Global Forex April 20th - Although the market news is not as unexpected as in previous days, for investors, overnight (April 19) has undoubtedly spent a sleepless night. According to market data, gold and crude oil both fell on Tuesday, deducting "double diving". At the same time, the US stock panic index VIX once again rose to above 15.

Let's first review the precious metals market. The trend of gold in the past two trading days is undoubtedly particularly dramatic! Before the London fixing price on Wednesday, gold was hit by a huge sell-off in a short-term sharp dive, but then oscillated higher. It is reported that someone sold a nominal value of up to $3 billion in just one minute, causing the gold to dive sharply in the short-term, and this scene is almost exactly the same as Tuesday's performance.

Subsequently, another person sold more than 25,000 hands of futures contracts within one minute, with a nominal value of $3 billion, resulting in a short-term diving of $8.

Compared to gold, the percentage of oil prices falling overnight is even more fierce! The tarpage oil oil price fell to 4% in the overnight trading. US oil refreshed as low as $50.28 per barrel, which is the largest single-day percentage decline since the beginning of March; the lowest oil hit $52.58 per barrel, the lowest since March 31.

With the oil price plummeting dragging down energy stocks, the optimism of the stock market overnight subsided almost overnight, and the Dow and S&P fell. The panic indicator (VIX) rebounded to more than 15 in the evening.

In the foreign exchange market, the US dollar rebounded on Wednesday, hitting a three-week low against major currencies yesterday, as expectations for US interest rate hikes cooled, and investors worried about US President Trump's ability to honour economic stimulus measures. However, the interesting scene is that the trend of the US dollar in the past two trading days is also the same as the history of last week.

In the end, the US dollar index closed up 0.31% on Wednesday at 99.81, and the US dollar index fell to the lowest 99.465 on March 28th. Greg Anderson, global head of foreign exchange strategy at BMO Capital Markets, said, "This is the trend after the market has rushed out of the long position in the US dollar. Once the dollar stops falling, investors will enter the market."

[A minute of $3 billion in gold throwing orders, why are there so many different fluctuations? 】

From the recent performance of the global market, the most exciting intraday volatility is undoubtedly appearing in the gold market. As we mentioned above, gold has experienced a large number of empty orders in a short period of time in recent days, which has made many precious metal traders more cautious now!

In terms of the trend of the disk, the international spot gold Wednesday morning opened at 1,298.26 US dollars / ounce, the price of gold shocked down, although the bulls had counterattacks, but all ended in failure. The price of gold in the European market has increased. In the long-term confrontation, the bulls once prevailed, and recorded an intraday high of $1290.76 per ounce. The US gold price fell, and there was a dip in the session. It recorded an intraday low of 1,276.60 US dollars per ounce and rebounded. The bulls struggled to attack, but the offensive failed to last. The gold price fell again and ended at 1,278.91 US dollars per ounce.

At present, gold has gradually shown signs of high resistance, while silver has recently fallen below the 200-day moving average:

After the gold price hit a strong week since the British referendum last week, gold has been out for two consecutive days, and profit-taking funds have fled. In response, FXStreet wrote that the demand for gold continued to fade, dragging it down below the $1,280/oz mark. The improvement in the dollar's tone is in line with today's gold correction, and the news that geopolitical risks have not broken out seems to have eased the upward pressure on gold.

The Royal Bank of Canada RBC also said in a recent report that geopolitical events will no longer promote gold, and macroeconomic factors will be replaced by the main drivers of gold prices. “Although the short-term price of gold has risen after the 2016 Brexit referendum and the geopolitical tensions in Syria and North Korea last week, we still believe that geopolitical events will no longer be the main driver of gold prices, global macroeconomics. The situation and market sentiment are."

From a technical perspective, Reuters analysis believes that spot gold failed to break through the 1300 mark, indicating that the technical side has become weak and may need to be revised. In terms of strategy, spot gold will fall to the target of $1,265 when it falls to Tuesday's low of $1279.02. Resistance is currently at $1,303, and the break may further rise to $1317.

It is worth noting that while gold is retreating this week, some investors are still buying ETF funds. On Wednesday, the world's largest gold ETF fund positions increased significantly, an increase of 11.84 tons from the previous day, the largest increase in holdings since September 6 last year, the current position is 860.76 tons, the highest since the beginning of December last year.

Obviously, despite the resistance of gold in the past two trading days, the bulls seem to be far from the point where the trend has gone. According to Bloomberg, at least one indicator shows that the gold's rise is still accumulating momentum – this week, Comex gold open interest has climbed to its highest level since January, from the issue between the US and North Korea to the European election. Global tensions have spawned demand for safe-haven assets.

Frank Cholly, senior market strategist at RJO Futures in Chicago, said, “The open interest is rising because investors want to protect themselves in the face of all uncertainty. Everything is very geopolitical. The situation is like a gunpowder. ”

[Multiple negative factors are bullish, and the oil market is already unable to return to the sky? 】

In addition to gold, another big plunge overnight is undoubtedly a crude oil. Oil prices fell to a two-week low, due to unexpected increases in US gasoline inventories and increased US crude oil production, partially offsetting efforts by other oil-producing countries to cut global excess supply. US crude oil futures closed down 1.97 US dollars, or 3.8%, to 50.44 US dollars per barrel, the biggest one-day drop on March 8. Brent crude oil futures closed down $1.96, or 3.6%, to $52.93 a barrel.

The financial blog Zerohedge wrote that the dollar's gains are coming back, the unexpected construction of gasoline inventories, the increase in US crude oil production, and the ability of UAE leaders to question the oil market's rebalancing. These four factors have led to a collapse in crude oil and gasoline futures.

Chris Kettenmann, chief energy strategist at New York Macro Risk Consultants Ltd., said: "The apparent increase in US gasoline product stocks has continued to increase the production of the local 48 states, which keeps us cautious about oil prices. We will not buy at this time."

Earlier data released by the US Energy Information Administration (EIA) on Wednesday showed that US crude oil inventories fell last week due to increased production at refineries, but gasoline inventories increased last week and refined oil inventories fell. EIA announced that as of the week of April 14, US crude oil inventories fell by 1.034 million barrels, and the market is estimated to reduce 1.47 million barrels. The data also showed that US refined oil inventories decreased by 1.955 million barrels to the lowest level in November 2015. The market is estimated to reduce 988,000 barrels; US gasoline inventories increased by 1.542 million barrels, which rose for the first time in eight consecutive weeks. The new high since February 10, the market is estimated to reduce 1.938 million barrels.

In addition, last week, US domestic crude oil production increased by 17,000 barrels to 9.252 million barrels per day, which increased for nine consecutive weeks and remained above the 9 million barrels per day mark, hitting the highest level since August 2015.

The Wall Street Journal commented on EIA crude oil inventory data, saying that US oil companies increased production speed or caught up with OPEC production. EIA data shows that although Alaska's oil production has declined, the 48-week increase in oil production in the United States has helped the US oil production to increase, bringing it to a 20-month high; OPEC leaders will meet next month to discuss Whether the production reduction agreement will be postponed, but the latest published EIA data has worried the market. The speed of US oil and gas production will catch up with the speed of OPEC production, thus occupying the market share of Saudi Arabia and other countries.

Abhishek Kumar, senior energy analyst at Interfax Energys Global Gas Analytics, told Reuters: "Although the market expects OPEC to extend production at the upcoming May meeting, US oil production growth is still the main bearish factor for oil prices.

Earlier, OPEC and non-OPEC producers such as Russia agreed to cut production by nearly 1.8 million barrels per day in the first half of 2017 to improve the oversupply situation for nearly three years. However, the current rise in US crude oil production has caused the market to doubt whether OPEC's production cuts are enough to improve the situation.

[The French election will meet the final contest. Who can laugh at the end?" 】

Looking ahead, investors' focus on the last two trading days of this week is likely to turn again to the French elections that have entered the impact stage. At 2 am Beijing time tomorrow, 11 presidential candidates in the French election will appear on television, and it is likely to become the final contest of these candidates before the election.

According to the process, each candidate in the TV debate will have an additional 15 minutes to show their time. However, unlike the general debate, two-and-a-half-minute candidates are free to choose topic elaboration, and the rest of the time is to answer questions from the moderator. There will be no direct confrontation between candidates.

Earlier investors generally expected that the mainstream pro-European French general election candidates will eventually win the final round of elections. However, in a recent poll, four major candidates, Mei Langxiong, Le Pen, and two mainstream candidates, Mark Hong and Fillon, staged a four-way situation, which increased the chances of Mei Langxiong and Le Pen winning. .

Kanman Public France head of the poll, Emmanuel Riviere, said that the current situation has never been seen before, and the four heavyweight candidates have made the election situation very complicated. The hesitation of the French voters has caused the polling agencies to be very worried. Uncertainty and volatility in 2017 have increased significantly over the previous years.

At present, more than one-third of voters still have not made the final choice, which also makes the election results have great uncertainty.

Previously, the market has already hedged the risk of the euro's plunge in advance. The EUR/USD hedging trade (the option trade against the risk of the euro's plunge) hit a record high, surpassing the Brexit period:

Stock investors are also heavily hedging the risk of stock market downturns:

In the bond market, the spread of French German bond yields continues to widen:

Bank of America Merrill Lynch believes that the current risk premium may be mainly due to uncertainty. Once the election dust settles, investors also overcome the shock of unexpected results, and the focus will shift to the longer-term strategic impact that the market believes.

The bank said, “The impact of such events will far exceed the market's return period, and it is difficult to accurately calculate their price impact due to too much uncertainty. If the market faces unexpected results again, investors can expect similarities. Response - Volatility occurs immediately in the first few days, after which the market becomes more calm and awaits clear policy results.

Bank of America Merrill Lynch also pointed out that "our European strategist expects that if Mark Long or Fei Yong wins, French stocks will rise, but if Le Pen wins, France's Brexit risk will expand and the stock market will fall 13-23%. Financial stocks will also be negatively affected. This also means that European credit spreads will expand significantly, and the US credit market will adjust to changes in the euro zone credit spreads."

Editor: Xiaoxiang

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