1.21 Financial Market News Express
2025-01-21
2901
On Tuesday (January 21, Beijing time), spot gold trading was around 2707.18, with gold prices rising on Monday supported by the weakening of the US dollar. The market assessed the impact of US President Trump's policies during his second term in office on the economy; US crude oil fell more than 1%, trading around $76.34 per barrel. Trump was sworn in for the second time and stated that he would immediately declare a national energy emergency, commit to enriching strategic oil reserves, and export US energy to the world.
UK unemployment rate, Eurozone January ZEW economic sentiment index, Canadian CPI data, and more unexpected news on Trump's first day in office.
gold market
Gold prices rose on Monday, supported by the weakening of the US dollar, as the market assessed the impact of US President Trump's policies during his second term in office on the economy.
Spot gold rose 0.3% to $2709.09 per ounce, as the US market was closed for the Martin Luther King Day holiday and trading volume was low. US gold futures fell 0.7% to $2730.20, narrowing the spot premium after a Trump administration official stated that President Trump will release a broad trade memorandum on his first day in office but will not impose new tariffs.
In recent weeks, the price difference between New York futures and spot prices has been raised as traders have priced potential import tariffs from the United States and increased delivery volumes for Chicago based inventory.
UBS analyst Giovanni Staunovo said, 'I believe that President Trump will lead to increased market volatility, and some of his policies may maintain high inflation rates for a longer period of time.'. This should continue to support safe haven assets such as gold.
After the slowdown in core inflation data, dovish remarks from Federal Reserve Governor Waller, and reports of gradually introducing tariffs led traders to increase the number of interest rate cuts this year from only one to two, gold prices hit their highest level since December 12, 2024 last week.
Spot silver rose 0.7% to $30.52 per ounce; Palladium fell 0.8% to $940.29; Platinum fell 0.2% to $940.70.
Oil market
Oil prices fell on Monday after US President Trump was sworn in for the second time and announced an immediate national energy emergency, promising to enrich strategic oil reserves and export US energy to the world.
Brent crude oil futures closed down 0.8% at $80.15 per barrel, as the market settled ahead of schedule due to the impact of the Martin Luther King Jr. holiday in the United States. US crude oil futures fell 1.7% to $76.58 per barrel. The March contract for US crude oil, which is more actively traded, fell 1.2% to $76.48. Due to the US holiday, US crude oil contracts will not be settled.
A Trump administration official did not provide details about the national emergency in a speech earlier on Monday, but Trump and his allies have hinted that they will use their power to quickly approve new oil, gas, and power projects that typically take years to get approved. The official said that Trump will also sign an executive order targeting Alaska, and added that the state is crucial to US national security and can export liquefied natural gas to other regions and allies in the United States.
Trump also stated in his inauguration speech that he would impose tariffs on other countries and promised to thoroughly reform the trading system. UBS analyst Giovanni Staunovo said the focus is on which executive orders Trump will sign in the next 24 hours.
It is expected that Trump will also announce some policies, including ending the ban on issuing liquefied natural gas export licenses, as part of a broader strategy to strengthen the economy.
After the Biden administration imposed sanctions on over 100 oil tankers and two Russian oil producers, Brent and US crude oil prices rose more than 1% last week, marking the fourth consecutive week of increase.
Analysts from ANZ Bank stated in a client report that while new sanctions may reduce Russia's oil supply by nearly 1 million barrels per day, the recent price increase may be short-lived depending on Trump's actions. They said that Trump has promised to help quickly end the Russia Ukraine war, which may involve relaxing some restrictions in order to reach an agreement.
foreign exchange market
The US dollar consolidated its decline on Tuesday after President Trump did not announce new tariffs and there were reports that any new taxes would be levied in a "moderate" manner, which greatly relieved trade risk currencies.
In his inauguration speech, Trump announced emergency measures in immigration and energy, as well as a more expansionary foreign policy, including a commitment to reclaim the Panama Canal.
However, the speech only briefly mentioned the issue of tariffs, and so far, there have been no details on how or when tariffs will be imposed. Taylor Nugent, Senior Market Economist at the National Australia Bank, said, "This does not mean that tariffs will not be imposed, but it is seen as a sign of a gradual approach and opposition to comprehensive tariffs
The market reacted quickly, and the US dollar index fell 1.2% on Monday, marking the largest daily decline since the end of 2023. The latest reading of the index is 108.060, slightly above the support level around 107.70. Previously, US President Trump was quoted as saying that he would not impose trade tariffs directly after his inauguration ceremony. The Wall Street Journal reported on Monday that Trump will release a wide-ranging trade memorandum on Monday, but will not impose new tariffs on his first day in office. An official from the incoming government confirmed this report.
Market participants have been anticipating that Trump will announce trade tariffs through an executive order. This move will strengthen expectations of rising inflation and long-term high Federal Reserve policy rates.
Monex's European Macro Research Director Nick Reese said, "The market seems to have taken comfort from the news suggesting that Trump will not impose tariffs on the first day. However, we believe that this confidence may be a bit misplaced. It is always unlikely to announce broad tariffs on the first day, but announcing more targeted import tariffs shortly after inauguration day is another issue
The US dollar index fell as much as 1.3% at one point, to 108.23. The index hit a 26 month high of 110.17 last week. Due to the closure of the US market during the Martin Luther King Day holiday, trading volume has decreased compared to usual.
Since the November presidential election, the US dollar has risen 4% as traders expect Trump's policies to boost economic growth and inflation. Investors' attention is focused on the policies that Trump will announce on his first day in office. At a rally on Sunday, Trump stated that he will strictly restrict immigration. Some analysts predict that Trump will trigger the International Emergency Economic Powers Act (IEEPA).
IEEPA is a federal law in the United States that authorizes the President to regulate economic transactions in response to unusual and special threats. In addition to tariffs, immigration and tax reductions will also be major issues of market concern.
Ajay Rajadhyaksha, a research analyst at Barclays Bank, said that on the fiscal front, "we will be watching whether President Trump will mention fiscal stimulus policies
The euro rose 1.3% to $1.04. The euro hit a two-year low of $1.0177 last week. At the same time, the softening of US inflation data and the prospect of multiple interest rate cuts by the Federal Reserve have recently boosted risk assets; The Japanese yen remained strong, with the US dollar falling 0.4% against the yen to 155.61. The Bank of Japan will hold a policy meeting earlier this week, and the market generally expects the central bank to raise interest rates at this meeting.
international news
Trump sworn in as the 47th President of the United States
On the 20th local time, Donald Trump, the elected President of the United States and a Republican, was officially sworn in as the 47th President of the United States at his inauguration ceremony held in Washington D.C. The swearing in ceremony on that day was presided over by Chief Justice John Roberts of the United States Supreme Court, and Trump completed the oath under Roberts' leadership. On the same day, Vice President elect Vance was officially sworn in as Vice President of the United States. (CCTV)
Trump nominated Commerce Secretary Lutnik outlines new administration's tariff plan
On Monday, Howard Lutnick, the Commerce Secretary nominated by US President Trump, detailed how Trump will use his "external tax bureau" and the administration's strategy on tariffs. Lutnik said at a rally celebrating the inauguration of the president in Washington that the "external tax bureau" will "impose tariffs", and foreign companies must pay this tax if they want to do business in the United States. Lutnik said, "If foreign companies want to sell products in the wealthiest country on Earth, they must pay." The nominee for Secretary of Commerce was also appointed by Trump as the person in charge of implementing trade and tariff policies. Lutnik's remarks indicate that the US government views tariffs as a form of taxation, but only targeting foreign goods and companies. He added: "If these companies do not want to pay, they can only build factories in the United States, hire Americans and provide high paying jobs."
Trump sworn in as the 47th President of the United States
On the 20th local time, Donald Trump, the elected President of the United States and a Republican, was officially sworn in as the 47th President of the United States at his inauguration ceremony held in Washington D.C. The swearing in ceremony on that day was presided over by Chief Justice John Roberts of the United States Supreme Court, and Trump completed the oath under Roberts' leadership. On the same day, Vice President elect Vance was officially sworn in as Vice President of the United States. (CCTV)
Putin: Russia is willing to engage in dialogue with the US government on the situation in Ukraine
On the 20th local time, Russian President Putin stated during a video conference of the Executive Committee of the Federal Security Council that Russia is open to dialogue with the new US administration regarding the conflict in Ukraine. Putin also stated that Russia has never refused to engage in dialogue with US authorities and is prepared to cooperate on an equal footing with any US government. But bilateral cooperation should be based on equality and mutual respect, as well as taking into account Russia's role in global affairs, including its role in consolidating strategic stability and security. (CCTV)
Hungarian Prime Minister: High energy prices stifle competitiveness of European businesses
Hungarian Prime Minister Orban stated on January 20th local time that the Ukrainian crisis is not a game, but a war. In fact, not only Ukraine is on the side of the war, but all European countries have fallen into war: soaring prices, EU funds being swallowed up on the front lines, sanctions harming businesses, and high energy prices stifling the competitiveness of European companies.
On the day of Trump's inauguration, the United States announced that it would withdraw from the Paris Agreement
On January 20th local time, the White House announced that President Trump will sign an executive order to withdraw the United States from the Paris Agreement. In December 2015, nearly 200 parties to the United Nations Framework Convention on Climate Change reached the Paris Agreement at the Paris Climate Change Conference. In November 2016, the Paris Agreement officially came into effect. According to the temperature control targets proposed in the Paris Agreement, by the end of this century, the increase in global average temperature compared to pre industrial levels should be controlled within 2 degrees Celsius, and efforts should be made to control the temperature rise within 1.5 degrees Celsius. (CCTV)
Domestic news
The consumer market is experiencing a "rejuvenation" trend, and policies are helping to activate the "main engine"
As the Spring Festival approaches, the festive atmosphere in various regions is becoming increasingly strong, and the consumer market is full of vitality. Various regions have successively introduced implementation rules for subsidies for purchasing new products such as mobile phones and tablets. The home appliance industry has expanded its coverage with the policy of exchanging old for new products, further stimulating the consumption potential of durable consumer goods. The tourism market during the Spring Festival holiday is also expected to continue to grow, and the space for service consumption growth is accelerating. The role of consumption as the "main engine" of economic growth will be further enhanced. The interviewed experts stated that with the efforts of multiple departments and local policies, the potential space for consumption of goods and services will be accelerated this year.
The price of naphtha has risen, and refining enterprises are accelerating their integrated transformation
Since entering 2025, under the influence of multiple factors, the price of naphtha, an important raw material and front-end product in the petrochemical industry, is experiencing a significant increase. According to data from Shandong Zhuochuang Information Co., Ltd. (hereinafter referred to as "Zhuochuang Information"), since early January, the price of locally refined naphtha in Shandong has shown a continuous increase followed by a slight decrease. Among them, the upward trend was strong in mid January, and the daily increase on January 11th was the highest in nearly 5 years. Zhuochuang Information analyst Zhang Jinyi told Securities Daily reporters that the price of locally refined naphtha has risen this round, mainly due to the impact of the refined oil market, and it is expected to experience a correction in the second half of January. Several experts admitted in interviews with reporters that with the promotion of the "dual carbon" target and the accelerated transformation of the refining industry, the role of naphtha in enhancing the integration of refining and chemical processes in the industry will become increasingly important.
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