Summary of institutional views: gold thorns thorns, or open mid-term gains

Huitong.com August 29th - A missile launched by North Korea on Tuesday morning (August 29) leaped into Japan's airspace, causing the geopolitical turmoil on the Korean Peninsula to escalate again, causing the risk aversion to heat up rapidly. Asian market in early trading on Tuesday, international spot gold sharply rose 10 dollars US dollar index continued the downturn, fell to near the 92 mark; the dollar fell against the 109 mark to a four-month low; the euro continued to hover near the high in the past two years Oil prices rebounded slightly from overnight lows. This article collects comments from many investment banking institutions, including the foreign exchange market, the gold market and the oil market, for your reference.

As the foreign exchange market in the Korean Peninsula has escalated, the risk aversion has warmed up. In early Asian trading on Tuesday, the US dollar continued its downturn and fell to near the 92 mark; the euro continued to hover near the high in the past two years; the dollar fell below the 109 mark to a four-month low against the yen.

★US dollar index

Greg Gibbs, director of Amplifying Global FX Capital , believes that although the dollar is generally in a bear market, the potential for bullish counterattacks cannot be ignored. Gibbs pointed out that the US economic growth has risen in recent months, and overall employment performance is positive, which in turn supports the Fed's interest rate hike expectations and US bond yields. Gary Cohn, the White House's chief economic adviser, said that US President Trump has already continued to promote public relations on tax reforms and is expected to pass relevant important legislation this year.

Liu Xia, chief trader of the cloud-nuclear financial group , said that the long-term pricing of the dollar is subject to the euro, which means that the dollar's decline may not end before the end of the euro's rise in 2017. However, every decade is a bull or bear market cycle of the US dollar. At present, there is at least one wave of upward movement of the US dollar to open a new bear market cycle.

Columbia University Business School Dean Glenn Hubbard said that the US inflation rate will reach the Fed's 2% target in the near future. He expects that the US inflation rate will rise, but it will not be a "blowout." If the US inflation rate reaches the Fed’s target, it will push the Fed to tighten monetary policy more logically, and thus push the dollar higher.

★ EUR/USD

Scotiabank said the dollar against the euro bulls gradually neglected-than-expected euro zone economic data, US Treasuries and German bonds and spreads to respond. The euro has turned a blind eye to the unexpectedly expected money supply data, and seems to be supported by a moderately narrow 10-week spread of German debt and US debt. The risk reversal shows that the bullish euro sentiment is mildly warming, and the CFTC position data also shows a modest expansion of the euro long position.

Kunkel, a cross-asset manager at UBS , pointed out that Jackson Hole’s “bad atmosphere” last week affected the dollar and made the euro stronger. Participants from Europe, Matt Miller and Guy Johnson, talked about the normalization of monetary policy in Europe and the United States, and the upcoming German election issue until dawn. In the medium term, these problems will cause the euro to oscillate against the US dollar. In view of the strong resistance level of 1.20 after the Jackson Hall meeting, the follow-up is expected to be in the range of 1.18 to 1.20.

ING said that moderate market conditions are expected to continue this week, and the euro is still supported. In terms of US economic data, Friday (September 1) will announce the change in the non-agricultural employment in the US in August, which is expected to increase by only 160,000, which will be less than the increase of 209,000 in July, and the salary growth is expected to remain sluggish. On Thursday (August 31), the euro zone will not announce the CPI in August. It is expected that the price environment in the euro zone will remain sluggish, but the euro has to be adjusted downwards. After all, the risk of a stalemate in the US debt ceiling seems to gradually increase. However, the European Central Bank is still expected to cut its bond purchases.

Danske Bank expects the euro to oscillate between 1.15-1.20 in the short term. The bank's analysts pointed out that the long-term risk of the currency pair's upwards stems from: First, the basic value is underestimated, there is still room for further correction. Second, given the possibility that the European Central Bank may withdraw from QE, the liquidity of the portfolio may be reversed.

★ GBP/USD

Scotiabank believes that the recent GBP/USD may be supported near 1.2880. The short-term seems to be on the upside. It has once again stood on the 100-day moving average (1.2895) and gradually measured the 50-day moving average. The resistance is at 1.2964 and 1.2973. .

UOB believes that the recovery of the pound against the US dollar in the coming weeks may continue, or 1.3020, but it is unlikely to continue to break. Last Friday (August 25th), the British pound against the US dollar unexpectedly recovered strongly, standing on the 1.2870 stop loss position, the three-week bearish position has expired, and currently holds a neutral position. On the downside, when the pound fell below only 1.2870 against the dollar, it suggests that the action has weakened.

German commercial bank analyst Axel Rudolph believes that the mid-term gains of the pound against the dollar will end at the high of 1.3267 recorded on August 11. The first resistance is at the high of 1.3126 on July 18 and the second resistance is at the May high of 1.3034. The first support below is in the low range of 1.2775/59 in December of last year, April and May of this year, followed by the 50% correction of this year's gain and the 1.2688/56 of the 200-day moving average.

★ USD/JPY

Kathy Lien, managing director of foreign exchange strategy at BK Asset Management, said in the early morning that the yen may have more room to rise. If US President Trump’s rhetoric to North Korea is more severe, the dollar may fall to 108 against the yen.

Barclays believes that the USD/JPY is still trading near the low of 108-109 in the year. Investors' concerns about the US debt ceiling and the US government's closure in the next few weeks may continue to influence market sentiment or drag the exchange rate.

Reuters analysts pointed out that the direction of the dollar against the yen is still slightly biased to the downside, and finally fell below the recent low of 108.61. There is still strong resistance around 110.00. 110.00 is the 23.6% retracement of the decline from 114.49-108.61 (July to August). The agency is still short at 109.75, with a target of 109.05 and a stop set above 110.00.

However, Jens Pedersen, a senior analyst at Danske Bank , pointed out that although the dollar fell against the yen after Yellen’s speech last Friday, Kuroda also stressed that he will work on easing, and stressed that the Bank of Japan is watching other countries in line with Japan’s national conditions. Related policy initiatives. In addition, in the absence of further progress in tensions in North Korea, it is more attractive to see more US dollars against the yen as the US dollar strengthens in the short term.

★ USD/KRW

Khoon Goh, head of Asian research at ANZ in Singapore, said that the technical resistance of the US dollar against the Korean won is expected to be 1134. If the risk of North Korea is greatly upgraded, the pair may rise to 1145. As foreign capital outflows put pressure on the Korean won, the Korean won generally performed poorly during geopolitical tensions. Other risk-sensitive Asian currencies will also be affected.

Sim Moh Siong, currency strategist at Bank of Singapore, said North Korea’s latest missile test represents a “provocation escalation,” and the market is closely watching the next step. If there is further provocation, market tensions will intensify, but if the test is followed by silence on Tuesday, the market may be somewhat settled. The influence effect of neighboring countries means that the won will bear the brunt of the impact, followed by the North Asian currency, and then the whole of Asia.

Standard Chartered Bank 's Asian currency strategy director Robert Minikin said in the report that Dutch Central Planning Burea's trade data shows that global exports have grown steadily in the first half of this year, and this year's accelerated growth in emerging Asian exports is significantly higher than the global level. It is expected to boost the Asian currency such as the won and the Singapore dollar. The trend of the South Korean won and the Singapore dollar is particularly sensitive to the global economic cycle. The rise in US bond yields has been suppressed, and the foreign exchange positions held by companies in North Asian countries have risen, which has also strengthened the long-term theme of local currencies.

★ USD/CAD

Brown Brothers Harriman Bank pointed out that the strong Canadian economic data strengthened market expectations that the Bank of Canada is expected to raise interest rates again in October, and the market's confidence in its interest rate hike is higher than other central banks including the Federal Reserve. From the end of July to mid-August, the US dollar against the Canadian dollar rose from a low near 1.24 to nearly 1.28, and then retraced again, it is expected to test the 1.24 mark again, and then break down to see 1.2160, but if it breaks 1.26, it will imply that the current bearish position is invalid. .

Huitong Finance and Economics Huihui market software shows that Beijing time at 11:40, the US dollar index reported 92.24; the euro against the US dollar at 1.1968/70; the pound against the US dollar at 1.2939/41; the US dollar against the Japanese yen at 108.82/84; the Australian dollar against the US dollar at 0.7926/ 28.

Gold International Spot Gold plunged $10 in early trading on Tuesday and hit a 10-month high of $1322.41 per ounce, as North Korea launched a missile to leap into Japan's airspace earlier, causing a sharp rise in tension on the peninsula, followed by a price hike. The increase.

According to The Wall Street Journal , North Korea’s launch of missiles escalated the crisis in the peninsula. The market took a "defensive" action ahead of the United States. The market has been accustomed to launching missiles for North Korea, and there is not much reaction, because the risk of defensive actions has not accumulated. But this morning, North Korea’s missile launched near Pyongyang is different. It flew over Japan’s Hokkaido and fell into the eastern waters of Hokkaido, something that has never happened before.

Evgeny Ananiev, head of precious metals at VTB Capital JSC , Russia's second-largest bank , said in an interview this month that the price of gold is expected to reach $1,400 at the end of this year, driven by North Korea's tensions and demand from China and India.

In addition, Francisco Blanch, global head of commodities research at Bank of America Merrill Lynch (BofAML), said this month that gold prices are expected to rise to a four-year high in early 2018, as long-term interest rates in the US fall and US President Trump implements a lack of progress in economic reform policies. $1400/oz. The economic cycle between the United States and Europe supports the euro, which will also boost the price of gold in dollars. He pointed out that the Fed's tightening pace is slower than expected, and the European Central Bank is expected to begin to reduce the easing, which will eventually push up the euro, coupled with the US long-term interest rate stagnant, which is good for gold.

Huitong Finance and Economics Huihui market software shows that Beijing time at 11:40, international spot gold reported 1316.65 US dollars / ounce.

Crude oil is still stranded in the heart of the US energy industry due to Hurricane Harvey - the Gulf Coast, seriously affecting local refining capacity, thus re-creating the refinery's demand for US crude oil and triggering market concerns about excess supply of crude oil On the Monday (August 28), the US oil market fell more than 2%, and the price difference with the cloth oil was widened. At present, oil prices have rebounded slightly from overnight lows.

According to Damien Courvalin, an analyst at Goldman Sachs Group , from the perspective of global oil supply and demand, the impact of the hurricane on US demand may be greater than supply, which may lead to an increase in crude oil and refined oil inventories in the next two months. Based on past hurricane experience and projected production disruptions, Hurricane Harvey will increase US domestic crude oil inventories by 1.4 million barrels per day, while gasoline and other distillate products will be reduced by 61.5-78.5 barrels per day and 700,000 barrels per day. day.

Tony Headrick, energy market analyst at CHS Hedging , said: "The closure of refinery facilities along the Gulf Coast is likely to lead to a resurgence of US crude oil inventories, which has overshadowed the negative impact of hurricane weather on US crude oil production."

ESAI Energy analysts wrote in an e-mail report that US oil production is expected to return to 9.5 million barrels per day in August after being hit by Hurricane Harvey. US production in September is expected to fall by 800,000 barrels per day, and the closure of crude oil production due to flooding may last for more than a month.

FX678 reminds: Beijing time on Wednesday (August 30) at 04:30 and 22:30 will announce the US API and EIA crude oil inventory report for the week ending August 18, investors can observe Hurricane Harvey's demand for US crude oil And the impact of crude oil inventories, and confirmed changes in US crude oil production and US crude oil inventories.

Huitong Finance Yihuitong market software shows that at 11:42 Beijing time, WTI crude oil October futures reported 46.81 US dollars / barrel; Brent crude oil November futures reported 51.64 US dollars / barrel.