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On June 18th, OCBC Group Research analysts stated in a report that the Central Bank of Indonesia and the Central Bank of the Philippines are likely to raise interest rates by 25 basis points each later on Thursday. The Federal Reserves decision to maintain interest rates likely indicates that these Southeast Asian central banks believe short-term capital flow volatility will persist, and in this context, their policy decisions will remain primarily driven by inflation and macroeconomic stability factors. OCBC noted that the expected rate hike by the Central Bank of Indonesia will be consistent with its policy objective of preventing further deterioration of market sentiment.On June 18th, Federal Reserve officials hinted on Wednesday that they may soon need to raise interest rates rather than cut them, a sharp shift in thinking against the backdrop of rapidly rising inflation. Krishna Guha, an analyst at Evercore ISI, said that the decline in energy prices could provide some relief in the coming months. However, he warned that the interest rate outlook has decoupled from oil prices, suggesting a deeper uncertainty about whether underlying inflation will cool enough that the Fed will not ultimately have to raise rates. Guha stated that in addition to energy, two other pressures remain: the continued transmission effects of tariffs and the cost spillover from the investment boom in artificial intelligence infrastructure. Claudia Sam, chief economist at New Century Advisors and a former Fed economist, said that she has not yet seen the conditions that would typically prompt the Fed to respond to supply-driven inflation—an overheated labor market or a loss of anchor in inflation expectations. But she acknowledged that the case for action is accumulating. “I can understand the view that the Fed should be prepared to intervene and raise rates if things worsen,” she said. The Fed may act faster than it did during the pandemic when inflation surged because “they are already having this debate.”According to TASS, the local mayor said that drones attacked a Moscow oil refinery.On June 18th, at the opening of the 2026 Hong Kong Auto Show, Geely Remote New Energy Commercial Vehicle and Cao Cao Mobility (02643.HK) reached a strategic cooperation agreement to jointly promote the large-scale deployment of Robovans. According to the plan, by 2030, the two companies will have deployed a total of 100,000 Geely Remote Robovan Prodigy T6 vehicles. Guided by the "One Geely" strategy, the two companies will accelerate the construction of an intelligent logistics network for the AI era through deep collaboration in the operation of new energy commercial vehicles and logistics scenarios, jointly creating a comprehensive green and intelligent transportation new energy ecosystem solution.On June 18, Li Chao, Deputy Director of the Policy Research Office and Spokesperson of the National Development and Reform Commission, stated at a press conference that achieving carbon peaking and carbon neutrality is not only an inevitable requirement for achieving high-quality development and promoting modernization in harmony with nature, but also a solemn commitment my country, as a responsible major power, has made to the international community. We will work with relevant departments and local governments to simultaneously address both existing and new carbon emissions. Regarding existing carbon emissions, we will focus on nine key industries, including steel, electrolytic aluminum, cement, flat glass, oil refining, ethylene, synthetic ammonia, methanol, and coal-fired power, implementing a three-year action plan for energy conservation and carbon reduction transformation, creating more space for new projects in high-energy-consuming and high-polluting sectors to implement carbon emission replacement at the same or reduced level. Regarding new carbon emissions, we will promote the optimization of energy structure in new projects, actively develop new models such as green direct supply, increase the proportion of non-fossil energy use, and reduce carbon emission levels. Next, we will encourage local governments to expand investment in zero-carbon industrial parks and zero-carbon transportation corridors, accelerate the realization of new clean energy power generation covering the entire societys new electricity demand, and continuously cultivate new drivers for green and low-carbon development.

Gold falls to 9-month lows while the dollar climbs to 20-year peaks

Skylar Williams

Jul 06, 2022 11:09

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The Fed just swallows gold bulls for lunch.


Tuesday, gold prices plunged 2 percent to $1,700 territory for the second time in less than a week as the dollar climbed to two-decade highs, delivering a devastating blow to longs invested in the yellow metal.


The Dollar Index, which measures the dollar to six major currencies, climbed by 1.5 percent to reach 106.50 points, the highest level since December 2002. Since November of last year, the dollar has climbed steadily on projections of quick rate hikes by the Federal Reserve, which have barely begun to materialize.


Carsten Fritsch, an analyst at Commerzbank, observed, "The strong U.S. dollar has caused a further reduction in the price of gold, culminating in a noteworthy decrease below $1,800 per troy ounce."


Tuesday's transaction on the New York Comex saw August gold futures slide $37.60, or 2.1 percent, to $1,769.90 per ounce. The session low was $1,763.15, the lowest level since $1,758 in October 2021.


It was the second time gold has plunged to $1,700 after plummeting to $1,781 on Friday.


India and China alternate as the world's major buyers of gold, and any policy moves taken by either nation regarding the precious metal are likely to send market players reeling.


India, the world's second-largest consumer of bullion, increased its basic import duty on gold to 12.5 percent from 7.5 percent on Friday, which would weaken demand ahead of third-quarter festivities that traditionally result in gold purchases.


Traders also credited gold's malaise to the Federal Reserve's incessant chatter about rate hikes, which was matched by the greatest increase in 28 years by the central bank in June in an effort to control inflation increasing at the fastest rate in four decades.


The Fed's rate hammer has been pummeling gold bulls for weeks, as central bank policymakers have shown no desire to tame the inflation beast.


During the outbreak, the Fed held interest rates between zero and 0.25 percent for two years before boosting them in March of this year. The central bank has declared that it will continue to hike interest rates until inflation, which has hit 40-year highs of more than 8 percent yearly, returns to its objective rate of 2 percent annually.


In April, the Fed lifted rates by 25 basis points, or a quarter-percentage point, and in May, by 50 basis points, or a half-percentage point. In June, it imposed a 75-basis-point, or three-quarters-of-a-percentage-point, raise, its biggest since 1994.


At its future meeting in July, the Fed is predicted to enact another rate hike of 75 basis points, but the view for September is less certain.



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