Asian stocks rise at the beginning of the last quarter
Asian stock markets had a strong start to the last quarter of the year on Monday, with futures for the S&P 500 index rising, and the dollar maintaining its stability, thanks to a last-minute agreement to avoid a U.S. government shutdown.
The benchmark Nikkei index in Japan jumped as much as 1.7% at the beginning of the session before retracting to a 0.7% gain in the afternoon. The yen also weakened to around 150 yen per dollar, which is a boon for exporters and their foreign earnings.
The eleventh-hour agreement to avert a U.S. government shutdown reached over the weekend also helped improve sentiment and lifted U.S. stock futures by 0.5% in Asia. The temporary funding bill passed over the weekend allows the government to continue operating until November 17, meaning key data releases, including the monthly jobs report due on Friday, can proceed as scheduled.
European futures also rose by 0.2%.
Strategists at TD Securities wrote in a client note, “Shutdown risks are only being pushed back, not eliminated.” They noted that “a sense of reduced uncertainty is likely to bring some relief to markets,” but “market volatility is likely to remain elevated as investors await the next catalyst, which is likely to be top-tier data releases.”
Japanese stocks received support from the quarterly Tankan survey conducted by the Bank of Japan, which showed an improvement in business sentiment. The broader MSCI Asia-Pacific index, excluding Japan, remained flat.
Among the major gainers were Japanese car manufacturers and electronics companies.
Toyota Motors’ stock rose by 1.4%, and Sony Group’s stock increased by 1.7%.
In the currency market, the dollar remained strong, despite falling short of its recent highs, except against the yen, where it reached its highest level since October last year at 149.74 yen.
Christopher Wong, a currency strategist at OCBC, said, “Relative growth resilience in the United States and the Federal Reserve’s hawkish stance are factors that continue to support the dollar until U.S. data starts showing more concrete signs of a slowdown.”
oil
Crude oil prices stabilized after late-week declines.
Futures for Brent crude for December rose 16 cents or 0.2% to $92.36 per barrel. Futures for U.S. West Texas Intermediate crude gained 20 cents, or 0.1%, to $90.99 per barrel.
Here are the key points from the report
Asian stock markets had a strong start to the last quarter, with S&P 500 futures rising and the dollar holding steady, thanks to a last-minute agreement to avoid a U.S. government shutdown.
The benchmark Nikkei index in Japan initially jumped 1.7% before retracting to a 0.7% gain. The yen weakened to around 150 yen per dollar.
The eleventh-hour agreement to avert a U.S. government shutdown over the weekend improved sentiment and lifted U.S. stock futures by 0.5% in Asia.
European futures also rose by 0.2%.
Strategists at TD Securities noted that shutdown risks are being postponed, not eliminated, and market volatility is likely to remain elevated.
Japanese stocks were supported by the quarterly Tankan survey, which showed an improvement in business sentiment.
Major Japanese car manufacturers and electronics companies saw gains, including Toyota Motors and Sony Group.
In the currency market, the dollar remained strong, except against the yen.
Crude oil prices stabilized after late-week declines.
Asian stocks rise at the beginning of the last quarter
In light of what is happening now through the budgets of great countries
and the continuous attempts to control inflation and resort to raising interest rates,
there is a prodigal son who stands against this solution,
which is “bonds and stocks,” as James Carville, political advisor to President Bill Clinton,
indicated to the Wall newspaper. Street Journal in 1993:
“I used to think that if there was a rebirth of him wanting to come back as president,
or to be the pope or a baseball player with 400 hits in a season,
but now I want to be like a (bond market) because it scares everyone.
This is something that must be taken into consideration by traders.
This was a comment on the current events regarding the bond market crash last week,
as the average ten-year borrowing costs were raised in the Group of Seven countries,
and the average return rose above 3% Assured.
The situation now makes investors and traders worried about the rise in government bond yields,
but they are not alone in suffering from small companies that want to borrow,
and those looking for home loans are also very worried about
what is happening with the high-interest rates that the modern world has not witnessed before,
but they have no choice. Just adapting and coexisting with the current situation.
Will things go back to how they were?
It is worth noting that since 2008, US bond yields have not risen to this extent.
Bonds have witnessed a 10-year rise as a benchmark for global debt markets.
Germany also witnessed a rise in the 10-year bond yield,
which negatively affected the movements of the fixed income markets
in the euro area and reached its highest level in more than 10 years.
The British 30-year bond yield jumped in the largest amount
before the intervention of the Bank of England to relieve the pressure
the country is experiencing due to the costs of government debt
and the matter is now subject to an effective economic solution
All solutions are futile now As for the G7 countries,
which are Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States,
the average 10-yeardebt yield is approaching a major turning point Its stop at around 3.15% means
that it is well above the 1.3% average seen for most of the past decade,
and if the Bank of Japan is not spending billions of yen
to keep its benchmark return below 0.25%;
This average was a long time ago higher.
High inflation figures suggest
High inflation figures suggest that central banks will need to tighten policy
further in the coming months to cool consumer prices,
and the average official interest rate in the G7 countries is around 1.75%,
after hovering aroundzero in the past two years,
and that does not appear to be high enough to curb prices at the high level.
Consumer prices have reached, prompted the Central Bank to act,
even if it was something late, and, as we mentioned,
it raised prices by raising interest rates to keep inflation below the target level of 2%. 7.2%
is very much the two-decade average of 1.7%, or the one-decade level of 1.6%,
or the average for the period from 2002 to 2012 at 1.8%,
which has made central banks on alert to tighten policies further in the coming months.
All of that, and we haven’t yet looked at the impact of rising and high borrowing costs on stocks.
While stocks soared to record highs when borrowing costs
were close to or below zero, the best advice now is probably: “Don’t look down (because the bottom is far)”
The total market capitalization of global stock markets is currently around $90 trillion
although this is 47% higher than when the pandemic shut down economies in the first quarter of 2020; It is 25% below the peak recorded in November and certainly everything
that is happening is causing the world to fear this year about the bond market.
It is expected that the G7 average will break 3.5% in the coming period.
Is it possible to achieve the desired goal and return
stability to the bond market once again?
The terrifying week and news of employment, inflation, bonds, and interest constitute a warning of danger to the global economy
It is expected that the Federal Reserve’s strength towards tightening monetary policies
will increase after Friday’s statement on the job rate for September,
as growth in the US jobs index is expected,
which will make the market accelerate significantly during the coming period.
Jobs may have increased by about 250 1,000 jobs last month,
while the unemployment rate may have registered at 3.7%,
just above its lowest level in five decades,
according to the median estimate in a Bloomberg survey of several economists.
It was less than it was in the five years before the epidemic and less than it was in 2020.
Will the employment rate continue to grow?
The continuation of the Federal Reserve in its strict policies toward the economy
and raising interest rates remains the obstacle to the growth process in most areas,
and a significant decline in the employment rate is expected in the coming period.
Policymakers accepted another tightening of 125 basis points this year,
which negatively affects the nature of investment and therefore employment rates as well.
It seems that raising interest rates is not an effective solution for the US economy,
despite the false strength of the dollar
that negatively affects the health of US bonds and stocks,
which negatively affects monetary policies throughout Europe and the world.
It seems that sticking to this solution and not retracting
it is the only decision in the hands of decision-makers.
At the Federal Reserve in other places,
many central banks around the world may raise interest rates,
with hikes likely as far afield as Australia and Peru. Meanwhile,
key policy statements by UK Conservative Party leaders
will be scrutinized for any sign of a shift in unfunded tax cuts
that most economists and global economists have predicted.
Looking at the eurozone
It also suffers from inflation, price swings, and an abundance of opinions without a clear plan.
For example, the United Kingdom is likely to remain in focus
after Treasury Secretary Kwasi Karting announced last month
tax cuts that lack plans on how to finance them,
the appearance of Bank of England officials may lead to scrutiny
for For any hints about ways to deal with the situation,
as Catherine Mann is scheduled to speak on Monday and Deputy Governor Dave Ramsden next Friday,
and it is expected to develop solutions and
consider effective plans to curb inflation and face successive crises,
more European Central Bank statements regarding
The potential size of an interest rate hike later this month will notably attract scrutiny from the news
that inflation has reached its highest level since the launch of the euro currency.
The account of the September decision,
issued on Thursday, may provide new evidence that
can move officials in an effective direction to confront the events
and events with a more in-depth look.
And about the events in Asia
After the intervention during the past week from the Japanese government side,
it is expected that investors will re-intervene again to
save Yemen from the expected slide in the coming period,
and the “Tankan” data on business confidence and
the consumer price indexin Tokyo due to be released
at the beginning of the week will show the strength of price increases in September,
and the impact of inflation concerns, and the global recession on corporate activity,
which intervenes again not reassuring on the health of the Japanese economy.
Coming back to the situation in Sri Lanka
after raising interest rates for the second week in a row by 9.5 points,
it seems that the Central Bank is insisting on the same position this year,
as raising interest rates has become the only popular solution in the world at this time.
Australia is also expected to take the same ideological side towards the crisis
by raising interest rates by half a percentage point for the fifth consecutive month on Tuesday,
although increases may be smaller in the future,
as inflation shows signs of slowing in response to the rapid increases in interest
She achieved her hope during the meetings of the past weeks.
In New Zealand, the matter is nearing its end as its turn to emphasize its hope is that
it is expected to raise rates by half a percentage point during Wednesday’s meeting this week.
Coinciding with the release of consumer price data in South Korea.
Tesla’s delivery of electric cars declines, and the company displays the first “Optimus” robot
With the increasing demand for electric cars,
the company decided to expand its activities and open4 new factories on three different continents.
In the third quarter of this year 2022,
the company was able to deliver 343,830 electric cars worldwide,
and this result was announced On Sunday,
it was less than expected, and this is due to the difficulty of transporting cars,
especially at the time of the logistical peak,
while expectations were that up to 358 thousand cars were shipped,
and this also comes in light of the desire to increase production in large quantities,
and thus delivery volumes change with the end of each year stage.
Company’s Delivery Indicators
The most important indicator that shows the strength of Tesla’s financial results is monitored,
which is the indicator of quarterly deliveries,
and despite the intensity of competition in the auto industry and the entry of giant companies into the field of electric cars,
now that Tesla has retained its leading position in the cars that Battery powered,
which is the company’s first model when
it was launched a decade ago and was the largest sales within the United States and China,
and the announcement of these results came after a very important event for Tesla,
which is “Artificial Intelligence Day”.
Teslaannounces the first robot at the “Artificial Intelligence Day” event
The artificial intelligence ceremony was held under the organization of “Tesla” on Friday,
where the company announced the first robot,
which bears the name “Optimus”,
and the results presented by the robot consisted of movement on the stage
an attempt to greet the audience without relying on any connections,
and Musk indicated that the robot has The ability to do more,
but we are afraid that he will fall on his face,
and videos have been shown that prove some of the work of the robot,
including carrying some things.
company in its cars and who helps the driver.
artical name Bond markets are in danger to the global economy
Oil continues to decline as stocks fall in Asia while the US dollar index rises
The price of oil continues to fall after falling to its lows in January,
Asian stock indexes fell during early trading on Monday,
while the US dollar continued to rise under the slump of the sterling.
Oil prices fall due to concern over fuel demand raised by recession concern
Oil pricescontinued to fall on Monday morning
after falling to January lows last weekend.
By Monday morning, November futures for Brenton
the London Futures Exchange in London cost $85.60 per barrel,
$0.55, or 0.64 percent lower than the previous session’s closing price.
The trading price of these futures fell last Friday by $4.31,
declining by 4.8 percent to $86.15 per barrel.
The price of November WTI oil futures in electronic trading
on the New York Mercantile Exchange
(NYMEX) is $78.28 per barrel by this time,
$0.46 or 0.57 percent lower than the final value of the previous session.
Over the past week, Brent lost 5.7 percent of its cost, WTI lost 7.1 percent of its value, and both brands ended trading
at their lowest levels since January.
In the analysts ‘ view, the main reason for the recent decline in
oil prices is concerns about a global recession that has affected all financial markets,
caused stocks to fall and caused bond yields to rise, as well as the dollar to rise.
Traders are also watching discussions on a new package of anti-Russian
sanctions that could affect the oil and gas sector.
artical name Oil continues to decline as stocks fall in Asia
The dollar is rising due to the financial concern in the UK and the sterling is slumping
Sterling fell to a record low on Monday as traders rushed out with speculation
that the new government’s economic plan would maximize Britain’s financial resources.
The sharp decline in sterling has helped the US dollar as a safe haven to reach
a new peak in two decades against a basket of major currencies.
Sterling fell by 4.9 percent to an all-time low of $1.0327,
before stabilizing around $1.05425 percent below the previous session’s close.
Sterling reached an all-time low against the sterling dollar
and reached an all-time low against dollar.
The euro is nearing a new 20-year dollar low,
concerned about an economic recession,
as the energy crisis spills into winter as the war against Ukraine escalates.
The dollar was boosted by its rebound against the yen after
the shock of Japanese authorities’ currency interference last week,
as investors refocused on the contrast between the Fed’s hawkishness and the Bank of Japan’s insistence
on holding onto massive stimulus.
The dollar index against a basket of major currencies reached 114.58
for the first time since May 2002 before falling to 114.02,
up 0.78 percent from last weekend.
The common European currency fell to $0.9528,
declining by 0.71 percent at $0.9623 in its last trading.
The dollar rose by 0.54 percent to 144.175 yen,
continuing its rise to a 24-year high of 145.90 on Thursday,
and fell to 140.31 on the same day after Japan’s intervention in buying
the yen for the first time since 1998.
On Monday, Japanese Finance Minister Shun’ichi Suzuki reiterated
that the authorities are ready to respond to speculative currency movements.
Elsewhere, the risk-sensitive Australian dollar fell to $0.64865,
the lowest since May 2020,
and was last trading 0.6 percent weaker at $0.6491.
China’s overseas yuan fell to a new low of 7.1728
against the dollar, its lowest level since May 2020.
artical name Oil continues to decline as stocks fall in Asia
Asian stocks slide in early trading
Japan’s Nikkei 225fell by 2.6 percent to 26462.48,
and Australia’s S & P/ASX 200 fell by 1.5 percent to 6479.30.
South Korea’s Kospi also fell by 3.1 percent to 2219.75, Hong Kong’s Hang Seng fell by 0.5 percent to 17851.36,
while the Shanghai Composite Index lost 0.6 percent of its value to 3069.65.
Recent moves by the US Federal Reserve and
other central banks around the world to raise interest rates have been
designed to limit high inflation for decades, but they also threaten a recession,
if rates rise too much or too quickly.
Wall Street ended last week with a large-scale sale,
leaving major indexes with another loss in six weeks.
The S&P 500 fell by 1.7 percent on Friday, to 3693.23,
its fourth straight decline, and the Dow,
which at one point fell by more than 800 points,
lost 486.27 points, to close at 29590.41. The Nasdaqfell by 1.8 percent to 10867.93 points.
More than 85 percent of stocks in the S&P 500 closed in the red zone,
with tech companies, retailers and banks among
the biggest weights on the benchmark.
Last week, the Fed raised its benchmark interest rate,
which affects many consumer and commercial loans,
to a range of 3 percent to 3.25 percent.
The Fed also issued forecasts that the benchmark interest
rate could reach 4.4 percent by the end of the year,
a full point higher than envisaged in June.
artical name Oil continues to decline as stocks fall in Asia
The oil price fell slightly on Tuesday after hitting a seven-year high following the results of the previous session.
Market attention turned to talks between Washington and Tehran on Iran’s nuclear program, which will resume on February 8.
Investors’ optimism that the parties will reach an agreement allowing Iran to formally resume oil exports is increasing, Bloomberg reported.
Earlier, the Wall Street Journal reported that President Joe Biden’s administration had lifted a number of sanctions against civilian nuclear projects in Iran,
in an effort to bring Tehran back into compliance with the terms of the Joint Comprehensive Plan of Action on Iran, a program approved in 2015.
The April futures price for Brent oil on London Futures Exchange reached $92.53 per barrel,
$0.16 (0.17%) lower than the closing price of the previous session.
As a result of Monday’s trading, these futures fell by $0.58 (0.6%) to $92.69 per barrel.
The price of oil futures for March in electronic trading on the New York Mercantile Exchange (NYMEX) at this time was $91.24 per barrel,
$0.08 (0.09%) lower than the final value of Monday’s session.
The day before, these futures fell by $0.99 (1.1%) – to $91.32 per barrel.
Traders’ concerns about market supply shortages have declined due to some progress in negotiations between the United States and Iran.
In the meantime, demand expectations remain mixed.
For its part, the state-owned Saudi Aramco said that Saudi Arabia planned to raise the price of all grades of oil to buyers from all regions in March.
Traders focus on talks in Ukraine
The situation throughout Ukraine remains a major concern for traders.
The day before, Biden said after talks with German Chancellor Olaf Schultz that the Nord Stream 2 gas pipeline would not work if Russia invaded Ukraine.
At a press conference in Washington following talks with the United States,
European diplomatic chief Josep Burrell said that the European Union was proceeding from the fact that it was possible,
to find a diplomatic solution to the situation that had developed in the Russian border area with Ukraine.
“If Russia continues the course of aggression, the actions of the European Union and the United States will be significant,
and this is particularly true of sanctions,” he said.
Russia and France negotiations
Russian President Vladimir Putin said at a press conference following negotiations with the French President ,
that the assertion that Russia was acting aggressively ran counter to common sense,
that it was the NATO infrastructure that came close to the borders of the Russian Federation, not the other way around.
Vladimir Putin also said that France and Russia were in solidarity on the need to maintain and fully restore the Joint Comprehensive Plan of Action on Iran’s nuclear program.
Putin drew the attention of French Emmanuel Macron to Kyiv‘s unwillingness to implement the “Minsk agreements”,
the only solution to the situation in south-eastern Ukraine.
He believes that some of Macron’s ideas could form the basis for joint steps to calm the situation on Ukraine.
Macron promised on Tuesday to discuss Russian proposals on security assurances with Kyiv.
According to Macron, the coming days will be decisive in terms of de-escalation of the situation in Ukraine,
which will depend on negotiations and consultations with the United States, NATO and Europeans,
as well as his meeting with Ukrainian President Volodymyr Zelensky.
According to media agencies, British Prime Minister Johnson is considering deploying British Royal Air Force fighters and RN warships to bring back Ukraine.
For his part, Russian President Putin warned against drawing the European States into military conflict if Ukraine joined NATO.
The Dow Jones index rose alone by one point in a volatile session
US stock indices, the Standard and Poor’s and the Nasdaq, fell by 0.4-0.6%, respectively, and the Dow Jones index rose by only one point after the volatile session on Monday.
This week, markets will focus on US consumer price dynamics data for January, which will be published on Thursday.
Analysts surveyed by Trading Economics predicted that US consumer prices rose by 7.3% on an annual basis last month and 0.5% versus December.
Accelerating inflation and a vibrant labor market recovery can become strong arguments for the Fed in favor of tightening monetary policy.
The corporate reporting season, which is well under way, turned out to be a success overall.
About 75% of companies have reported the S&P index already over the past quarter, and their earnings exceeded market expectations by an average of 8%, according to Credit Suisse.
Mixed dynamics in Asia
In Asia, index dynamics were mixed on Tuesday.
Australia’s ASX index rose by 1.1%, Japan’s Nikkei index – by 0.3%,
China’s Shanghai Composite Index fell by 0.9%, South Korea’s KOSPI rose by 0.8%, and Hong Kong’s Hang Seng Index rose.
The gold declined again and the dollar surged
Both gold and silver moved lower at the beginning of the European session.
In the rest of the commodity complex, copper fell by about 1%.
In foreign exchange markets, the dollar index rose by 0.35% overnight.
The dollar pair against the Japanese yen was the largest driver, jumping by 0.38%.
In cryptocurrency, bitcoin started to recover, also rising by 2.25%.
Oil prices rose on Monday morning near 7-year highs.
The price of March Brent oil futures on the London Stock Exchange Futures is $91.02 per barrel on Monday,
$0.99 (1.1%) higher than the closing price of the previous session.
As a result of Friday’s trading, these futures rose by $0.69 to $90.03 per barrel,
as the price rose to $91.7 per barrel during the auction for the first time since October 2014.
Brent crude rose to $90 per barrel for the first time since October 2014
Brent crude futures for March expire on Monday.
The cost of the more active traded April futures rose by $0.89 (1.01%) to $89.41 per barrel.
The price of West Texas Intermediate crude futures for March in electronic trading on the New York Mercantile Exchange (NYMEX) was $87.78 per barrel by this time,
$0.96 (1.11%) higher than the final value of the previous session.
The day before, these futures rose by $0.21 to $86.82 per barrel.
The prices of both types of oil rose for the sixth week in a row.
Since the beginning of January, its value has risen by about 16%,
while the growth rate may be the highest since February 2021.
According to analysts, the start of the week was strong due to concerns ,
over oil supply issues as well as ongoing geopolitical risks.
In the meantime, market attention is shifting to the next OPEC + ministerial meeting.
Market participants are anticipating the meeting to be held on February 2,
to decide to continue the plan to increase oil production by 400 thousand barrels per day monthly in March.
Oil prices are likely to continue rising this week,
as Brent crude is believed to remain above $90 a barrel,
given the expectation that OPEC+ will maintain the current policy of gradually increasing production.
US Russia discussions about the attack on Ukraine
Pentagon chief, Lloyd Austin, said on Friday that the US administration,
is not yet clear whether Russia intends to attack Ukraine,
but it believes that Moscow is currently militarily equipped to carry out such an attack.
Austin has also indicated that the United States does not rule out Russia taking “extremely provocative steps,
such as recognizing the independence of the territories separated from Ukraine.”
In the meantime, “conflict is not inevitable,” according to the Pentagon chief.
For his part, Secretary of the Security Council of the Russian Federation, Nikolai Patrushev
said that Russia has no desire to fight with Ukraine, and Moscow does not pose threats.
“The Ukrainians themselves, including the officials, say they are not being threatened.
But US officials say they are not threatened, ready to fight,
and provide enough weapons to the Ukrainians, parties or not,” Patrushev said.
According to Western media, for his part,
US President Joe Biden said that he intends to ,
send additional troops to the NATO countries’ territories in Eastern Europe soon.
Biden has made it clear that he will do so “in the near future,” according to them.
The Pentagon announced earlier last week that it had put 8,500 troops,
on high alert in anticipation of the need to move them to Europe due to the tense situation over Ukraine.
Bloomberg reported last Friday that the UN Security Council meeting ,
on the situation in Ukraine is scheduled for Monday, even with Russia’s reluctance to do so.
The United States believes that the meeting,
is an opportunity for Russia to explain its actions on the border with Ukraine ,
and to clarify whether it is planning a diplomatic solution to the problem,
according to the agency.
US indices end the week higher after a 3-week decline
In the US, indices rose by 1.7-3.1% on Friday,
strong growth in the last hours of trading after strong corporate reports,
thanks to which indices were able to reach “positive” at the end of the week.
During the week, the Dow Jones index rose by 0.8% and the Standard & Poor’s – by 1.3%,
Previously, the Dow Jones and Standard & Poor’s indices had fallen for three weeks in a row.
The Nasdaq ended the week just 0.01% higher, but it was enough to break a four-week declines streak.
Investors also evaluated the latest statistical data released by the United States.
US Department of Commerce data showed that ,
the US population’s income in December rose by 0.3% compared to the previous month.
Meanwhile, Americans’ expenditures fell by 0.6%.
Which previously rose on the basis of six months in a row.
Analysts predicted an increase in the first indicator by an average of 0.5%,
while the second indicator dynamics matched expectations, according to Trading Economics.
The record consumer price index rose by 0.4% last month compared to November and 5.8% compared to December 2020,
and the annual growth rate was the highest in 40 years.
The core PCE index, which does not include food and energy prices,
rose by 0.5% on a monthly basis and 4.9% on an annual basis in December, the highest level since 1983.
Medium-term (next year) inflation predictions rose in January to 4.9% from 4.8% for the long-term (5 years) ,
up to 3.1% from 2.9%.
Positive trading in Asia and the Chinese exchanges are closed
Positive dynamics of stock indices also rolling Asia.
Australia’s ASX Australia rose by 0.2%, Japan’s Nikkei – by 1.4%,
Hong Kong’s Hang Seng – by 1.6%,
and mainland China and South Korea are closed due to celebrate the New Year according to the lunar calendar
Oil rises under the geopolitical developments in the UAE
Oil prices rose on Tuesday with rising geopolitical tensions, and Brent crude trading above $87 per barrel,
the highest level since October 2014.
On the eve of this, it became known about the impact of drones on the territory of the United Arab Emirates,
which resulted in the death of three people.
The UAE authorities charged the Yemeni Houthi rebels with carrying out the strikes.
Three oil tanks in Abu Dhabi were damaged by the explosion that resulted in the attack.
In addition, the fire started inland at the international airport in Abu Dhabi.
The cost of March Brent oil futures on the London Stock Exchange Futures is $87.3 per barrel on Tuesday,
$0.82 (0.95%) higher than the closing price of the previous session.
As a result of Monday’s trading, these futures rose by $0.4 (0.46%) – to $86.48 per barrel.
The price of West Texas Intermediate crude futures for February in electronic trading on the New York Mercantile Exchange (NYMEX) is $84.92 per barrel,
$1.1 (1.32%) higher than the final value of Friday’s session.
On Monday, the main trading of WTI was not held because of a holiday in the United States.
According to Bloomberg experts: “The shortage of oil supply while maintaining strong demand means that the market situation is more difficult than expected.”
Positive dynamics in Asia and closing in on Wall Street
The stock exchanges were closed in the United States on Monday because of the celebration of Martin Luther King Day.
The positive dynamics of stock indices prevailed in Asia today, Tuesday, with Japan’s Nikkei index rising 0.5%,
China’s Shanghai Composite 0.9%, and Hong Kong’s Hang Seng 0.1%.
On Monday, the People’s Bank of China (PBOC, the country’s central bank) cut two key interest rates to support the Chinese economy.
The one-year medium-term lending facility (MLF) program was reduced by 10 basis points (bp) to 2.85% per annum from 2.95%,
and the seven-day reverse buybacks interest rate was reduced by 10 basis points to 2.1%.
MLF is an important lending tool used by the Central Bank of China to provide liquidity to commercial banks,
and directly affects the prime interest rate (the basic loan rate, LPR),
which became a standard in the summer of 2019.
Gold keeps its gains
Gold prices maintained their gains on Monday, with expectations of tightening monetary policy in the United States.
Spot gold rose by 0.1 percent to $1819.41 an ounce, while US gold futures rose by 0.1 percent to $1818.80. US markets have been closed for a public holiday.
Although gold is considered an inflationary hedge, it is very sensitive to rising U.S. interest rates,
increasing the opportunity cost of holding non-yield alloys.
US 10-year Treasury yields hit a two-year high last week amid expectations of higher interest rates.
the US Federal Reserve’s January 25-26 meeting had a key role after policymakers indicated that they would start raising interest rates in March to curb inflation.
According to experts: “Market participants are likely to refrain from buying gold before the US Federal Reserve raises the first interest rate,
perhaps hoping that next week’s Fed meeting will give them more signals or make it clear that the Fed will start the rate hike cycle in March.”
Reflecting the broader morale, data on Friday showed speculators cut their net gold deals at Comex in the week ending January 11.
On the other hand, spot silver rose by 0.1% to $22.97 per ounce, platinum rose by 0.4% to $974.32, and palladium increased 0.5% to $1887.19.
UK labor market booming after interest rate hike last month for the first time since the pandemic
British employers added 184000 employees to their payroll in December, showing little impact of the Omicron variant of the Coronavirus,
while vacant jobs hit a new record level, which could increase inflation concerns at the Bank of England.
On Tuesday, the Office for National Statistics said the broader unemployment rate in the three months to the end of November fell to 4.1 percent,
below economists’ expectations in a Reuters poll, to stabilize at 4.2 percent, its lowest level since June 2020.
British Finance Minister Rishi Sunak said, “Today’s figures are evidence of a booming labor market,
with employee numbers rising to record levels and repetition notifications at their lowest level since 2006 in December.”
concern about potential labor shortages and medium-term wage pressures had a key role,
in raising interest rates last month by the Bank of England for the first time since the start of the pandemic
Financial markets expect a greater than 80% chance that the Bank of England will raise interest rates again on February 3 after its next meeting.
The performance of the British labor market was stronger than predicted by the Bank of England late last year,
with unemployment falling despite the end of the government’s job support program, which supported more than a million workers in September.
More recently, the increase in Covid- 19 cases associated with the Omicron variant of the Coronavirus,
has caused widespread employee absences and caused increased demand in the hospitality sector.
But most economists expect that the adverse effects won’t last long.
Average profits growth
Tuesday’s data showed that average profits growth in the three months to November were 4.2% higher than the previous year ,
in line with economists’ expectations – while vacancies in the three months to December were 1.247 million.
The Office for National Statistics (ONS) said that it believed that temporary factors,
that had negatively affected wage increases earlier in 2021 had now largely disappeared.
In nominal terms, wage growth is much higher than the 2-3% range seen before the pandemic,
and potential inflation concerns in the Bank of England due to weak basic productivity growth.
But rapidly rising inflation weakens workers’ high wage benefits.
Wages excluding bonuses were fixed in inflation-adjusted terms in the three months to November, the weakest performance since July 2020.
Oil continues to rise due to US inventories decline and Brent exceeds 85 Dollar
Oil prices continued to rise on Wednesday morning against the backdrop of data from the American Petroleum Institute about an unexpected decline in US inventories.
Brent crude futures for January on the London Futures Exchange rose by $0.24 (0.28%), to $85.02 per barrel.
On Tuesday, the future rose $1.35 (1.62%) to $84.78 per barrel.
West Texas Intermediate crude futures’ prices for December on the New York Mercantile Exchange (NYMEX) rose by $0.04 (0.05%) to $84.19 per barrel.
During the previous session, West Texas Intermediate crude rose by $2.22 (2.7%) to $84.15 per barrel.
According to estimates by the American Petroleum Institute, U.S. oil reserves fell by 2.5 million barrels last week,
while experts predicted an increase of 1.9 million barrels.
Meanwhile, oil inventories at the terminal in Cushing (Oklahoma), where oil traded on the New York Stock Exchange is stored,
rose by 234 thousand barrels.
API receives information from refinery operators, storage tanks and pipelines on a voluntary basis.
The United States Department of Energy will publish an official report on reserves volume dynamics later in red.
The experts interviewed by Standard & Poor’s Global Platts predict a weekly increase in oil reserves by an average of million barrels.
Gasoline inventories are expected to decline by 1.6 million barrels, while distillation inventories remain unchanged
Negative dynamics in Asia and Wall Street and Standard & Poor’s breaks its longest rising streak since 1997
Stock indices in Asia and the Pacific show negative dynamics on Wednesday.
Japan’s Nikkei 225 fell by 0.58% and China’s CSI300 by 1.4%. US S&P 500 index’s futures fell also by 0.37%.
US stocks declined on Tuesday, as the Standard & Poor’s 500 broke the record streak after hitting the longest (8 sessions in a row of rising) since 1997.
On the basis of Tuesday’s trading, the Dow Jones Industrial Index fell by 112.24 points (0.31%) to 36319.98.
Standard & Poor’s 500 fell by 16.45 points (0.35%) to 4685.25. The Nasdaq Composite Index lost 95.81 points (0.6%) to 15886.54.
Some investors saw the market decline as a small respite after several days of sustained gains.
The company’s strong third-quarter reports support the stock market, despite continued investor concerns regarding rising inflation and supply chain problems.
According to statistics released on Tuesday, there was a slight increase in the producer prices’ rise rate in October,
compared to the previous month – to 0.6% from 0.5% in September.
The significant acceleration growth is due to higher gasoline prices (6.7%).
US producer prices jumped, on an annual basis, at a record of 8.6%, as in the previous month.
In addition, the National Federation of Independent Business reported that its Small Business Optimism Index fell 0.8 percentage points in October,
to 98.2 points, the lowest level since March.
Tesla’s losses continue
Tesla lost approximately 12% in price.
On Monday, it became known that the brother of Tesla’s chairman, Kimball Musk, a member of the company’s board,
last Friday offered an option to buy 25,000 Tesla stocks at $74.17 per stock ,
and were immediately sold on several slices at $1223 to $1236 per stock, earning about $108.8 million.
at the end of last week, Elon Musk promised to sell 10% of his shares in the company, if Twitter users voted for such a move,
and according to the results of a poll conducted on this social network, he would sell securities worth about $21 billion.
Gold declines as the US dollar stabilizes
old prices declined on Wednesday as the dollar stabilized, with investors expecting major inflation data in the United States
that could have an impact on the Fed’s next policy move.
Spot gold fell 0.4 percent to $1824.90 an ounce after hitting its highest level since September 3 at the previous session.
US gold futures declined 0.1 percent to $1828.40.
Its weight on alloys increased by increasing its cost to buyers with other currencies, and the US dollar rose by 0.1%.
The focus now turns to the US Consumer Price Index (CPI) report to be released later in the day,
given the possibility of a higher reading due to a tight labor market and turmoil in global supply chains.
In a Reuters poll, economists expect a 5.8% increase in the consumer price index in the 12 months to October.
The report follows the Fed policymakers’ indication that interest rate hikes were not yet on the table earlier this week,
although two of the central bank’s most pessimistic officials said on Tuesday, they expected more clarity on the economic outlook by next summer.
Gold tends to benefit from low low-interest because it reduces the opportunity cost of the metal that does not yield a return.
On the other hand, the price of spot silver stabilized at $24.28 per ounce, platinum fell by 0.7% to $1052.00, while palladium rose 0.5% to $2031.89.
