UK Prime Minister Theresa May gets the ‘no-confidence’ vote in the Parliament with 325 winnings over 306 veto votes on the Brexit deal. However, complication has emerged as Britain is still trying to negotiate with the European Commission on Ireland’s backstop matter that has been rejected. Business leaders are calling for a second national referendum while the Brexit is expected to take effect March 29.
The US Government remains partially shut down and economists have quantified the economic loss to be more than US$65 billion, which exceeds the cost of building the border wall. No solid solutions came from the trade deal talks between US and China but some US officials say that reducing the tariffs could be one way to get China concur on the negotiations.
President Donald Trump cancelled a five-men delegation led by Finance Secretary Steven Mnuchin to the annual Davos World Economic Forum in Switzerland. Currently, 800,000 civil servants have not received their pay due to the standstill in some of the Federal Ministerial departments and many activities have to be suspended to save cost.
The Organisation of Petroleum Exporting Countries (OPEC) and its alliances have cut the oil output by 751,000 barrels per day to 31.6 million barrels per day (BPD) in December. The leader Saudi Arabia slashed production by 468,000 bpd to just over 10.5 million bpd. The conglomerate vowed to continue the effort in January to lift crude prices due to shorter output on a global basis.
US dollar/Japanese yen jumped higher last week as the dollar recovered. Market trend bounced from 108.00 as demand rose. This week, we reckoned the prices may climb higher to 111 before profit-taking occurs. Subsequently, we foresee the market will thread sideways due to uncertainties in the dollar during the trade truce period between US and China.
Euro/US dollar receded last week to counterbalance the dollar-yen’s upward trend. This week, we predict the support will rise to 1.13 in case it falls further. From technical study, resistance will emerge at 1.15 with strong selling interest.
British pound/US dollar climbed higher last week after May won the Parliament vote in supporting her. Market trend reached 1.3 and began to fall as selling pressure emerged. This week, we expect the trend to correct but it will be contained from 1.27 to 1.30. Uncertainties still linger around the pound, with Brexit just three months away.
Gold prices fell after topping off US$1,295 per ounce last week. This week, we forecast the decline will be shallow and supported at US$1,270 per ounce. Hence, the overall range could be contained from US$1,270 to US$1,300 per ounce if no surprise emerges.
WTI Crude prices stood well on US$50 per barrel last week and advanced after positive news of a production cut in December by OPEC members. We foresee there will be strong resistance at US$55 per barrel in coming week.
Silver prices fell last week as predicted after the market failed to pierce above US$15.80 per ounce. This week, we reckoned the the trend will draw down for a correction with support to be tested at US$15 per oz.
Crude Palm Oil (FCPO) Futures on Bursa Derivatives traded higher after the rollover activity. New active month in April settled at RM2,223 per MT on Friday. The market trend is well supported at RM2,130 per MT while positively affected by strong demand in soyoil prices. This week, we foresee the trend will be supported at RM2,200 per MT and it will likely rise further to RM2,300 per MT.
Dar Wong has 30 years of trading and hedging experiences in the global financial market. The opinion is solely his own. He can be reached at www.pwforex.com
Source: Borneo Post Online