Archives of “June 2019” month

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Gold climbs back above $1350 on ‘additional stimulus’ talk

  
Analysis, Gold / Silver

Gold rises to $1354

Gold rises to $1354
Gold yields nothing, but that’s better than billions of sovereign bonds. French, Austrian and Swedish 10-year bonds hit a zero yield today for the first time after Mario Draghi said additional stimulus will be needed “in the absence of any improvement” in the outlook.
Gold rose $13 to $1352 as yields globally sank and stock markets jumped.
The $1350 level is key because it was the February high. It was breached on Friday briefly but the gains later evaporated. The next level to watch is $1358, which was the intraday high on Friday. It will surely break if the Fed sends a dovish signal.
Beyond that, we could be in the process of breaking out of a multi-year consolidation pattern that’s capped at $1381. The sky would be the limit if that gives out, especially if it’s coupled with central bank easing, a trade war and other uncertainty.

Nikkei 225 closes lower by 0.72% at 20,972.71

  
Analysis, Global Indices

Tokyo’s main index falls amid mixed mood in Asian trading

Nikkei 18-06

Markets are in a state of flux ahead of the Fed tomorrow with the risk mood holding softer in Asia as Treasury yields are notably weaker alongside a more subdued performance in US equity futures to start the day.

The lower yields is helping to push gains in the yen and swissie to start the session but there isn’t any major breakouts yet among major currencies. The bouncing of risk sentiment is likely to continue over the next few sessions until the FOMC meeting is out of the way so expect more of the same in the European morning today.

China has cut its holding of US Treasuries to the lowest in almost two years

  
  Analysis

As we head into China trade for the session, this news from the US afternoon Monday.

China cut its US Treasury holdings to the lowest in almost two years
  • holdings of notes, bills and bonds declined by $7.5 billion in April to $1.11 trillion
Japan remained the second-biggest holder of Treasuries
  • 1.06 trillion in April, down from $1.08 trillion a month earlier

Japan Reuters Tankan (June) – manufacturing index drops again (halves from May!)

  
Analysis, Economy

The monthly poll from Reuters tracks the Bank of Japan’s tankan quarterly survey.

  • Japan manufacturers index +6 in June vs +12 in May
  • non-manufacturers index +22 in June vs +27 in May
  • Japan manufacturers September index seen at +11, non-manufacturers +21
Manufacturers’ business confidence to a more than 2-1/2-year low
  • service-sector mood fell for the first time in four months
  • Both are expected to remain under last month’s levels over the coming three months
—
Reuters poll of 505 large- and mid-sized companies, in which 263 firms responded:
  • indexes are calculated by subtracting the percentage of pessimistic respondents from optimistic ones. A positive figure means optimists outnumber pessimists.
Next official, BOJ, tankan is due in July

Brazilian conglomerate Odebrecht has filed for bankruptcy protection

  
  Analysis

Odebrecht SA, one of the companies at the heart of Brazil’s massive Car Wash corruption scandal, on Monday filed for bankruptcy protection.

Once one of the world’s biggest engineering and construction groups, the conglomerate said it was planning to restructure some $13bn in debt in what would be one of the region’s largest in-court debt restructurings.

In November, the cash-strapped construction unit of the group said it would miss a $11m debt payment to “preserve liquidity.”

The conglomerate has been battered by the long-running Car Wash corruption probe, which implicated scores of Brazilian politicians and businessmen in a massive contracts-for-kickbacks scheme.

In 2016, Marcelo Odebrecht, then chief executive of the Odebrecht group, was found guilty of channelling hundreds of millions of dollars to politicians across a dozen countries in exchange for favours. 

The same year, the conglomerate and its petrochemicals unit Braskem pleaded guilty to violating US anti-bribery laws and agreed to pay fines totalling at least $3.5bn.

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