Here’s today’s ‘Just A Minute’ bringing you a 60 second summary of what’s happening in the financial markets:
Main Trading Event Of The Day: Several today including EUR German ZEW Economic Sentiment 9.00, USD Core CPI m/m @ 12.30 & Fed Chair Yellen Speaks @ 12.45 GMT
WHAT WE’RE WATCHING TODAY
Gold Slips From 3-Week High But Will It Head Back Up?
Gold declined today from a three-week high as gains in equities and strong U.S. retail sales data offset safe-haven bids that were driven by heightened tensions in Ukraine. Bullion for immediate delivery fell 0.5 percent to $1,321.31 an ounce after reaching $1,331.20 yesterday, the highest since March 24. While gold benefited from the escalation in tension between Russia and the Ukraine, upbeat U.S. economic data has put a dampener on the safe-haven rally. Nevertheless, opinions still vary as to what lies ahead for the precious metal. Some traders have warned that the gains from safe-haven bids could quickly dissipate when the Ukraine crisis is resolved while others expect gold to shine even brighter as the situation in Ukraine grows more volatile. With the Fed reiterating its commitment to improving the labour market, they expect the recent rally in gold to continue.
Generally, geopolitical tensions tend to be good for gold, given the metal’s use as a safe-haven asset. But that’s not the only catalyst traders are looking at. Gold has also been buoyed by falling interest rates over the course of the month, which stems the attraction of bonds when they are compared with non-yield-bearing assets like gold. The recent decline in stocks has not hurt either. With relations between Russia and the West at their worst since the Cold War after Moscow annexed Crimea from Ukraine, traders will be closely scrutinising movements in the price of gold.
Dollar Nudges Higher After Positive US Retail Sales Data
The dollar nudged higher versus a basket of major currencies on today after U.S. retail sales data signaled a brighter outlook for the U.S. economy. U.S. retail sales recorded their largest gain in one and a half years in March, the latest suggesting growth is on course to spring back in the second quarter after an unusually severe winter. The dollar index edged up 0.1 percent to 79.791, holding above Monday’s low of 79.562. Against the yen, the dollar edged up 0.1 percent to 101.91 yen, staying above a three-week low of 101.32 yen set on Friday on trading platform EBS. Some caution over tensions in Ukraine may be helping to temper the dollar’s gains against the yen. Since early February, the dollar has mostly traded in a range of roughly 101 yen to 103 yen, although it spent some time above 103 yen from early to mid-March and also in late March to early April.
Rio Tinto Produces Record Iron-Ore Output as Global Supply Gains
Rio Tinto Group, the world’s second-largest mining company, said first-quarter iron ore production rose to a record, up 8 percent to 52.3 million metric tons from 48.3 million tons a year earlier. At the same time as reining in spending and cutting costs companywide, the company has been driving an expansion of Rio’s iron-ore unit, the biggest contributor to earnings. Prices plunged into a bear market during the quarter as inventories ballooned to the highest ever in China. The stock advanced 1.1 percent to A$63.97 in Sydney trading. The benchmark S&P/200 Index gained 0.4 percent. Rio Tinto has started the year with a series of performance records as it continues to drive productivity gains across its operations, presenting possible opportunities for traders.
That sums up today’s highlights! Keep in touch for all the latest trading news! Find us on Facebook, Twitter, Google+ and LinkedIn. We hope you have a profitable day on the markets.
