SILVER, POLITICAL TURBULENCE, TREASURY YIELDS – KEY POINTS:
- Silver pushes higher as the US Dollar rebounds, but the steep losses for the week remain
- The U.S. political turmoil from the capitol hill riot continue with the impeachment efforts
- Wall street buyers move to small-cap stocks as the economic bets surge
The New York trade bout experienced the choppy day as the Wall Street buyers mulled over the rising Treasury Yields and last week’s political turmoil from the Capitol Hill and the increasingly positive inflation bets. The Dow Jones and S&P 500 index notched the small wins at 0.195 and 0.04% respectively. The technology stocks continue rising, likely resulting in increased regulatory assessment concerns amidst continued turmoil from the capitol hall attack in Washington D.C. – with Nasdaq 100 index plunging 0.08%.
However, the small-cap stocks extended the most recent strength. This might be an indication that traders are still betting on enhanced economic conditions in the short term as the vaccine distribution continue across all major economies, with the Russell 2000 Index closing 1.77% high. The enhanced market positivity is also mirrored in bond markets, shown by the 2 and 10-year yield curve steepening to new multi-year peaks, before moderating into a close as long-dated US bond yields eased as Prices of Crude Oil Hit 11-Month Peak on Hopes of Reflation.
Markets are key in on the measures in the U.S House of Representatives aimed at responding to Donald Trump’s allegations that incited last week’s riots. Congress is likely to start a debate on the impeachment articles today, a move that is gaining support amongst republican legislators. However, a Senate trial will most likely continue beyond Trump’s term in the office, which is set to expire on 20th January after president Biden is sworn in.
Silver, Russell 2000, XAG/USD – 30-Minute Chart
WEDNESDAYS ASIA PACIFIC FORECAST
Traders extensively ignored the worsening coronavirus situation across different major APAC economies after the Malaysian King declared a state of emergency from January through August as they try to manage the ravaging covid-19 virus. This announcement pulled the regional markets down, but lots of damage was felt in the Malaysian markets.
On the other hand, the crude oil prices continue rising, another good sign to improve economic prospects. The crude oil prices surged 2% on Tuesday, which extended the gains from 1st January to almost 10%. The surge ought to bolster the struggling energy industry after the coronavirus induced economic contraction in 2020 crushed margins for oil producers and other energy organizations.
Silver is rising in the aftermath of the US Dollar index’s latest multi-day action-driven declines from metal, with the XAG/USD plunging more than 10% until the prices catch the bid early. The decline from the early January multi-month peak saw the prices of gold suffer a similar fate, also caused by the strong US Dollar. The strength of the US Dollar was most likely boosted by short coverage in the market, as some buyers abandoned the bearish outlook for the DXY index after the pair of Georgia senate runoff elections.