stock market
The US stock market's S&P 500 index closed down on Monday, and the Nasdaq index fell sharply. Both reached record highs after announcing that Federal Reserve Chairman Powell had been nominated for a second term. The Dow Jones Industrial Average rose 0.05% to close at 35,619.25 points, while the S&P 500 fell 0.32% to 4,682.94. The Nasdaq index fell 1.26% to 15,854.76 points.
The European stock market closed basically flat. Germany warned that the tightening of blockade restrictions would largely offset the boosting effect brought about by the rise in Telecom Italia. Previously, the US fund KKR proposed privatizing Italy's largest telecom group with 12 billion US dollars. The pan-European STOXX 600 index has basically leveled off, falling earlier in the intraday period because German Chancellor Angela Merkel said that stricter restrictions are needed to control a wave of infections. The German DAX index closed 0.27% lower. The French CAC-40 index fell 0.1%, and the British stock FTSE index closed 0.44% higher.
Foreign exchange market
The US dollar hit a new high against the euro in 16 months. Earlier, US President Joe Biden nominated Powell for re-election as Chairman of the Federal Reserve for a term of four years, while the euro was affected by blockade measures related to the epidemic. The US dollar index rose 0.42% intraday to 96.53, the highest since July 2020. The euro fell 0.58% against the US dollar to $1.1233, the lowest since July 2020. The dollar rose 0.79% against the safe-haven yen to 114.93 yen, approaching the four-and-a-half-year high of 114.97 hit on November 17. The dollar rose 0.55% against the Canadian dollar, hitting a seven-week high of 1.27 Canadian dollars.
Click here to check the foreign exchange ETFs that have received the most capital in the past week.
bond market
US bond yields rose after Biden announced that he would nominate Powell for re-election as Chairman of the Federal Reserve, while at the same time nominating Governor Brainard as Vice Chairman. Two-year bond yields rose 8.5 basis points to 0.590%, the highest since the beginning of March 2020. The 10-year bond yield climbed 8.9 basis points to 1.625%. The yield on 30-year bonds climbed 6.6 basis points to 1.973%. The yield curve has leveled off. The yield gap on 5-year/30-year bonds narrowed to its narrowest since March 2020, and the yield spread on 5-year/10-year bonds narrowed to its narrowest since July 2020.
Eurozone bond yields rose slightly. Investors consolidated their positions after a week of turbulence in the global bond market, recovering some of last Friday's losses. At that time, yields fell to their lowest level in more than two months. The indicator 10-year German bond yield rose slightly by 3 basis points to minus 0.312%, but it is still far below the high of minus 0.252% reached last Friday.
oil market
Oil prices have rebounded from recent declines due to reports that if major consumer countries release crude oil from their reserves, or if the pandemic curbs demand again, OPEC+ formed by the Organization of Petroleum Exporting Countries (OPEC) and its allies may adjust plans to increase oil production. Brandt crude futures rose by $0.81, and the settlement price was reported at $79.70 per barrel, an increase of 1%. U.S. crude oil futures rose by $0.81, and the settlement price was reported at $76.75 per barrel, an increase of 1%.
Metals market
The price of gold fell more than 2%, and Biden nominated Powell for re-election as the chairman of the Federal Reserve, triggering expectations that the Fed might insist on reducing economic support, after which the US dollar rose sharply. Spot gold fell 2.1% to $1,805.04 an ounce, the lowest since November 5. The settlement price of US gold futures fell 2.4% to $1,806.30 an ounce. Palladium fell 5.2% to $1,953.99 an ounce.
Copper prices on the London Metal Exchange (LME) were under pressure for a while, and investors' concerns about demand from China, a major consumer country, rekindled. The market expects the market to be more balanced and the US dollar to strengthen in the next few months. However, traders said that industrial metals prices rose after the opening of the New York market due to a bearish rebound after the unexpectedly strong US housing sales data. At 1707 GMT, the LME three-month copper index rose 0.6% to 9,705 US dollars per tonne.
Click here to check the flow of funds for the exchange-traded fund Silver ETF ishares (SLV) that holds physical silver positions. Click here to check the capital flow of SPDR Gold Shares (GLD), an exchange-traded fund that holds physical gold positions. Click here to check the gold ETFs that have had the most capital inflows in January. (Compiled from Reuters Financial Morning Post)