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U.S. sources say that U.S. Marines opened fire on protesters at the U.S. consulate in Karachi, Pakistan, last Sunday.Futures analyst Guangda Futures reports: On March 2nd, COMEX gold opened higher and trended upwards, before a sharp sell-off at the close, ending slightly higher at $5335.9 per ounce, a gain of 1.68%. Domestic SHFE gold opened higher but then fell in the night session, closing at 1184.90 yuan per gram, a gain of 1.14%. 1. Data released by the Institute for Supply Management (ISM) on Monday showed that the US ISM Manufacturing PMI fell slightly to 52.4 in February, expanding for the second consecutive month, but the input price index surged to 70.5, a near four-year high. Its worth noting that this data reflects market conditions prior to the US-Israeli airstrikes on Iran this weekend. Afterwards, tanker traffic in the Strait of Hormuz nearly ceased, and international oil prices recorded their largest single-day increase since the Russia-Ukraine war in early 2022 on Monday, meaning that price pressure may continue to rise. Given that tariffs and geopolitical conflicts are creating a persistent undercurrent of inflation, manufacturers may be forced to pass on costs to consumers, squeezing the Federal Reserves room for interest rate cuts. Last night, the US dollar index rose by more than 1%, and precious metals rose and then fell back. 2. Geopolitically, the US-Iran conflict escalated rapidly over the weekend. The joint US-Israel assassination attempt plunged Iran into regime chaos, unexpectedly reigniting geopolitical risks and initially reflecting some safe-haven demand. However, as the conflict progressed, the market gradually withdrew from this safe-haven panic, shifting towards concerns about the closure of the Strait of Hormuz, a rebound in oil prices due to disruptions in oil production facilities, and renewed expectations of global inflation. This had a mixed impact on gold. Inflation expectations are generally favorable for gold prices, but the expectation of a Fed rate cut and further easing has been further delayed. Investors should continue to closely monitor the US-Iran situation. Whether the conflict slows down or escalates further will determine the subsequent trend of gold prices. Strategically, timing is more important than directional choice; avoid chasing highs excessively. (This content and opinion are for reference only and do not constitute any investment advice.)Japans energy minister stated that the suspension of Qatars liquefied natural gas (LNG) operations will not immediately affect the countrys energy supply.The main Shanghai silver futures contract plunged in the short term, falling more than 4.00% intraday, and is currently trading at 22,888.00 yuan/kg.March 3 - Oil prices rose in early Asian trading due to the ongoing Middle East conflict and the persistent high risk of supply disruptions. Kerstin Hottner, head of commodities at Vontobel, stated, "The ongoing military conflict between the US/Israel and Iran has caused turmoil in the global energy market. The Strait of Hormuz, a crucial chokepoint for global energy trade, has effectively ceased operation due to the conflict. As the situation develops, the duration and intensity of the conflict will be key factors shaping the energy landscape in the short term."

The USD/CHF exchange rate bounces around 0.9700 as hawkish Fed bets rise, with the US PMI in focus

Alina Haynes

Jun 20, 2022 15:40

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In the early Tokyo session, the USD/CHF exchange rate fluctuates between 0.9687 and 0.9712. Following a retest of its earlier lows at 0.9629 under waning selling pressure, the asset has appreciated significantly. After the Swiss National Bank (SNB) issued a 50 basis point (bps) interest rate rise on Thursday, the dollar faced heavy selling pressure against the Swiss franc last week.

 

The current SNB official interest rate is - 0.25 percent. Over the past fifteen years, the Swiss National Bank (SNB) has maintained a constant posture on interest rates to make the Swiss franc less attractive, so luring more business to the Swiss economy. In reaction to inflation shocks, the SNB has announced a huge hike in interest rates, following in the footsteps of other Western countries. After SNB president Chris Jordan's unexpected announcement of a rate rise, the Swiss franc is no longer overvalued, and higher interest rates will assist Swiss currency bulls going ahead.

 

In the meantime, the US dollar index (DXY) is trading flat in the Asian session at about 104.66 despite rising possibilities of a Federal Reserve announcement of a 75 basis point (bps) consecutive rate hike (Fed). It will take a little longer for pricing pressures to result in stable prices. Investors will continue to focus on US PMI data moving forward.

 

It is projected that the Composite PMI would increase to 53.5 from 53.4. The Composite PMI's separation into Manufacturing and Services entails a performance drop. The Services PMI is expected to be significantly lower at 49.1 than the prior figure of 53.2. The Manufacturing PMI is expected to decline to 54.7 from 55.7, but the Services PMI is expected to remain steady.

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