heapsowins| Bonda Asia: Market risk aversion heats up, gold rises sharply

Rick Rieder, chief investment officer of BlackRock Global fixed income, the world's largest asset manager, said on May 20th that perhaps the best way for the Fed to slow inflation should be to cut interest rates rather than keep them high. According to BlackRock's website, Rieder is responsible for managing about 2. 5% of the company.Heapsowins.4 trillion dollars in assets, which is more thanHeapsowinsThe total market capitalization of Nvidia. "I'm not sure if raising interest rates will really reduce inflation," he said on a program. I put forward a point, that is, if you cut interest rates, you can reduce inflation. " Rieder explained that benchmark interest rates in the US are now at their highest level in this generation, allowing wealthy Americans to earn unprecedented income from fixed-income investments. "Middle-to higher-income Americans are benefiting from high interest rates." "this makes us shift to a service-oriented economy, where more money is spent on services," Rieder said. "along with the decline in commodity prices, more disposable income flows to the service sector."

In addition, according to Mohamed El-Erian, Allianz's chief economic adviser, the Fed is at risk of lagging behind in delaying interest rate cuts to curb inflation. "the Fed made adjustments based on the data," El-Erian said. This is contrary to their adjustment in December, and now they have to turn around. As they are turning around and staying high for a longer time, the market is moving in the other direction. " He also mentioned that the Fed had to adjust based on actual economic conditions rather than inflation data. Like other market watchers, the El-Erian has previously argued that the US central bank should look beyond its 2 per cent inflation target in a new era of structural pressure on price growth. "is the inflation target the right target?" he said.Heapsowins? We're all talking about wanting to go back to 2%, and 2% is completely arbitrary. If we pursue the wrong inflation target, this mistake will mean unnecessary sacrifice of growth. This is a world affected by high inflation. And we have just experienced a world affected by lower inflation. "

The data to watch today are the monthly rate of tertiary industry activity in Japan in March, the annual rate of PPI in Germany in April and the difference in retail sales of CBI in May in the UK.

Gold / US dollar

Gold climbed sharply last Friday, breaking the 2400 mark. In addition to the Fed's interest rate cut expectations continue to provide support for gold, risk aversion triggered by rising geopolitical tensions also provide strong support for safe haven commodity gold. In addition, gold in breaking through the pressure of 2400, attracting some technical aspects of the intervention of buying also formed a certain support for gold. Gold continued to climb in early trading in Asia and is now trading around 2444. Today, we will focus on the pressure situation near 2460, with the lower support around 2430.

USD / JPY

Last Friday, the dollar / yen fluctuated upward, and the Japanese line closed slightly higher, now trading at 155.HeapsowinsNear .70. A spate of hawkish comments by Fed officials to cool the Fed's expectations of interest rate cuts is the main reason for the continued rise in the exchange rate. However, fears of the Bank of Japan intervening again in the foreign exchange market and the Bank of Japan's expectation of raising interest rates this year have limited the room for appreciation. Today, we will focus on the pressure situation near 156.50, with the lower support around 155.00.

Us dollar / Canadian dollar

Last Friday, the US dollar / Canadian dollar fluctuated and consolidated, the daily line closed slightly lower, and the exchange rate is now trading around 1.3610. In addition to profit-taking to a certain extent on the exchange rate, crude oil prices continue to rebound under the support of improved demand expectations is also an important factor to pressure the exchange rate. However, the technical buying formed near the 1.3600 mark and the expected cooling of the Fed's interest rate cut limit the room for decline in the exchange rate. Today, we will focus on the pressure situation near 1.3700, with the lower support around 1.3500.