Tag: WTI

  • Markets Slide as Israel Strikes Iran, Safe Havens Climb

    Markets Slide as Israel Strikes Iran, Safe Havens Climb


    Asia-Pacific equities slumped today after Israel launched a military strike on Iran, targeting nuclear facilities and escalating geopolitical tensions in the region. The strike, which came without US support, was followed by a sharp vow of retaliation from Tehran. The immediate reaction saw oil prices spike nearly 9%, as traders rushed to price in potential supply disruptions across the Middle East. The risk-off mood gripped markets across asset classes, dragging equities lower and boosting safe havens.

    Gold, Swiss Franc, and Yen all climbed as investors sought shelter from the rising uncertainty. Meanwhile, Dollar also found some renewed strength as it recovered, after broader weakness earlier in the week triggered by softer-than-expected inflation data and rising odds of a September Fed rate cut.

    On the other hand, Kiwi led the declines, pressured by both heightened risk aversion and a sharp contraction in local manufacturing activity. Kiwi was followed closely by Aussie and Sterling. Loonie managed to hold mid-pack, underpinned partially by the surge in oil prices. Euro also traded with relative calm, despite the Middle East tensions, as ECB’s message this week has helped anchor expectations that easing cycle may be drawing to a close.

    Technically, NZD/USD’s upside momentum has been rather week with the choppy rise from 0.5845. Firm break of 0.6005 support should confirm short term topping. It would be a bit early to conclude the that rally from 0.5484 has completed. But even as correction, fall from 0.6079 would extend to 0.5845 cluster support (38.2% retracement of 0.5484 to 0.6079 at 0.5852).

    In Asia, at the time of writing, Nikkei is down -1.15%. Hong Kong HSI is down -0.98%. China Shanghai SSE is down -0.83%. Singapore Strait Times is down -0.45%. Japan 10-year JGB yield is down -0.05 at 1.41. Overnight, DOW rose 0.24%. S&P 500 rose 0.38%. NASDAQ rose 0.24%. 10-year yield fell -0.055 to 4.357.

    Looking ahead, Eurozone industrial production and trade balance are the main features in European session. Later in the day, Canada will release manufacturing sales and wholesale sales. US will publish U of Michigan consumer sentiment.

    NZ BNZ manufacturing fall to 47.5, slumps back into contraction

    New Zealand’s manufacturing sector slipped sharply back into contraction in May, with the BusinessNZ Performance of Manufacturing Index plunging from 53.3 to 47.5. The reading not only marks a decisive reversal from April’s expansion but also sits well below the historical average of 52.5.

    Key components of the index showed broad-based weakness: production dropped from 53.0 to 48.7, employment tumbled from 54.6 to 45.7, and new orders fell sharply from 50.8 to 45.3—all signaling deteriorating activity across the sector.

    The sharp decline was echoed in business sentiment, with 64.5% of survey respondents offering negative comments—up from 58% in April. The commentary reflects a growing sense of pessimism as manufacturers grapple with falling demand, weak forward orders, and subdued consumer spending. Rising input costs, ongoing economic uncertainty, and stalled investment plans are compounding pressures.

    BNZ’s Senior Economist Doug Steel said that “the New Zealand economy can claw its way forward over the course of 2025, but the PMI is yet another indicator that suggests an increased risk that the bounce in GDP reported for Q4, 2024 and Q1, 2025 could come to a grinding halt”.

    WTI oil soars on Israel-Iran escalation, but resistance looms near 78

    Crude oil prices surged sharply following news that Israel had launched direct airstrikes against Iran, targeting its nuclear and ballistic missile infrastructure. WTI crude is now trading more than 30% above its April low of 55.20, as geopolitical tensions in the Middle East reignite supply risk concerns.

    Israeli Prime Minister Benjamin Netanyahu confirmed that the military had struck Iran’s Natanz enrichment site, leading nuclear scientists, and the core of its missile program, vowing to continue operations “for as many days as it takes to remove this threat.”

    The military action was carried out without coordination with Washington. US Secretary of State Marco Rubio emphasized that Israel acted unilaterally and that the US was not involved in the strikes.

    Technically, despite the sharp rally in WTI oil, strong resistance is expected between 74.65 and 78.08 to limit upside 161.8% projection of 55.63 to 64.60 from 60.14. at 74.65 and 200% projection at 78.08), on overbought condition. Break of 69.11 resistance turned support would indicate that the current buying wave has likely peaked.

    Still, the path forward depends heavily on how geopolitical events unfold. Should the conflict escalate further or draw in regional actors, a break above the resistance zone could open the door to a test of 81.01, a level that marks the potential start of a broader bullish reversal in the longer-term oil trend.

    USD/CHF Daily Outlook

    Daily Pivots: (S1) 0.8067; (P) 0.8138; (R1) 0.8174; More….

    Intraday bias in USD/CHF remains on the downside, with immediate focus now on 0.8038 low. Strong support could be seen there to bring rebound, and above 0.816 support turned resistance will turn intraday bias neutral first. However, firm break of 0.8038 will resume larger down trend. Next target will be 61.8% projection of 0.9200 to 0.8038 from 0.8475 at 0.7757.

    In the bigger picture, long term down trend from 1.0342 (2017 high) is still in progress and met 61.8% projection of 1.0146 (2022 high) to 0.8332 from 0.9200 at 0.8079 already. In any case, outlook will stay bearish as long as 55 W EMA (now at 0.8696) holds. Sustained break of 0.8079 will target 100% projection at 0.7382.

    Economic Indicators Update

    GMT CCY EVENTS ACT F/C PP REV
    22:30 NZD Business NZ PMI May 47.5 53.9 53.3
    04:30 JPY Tertiary Industry Index M/M Apr 0.30% 0.20% -0.30% -1.00%
    04:30 JPY Industrial Production M/M Apr -1.10% -0.90% -0.90%
    06:00 EUR Germany CPI M/M May F 0.10% 0.10%
    06:00 EUR Germany CPI Y/Y May F 2.10% 2.10%
    08:30 GBP Consumer Inflation Expectations 3.40%
    09:00 EUR Eurozone Industrial Production M/M Apr -1.60% 2.60%
    09:00 EUR Eurozone Trade Balance (EUR) Apr 22.5B 27.9B
    12:30 CAD Manufacturing Sales M/M Apr -2.00% -1.40%
    12:30 CAD Capacity Utilization Q1 79.80% 79.80%
    12:30 CAD Wholesale Sales M/M Apr 0.30% 0.20%
    14:00 USD UoM Consumer Sentiment Jun P 53.5 52.2
    14:00 USD UoM Inflation Expectations Jun P 6.60%

     



    Source link

  • Trade Tensions Drag Dollar While Oil Jumps on OPEC+ Hold

    Trade Tensions Drag Dollar While Oil Jumps on OPEC+ Hold


    Risk sentiment remains fragile as the US session gets underway, with equity markets under pressure from renewed tariff threats. European stocks are particularly heavy after US President Donald Trump threatened to double tariffs on imported steel. UK equities, however, are finding some support from Prime Minister Keir Starmer’s announcement of increased defense spending.

    In the currency markets, Dollar is under broad pressure, currently the weakest performer of the day as traders react to the heightened trade uncertainty again. Loonie and Swiss Franc are also underperforming. Kiwi leads gains, followed by Yen and Aussie. Sterling and Euro sit in the middle.

    Meanwhile, oil prices have jumped after OPEC+ confirmed it would maintain output increases in July at pace of 411k barrels per day. Markets had been wary of a possible larger hike, as hinted by sources late last week. That outcome would have likely sparked a sharp bearish gap on Monday’s open. The restraint from OPEC+ has thus supported a modest rebound in crude.

    Technically, despite the rebound, WTI crude remains capped below key cluster resistance at 65.24 (38.2% retracement of 81.01 to 55.20 at 65.05. As long as this resistance zone holds, outlook will stay bearish for down trend resumption through 55.20 at a later stage. Nevertheless, firm break of 65.05/24 would bring strong rally to 61.8% retracement at 71.15, with risk of bullish trend reversal.

    In Europe, at the time of writing, FTSE is up 0.08%. DAX is down -0.45%. CAC is down -0.58%. UK 10-year yield is up 0.025 at 4.674. Germany 10-year yield is up 0.036 at 2.541. Earlier in Asia, Nikkei fell -1.30%. Hong Kong HSI fell -0.57%. Singapore Strait Times fell -0.10%. Japan 10-year JGB yield rose 0.004 to 1.509.

    UK PMI manufacturing finalized at 46.4, with tentative signs of stabilization

    UK manufacturing activity remained in contraction in May, with PMI finalized at 46.4, up modestly from April’s 45.4.

    The data indicate that the sector continues to face “major challenges,” according to S&P Global’s Rob Dobson, citing turbulent domestic and global conditions, trade uncertainty, subdued client confidence, and increased wage costs tied to tax changes.

    Still, there are early signs that the worst of the downturn may be easing. The indexes for output and new orders have risen for two consecutive months and were stronger than the initial flash estimates, hinting at possible stabilization.

    However, Dobson warned that the sector could either steady or slip further depending on how trading conditions evolve in the coming months.

    Eurozone PMI manufacturing finalized at 49.4, recovery progressing

    Eurozone PMI manufacturing was finalized at 49.4 in May, up from April’s 49.0 and marking the highest level in 33 months.

    Production increased across all four major economies: Germany, France, Italy, and Spain, supporting economist Cyrus de la Rubia’s view that the recovery is gaining traction.

    De la Rubia also noted that output has now risen for three straight months, reinforcing the view that the recovery is gaining traction. Historical data suggests a 72% chance of another output increase next month.

    Falling input costs, driven by lower energy prices, have enabled manufacturers to cut selling prices again, offering the ECB more flexibility for its expected interest rate cuts.

    However, the outlook remains clouded by external risks, particularly the threat of higher US tariffs on EU goods. Any escalation in transatlantic trade tensions could quickly derail the fragile rebound.

    Swiss GDP grew 0.5% in Q1, pharma exports surge on tariff frontloading

    Switzerland’s GDP expanded by 0.5% qoq in Q1, beating market expectations of 0.4% qoq. When adjusted for the impact of major sporting events, GDP growth came in even stronger at 0.8% qoq. The State Secretariat for Economic Affairs noted that the services sector posted broad-based gains and domestic demand remained firm, contributing to the overall solid performance.

    A standout was the chemical and pharmaceutical sector, which surged 7.5% in the quarter, driven by a sharp rise in pharmaceutical exports. This lifted overall manufacturing output by 2.1% and goods exports by 5.0%. Notably, exports to the US jumped significantly, suggesting possible front-loading in anticipation of evolving US trade policy.

    Japan’s PMI manufacturing finalized at 49.5, firms eye recovery despite trade headwinds

    Japan’s PMI Manufacturing was finalized at 49.5 in May, up from April’s 48.7. S&P Global’s Annabel Fiddes noted that business conditions “moved closer to stabilisation,” as declines in sales eased and firms reported improved hiring activity.

    Global trade tensions stemming from US tariffs continue to weigh on demand, with businesses citing “increased client hesitancy” and weaker orders.

    Despite persistent external challenges around tariffs, sentiment around future output improved, and hiring rose at the fastest pace in over a year.

    EUR/USD Mid-Day Outlook

    Daily Pivots: (S1) 1.1310; (P) 1.1350; (R1) 1.1387; More…

    Intraday bias in EUR/USD is back on the upside as rebound from 1.1064 resumed by breaking through 1.1417. Further rise would be seen to retest 1.1572. Strong resistance could be seen there to limit upside at first attempt. Below 1.1311 minor support will turn intraday bias neutral first. Nevertheless, decisive break of 1.1572 will confirm larger up trend resumption.

    In the bigger picture, rise from 0.9534 long term bottom could be correcting the multi-decade downtrend or the start of a long term up trend. In either case, further rise should be seen to 100% projection of 0.9534 to 1.1274 from 1.0176 at 1.1916. This will now remain the favored case as long as 55 W EMA (now at 1.0856) holds.

    Economic Indicators Update

    GMT CCY EVENTS ACT F/C PP REV
    23:50 JPY Capital Spending Q1 6.40% 3.80% -0.20%
    00:30 JPY Manufacturing PMI May 49.4 49 49
    01:00 AUD TD-MI Inflation Gauge M/M May -0.40% 0.60%
    06:30 CHF Real Retail Sales Y/Y Apr 1.30% 2.50% 2.20% 2.10%
    07:00 CHF GDP Q/Q Q1 0.50% 0.40% 0.20% 0.30%
    07:30 CHF Manufacturing PMI May 42.1 48.1 45.8
    07:50 EUR France Manufacturing PMI May F 49.8 49.5 49.5
    07:55 EUR Germany Manufacturing PMI May F 48.3 48.8 48.8
    08:00 EUR Eurozone Manufacturing PMI May F 49.4 49.4 49.4
    08:30 GBP Manufacturing PMI May F 46.4 45.1 45.1
    08:30 GBP Mortgage Approvals Apr 60K 65K 64K
    08:30 GBP M4 Money Supply M/M Apr 0.00% 0.20% 0.30%
    13:30 CAD Manufacturing PMI May 45.3
    13:45 USD Manufacturing PMI May F 52.3 52.3
    14:00 USD ISM Manufacturing PMI May 49.3 48.7
    14:00 USD ISM Manufacturing Prices Paid May 70.2 69.8
    14:00 USD ISM Manufacturing Employment Index May 46.5
    14:00 USD Construction Spending M/M Apr 0.30% -0.50%

     



    Source link

  • Focus Turns to Fragile Trade Progress as Dollar Lags in Cautious Markets

    Focus Turns to Fragile Trade Progress as Dollar Lags in Cautious Markets


    Dollar is once again under pressure in a relatively calm Asian session, as broader financial markets appear to have stabilized following the earlier bout of volatility driven by US deficit and debt concerns. Wall Street closed the day nearly flat with little direction, while US 10-year Treasury yield held above the 4.5% level after recent volatility. In Asia, risk appetite is returning modestly, with regional equities trading slightly higher.

    The spotlight, however, has shifted back to the slow-moving trade negotiations between the US and several of its major partners. Japan is intensifying its engagement with the US on tariff talks, with top negotiator Ryosei Akazawa said to make a fourth visit to Washington on May 30, just one week after this weekend’s third round. Akazawa is seeking a direct meeting with US Treasury Secretary Scott Bessent, who won’t attend the upcoming session. Prime Minister Shigeru Ishiba also held a 45-minute phone call with US President Donald Trump at the latter’s request, though Ishiba said Trump made no concessions on Japan’s demand for complete tariff elimination.

    On the European front, the Financial Times reported that US Trade Representative Jamieson Greer plans to deliver a strong message to European Trade Commissioner Maros Sefcovic. Washington views Brussels’ recent “explanatory note” as insufficient and continues to push for unilateral tariff reductions on US goods. Without meaningful concessions, the US is prepared to impose additional 20% reciprocal tariffs on EU exports.

    Meanwhile, US-China communication channels remain open but unclear. A call between Chinese Vice Foreign Minister Ma Zhaoxu and US Deputy Secretary of State Christopher Landau yielded “substantial progress” in Beijing’s phrasing, though neither side confirmed whether tariff issues were addressed. Earlier, Vice Premier He Lifeng emphasized China’s willingness to open its markets further to US firms, a potentially strategic signal of compromise from Beijing amid slow progress elsewhere.

    Currency markets continue to reflect a defensive stance. Yen remains the top performer for the week, followed by Euro and Swiss Franc. Dollar lags as the weakest currency, alongside Aussie and Kiwi. Sterling and the Canadian Dollar are holding in mid-pack.

    Technically, WTI crude oil reversed quickly after a brief spike to 64.60 earlier in the week. Overall outlook is that price actions from 55.20 low are merely a corrective pattern. Firm break of 60.54 support will suggest that the consolidation has completed with three waves to 64.60. Retest of 55.20/55.64 support zone should then be seen next.

    In Asia, at the time of writing, Nikkei is up 0.58%. Hong Kong HSI is up 0.77%. China Shanghai SSE is up 0.03%. Singapore Strait Times is down -0.20%. Japan 10-year JGB yield is down -0.007 at 1.555. Overnight, DOW fell -0.00%. S&P 500 fell -0.04%. NASDAQ rose 0.28%. 10-year yield fell -0.043 to 4.553.

    Looking ahead, retail sales data from the UK and Canada are the main focuses of the day.

    Sticky inflation persist as Japan’s core CPI climbs to 3.5%

    Japan’s inflation pressures remained elevated in April, with the core CPI (excluding fresh food) rising from 3.2% yoy to 3.5% yoy, beating expectations of 3.4% yoy and marking the highest level since January 2023. This keeps core inflation above the BoJ’s 2% target for over three years.

    Core-core CPI, which excludes both food and energy, also ticked up from 2.9% yoy to 3.0% yoy, suggesting broader underlying price momentum. Headline CPI held steady at 3.6% yoy.

    There were notable upward drivers in inflation. Energy prices surged 9.3% yoy, up from March’s 6.6% yoy. Food prices (excluding fresh items) jumped 7.0% yoy, up from 6.2% yoy. In particular, rice prices soared by 98.4% yoy, a seventh consecutive record high, reflecting persistent supply shortages.

    However, services inflation, closely watched by BoJ as a wage-sensitive component, edged slightly lower to 1.3% from 1.4%, tempering some of the hawkish signals.

    NZ retail sales rise 0.8% qoq in Q1, but ex-auto growth modest

    New Zealand retail sales volumes rose a stronger-than-expected 0.8% qoq in Q1 to NZD 25B, offering a positive surprise relative to market expectations of flat growth.

    According to Stats NZ, 10 of the 15 major retail industries saw increased activity, led by a 3.1% jump in motor vehicle and parts retailing and a 3.7% rise in pharmaceutical and other store-based sales. Clothing and accessories also saw a healthy 3.2% gain.

    Despite the upbeat headline, underlying momentum appears less robust when excluding the volatile auto sector. Core retail sales rose just 0.4% qoq, sharply missing expectations of a 1.5% qoq rise.

    Economic indicators spokesperson Michelle Feyen noted that growth was “modest” and broad-based.

    USD/CAD Daily Outlook

    Daily Pivots: (S1) 1.3840; (P) 1.3864; (R1) 1.3883; More…

    Intraday bias in USD/CAD remains mildly on the downside at this point. Deeper decline should be seen for retesting 1.3479 low, or further to 1.3727 key fibonacci level. Nevertheless, break of 1.3888 minor resistance will turn bias back to the upside, to extend the corrective pattern from 1.3749 with another rising leg.

    In the bigger picture, price actions from 1.4791 medium term top could either be a correction to rise from 1.2005 (2021 low), or trend reversal. In either case, further decline is expected as long as 1.4150 resistance turned support holds. Firm break of 38.2% retracement of 1.2005 (2021 low) to 1.4791 at 1.3727 will pave the way back to 61.8% retracement at 1.3069.

    Economic Indicators Update

    GMT CCY EVENTS ACT F/C PP REV
    22:45 NZD Retail Sales Q/Q Q1 0.80% 0.00% 0.90% 1.00%
    22:45 NZD Retail Sales ex Autos Q/Q Q1 0.40% 1.50% 1.40%
    23:01 GBP GfK Consumer Confidence May -20 -22 -23
    23:30 JPY National CPI Y/Y Apr 3.60% 3.60%
    23:30 JPY National CPI Core Y/Y Apr 3.50% 3.40% 3.20%
    23:30 JPY National CPI Core-Core Y/Y Apr 3.00% 2.90%
    06:00 EUR Germany GDP Q/Q Q1 F 0.20% 0.20%
    06:00 GBP Retail Sales M/M Apr 0.30% 0.40%
    12:30 CAD Retail Sales M/M Mar 0.60% -0.40%
    12:30 CAD Retail Sales ex Autos M/M Mar -0.10% 0.50%
    14:00 USD New Home Sales M/M Apr 696K 724K

     



    Source link

  • WTI declines to below .00 on potential OPEC+ output hike

    WTI declines to below $61.00 on potential OPEC+ output hike


    • WTI price drifts lower to near $60.75 in Friday’s early Asian session. 
    • Oil inventories rose by 1.328 million barrels in the week ended May 16, according to the EIA. 
    • The US and Iran will hold fresh nuclear talks on Friday. 

    West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $60.75 during the Asian trading hours on Friday. The WTI price edges lower amid concerns that global supply could outpace demand growth.

    The Organization of the Petroleum Exporting Countries and its allies (OPEC+) planned to boost oil output to regain market share, which might cap the upside for the WTI price. OPEC+ has raised oil output by more than previously expected since April, with its May output likely to increase by 411,000 barrels per day. OPEC leaders are also contemplating a similar increase in July, and could bring back as much as 2.2 million barrels-per-day (bpd) of supply to the market by November, Reuters reported earlier.

    The US Energy Information Administration (EIA) weekly report showed crude oil stockpiles in the US for the week ending May 16 climbed by 1.328 million barrels, compared to a rise of 3.454 million barrels in the previous week. The market consensus estimated that stocks would drop by 1.85 million barrels.  

    On Tuesday, the US obtained new intelligence suggesting that Israel is making preparations to strike Iranian nuclear facilities, even as US President Donald Trump has been pursuing a diplomatic deal with Tehran. It isn’t clear that Israeli leaders have made a final decision to carry out the strikes, CNN said, citing unnamed officials.  

    An attack by Israel would hinder any progress in those negotiations and contribute to tension in the Middle East, which provides about one-third of the world’s petroleum. Traders will closely watch the next round of Iran-US talks, which will take place on Friday in Rome. Any signs of progress in nuclear talks might weigh on the WTI price.

    WTI Oil FAQs

    WTI Oil is a type of Crude Oil sold on international markets. The WTI stands for West Texas Intermediate, one of three major types including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” because of its relatively low gravity and sulfur content respectively. It is considered a high quality Oil that is easily refined. It is sourced in the United States and distributed via the Cushing hub, which is considered “The Pipeline Crossroads of the World”. It is a benchmark for the Oil market and WTI price is frequently quoted in the media.

    Like all assets, supply and demand are the key drivers of WTI Oil price. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of WTI Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa.

    The weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of WTI Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. API’s report is published every Tuesday and EIA’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency.

    OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 Oil-producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact WTI Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia.



    Source link

  • Dollar Slips in Holiday Trade, Fed and BoE in Focus This Week

    Dollar Slips in Holiday Trade, Fed and BoE in Focus This Week


    Dollar drifted lower in subdued trading, with many Asian markets closed for holidays. Movements in the currency markets elsewhere were mixed. Traditional safe havens like Yen and Swiss Franc inching higher. But at the same time, risk-sensitive currencies such as Australian and New Zealand Dollars also advanced. Overall risk sentiment lacking clear direction.

    This lack of coherence highlights the current state of indecision. Traders are reasonable to be hesitant to take firm positions ahead of key events later in the week, including Fed and BoE rate decisions. Nevertheless, today’s US ISM Services PMI might still inject some short-term volatility. The manufacturing sector in the US has held up better than expected despite tariff shocks. It’s time for the services sector to face its own resilience test.

    On the trade front, US President Donald Trump announced a new 100% tariff on foreign-produced films, citing what he called a “very fast death” of the US film industry due to global competition. He also signaled that new tariff decisions on select countries could be announced in the coming weeks if negotiations stall.

    Meanwhile, Australian Prime Minister Anthony Albanese celebrated a landslide reelection and confirmed a “positive” conversation with Trump. Albanese reiterated continued engagement on AUKUS and tariff matters. However, despite the friendly rhetoric, markets remain wary of what’s next on the trade front.

    Oil sinks as OPEC+ ramps up output again, WTI heading back to 4-yr low

    Oil prices opened the week with a sharp gap lower, as traders responded to OPEC+’s weekend agreement to accelerate output increases for a second straight month. WTI crude is now heading back toward the four-year low of $55.20 set in April.

    OPEC+ will raise June production by 411k barrels per day. That brings the total additional supply from April to June to nearly one million barrels per day, representing 44% rollback of the group’s 2022-era production cuts.

    This shift has stoked concerns that global oil markets may soon swing into surplus. The broader concern is that OPEC+ may fully unwind voluntary production cuts by October unless compliance among members improves. Such a move would flood the market with more supply just as global demand outlooks remain clouded by trade tensions.

    Technically, prior rejection by 65.24 support turned resistance keeps WTI’s long term down trend intact. Further decline is now expected as long as 60.16 resistance holds. Firm break of 55.20 low will confirm down trend resumption. WTI could then decline through 50 psychological level to 100% projection of 72.37 to 55.20 from 65.32 at 48.20.

    Fed to hold, BoE to cut, and more global data

    Two major central banks will meet this week: Fed and BoE.

    Fed is widely expected to leave interest rates unchanged at 4.25–4.50%, a view fully priced in by markets with over 97% probability. As a result, there’s little room for surprise in the policy decision itself. Instead, attention will be on Chair Jerome Powell’s guidance—particularly on whether he hints at a rate cut in June.

    However, following last week’s solid non-farm payroll report, expectations have already tempered, with the probability of a June cut slipping to just 35%. Also, the US is in a 90-day tariff truce. Negotiations are said to be progressing. But any major developments, positive or negative, may not materialize until closer to early July.

    Given this backdrop, Powell is expected to reiterate that Fed is not in a rush to cut rates again, maintaining a data-dependent and cautious stance, especially while inflation expectations remain sticky and labor markets resilient.

    In the UK BoE is expected to proceed with a 25 bps rate cut, lowering its Bank Rate to 4.25%. Governor Andrew Bailey has recently emphasized the downside risks from global trade tensions, particularly after the IMF revised down UK and global growth forecasts.

    Yet while rhetoric has turned more cautious, markets will be looking to BoE’s updated projections for confirmation on how these concerns are turning into numbers. Inflation progress and growth expectations will be critical in assessing whether BoE will stick to a steady quarterly cutting path.

    Beyond the central banks, markets will be watching a series of key economic data. Highlights include US ISM Services PMI, employment data from Canada and New Zealand, Japan’s wage growth and household spending, Swiss CPI, and China’s trade balance.

    Here are some highlights for the week:

    • Monday: Swiss CPI; US ISM services.
    • Tuesday: China Caixin PMI services; Swiss unemployment rate; EUrozone PMI services final, PPI; UK PMI services final; Canada trade balance; US trade balance.
    • Wednesday: New Zealand employment; Germany factory orders; Swiss foreign currency reserves; UK PMI construction; Eurozone retail sales; FOMC rate decision.
    • Thursday: BoJ minutes; Germany industrial production, trade balance; BoE rate decision; US jobless claims, non-farm productivity.
    • Friday: Japan average cash earnings, household spending; China trade balance; Swiss SECO consumer climate; Canada employment.

    AUD/USD Daily Report

    Daily Pivots: (S1) 0.6384; (P) 0.6427; (R1) 0.6484; More…

    Intraday bias in AUD/USD remains on the upside for the moment. Rise from 0.5913 should continue to 61.8% retracement of 0.6941 to 0.5913 at 0.6548. On the downside, though, break of 0.6364 support will indicate short term topping, and turn bias to the downside for 55 D EMA (now at 0.6325) and below.

    In the bigger picture, as long as 55 W EMA (now at 0.6443) holds, the down trend from 0.8006 (2021 high) should resume later to 61.8% projection of 0.8006 to 0.6169 from 0.6941 at 0.5806. However, sustained trading above 55 W EMA will argue that a medium term bottom was already formed, and set up further rebound to 0.6941 resistance instead.

    Economic Indicators Update

    GMT CCY EVENTS ACT F/C PP REV
    01:00 AUD TD-MI Inflation Gauge M/M Apr 0.60% 0.70%
    06:30 CHF CPI M/M Apr 0.20% 0.00%
    06:30 CHF CPI Y/Y Apr 0.30%
    08:30 EUR Eurozone Sentix Investor Confidence May -14.9 -19.5
    13:45 USD Services PMI Apr F 51.4 51.4
    14:00 USD ISM Services PMI Apr 50.6 50.8

     



    Source link

  • WTI price bullish at European opening

    WTI price bullish at European opening


    West Texas Intermediate (WTI) Oil price advances on Monday, early in the European session. WTI trades at $63.19 per barrel, up from Friday’s close at $62.97.

    Brent Oil Exchange Rate (Brent crude) is stable, hovering around its previous daily close at $65.90.

    WTI Oil FAQs

    WTI Oil is a type of Crude Oil sold on international markets. The WTI stands for West Texas Intermediate, one of three major types including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” because of its relatively low gravity and sulfur content respectively. It is considered a high quality Oil that is easily refined. It is sourced in the United States and distributed via the Cushing hub, which is considered “The Pipeline Crossroads of the World”. It is a benchmark for the Oil market and WTI price is frequently quoted in the media.

    Like all assets, supply and demand are the key drivers of WTI Oil price. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of WTI Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa.

    The weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of WTI Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. API’s report is published every Tuesday and EIA’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency.

    OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 Oil-producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact WTI Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia.



    Source link

  • WTI price bearish, according to FXStreet data

    WTI price bearish, according to FXStreet data


    West Texas Intermediate (WTI) Oil price falls on Thursday, according to FXStreet data. WTI trades at $70.55 per barrel, down from Wednesday’s close at $71.16. Brent Oil Exchange Rate (Brent crude) is also shedding ground, trading at $74.29 after its previous daily close at $74.89.

    WTI Oil FAQs

    WTI Oil is a type of Crude Oil sold on international markets. The WTI stands for West Texas Intermediate, one of three major types including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” because of its relatively low gravity and sulfur content respectively. It is considered a high quality Oil that is easily refined. It is sourced in the United States and distributed via the Cushing hub, which is considered “The Pipeline Crossroads of the World”. It is a benchmark for the Oil market and WTI price is frequently quoted in the media.

    Like all assets, supply and demand are the key drivers of WTI Oil price. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of WTI Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa.

    The weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of WTI Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. API’s report is published every Tuesday and EIA’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency.

    OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 Oil-producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact WTI Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia.

    (An automation tool was used in creating this post.)



    Source link

  • WTI rises above $74.00 on larger drop in US crude oil inventories, hopes for China’s demand


    • WTI price gains traction to near $74.15 in Wednesday’s Asian session.
    • US crude oil inventories fell by 4.022 million barrels last week, according to the API. 
    • Oil traders brace for the FOMC Minutes on Wednesday ahead of the US December NFP report. 

    West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $74.15 on Wednesday. The WTI price edges higher amid expected higher Chinese demand and a larger drop in US crude stocks. 

    A large drop in US crude inventories last week provides some support to the WTI. The API weekly report showed crude oil stockpiles in the United States for the week ending January 3 fell by 4.022 million barrels, compared to a decline of 1.442 million barrels in the previous week. The market consensus estimated that stocks would decrease by 250,000 barrels. Furthermore, the escalating geopolitical tensions in the Middle East and ongoing Russia-Ukraine conflicts could boost the WTI price in the near term. 

    On Tuesday, the National Development and Reform Commission (NDRC), China’s top economic planner, issued a guideline for building a unified national market, breaking down market barriers to boost domestic demand while enhancing openness. The positive development surrounding the Chinese stimulus measure could boost the black gold price as China is the world’s second-largest economy. 

    ”While the market is currently range-bound, it is recording gains on the back of improved demand expectations fuelled by holiday traffic and China’s economic pledges,” Hilal said in a morning note. “However, the primary trend remains bearish.”

    Looking ahead, Oil traders will keep an eye on the Minutes of the Federal Open Market Committee (FOMC), which is due later on Wednesday. On Friday, the US employment data for December will be in the spotlight. Economists expect 154,000 new jobs for December, while the unemployment rate is expected to remain at 4.2% during the same report period. In case of a stronger-than-expecetd outcome, this could lift the Greenback and weigh on the USD-denominated commodity price in the near term. 

    Gold FAQs

    Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.

    Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.

    Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.

    The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.

     



    Source link