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Palladium soared to a record high on Tuesday on worries over short supplies of the metal used in emissions controlling devices in automobiles, while gold fell 1% after U.S. Treasury Secretary Janet Yellen said interest rates may need to rise.

·         Spot palladium eased 0.2% to $2,965.35 per ounce by 12:32 p.m. EDT (1632 GMT), after hitting an all-time high of $3,017.18.

·         “There are stricter pollution controls globally that we’ve not seen in the past, which means vehicles that were not previously required to use auto-catalysts will now have to, and hence more demand,” said Bart Melek, head of commodity strategies at TD Securities.

 

·         “For the foreseeable future, the market will be in physical deficit and prices will go higher,” he added.

 

·         Concerns about supply shortages were exacerbated after top producer Nornickel announced disruptions at two mines due to flooding.

 

·         Spot gold fell over 1% after Yellen said U.S. interest rates may need to rise to prevent the economy from overheating as more support programs come on line.

 

·         Gold was last down 0.9% to $1,776.73 per ounce.

 

·         U.S. gold futures settled down 0.9% at $1,776.

 

 

·         Higher interest rates increase the opportunity cost of holding non-yielding bullion.

 

·         “Gold failing for the fourth time in two weeks ahead of $1,800, which has been the top of the range, triggered some profit taking before it dove $20 on Yellen’s unexpected comment,” said Tai Wong, head of metals derivatives trading at BMO.

 

“Yellen had a long and consistent history as a dove at the Fed.”

 

·         Also reducing bullion’s allure for other currency holders was a stronger dollar.

 

·         “We continue to see prices averaging $1,775/oz in Q2, given the physical market has cushioned the downside, ETP (exchange-traded products) outflows have started to slow and the dovish Fed messaging keeps risks skewed to the upside,” said Standard Chartered analyst Suki Cooper.

 

·         Silver fell 2% to $26.34 per ounce, after hitting its highest since Feb. 26.

 

·         Platinum dipped 0.6%, to $1,222.93.

 

 

·         Yellen says she sees no inflation problem after rate hike comments roil Wall Street

U.S. Treasury Secretary Janet Yellen said on Tuesday she sees no inflation problem brewing, downplaying earlier comments that rate hikes may be needed to stop the economy overheating as President Joe Biden’s spending plans boost growth.

 

·         Yellen says U.S. pushing to end global ‘race to the bottom’ on corporate taxes

The U.S. is taking a two-pronged approach toward its goal of implementing a worldwide minimum tax for corporations as it progresses through negotiations with a global consortium, Treasury Secretary Janet Yellen said Tuesday.

 

·         Fed's Kaplan says jury is out about inflation outlook

Dallas Federal Reserve Bank President Robert on Tuesday said he expects inflation to rise in coming months and then “settle down” near 2.25% by year’s end, adding that he’s still trying to understand how much of the rise in inflation will persist into coming years.

 

·         Fed's Daly: not time to talk taper yet

San Francisco Federal Reserve Bank President Mary Daly on Tuesday said the U.S. economy is a “long way” from the Fed’s goals of full employment and 2% inflation, and it is not time yet to start talking about reducing support for the recovery.

 

·         U.S. factory orders rebound in March; business spending on equipment strong

New orders for U.S.-made goods rebounded in March and business spending on equipment was stronger than initially estimated, boosted by robust domestic demand, though momentum could slow because of bottlenecks in the supply chain.

The Commerce Department said on Tuesday that factory orders increased 1.1% in March after falling 0.5% in February.

 

·         U.S. trade deficit hits a record high amid pent-up demand

The U.S. trade deficit jumped to a record high in March amid roaring domestic demand, which is drawing in imports, and the gap could widen further as the nation's economic activity rebounds faster than its global rivals.

The White House's $1.9 trillion pandemic relief package and the expansion of the COVID-19 vaccination program to all adult Americans have led to a boom in demand, which is pushing against supply constraints. Economic activity is also being boosted by the Federal Reserve's ultra-easy monetary policy stance.

The trade deficit increased 5.6% to an all-time high of $74.4 billion in March, the Commerce Department said on Tuesday. The trade gap was in line with economists' expectations.

Imports soared 6.3% to record high $274.5 billion in March. Goods imports shot up 7.0% to $234.4 billion, also a record high. Imports of consumer goods were the highest on record, as were those for food and capital goods.

Exports surged 6.6% to $200.0 billion. Exports of goods vaulted 8.9% to $142.9 billion. They were led by industrial supplies and materials, capital and consumer goods. The pandemic remained a drag on services exports, especially travel. At $17.1 billion in March, the services surplus was the smallest since August 2012.

 

·         Goldman Sachs employees in U.S., UK to return to office by summer

 

·         S&P Dow Jones brings bitcoin, ethereum to Wall St with cryptocurrency indexes

The S&P Dow Jones Indices launched new cryptocurrency indexes, it said on Tuesday, further mainstreaming digital currencies including bitcoin and ethereum by bringing them to the trading floors of Wall Street.

The new indexes, S&P Bitcoin Index, S&P Ethereum Index and S&P Crypto Mega Cap Index, will measure the performance of digital assets tied to them.

The list will expand to include additional coins later this year, the division of financial data provider S&P Global said.

 

·         Bitcoin, Ethereum see strong inflows in latest week - CoinShares data

Bitcoin and ethereum, the two largest cryptocurrencies in terms of market capitalization, posted strong inflows last week that saw investments in the sector hit $489 million, the largest since February, CoinShares weekly data showed on Tuesday.

 

·         Dogecoin surges 30% to a record above 50 cents as speculative crypto trading continues

Dogecoin, the cryptocurrency based off a viral dog meme from nearly a decade ago, surged 30% on Tuesday to set a new record high at more than 50 cents per coin.

 

·         ‘Rising threats’ and Russia on the agenda as G-7 foreign ministers meet in London

Foreign ministers from the Group of Seven (G-7) developed nations are to meet in London on Tuesday to discuss the most pressing geopolitical challenges facing the world, including Russia and China.

Geopolitical issues that the U.K. said “threaten to undermine democracy, freedoms and human rights” will be on the agenda Tuesday, including “relations with Russia, China, and Iran, as well as the crisis in Myanmar, the violence in Ethiopia, and the ongoing war in Syria,” the government said in a statement.

Russia’s “ongoing malign activity,” the U.K. said, including the build-up of troops on the border with Ukraine, its imprisonment of opposition figure Alexei Navalny and the situation in Belarus, are high on the agenda.

 

·         UK and India agree to deepen ties, including in universities

British Prime Minister Boris Johnson and Indian leader Narendra Modi agreed in a call on Tuesday to try to deepen cooperation on areas such as education, health, science and defence.

 

·         CORONAVIRUS UPDATES:

COVID-19 infections are still rising in 31 countries.

Global Cases: 154.94M (+755,475)
Global Deaths: 3.23M (+12,791)

 

No.1-3

U.S. Cases: 33.27M (+40,947)
U.S. Deaths: 592,358 (+802)

India Cases: 20.65M (+382,691)
India Deaths: 226,169 (+3,786)

Brazil Cases: 14.85M (+65,454)
Brazil Deahts: 411,588 (+2,759)

 

No.98

Thailand Cases: 72,788 (+1,763)
Thailand Deaths: 303 (+27)

·         Pfizer plans to file for full FDA approval of Covid vaccine at the end of this month

 

·         Pfizer bets on COVID-19 vaccine demand for years, sees sales of $26 bln in 2021

Pfizer Inc (PFE.N) on Tuesday raised its forecast for 2021 COVID-19 vaccine sales by more than 70% to $26 billion and said demand from governments around the world trying to halt the pandemic could contribute to its growth for years to come.

 

·         Singapore says it detected the ‘double mutant’ Covid variant from India in its community, tightens restrictions

Domestically, new restrictions will be imposed from May 8 until May 30. The measures include limits on the size of social gatherings, pre-event testing for large gatherings and the closure of gyms.

 

·         Japan considering state of emergency for Tokyo, other areas beyond May 11 - media

The Japanese government is considering an extension of the state of emergency for Tokyo and other major urban areas that was scheduled to end on May 11, the Yomiuri Newspaper said on Wednesday.

 

·         Serious Covid situation in greater Bangkok

Covid-19 is raging in Greater Bangkok, including several crowded communities in the capital, and infections were partly linked to visits to pubs and Songkran travel, according to the Centre for Covid-19 Situation Administration.

 

Reference: CNBC, Reuters, Worldometers, Bangkok Post