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: USD PPI @ 12.30 GMT
WHAT WE’RE WATCHING TODAY
Yellen’s Comments Send Gold Lower
As Janet Yellen testified before the Senate Banking Committee yesterday, gold sank 1 percent in 10 minutes, taking the metal back below $1,300 for the first time in nearly a month. Rather than being the victim of a massive bearish trade, the metal seems to have was reacted to a slightly less dovish outlook from the Fed chair than some gold holders were expecting or hoping for. This could signal that higher rates will come sooner rather than later which is anti-inflationary, and presents competition for gold.
Several traders still noted the oddity of gold moving so quickly on comments that didn’t surprise many people. At 10:55 a.m. EDT, about 7,600 gold contract traded, which means that nearly $1 billion in nominal gold value changed hands in that minute. This boost in volume led to speculation that gold futures fell because someone “dumped” $2.3 billion worth of the futures. Other analysts however believe the explanation was simply down to Yellen’s comments which caused one trader to sell gold, the sale of which triggered stops around the $1,300 level.
Spot gold edged up slightly to $1,296.35 an ounce, after losing 3.3 percent in the last two sessions the metal’s biggest two-day loss since October. With the break below $1,300 an ounce and technical weakness, further losses for gold may be likely.
Japan: Demand Exceeds Supply for First Time Since 2008
Demand has overtaken supply in the Japan for the first time in six years, adding to inflationary pressure in the world’s third-biggest economy. The Bank of Japan’s measure swung to 0.6 percent in the first quarter from negative readings back as far as 2008. The change followed six straight quarters of economic growth that closed a shortfall between demand and supply that had put downward pressure on prices. BOJ Governor Haruhiko Kuroda has said he expects the elimination of this output gap, together with rising inflation expectations, to help drive consumer price gains toward the central bank’s 2 percent target. Whether this will actually lead the way to stable inflation, given lackluster growth in wages remains to be seen and companies are still cautious.
Stocks: Microsoft: Job Cuts Imminent
Microsoft is planning its biggest round of job cuts in five years after CEO Satya Nadella said last week that he was preparing to make sweeping changes at Microsoft. The reductions will probably be in engineering, marketing and areas of overlap with Nokia. The restructuring which may be unveiled as soon as this week may end up being the biggest in Microsoft history, topping the 5,800 jobs cut in 2009, according to sources. Nadella commented that Microsoft would have to become more focused and efficient as he issued his first company mission statement, calling for greater emphasis on mobile devices, cloud-computing and productivity software as consumers and businesses buy fewer personal computers to check e-mail, browse the Web and access data and software. Traders will be watching for news of Microsoft’s job cuts and the possibility of trading opportunities.
That sums up today’s highlights! Find us throughout the day on Facebook, Twitter, Google+ and LinkedIn for all the latest trading news. We hope you have a profitable day on the markets.
