Market Watch Today: China’s Steel Futures Surge
MARKET WATCH TODAY – On Monday, the steel and iron ore futures of China begun the week with a firm stance. This was due to the softening central bank policy through hopes that talks could potentially end the US-China trade war.
The People’s Bank of China on Friday trimmed the amount of cash of banks as reserves for the fifth time in a year. Further, the move released an amount of $116 billion for new lending.
Later this week, US representatives will meet their counterparts in China. This will be the first face-to-face talks following the agreement of a trade truce between the US and China for 90 days last December.
“The market is improving its expectations over the macroeconomic situation amid Beijing’s attempts to stabilize the economy,” Huatai Futures analysts said.
Meanwhile, Baoshan Iron & Steel Co is the largest listed steel company in China. It stated there would be an increase in the prices of its steel products for March delivery. Moreover, the increase in prices is at 50 yuan ($7.30) a tonne.
Based on the Shanghai Futures Exchange, there was 1.2% to 3,500 yuan a tonne surge in the benchmark construction steel debar prices. Further, they climbed as high as 3,517 yuan during early trade. But analysts flagged warning that there might be a waning demand that will occur in the off-peak season.
For the second week to January 4, there was an increase in the steel products’ inventories at Chinese traders. According to Mystery consultancy, they added 416,000 tonnes to 8.38 million tonnes.
Meanwhile, Reba stocks climbed 6.4 percent at 3.35 million tonnes. Also, the coil stocks surged 2.5 percent at 1.8 million tonnes.
Market Watch Today: Gold prices climb amid the decline in the dollar
On Monday, the prices of gold climbed in Asia. Further, this was amid the drop of the US dollar ahead of the release of the Federal Reserve’s minutes on December’s meeting and the Fed Chair’s speech a day later. An improved risk appetite limited gains for the precious metal.
Based on the Comex exchange, the February delivery of gold futures increased 0.5% to $1,292.25.
Meanwhile, the Federal Open Market Committee last December decided to increase interest rates for the fourth time last year. It also hinted possible two more rate hikes for 2019.
On Friday, Federal Reserve Chairman Jerome Powell vowed that the central bank would watch the performance of the economy for this year and adjust policy accordingly.
“Mr. Powell said he is open to a potential view change but so long as the data stays strong in the U.S. we will continue to project hikes in the interest rates in the U.S. by the central bank,” said TD Securities Commodity Strategist Head Bart Melek.
Get the latest economy news, trading news, and Forex news on Finance Brokerage. Check out our comprehensive trading education and list of best Forex brokers list here. Subscribe now and receive FREE updates on the market today!