SILVER: Silver Just Shy of ATHs; Trendline Support in Gold/Silver Ratio Noted
Spot silver is currently at $50.5/oz, up another 2.5% on the session and just shy of yesterday's $51.2 all-time high. This month's rally in silver and precious metals more broadly has come despite a bounce in the dollar index. Momentum is clearly positive, with the idea of a "debasement trade" gaining more widespread traction amongst market participants in recent weeks.
- Beyond yesterday’s high, our technical analysts flags resistance at $51.405 (4.000 proj of the Sep 4 - 16 - 17 price swing), which shields round number resistance at $52.0.
- Bloomberg noted earlier this morning that "The silver lease rate, the one-month of return holders of silver in London vaults get loaning their metal, topped 35%, indicating a deepening shortage".
- Silver's rally has outstripped gold both month- and year-to-date, pressing the gold/silver ratio below 80 for the first time in a year. In the second chart below, we highlight long-term trendline support in the Gold/Silver ratio drawn from the 2011 low. This trendline intercepts at 77.5bps this quarter.
Figure 1: Silver Prices Since 1970 (Quarterly)
Figure 2: Gold/Silver Ratio Since 1975 (Quarterly)
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MNI: US EIA: CRUDE OIL STOCKS EX SPR +3.94M TO 424.6M SEP 05 WK
- US EIA: CRUDE OIL STOCKS EX SPR +3.94M TO 424.6M SEP 05 WK
- US EIA: DISTILLATE STOCKS +4.72M TO 120.6M IN SEP 05 WK
- US EIA: GASOLINE STOCKS +1.46M TO 220.0M IN SEP 05 WK
- US EIA: CUSHING STOCKS -0.36M TO 23.9M BARRELS IN SEP 05 WK
- US EIA: SPR +0.51M TO 405.2M BARRELS IN SEP 05 WK
- US EIA: REFINERY UTILIZATION WEEK CHANGE +0.6% TO 94.9% IN SEP 05 WK
SCANDIS: Fresh Strength For NOK and SEK Since the US Equity Open
Fresh strength seen for Scandi FX since the US cash open, seemingly a function of the broader dollar pullback post-US PPI rather than in response to any fresh domestic catalyst. NOK and SEK outperform the G10 basket on an intraday basis.
- USDNOK (-0.9%) is narrowing the gap to the June 17 low at 9.8615, clearance of which would expose the December 2022 low at 9.6982.
- A reminder that this morning’s August inflation report was stronger-than-expected, driving a 7bp intraday rise in 2-year NOK swap rates and placing heightened focus on tomorrow’s Q3 Regional Network Survey. A Norges Bank hold next week is still possible if that survey is hawkish.
- USDSEK meanwhile has registered a fresh multi-year low, with support seen at 9.2307 (March 2022 low).
- Tomorrow’s Swedish calendar includes the final August inflation report, details of which will be important to judge the likelihood of a September rate cut. With Riksbank Deputy Governor Jansson not coming across as overtly dovish following the lower-than-expected flash release last week, the Executive Board could decide to keep rates steady in September, and save some dry powder for later this year if required.
- Riksbank Governor Thedéen also speaks tomorrow at 1200BST. The topic of the speech is banking sector liquidity.
GLOBAL: MNI Tech Trend Monitor - Highlighting Key Longer-Term Trends
MNI Tech Trend Monitor: https://emedia.marketnews.com/marketnewsintl/MNITechTrendMonitor.pdf
We introduce the MNI Tech Trend Monitor - This document highlights a selection of key longer-term trends that we have identified in markets that could be reaching inflection points, trend reversals/extensions or technically significant levels.
Covering:
- UK Gilt 10y Yield
- UK Gilt 30y Yield
- ICE USD Index
- Europe Banking Stock Index (SX7E)
