrial production in Japan was up a seasonally adjusted 1.1 percent on month in October, the Ministry of Economy, Trade and Industry said on Tuesday.
That was shy of expectations for an increase of 1.8 percent following the 5.4 percent decline in September.
On a yearly basis, industrial production retreated 4.7 percent after sinking 2.3 percent in the previous month.
Upon the release of the data, the METI adjusted its monthly assessment of industrial production to that it is pausing.
The material has been provided by InstaForex Company - www.instaforex.com
source http://www.mt5.com/forex_news/quickview/2186288/
Japan Jobless Rate Falls To 2.7% In October
The unemployment rate in Japan came in at a seasonally adjusted 2.7 percent in October, the Ministry of Internal Affairs and Communications said on Tuesday.
That was below expectations for 2.8 percent, which would have been unchanged from the September reading.
The job-to-applicant ratio was 1.15, missing forecasts for 1.17 and down from 1.16 in the previous month.
The participation rate was 62.0 percent, down from 62.3 percent a month earlier.
The material has been provided by InstaForex Company - www.instaforex.com
source http://www.mt5.com/forex_news/quickview/2186287/