Data released by the U.S. Bureau of Labor Statistics on Friday showed that the U.S. non-farm payrolls increased by 850,000 in June, compared with expectations for an increase of 690,000. The previous value was revised up from an increase of 559,000 to an increase of 583,000. The U.S. unemployment rate rose 0.1 percentage points to 5.9% in June, 0.3 percentage points higher than expected.
After the release of non-agricultural data, U.S. federal funds rate futures suggested that market expectations for the Federal Reserve to raise interest rates once in December 2022 increased slightly. Specifically, the market expects that the probability of the Fed raising interest rates once at the September 2022 meeting is 63.0%; if there is no interest rate increase in September, the probability of raising interest rates once in November is 73.6%; if both September and July Without a rate hike, the probability of a rate hike at the December meeting is 107.3%.
No agreement was reached at the OPEC+ ministerial meeting on Friday, as the UAE still blocked the adoption of the proposal to increase supply, and negotiations will continue next Monday.
The OPEC+ meeting did not reach an agreement
Oil prices have continued their strong performance recently. Brent crude oil exceeded US$75/barrel in the early stage. Market participants believe that the optimistic recovery of global demand will continue to provide support to oil prices.
OPEC+’s new ministerial meeting will determine the alliance’s production policy for the second half of this year and has attracted market attention. However, the meeting that was originally scheduled to end on July 1, Beijing time, was blocked by the United Arab Emirates. It was postponed due to last minute objections. At this point, the OPEC+ meeting has added greater uncertainty.
“On July 1, according to the preliminary agreement reached between Saudi Arabia and Russia, OPEC+ production will increase crude oil production by 400,000 barrels per day from August to December. The total monthly production will increase by 2 million barrels per day. However, the UAE has previously rejected the relevant agreement. It is seeking to increase the OPEC+ crude oil baseline production to approximately 3.8 million barrels per day, that is, from the baseline in October 2018 to April 2020. The increase in the benchmark means that the actual reduction in production is lower. It also means that under higher price levels, other OPEC+ members can no longer conceal their intention to increase production.” said Zhong Meiyan, director of energy and chemical research at Everbright Futures Research Institute.
Based on current overall calculations, the production reduction agreement reached in April 2020 is until April 2022, and once supply recovers quickly thereafter, it will once again lead to an imbalance between supply and demand. , so OPEC+ proposed to extend production cuts until the end of 2022. This currently exceeds market expectations, so oil prices rose sharply during the session on Thursday.
International oil prices fell back after rising during the day yesterday, which was also mainly affected by the fluctuation of investor sentiment caused by the pending agreement of the OPEC+ meeting.
“The biggest uncertainty in the implementation of OPEC+ production policy comes from the United Arab Emirates, which seeks to increase the country’s crude oil production reduction baseline to 3.8 million barrels per day, which will be 317% higher than the current implementation of 3.8 million barrels per day. The baseline of 10,000 barrels/day is as high as 630,000 barrels/day. This request may be due to the commissioning of new projects in the UAE in recent years, which has expanded its production capacity to nearly 4 million barrels/day, which is higher than the scale when the production reduction agreement was reached.” Topix Futures Analyst An Ziwei said that the opposition of the UAE has increased the uncertainty of the adjustment of the agreement. However, at present, the differences between Saudi Arabia and Russia are relatively small, and the possibility of the final implementation of the production adjustment plan is still high. The subsequent negotiations will The focus is mainly on lobbying the UAE to either follow the original plan or grant small concessions to the UAE on this basis.
“On the whole, OPEC+ will strive to maintain the stability of the alliance, and therefore will adopt compromise measures for individual member states, that is, acquiescing to the UAE’s production increase, or increasing production appropriately. Quota ratio.” Zhong Meiyan said that judging from the preliminary production increase plan, the path to increase production is relatively certain. The market outlook will test the speed and rhythm of demand increase, and the spillover effect of high oil prices on demand will gradually appear.
In An Ziwei’s view, since this year, OPEC+, as the main growth point of the supply side, has significantly increased its control over oil prices. Therefore, the breakdown of the production reduction agreement at this time may lead to a fall in oil prices. Sex is still low. The trend of global demand recovery will continue in the third quarter. European and American markets are supported by peak consumption seasons and rising vaccine penetration rates. Indian market demand has also begun to bottom out.
“The recent trend of oil prices and OPEC+’s continued high implementation rate of production cuts show the firm determination of oil-producing countries to maintain oil prices. The market predicts that even if an agreement to increase production is reached at this OPEC+ meeting, it will There will be no blind dumping behavior, the influence and credibility of the OPEC+ oil production alliance on oil prices is still strong, and the overall trend of the international oil market is still good.” An Ran, an analyst at Hua’an Futures, said.
In Enron’s view, the change in output policy from maintaining production reduction to gradually increasing production shows that the global economy is gradually getting rid of the impact of the epidemic, population movement and trade are becoming increasingly frequent, and the increase in production itself This is absolute confidence in the real recovery of crude oil demand, and international oil prices still maintain a strong trend. If the pace of production increases gradually accelerates in the future, the high premium in oil prices in recent months may weaken.
The limited supply recovery in the United States has provided OPEC+ with some room to increase production. The gradual increase in production is not expected to change the overall tight environment of the crude oil market in the third quarter. An Ziwei believes that the upward trend in oil prices is expected to continue, and the short-term risk is mainly that the conflict between the UAE and OPEC+ may affect market confidence.
Li Yunxu, an analyst at SDIC Essence Futures, said that OPEC+ will continue to manage global crude oil production expectations by setting the amount of production cuts in the second half of the year and delaying the end of production cuts next year. If the results of this meeting Continue this route in terms of the total amount and pace of production increase, supplyFrom a short-term perspective, the tight balance is expected to continue in the third and fourth quarters, and the destocking speed will slow down. The short-term focus is mainly on the detailed adjustments that may result from internal production allocation, but it is expected to have a great impact on the overall framework of OPEC+’s gradual increase in production. micro.
Li Yunxu believes that for oil prices, the current accelerated recovery in global oil product demand has entered the confirmation period. The slightly difficult Iranian nuclear negotiations have led to the continued postponement of expectations for the return of Iranian production. Under the current policy guidance of OPEC+, the expectation of destocking continues to make the supply and demand side of the oil market still optimistic. After entering the third quarter, the marginal benefits of exceeding expectations on the demand side will be very limited. The release of Iranian production on the supply side may have an impact on the existing OPEC+ production reduction pattern. It is expected that oil prices may gradually shift from a trend to a high oscillation pattern.
U.S. non-agricultural data in June exceeded expectations
Yesterday, domestic Precious metals rose slightly, with Shanghai gold rising by 0.82% and Shanghai silver rising by 0.11%. Caution triggered by Friday’s U.S. non-farm payrolls data and a stronger dollar limited gains in precious metals prices.
In fact, since the Federal Reserve meeting last month, the overall performance of precious metals has been a downward trend under the pressure of the strong US dollar. Among them, gold fell from US$1,860/oz to US$1,750/oz, a drop of nearly 6%; silver fell from US$27.8/oz to US$25.6/oz, a drop of nearly 8%. Judging from the actual trend, the Fed’s tightening signal has indeed brought significant suppression to precious metals.
“After the Federal Reserve’s interest rate meeting in June, judging from the performance of the financial market portfolio, the market’s expectations for marginal tightening of monetary policy have eased to some extent.” Everbright Futures Analyst Exhibition Dapeng said that Federal Reserve Chairman Powell has also defended loose monetary policy, so risk assets have performed strongly.
“The number of ADP employment in the United States in June changed by 692,000, which was expected to be 600,000, and the previous value was 978,000. Although the data was higher than expected, it was still lower than the previous value. The market The response was relatively muted. The non-farm payrolls released on Friday are relatively more important.” Wu Jiang, an analyst at SDIC Esxin Futures, said that since the Fed meeting in June, the market generally believes that raising interest rates and reducing the scale of bond purchases is only a matter of time, and hawks There are more Fed officials taking a stance, but the Fed’s policy is constrained by economic data, especially employment and inflation data.
“The U.S. ADP employment data is slightly higher than expected, and the U.S. economy is still in a period of rapid recovery recently, so investors will most likely believe that the non-farm employment data will also be better than expected. , this is negative for gold, and the market sentiment will be cautious before the data is released.” In Zhan Dapeng’s view, after the Federal Reserve’s interest rate meeting, gold has been showing a low and slightly hovering trend after falling rapidly, and the rebound is weak, so the market is also worried If this time’s non-farm payrolls data is significantly better than expected, it may be the “last straw” that crushes gold prices.
Data released yesterday showed that the U.S. non-farm payrolls increased by 850,000 in June, which was expected to increase by 690,000. The previous value was revised upward from an increase of 559,000 to an increase of 583,000.
The U.S. unemployment rate rose 0.1 percentage points to 5.9% in June, 0.3 percentage points higher than expected. The U.S. labor force participation rate in June remained unchanged at 61.6%, 0.1 percentage point lower than expected. The U.S. Bureau of Labor Statistics reported significant job growth in leisure and hospitality, public and private education, professional and business services, retail trade and other services.
June non-farm employment data shows that with the expiration of various previous unemployment benefits subsidies, the American people’s willingness to find jobs has begun to pick up, which is still a boon for the medium and long-term prospects of the economy. Optimistic signal. However, the labor force participation rate is still at a low level, indicating that employment promotion actions still have a long way to go, which curbs further optimism in the market.
“On the whole, the non-agricultural data is mixed, the job market has not yet reached the level of rapid repair, and it will take time to make substantial progress.” Xu, an analyst at Orient Securities Futures Ying told the Futures Daily reporter that as far as precious metals are concerned, after the release of non-agricultural data, U.S. bond yields and the U.S. dollar index fell, which is bullish for gold.
“The market’s judgment is that the non-agricultural data is not enough to trigger the Federal Reserve to quickly tighten monetary policy. The Federal Reserve is still waiting for stronger employment data in the autumn and continues to observe the persistence of inflation. In the Federal Reserve During the wait-and-see period, precious metals have bottomed out,” Xu Ying said.
Yide Futures analyst Zhang Chen said in an interview that from the perspective of the main influencing factors in the medium term, since the end of the Federal Reserve’s interest rate meeting in mid-June, both the actual interest rate and the U.S. dollar exchange rate have The differentiation of end trends has caused the coexistence of long and short influences, causing precious metals to continue to oscillate at low levels.
“On the one hand, the dot plot released by the Federal Reserve meeting shows that the time for raising interest rates is expected to be advanced, thereby squeezing the time for QE contraction, tightening expectations, and compounding the recent recurrence of epidemics in some parts of Europe. , supporting the rebound of the US dollar, thereby putting pressure on precious metals. On the other hand, inflation expectations that continued to decline in the early period have been restored, and real interest rates have fallen slightly, which has provided certain support to precious metals.” Zhang Chen said.
In Wu Jiang’s view, the overall logic of precious metals trends in the second half of the year is that the market weighs the outlook for inflation and the Fed’s policy. “In the third quarter, the market still continued the Fed’s policy contraction thinking, looking for rhythm in economic data and Fed officials’ statements. However, as time goes by, the inflationary pressure brought about by post-epidemic recovery and economic flows still needs to be paid attention to, and inflation trading is in precious metals. The logical weight will be improved.” Wu Jiang said.
Xu Ying believes that the marginal growth rate of the U.S. economy will gradually decline in the second half of the year. “After the effects of fiscal stimulus subside, demand for goods peaks, the service industry moderately returns to pre-epidemic levels, and the overall economy will gradually return to normal growth. Inflation pressure will continue at least until the end of the year, and gold may bottom out near $1,700 per ounce. .” Xu Ying said.
��Promote. “Wu Jiang said.
Xu Ying believes that the marginal growth rate of the U.S. economy will gradually decline in the second half of the year. “After the fiscal stimulus effect subsides, demand for goods peaks, and the service industry returns moderately to before the epidemic. level, the overall economy will gradually return to normal growth. Inflation pressure will continue at least until the end of the year, and gold may bottom out near $1,700 per ounce. “Xu Ying said.</p
