Nickel futures sharpen losses to over 19% and plumb April lows
Nickel prices fell on Wednesday as the dollar rose against most major rivals while waiting for US data.
Nickel hit a quarterly high on May 20th before tumbling 19% from these levels by June 20, but it’s still 4.24% higher than its first quarter close.
Recent data showed little optimism on the current situation for stainless steel as the demand remains weak, with nickel playing an important role in the manufacturing process.
Historically, demand usually picks up again in August, however traders are still doubting such a process, as inventories continue to pile up, and interest rate uncertainty grows in the US.
The short-term view for both copper and nickel are rather bearish, with some pointing to a recent explosion in a nickel smelting factory owned by PT Indonesia Tsingshan as a cause of concern, however the nickel market continues to suffer from oversupplies.
Investors are waiting for important US GDP data, in addition to personal spending data later this week.
Otherwise, the dollar index rose 0.4% as of 15:59 GMT to 106.03, with a session-high at 106.1, and a low at 105.6.
On trading, nickel spot prices fell 0.6% as of 16:00 GMT to $16.851 thousand a tonne.
Bitcoin resumes losses under pressure from US yields
Bitcoin fell over 1% on Wednesday, resuming losses and approaching eight-week lows under pressure from US yields.
US 10-year treasury yields surged to one-week highs after strong US data and bullish remarks from Fed officials reduced the odds of multiple Fed rate cuts this year.
The Price
Bitcoin fell 1.1% today at Bitstamp to $61,148, with a session-high at $62,458.
Bitcoin rose 2.55% on Tuesday at Bitstamp, the first profit in three days away from eight-week lows at $58,456.
Crypto Market Value
The market value of cryptocurrencies fell by $25 billion on Wednesday to a total of $2.382 trillion as both ethereum and bitcoin sustained losses.
US Yields
US 10-year treasury yields rose 0.75% on Wednesday, extending gains for the second session and hitting week highs at 4.279%.
The developments came after strong US housing prices and consumer sentiment data in June.
Federal Reserve member Michelle Bowman also reiterated her view that interest rates should be maintained at current levels for “some time” to control inflation.
Following the data, and according to the Fedwatch tool, the odds of a Fed 0.25% interest rate cut fell to 64% in September, and to 76% in NNovember.
Now investors await important US housing sales data later today, which will provide important clues on the health of the economy.
Gold skids to week lows as the dollar powers up
Gold prices skidded in European trade on Wednesday to two-week lows, sharpening losses for the second day as the US dollar rose against main rivals.
US 10-year treasury yields rebounded following strong data and bullish remarks by several Fed officials.
Prices
Gold prices fell 0.4% today to $2309 an ounce, the lowest since June 18, with a session-high at $2323.
On Tuesday, gold prices lost 0.65%, the second loss in three days amid mounting pressure from the dollar and US yields.
The Dollar
The dollar index rose 0.25% on Wednesday, extending gains for the second session and approaching seven-week highs at 105.92 against a basket of major rivals.
US Yields
US 10-year treasury yields rose 0.75% on Wednesday, extending gains for the second session and hitting week highs at 4.279%.
The developments came after strong US housing prices and consumer sentiment data in June.
Federal Reserve member Michelle Bowman also reiterated her view that interest rates should be maintained at current levels for “some time” to control inflation.
US Rates
Following the data, and according to the Fedwatch tool, the odds of a Fed 0.25% interest rate cut fell to 64% in September, and to 76% in NNovember.
The SPDR
Gold holdings at the SPDR Gold Trust remained flat at 829.05 tonnes yesterday, the lowest since June 14.
Euro moves towards six-week low as French elections loom
Euro declined in European trade on Wednesday against a basket of major rivals, extending losses for the second straight day against the US dollar and almost touching six-week lows once more as French parliamentary elections loom.
Recent polls indicate the supremacy of the far right groups, followed by a far left coalition, then the centrist party led by President Emanuel Macron in third place.
Political uncertainty will continue to permeate through the landscape in France until elections results, which might lead to the formation of a new far-right government.
The Price
The EUR/USD pair fell 0.3% today to $1.0685, with a session-high at $1.0718.
Euro lost 0.2% on Tuesday, resuming losses and approaching a six-week trough at $1.0668.
French Politics
French elections are a major flashpoint for the euro in the next few weeks, with far right and far left groups gaining momentum before elections, in turn overwhelming the centrist Macron’s administration.
Latest Polls
The Economist poll showed the far right National Front party with 37% of the vote, while Macron’s party fell to just 21%.
A Bloomberg poll showed the National Front leading with 35% of the vote.
An Attempt to Reassure Voters
The National Front tried to reassure voters that if they held authority, they would commit to the EU financial rules.
It’s an attempt to brush out accusations of trying to ruin the economy with financially irresponsible decisions once the party assumes power.
It’s worth noting that a leftist coalition is also gaining momentum, led by a collection of socialist and communist and green parties.
The leftist coalition plans to raise the monthly minimum wage to 1600 euro, and impose ceilings on the prices of basic food, electricity, gas, while removing Macron’s unpopular decision to increase the retirement age to 64 years.