Virus outbreaks raise fears about global economic recovery
Oil prices decreased almost by 8% yesterday. There are two reasons for such a precipitous drop. The first reason is that the OPEC+ countries agreed to increase the daily oil production to the pandemic level (the supply started to catch up with the demand). The second reason is that new outbreaks of COVID-19 also continue to darken fuel demand prospects, as some countries reintroduce isolation measures.
Gold and silver prices jumped amid falling stock indices and the declining US government bond yields. The fundamental picture for precious metals is in favor of higher prices now. But as soon as the Fed starts cutting stimulus, there will be a decrease in the gold and silver market.
Asia-Pacific stock indices also fell sharply yesterday. The Delta strain of COVID-19 is taking a significant toll on the economic recovery of the region. Japan’s Nikkei 225 Index hit a six-month low yesterday. In its turn, China’s blue-chip index CSI300 remained unchanged. The People’s Bank of China kept the benchmark interest rate on loans unchanged. In Australia, about half of the population is living under quarantine to quell an outbreak of the Delta strain. Earlier this month, the Reserve Bank of Australia (RBA) announced that it would cut bond purchases starting from September. But today at the RBA meeting, the issue was raised that the RBA could cancel its decision to reduce QE if Sydney remains in lockdown until August, as seems likely.
S&P 500 (F) 4,258.49 -68.67 (-1.59%)
Dow Jones 33,962.04 -407.11 (-2.62%)
DAX 15,133.20 -407.11 (-2.62%)
FTSE 100 6,844.39 -163.70 (-2.34%)
USD Index 92.84 +0.15 (+0.16%)
News feed for: 2023.07.04
- Japan National Consumer Price Index (m/m) at 02:30 (GMT+3);
- Australia RBA Meeting Minutes at 04:30 (GMT+3);
- China PBoC Loan Prime Rate at 04:30 (GMT+3);
- US Building Permits (m/m) at 15:30 (GMT+3).
This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.
