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The main contract for 2-year Treasury bond futures (TS) remained unchanged, the main contract for 5-year Treasury bond futures (TF) remained unchanged, the main contract for 10-year Treasury bond futures (T) fell by 0.03%, and the main contract for 30-year Treasury bond futures (TL) fell by 0.12%.At the close of the morning session, domestic futures contracts showed mixed results. Low-sulfur fuel oil (LU) rose nearly 8%, SC crude oil rose nearly 6%, synthetic rubber and fuel oil rose over 4%, container shipping to Europe rose nearly 4%, and liquefied petroleum gas (LPG) rose over 3%. On the downside, Shanghai silver fell over 9%, Shanghai tin and apples fell over 3%, and platinum and red dates fell over 2%.On May 18th, Kazuhiro Sasaki, Head of Research at Philips Securities Japan, stated that at current yield levels, foreign investors may find it easier to buy Japanese government bonds, and he wouldnt be surprised if domestic investors sold foreign bonds and bought Japanese government bonds instead. He said, "From an exchange rate perspective, foreign capital inflows into Japanese bonds could lead to a stronger yen, which could put some pressure on the Japanese stock market." Rising long-term Japanese government bond yields mean that policy rates may rise, which would be a negative factor for the stock market. If interest rates rise too quickly, it will have a significant negative impact on the stock market. This cautious sentiment is intensifying against the backdrop of inflation concerns triggered by rising oil prices.Futures News, May 18th - According to foreign media reports, Malaysian palm oil futures recorded their second consecutive day of gains on Monday, mainly supported by stronger prices in Dalian palm oil, Chicago soybean oil, and crude oil, while the weak ringgit also provided assistance. On the policy and export front, Malaysia has lowered its June reference price for crude palm oil to ensure that export tariffs remain at 10%. Meanwhile, data from inspection agency AmSpec shows that Malaysian palm oil exports from May 1st to 15th are expected to decline by 16.5% compared to the same period last month.On May 18th, Fu Linghui, spokesperson, chief economist, and director of the Department of Comprehensive Statistics of the National Economic Bureau, stated at a press conference held by the State Council Information Office that industrial production growth fluctuated in April, which is a normal monthly fluctuation. Cumulatively, from January to April, the added value of industries above designated size increased by 5.6% year-on-year, maintaining a steady and relatively rapid growth trend. Overall, industrial production is progressing steadily, with continued trends towards high-end, green, and intelligent development. However, it should also be noted that there are currently many external uncertainties, increasing operating cost pressures on enterprises, and some enterprises are still facing difficulties. In the next stage, it is necessary to earnestly implement the spirit of the Central Economic Work Conference and the arrangements of the National Peoples Congress and the Chinese Peoples Political Consultative Conference, focusing on expanding domestic demand, strengthening innovation-driven development, developing new types of productive forces according to local conditions, strengthening the supply of energy and raw materials, alleviating enterprise difficulties, and promoting high-quality industrial development.

Gold Price Prediction: XAU / USD will continue to fluctuate above $1,900 despite a decline in US Inflation

Daniel Rogers

Mar 15, 2023 11:43

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Gold price (XAU / USD) is not in danger despite U.S. inflation figures meeting expectations. Since Monday, the precious metal has been fluctuating continuously between $1,895 and $1,913. The release of the US Consumer Price Index (CPI) failed to produce a significant reaction in the Gold price; however, the upside bias appears to be solidified as wagers on lesser rate increases from the Federal Reserve (Fed) have increased.

 

The US Dollar Index (DXY) is protecting the critical support at 103.50, but it appears vulnerable to further losses as investors' risk appetite has dramatically increased. As market participants purchased S&P500 futures in response to higher odds of a smaller rate hike from Fed chair Jerome Powell, a likely recession in the US economy was postponed, signaling an uptick in optimism.

 

Contrary to the risk-on sentiment, demand for US Treasury bonds remained weak, causing 10-year US Treasury yields to rise above 3.68 percent.

 

The headline As anticipated, the US CPI increased by 0.4% on a monthly basis, and the annual figure decreased from 6.4% to 6.0%. In addition, the core CPI, which excludes crude and food prices, decreased to 5.5% from 5.6% previously. The Fed appears to be pleased with the persistence of a declining trend in US inflation.

 

In the future, investors will closely monitor the US Retail Sales (Feb) data. Monthly Retail Sales data is anticipated to decline by 0.3% compared to the previous release of a 3.0% increase. This indicates that the consumer spending rebound is over and the Fed is on course to achieve its inflation target of 2%.