While the global stock markets ended the week positively with the expectations that the concerns about the banking sector were largely left behind and the “hawkish” steps in monetary policies were approaching, the rises were also dominated by the commodity market.
Analysts stated that the slowdown trend of inflation in both Europe and the USA, although not at the desired pace, was welcomed in the markets, and stated that this situation was interpreted as “the end of hawkish policies is approaching”.
The intense data agenda, especially the non-farm employment to be announced in the USA next week, has been in the focus of investors.
The banking crisis, which resulted in the collapse of 3 banks in the USA, was prevented from spreading further with the steps of the US Federal Reserve (Fed) and the government. As the concerns about the banking sector faded, attention was turned to the monetary policies of the next period, while the predictions that the Fed will increase the interest rate by 25 basis points in the next meeting started to strengthen in the pricing in the money markets.
Gold fell 0.5 percent last week, silver rose 3.5 percent, palladium 3.1 percent and platinum 1.3 percent.
After the sharp rises in gold, domestic buyers’ holding on hold in India reduced the demand for gold.
Analysts pointed out that silver continues to be in demand as a “safe haven”.
Base metals rise as dollar depreciates
The decrease in demand for the dollar last week had a positive effect on base metals.
In the over-the-counter market, copper gained 0.9 percent, aluminum 3.1 percent, nickel 0.9 percent and zinc 2%.
Goldman Sachs analysts think the world could enter a serious copper crisis in the third quarter of this year if China repeats the high demand it showed in February. According to the bank, China’s copper demand increased by 13 percent year-on-year last month. The 3.7 percent annual decrease in copper production in Chile in February also caused concerns about the supply.
Brent crude finished last week with 7 percent gains. The rising geopolitical risks in the markets triggered the concerns about the global oil supply were effective in the rise in prices.
Russian President Vladimir Putin stated that they will place tactical nuclear weapons in Belarus, “We will do this without violating our international obligations on non-proliferation.” had used the phrase.
Expectations of demand recovery in China support Brent oil prices. China’s National Petroleum Corporation reported that apparent oil demand in the country could rise 5.1 percent this year to 756 million tons. In addition, the decline in the commercial crude oil and gasoline stocks of the USA, the world’s largest oil consumer, supports prices upwards with the perception that the demand is strong in the country.
Natural gas traded on the New York Mercantile Exchange, on the other hand, followed a horizontal course last week. After the mild winter in the USA, the increase in natural gas stocks and the above-normal air temperatures suppressed natural gas prices.
Agricultural commodities saw sharp rises last week
Last week, sharp rises came to the fore in agricultural commodities.
Rapid increases were seen in agricultural commodities last week due to factors such as the depreciation of the dollar, geopolitical risks, and optimism towards China.
Wheat traded on the Chicago Mercantile Exchange rose 0.5 percent, corn 2.7 percent and soybeans 5.4 percent, while rice decreased 2.6 percent.
Sugar, which saw its highest level since November 2016 with 0.22 dollars in the Intercontinental Exchange (ICE), rose 7.1 percent, while cocoa, which saw its highest level since August 2016 with 2,963 dollars, rose 1.6 percent and cotton rose 9 percent, coffee fell 4.9 percent.
Analysts stated that the El Nino weather event has a 61 percent probability of occurring in the second half of this year, adding that El Nino may negatively affect sugar production by bringing heavy rains to Brazil and drought to India.
The decrease in sugar production in Thailand also affected sugar prices upwards.
