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ECB Governing Council member Dorenz: The inflation situation has not yet been resolved, and there are sufficient reasons to raise interest rates in September. 1. Indias Ministry of Food stated in a press release, "The government has observed that in some cases, sugar sold by sugar mills at the beginning of the month is only picked up or shipped by buyers at the end of the month. This practice exacerbates artificial shortages in the market. To address this issue and ensure timely access to the market, the government has decided to implement a bi-weekly sugar allocation system starting in September, replacing the existing monthly quota system." 2. On August 28, the Ministry of Agriculture and Rural Affairs held a ministerial meeting, emphasizing the need to focus on autumn grain field management and agricultural disaster prevention, mitigation, and relief, striving for a bumper harvest and ensuring the achievement of the target of approximately 1.4 trillion jin (600 million tons) of grain output. The meeting also stressed the importance of strengthening and improving macro-control of the agricultural industry, focusing on stabilizing the production of livestock products such as hogs, and promoting reasonable prices. 3. The U.S. Department of Agriculture (USDA) released data showing that private exporters reported selling 182,000 tons of soybeans to China, 226,000 tons of soybeans to unknown destinations, 100,000 tons of soybean meal to Germany, and 100,000 tons of soybean meal to the Netherlands, all for delivery in the 2026/2027 marketing year. 4. Fed Chair Hamack: The Fed should raise interest rates; waiting will only bring pain. He does not believe financial conditions are tight. 5. Fed Chair Warsh warned that inflation has not shown a meaningful slowdown and said policymakers must be confident that inflation is moving in the right direction, otherwise the central bank "has more work to do." Warsh reiterated that the Fed will bring inflation back to its 2% target. He stated that this is a clear and fixed target. Warsh also stated that current financial conditions are not restrictive, and interest rates are the Feds "primary tool" for fulfilling its mandate. 6. US short-term interest rate futures fell, with market pricing indicating increased bets on a Fed rate hike following Warshs remarks. 7. Fed Chair Warsh stated, "Although the PCE and CPI data released this summer were better than expected, they did not convince me that the underlying trend of inflation has shown a meaningful improvement." "Market prices reflect the markets belief that we will achieve price stability. I can assure you that the markets judgment is correct." Warsh then stated that with inflation above 2%, the Feds "primary focus right now should be prices." 8. According to the Associated Press, Federal Reserve Chairman Warsh said on Friday that inflation remains too high. He hinted that the central bank may need to raise interest rates in the coming months to reduce inflation. This statement more clearly reflects his view on the economic situation than his previous remarks.On August 28th, George Catrambo, Head of Fixed Income for the Americas at DWS, said during a speech by Federal Reserve Chairman Warsh, "Whatever you call it, this is exactly the forward guidance the market was expecting at the July Federal Open Market Committee (FOMC) meeting." "Im listening to a Fed chairman who is likely to tighten monetary policy. Hes trying to maintain a balance in his speech, but the Fed will most likely raise rates."According to documents from the Hong Kong Stock Exchange, Nanjing Nuoling Biotechnology Co., Ltd. has submitted a listing application to the Hong Kong Stock Exchange.On August 28th, Omar Sharif, an analyst at inflation research firm Inflation Insights, stated, "Federal Reserve Chairman Warsh gave the market what it wanted: a more detailed explanation of his views on current economic data, especially inflation data. Of course, he didnt reveal any potential future policy actions. In that sense, it seems to be a win-win situation for both Warsh and the market."

Copper Rises Ahead of The Fed on China COVID Expectations

Aria Thomas

Nov 02, 2022 14:38

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On Wednesday, gold prices held on to recent gains as the dollar stabilized prior to the conclusion of a Federal Reserve meeting, while copper prices gained on rumors that China may relax its zero-COVID policy.


Gold spot prices were unchanged at $1,648.23 per ounce, whilst gold futures prices rose 0.1% to $1,650.80 per ounce. Both assets rebounded from 10-day lows on Tuesday as the dollar halted its recent advance.


As the dollar index held around 111 on Wednesday, attention switched to the conclusion of a Federal Reserve meeting. Even though it is widely expected that the bank will raise interest rates by 75 basis points (bps), the markets will be on the lookout for any hints from the Federal Reserve as to when it may temper its hawkish posture.


Nonetheless, impressive U.S. economic data presented this week suggested that the central bank likely has ample room to continue rapidly increasing interest rates, a scenario that is adverse for gold.


As a result of the Federal Reserve's decision to raise interest rates, the opportunity cost of holding the non-yielding yellow metal increased as a result of the increase in interest rates.


This year, rising interest rates also affected the metals business.


As a majority of the world's countries struggle with rising inflation, the Bank of England is poised to boost interest rates by 75 basis points on Thursday.


Copper prices stabilized among industrial metals following Tuesday's roughly 3% surge. The price of the precious metal increased due to unfounded rumors that China planned to soften its strict zero-COVID policy, which is at the heart of the country's economic woes this year.


Copper futures increased modestly on Wednesday to $3.4677 per pound. In response to the rumors, Chinese markets and oil prices also increased.


This year, copper prices plummeted as Chinese economic growth slowed, lowering the country's need for the mineral. China is the top copper importer in the world.


Given that Beijing has undertaken a number of economic stimulative measures, it is expected that the relaxing of COVID laws in the country will stimulate a rapid economic recovery.


Given China's market dominance, this could result in huge commodity price hikes. However, Beijing did not issue an official remark on the subject. President Xi Jinping has reaffirmed China's commitment to the zero-COVID strategy.


Copper must also contend with the global economic slump brought on by inflation and interest rate increases. However, supply constraints are projected to favor the red metal in the medium term.

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