Gold eases as dollar strengthens on stimulus hopes
· Gold eased on Monday, having touched a six-week low earlier in the session, clamped down by a firm dollar and higher U.S. Treasury yields due to hopes of more fiscal stimulus.
· Spot gold was down 0.1% at $1,846.61 per ounce, after touching its lowest level since Dec. 2 at $1,816.53. U.S. gold futures, meanwhile, settled up 0.8% at $1,850.80.
· “We’ve seen a little rebound in the dollar, a slight pickup in yields and as a result we have seen some commodities’ markets, including the metals pull back,” said David Meger, director of metals trading at High Ridge Futures.
A “quiet period” prior to the inauguration of the Joe Biden administration in Washington “and the Democratic agenda being put forward” in terms of interest rates, liquidity and stimulus, is also weighing on the metals, Meger added.
· The dollar index scaled a near three-week peak, helped by gains in the U.S. 10-year Treasury yield .
· “If the yield curve becomes steeper and differentials become much wider, expect to see a strong recovery in the dollar despite the new billions in expected stimulus,” Kitco Metals senior analyst Jim Wyckoff said in a note.
· U.S. President elect Biden said on Friday that he plans to unveil a plan costing trillions of dollars in coronavirus relief
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· While gold has generally been seen as a hedge against the inflation and currency debasement that could result from widespread stimulus, especially last year, that has changed as higher bond yields increase the opportunity cost of holding non-interest yielding bullion.
· Elsewhere, silver fell 1% to $25.12 per ounce, having earlier hit a near one-month low of $24.30.
· Silver “should continue moving in gold’s slipstream”, Julius Baer analyst Carsten Menke said in a note.
· Platinum dropped 3.1% to $1,031.70 per ounce while palladium fell 0.5% to $2,358.75.
· Crypto inflows slump after December record -report
Investment flows into cryptocurrency funds and products were just $29 million in the first week of January, down sharply from a record $1.09 billion in the week before Christmas, according to the latest data on Monday from asset manager CoinShares.
Bitcoin plunged more than 19% on Monday, putting it on track for its biggest one-day drop since March as its surge to a record $42,000 last week lost steam.
· CORONAVIRUS UPDATES:
Global Cases: 91.27M (+549,618)
Global Deaths: 1.95M (+8,946)
U.S. Cases: 23.11M (+188,966)
U.S. Deaths: 385,088 (+1,752)
UK Cases: 3.11M (+46,196)
UK Deaths: 81,960 (+529)
South Africa Cases: 1.24M (+15,046)
South Africa Deaths: 33,579 (+416)
Asian Updates:
Japan Cases: 286,752 (+5,977)
Japan Deaths: 4,044 (+48)
China Cases: 87,536 (+103)
China Deaths: 4,634
South Korea Cases: 69,114 (+450)
South Korea Deaths: 1,140 (+15)
Myanmar Cases: 131,186 (+582)
Myanmar Deaths: 2,858 (+12)
Thailand Cases: 10,547 (+249)
Thailand Deaths: 67
· Japan has found a new Covid variant.
· BioNTech says Covid vaccine is effective against key new strains; to publish more data in days
The CEO of German pharmaceutical company BioNTech has said he remains confident the company’s Covid vaccine, developed in partnership with Pfizer, will be effective against the highly-infectious variants of the virus discovered in the U.K. and South Africa.
“We are confident that based on the mechanism of our vaccine, even though there are mutations, we believe that the immune response which is induced by our vaccine could also deal with (a) mutated virus,” Dr. Ugur Sahin, co-founder and CEO of BioNTech, told CNBC’s Meg Tirrell on Monday.
“Last week, we reported another mutation which is present in the U.K. variant and also in the South African variant and this mutation is considered to be important because it could change structurally the protein. But it appears the immune response against our vaccine also neutralizes this mutation.”
His comments referred to research published Thursday that showed Pfizer-BioNTech’s Covid-19 vaccine appeared to be effective against a key mutation in the more infectious variants of the virus discovered in the U.K. and South Africa.
· CDC says 9 million Americans now vaccinated as U.S. states scramble
Nearly 9 million Americans had been given their first COVID-19 vaccination dose as of Monday, the U.S. Centers for Disease Control and Prevention said, as states scrambled to step up inoculations that have yet to slow the roaring pandemic.
· Fed’s Bostic sees possible interest rate hike as soon as the second half of next year
Interest rates could rise sooner than forecast as the economy recovers more quickly than expected from the throes of the Covid-19 damage, Atlanta Federal Reserve President Raphael Bostic said Monday.
While most of his colleagues don’t see a rate hike coming through until at least 2023, Bostic said he thinks the emergency measures the Fed has taken to combat the pandemic can start to be rolled back within the next two years if not sooner.
“I do think there is some possibility that the economy could come back a bit stronger than some are expecting,” he said during a virtual Q&A session before the Atlanta Rotary Club. “If that happens, I’m prepared to support pulling back and recalibrating a bit of our accommodation and then considering moving the policy rate.”
“But I don’t see that happening in 2021. A whole lot would have to happen to get us there,” he added. “Then we’ll see into 2022. Maybe the second half of 2022 or even 2023 where that might be more in play.”
· Fed's Kaplan hopes to begin QE weaning this year
Dallas Federal Reserve President Robert Kaplan on Monday said he expects broad vaccine distribution to unleash strong economic growth later this year, allowing the U.S. central bank to begin to pull back on some of its extraordinary monetary support.
“We should be as aggressive as we can be while we are in the teeth of this pandemic, until we are convinced that we have weathered this pandemic,” Kaplan said in a virtual town hall event. But “later this year, my own view is, we should at least be having an earnest discussion about when it’s appropriate to taper” the Fed’s asset purchase program.
· Fed's Barkin says workers, not inflation, are his focus
Richmond Federal Reserve President Thomas Barkin on Monday said he is more worried about the labor market than possible excess inflation as he assesses the effects of the pandemic, the rollout of vaccines, and past and future fiscal relief on the economic outlook.
“I do worry about adjustments that businesses have made,” including automation and other adaptations that could make it more difficult for people who lost jobs in the recession to find new ones, Barkin told CNBC in an interview. Fiscal relief is likely “to support spending over several years” and even if there is inflation, the Fed has the tools to control it, he said.
· New U.S. tariffs on French, German aircraft parts, wines to start Tuesday
The U.S. government on Monday said it would begin collecting new duties on aircraft parts and other products from France and Germany from Tuesday after failing to resolve a 16-year dispute over aircraft subsidies with the European Union.
In a notice late on Monday, U.S. Customs and Border Protection said the new duties would apply from 12:01 a.m. ET (0501 GMT) on Tuesday as part of the long-running battle over government subsidies to Europe’s Airbus SE and its U.S. rival, Boeing Co.
The notice here follows an announcement by the U.S. Trade Representative's office that it would impose an additional 15% tariff on aircraft parts, including fuselage and wing assemblies, and a 25% duty on certain wines.
Talks between Washington and Brussels to end the battle stalled in the final weeks of the Trump administration, a European source familiar with the matter said. Washington had also pressed to reach a separate solution with Britain, which has a share in Airbus, but has exited the EU.
Brussels said it would seek swift resolution of the issue with U.S. President-elect Joe Biden, who takes office on Jan. 20. The Biden team had no immediate comment on the tariff issue.
· Republicans face growing corporate backlash after Capitol assault
Republicans in the U.S. Congress faced growing blowback on Monday from businesses that said they would cut off campaign contributions to those who voted last week to challenge President-elect Joe Biden’s victory.
· U.S. Supreme Court shuns election-related disputes
The U.S. Supreme Court on Monday steered clear of more cases involving bids by President Donald Trump and some Republican allies to overturn his election loss and turned away a Democratic effort to expand mail-in voting in Texas.
The justices, as expected, declined to expedite consideration of eight Trump-related cases including three filed by his campaign challenging the election results in Wisconsin and Pennsylvania, two of the states he lost to Democratic President-elect Joe Biden. It already was clear that the court had no intention to intervene because it had not acted before Congress last week certified Biden’s victory in the Nov. 3 election.
· Trump approves emergency declaration for Washington for Biden inauguration
· FBI warns of armed protests ahead of inauguration
The FBI has warned of armed protests being planned for Washington and all 50 U.S. state capitals in the run-up to President-elect Joe Biden’s Jan. 20 inauguration, a federal law enforcement source said on Monday.
· Britain to tighten laws on imports linked to alleged Chinese human rights abuses: Telegraph
Britain will tighten the law on importing goods linked to alleged human rights abuses in China as ministers take a tougher stance on Beijing, The Telegraph reported on Monday.
Foreign Secretary Dominic Raab will make a statement on Tuesday in the House of Commons on the government's response to allegations of forced labour in China's Xinjiang province, home to about 12 million Uighur Muslims, the report
Reference: CNBC, Reuters, Worldometers
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