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Futures Commentary by Everbright Futures: 1. Overnight, gold prices initially declined before rebounding. Spot gold recovered to $4,500/ounce, up 0.08%, while SHFE gold rose 1.03%. US initial jobless claims data was released, showing 206,000 claims this week, lower than the expected 210,000, indicating resilience in the job market. After a significant rise in gold prices the previous day, some profit-taking led to intraday volatility. The US Treasury expanded its long-term bond repurchase program, causing yields on long-term US Treasury bonds to rise again. US Treasury Secretary Bessenter stated that a single long-term bond repurchase could exceed $4 billion, emphasizing the Treasurys powerful toolbox, which further eased market concerns. However, expanding long-term bond repurchases cannot solve the problem of high US fiscal debt; the policy itself is a support measure after the bond market crash, and the market may gradually return to rationality. Short-term gold volatility has intensified. 2. On the geopolitical front, according to Xinhua News Agency, the US military has quietly established a shipping channel in and out of the Strait of Hormuz, ensuring that "millions of barrels" of oil are transported out of the Strait of Hormuz daily. This operation has been ongoing for several weeks. The rapidly growing US Treasury bond, concerns about stagflation, the stalemate in US-Iran negotiations, and the Federal Reserves indecisiveness regarding a September rate hike have fueled safe-haven demand for gold, potentially driving gold prices to maintain a relatively strong upward trend.The UKs July public sector net borrowing and seasonally adjusted retail sales figures will be released in ten minutes.On August 21, the Chongqing Municipal Peoples Government issued the "Chongqing Municipal 15th Five-Year Plan for the Construction of a Beautiful Chongqing (2026-2030)," which proposes to promote the low-carbon upgrading of transportation equipment. The plan calls for actively promoting new energy vehicles, advancing the electrification of public sector vehicles, and promoting the application of pure electric and hydrogen fuel cell commercial vehicles. It also calls for the construction of zero-carbon transportation corridors, establishing "zero-carbon corridors," implementing the scrapping and replacement of old operating vessels, and promoting new energy and clean energy-powered vessels. Furthermore, it aims to promote energy-saving and carbon-reducing retrofits of existing transportation infrastructure and construct a number of low-carbon stations, wharves, and highway service areas.Market news: Members of the SK Hynix South Korean labor union will vote on the provisional wages and labor agreement for 2026 from August 24 to 25.On August 21, analysts at Daiwa Capital Markets noted in a report that European Central Bank policymakers may have been somewhat relieved so far by the relatively limited indirect impact of the energy shock on other commodity prices. "Of course, the pressure is mainly concentrated in the early stages of the production chain and in industries most vulnerable to oil and gas prices," they stated. However, with wholesale oil and gas prices rising again in recent weeks, the risk of further exacerbation of the indirect transmission effect and a second round of price impacts lasting longer is also increasing.

Fears of Stagflation Caused by Tightening Policies Increase As Asian Stocks Fluctuate

Haiden Holmes

Jun 15, 2022 11:11

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Asia-Pacific stocks were mixed this morning, Wednesday. Ahead of a U.S. Federal Reserve meeting that is likely to provide strong tightening decisions, U.S. share markets continued to decline.


Nikkei 225 dropped 0.67 percent at 10:49 PM ET (2:49 AM GMT).


The KOSPI decreased by 1.21 percent.


Australia's ASX 200 index declined 0.38 percent.


Hong Kong's Hang Seng gained 1.14 percent .


Shenzhen Component rose 0.49 percent and Shanghai Composite rose 0.90 percent.


China's industrial output climbed by 0.7% year-over-year in May, according to statistics released on Wednesday, which was marginally higher than market estimates. In April, a decrease of 2.9% was seen, whereas Investing.com had expected a decrease of 0.7%.


Nonetheless, as Beijing saw clusters of COVID-19 breakouts, the city's officials warned on Tuesday that the city was in a "race against time," heightening concerns that the reinstatement of harsh restrictions might harm the city's economy and global supply chain.


The S&P 500 finished down for the fifth consecutive day due to concerns that Fed measures to tighten monetary policy to calm raging inflation might lead to stagflation.


Investors are now betting on aggressive interest rate rises, such as 75 basis points from the Fed, which would be the largest increase since 1004


Steve Englander, director of global G10 FX research at Standard Chartered Bank, wrote in a note, "Inflation is front and center in the headlines and asset markets, and few are voicing worry about over tightening the monetary policy."

After their greatest decline in decades, Treasuries stabilized. Two-year rates recovered after reaching a level not seen since 2007, while 10-year yields retreated from around 3.5 percent.


Barbara Ann Bernard, chief investment officer of Wincrest Capital Ltd., told Bloomberg, "The sooner they are explicit about how rapidly they would increase interest rates and what amount of inflation they consider acceptable, the sooner the markets will settle down."


The Bank of England will announce its policy decision on Thursday, while the Bank of Japan will announce its decision on Friday.


Bitcoin's value on the cryptocurrency market steadied at $22,000.


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