China’s Services Sector Growth Accelerates in October According to Caixin PMI
Data released by S&P Global on Tuesday showed that the Caixin Services PMI for China rose to 52.0 points in October, marking its highest level since July. This reading came in above expectations of 50.5 points and higher than September’s reading of 50.3 points.
Reserve Bank of Australia Keeps Interest Rates Unchanged Despite Inflationary Pressures
The Reserve Bank of Australia decided in its meeting on Tuesday, November 5, 2024, to keep the main interest rate unchanged at 4.35%, the highest level in 13 years. This decision comes amid persistent high inflation and uncertainty in global economic outlooks. The bank stated that “core inflation remains very high” and that “it will take a considerable amount of time before inflation returns to the target range.” The bank also stressed the need to remain vigilant regarding upward inflation risks, indicating that future monetary policy decisions have not been ruled out.
Britain
Decline in New Car Registrations in the UK Despite Rise in Electric Vehicle Sales Supported by Government Incentives
The United Kingdom saw a decline in new car registrations for the second time this year, falling by 6% in October to 144,288 units, according to data from the Society of Motor Manufacturers and Traders (SMMT). However, electric vehicle sales surged by 24.5%, supported by the availability of new models. Approximately 300,000 new electric cars hit British roads this year, representing 18.1% of the total market, up from last year but still short of the 22% target.
China’s Services Sector Growth Accelerates in October
US Consumer Confidence Index Surprises Markets with Largest Decline in Three Years
Yesterday, the US Consumer Confidence Index was released, showing a sharp decline from 105.6 to 98.7, while expectations pointed to a reading around 104. This significant drop caused the US dollar to fall sharply due to increased market expectations of a weakening US labor market after the negative data released recently. It is worth noting that this is the largest decline in the index in three years.
Morgan Stanley Revises Its Outlook on the Automobile Industry
Morgan Stanley has revised its outlook on the US automobile industry, downgrading it from “Attractive” to “Neutral.”
This revision was attributed to several negative factors, including high inventory levels, concerns about affordability,
and increased competition from Chinese companies,
which have shifted from being a source of demand to a source of global oversupply.
The report pointed out that Chinese automakers are currently producing about 9 million more units
than are needed in their domestic market, increasing pressure on global markets.
Morgan Stanley warned that this surplus production would impact other regions,
intensifying the competition faced by US automakers.
Morgan Stanley analysts stated in a note on Wednesday: “Even if these units do not reach the US directly,
the loss of market share and profits by major US companies will add domestic pressure.”
Japan
Japanese Stocks Start to Lose Gains from Interest Rate Hold
Japanese stock indices closed lower on Wednesday, with the Nikkei index declining for the first time after four consecutive sessions of gains. This drop was due to profit-taking after the index reached its highest level in three weeks yesterday, in addition to weak performance in some sectors that contributed to the market’s decline.
This comes after a series of gains that followed the Bank of Japan’s decision to hold interest rates last week. However, expectations are growing that the central bank will raise rates again by the end of this year, which is expected to negatively impact Japanese stock markets.
US Consumer Confidence Index Surprises Markets with Largest Decline in Three Years
Restoring Confidence: Alibaba Surpasses Investigations and Begins a New Chapter
Alibaba regained the Chinese government’s confidence after three years of investigations by implementing corrective measures,
reflecting Beijing’s support for the tech sector.
Despite the improvement, the industry still faces significant challenges such as slowing consumer spending.
After more than three years of intensive investigations, Alibaba Holding has regained the confidence of the Chinese government,
following the Antitrust Authority’s commendation of the company’s corrective actions.
This move reflects Beijing’s desire to support the technology sector, which is vital to the country’s economy.
Investigations and Corrective Measures
The Antitrust Authority began its investigation into Alibaba in 2020 as part of a broader regulatory campaign
that targeted various sectors of the digital economy.
During this period, the company ceased its monopolistic practices and improved its services and competitive landscape online.
These changes contributed to a more than 4% increase in the company’s shares during after-hours trading.
Ongoing Challenges and Concerns
Despite this improvement, China’s technology sector faces significant challenges,
including a decline in funding and a slowdown in consumer spending,
raising concerns about future growth.
Despite some companies issuing pessimistic warnings,
Alibaba remains optimistic about its future and reaffirms its commitment to innovation and investment in technology.
Restoring Confidence: Alibaba Surpasses Investigations and Begins a New Chapter
Asian Stocks Decline Amid Anticipation of Key Economic Data
Asian stocks experienced a notable decline today as investors trimmed their holdings ahead
of several significant upcoming economic events.
These events include the Federal Reserve’s decision, key economic data releases,
and earnings reports from major American companies.
Stocks in various Asian markets, including Australia, South Korea, Japan, Hong Kong, and China, all saw declines.
Similarly, U.S. stock futures also dropped.
The dollar strengthened against most major currencies as traders prepared for the Federal Reserve’s decision on Wednesday.
The Japanese yen remained near its 12-week high ahead of the Bank of Japan’s
monetary policy statement on the same day.
U.S. Treasury Performance
U.S. Treasury bonds saw little change in Asia but are on track for their third consecutive monthly gain,
the longest streak since 2021.
The United States has reduced its federal borrowing estimates for this quarter,
anticipating a decline in its cash reserves towards the end of the year.
Bank of Japan Expectations
Bank of Japan Governor Kazuo Ueda will be in the spotlight on Wednesday,
as investors await his announcement of a detailed plan for quantitative tightening after years of massive easing.
This tightening could include raising interest rates.
The Japanese labor market remained tight in June, likely maintaining upward pressure on wages as companies compete to hire and retain workers.
The Bank of Japan is looking for signs that sustained wage increases will spur consumption recovery and demand-driven price growth, creating a scenario that allows authorities to continue normalizing monetary policy.
Chinese Bond Performance
Chinese bonds rose today, with 10-year bond yields hitting another record low.
This rise is seen as a test of the central bank’s patience,
as it walks a tightrope between boosting growth through monetary easing measures and
containing potential financial shocks from an overheated bond market.
Anticipation of the Fed’s Decision
The S&P 500 closed slightly higher on Monday, with the index tracking major technology companies, known as the “Magnificent Seven,” gaining 1%. Meanwhile, the Russell 2000 index of smaller companies fell by 1.1%.
Tesla shares surged after a buy recommendation from Morgan Stanley.
McDonald’s investors shrugged off declining sales, as executives promised new promotional offers.
Energy producers joined the downturn in the oil sector.
Economic Outlook
It is widely expected that U.S. policymakers will leave interest rates unchanged on Wednesday,
having kept rates at their highest level in over two decades for a year.
However, investors believe officials will hint at a move in September as the risks of weakening the strong job market increase, despite it slowing down.
Interest rate decisions in Japan and the UK will also be closely watched,
with expectations for the former to raise rates and the latter to cut them.
Stock and Technology Markets
July saw wild stock market gains, highlighting that betting on seven major tech companies is no longer a simple trade.
For most of the month, investors flocked to other market corners, speculating that Federal Reserve rate cuts would boost U.S. stocks.
However, the S&P 500 ended up with two consecutive weeks of losses, impacted by the decline of its most influential companies, particularly tech stocks.
David Lefkowitz of UBS Global Wealth Management stated,
“It is almost impossible to know if the recent market downturn has ended,
but we still believe the stock market backdrop is favorable thanks to sustained growth,
declining inflation, potential Fed rate cuts, and AI spending.”
Corporate and Commodity News
BHP Group Ltd has teamed up with Lundin Mining to acquire Filo Corp, gaining access to copper projects in South America.
In the commodities market, oil prices remained near seven-week lows amid fragile demand expectations,
especially in China (the world’s largest oil importer), while gold prices declined as the dollar strengthened.
Asian Stocks Decline Amid Anticipation of Key Economic Data
TSMC Plans $40 Billion Investment in Arizona Factories, Anticipates $5 Billion US Grant
Informed sources expect Taiwan Semiconductor Manufacturing Company (TSMC) to receive a US grant exceeding $5 billion to enhance
its chip manufacturing project in Arizona.
This aligns with President Joe Biden’s efforts to boost the semiconductor manufacturing sector in the United States.
The sources, requesting anonymity due to the confidential nature of the discussions, state that the grant’s final value is yet to be determined.
It remains unclear whether TSMC will also benefit from loans and guarantees under the Chips Act, enacted in 2022.
Meanwhile, the company, along with other major computer chip producers,
is negotiating with the US Department of Commerce to secure grants totaling around $28 billion to support advanced factories.
Samsung
on the other hand, presented an additional initiative, investing an additional $17 billion in the US to build a new factory in Texas.
Despite reservations about these talks, they are part of significant efforts to boost investments and strengthen local production in this vital sector.
In a related context, Intel, the American competitor to TSMC, confirms ongoing talks to secure over $10 billion in federal incentives,
with at least $3.5 billion allocated for direct grants.
These efforts are part of the Chips Act, allocating nearly $39 billion in direct grants, along with financing options totaling $75 billion
, aiming to attract companies to build projects in the United States after decades of production in Asian regions.
US officials aim to announce more agreements with advanced chip manufacturing companies in the coming days,
with expectations of announcements for three companies so far.
New Factories
It’s worth noting that TSMC plans to invest up to $40 billion to establish factories in Arizona,
a state playing a pivotal role in the chip industry and a key battleground in the anticipated 2024 presidential elections.
Despite facing challenges at its Phoenix factory site, with delays and disputes with local unions,
TSMC achieved progress with a formal labor agreement in December last year.
Overall, the industry is currently witnessing massive investment movements as leading chip companies prepare for qualitative leaps in production,
strengthening their presence in the US market.”
Surge in Asian Markets and Yen Reaches One-Month High
The Asian markets witnessed an increase, with the Japanese currency,
the “Yen,” reaching its highest level in a month,
driven by the rise on Wall Street due to statements from the Federal Reserve Chairman.
Most Asian markets experienced an upswing on Thursday following the uptrend in U.S. markets
attributed to remarks by Federal Reserve Chairman Jerome Powell, hinting at the possibility of interest rate cuts this year.
The Yen strengthened to its highest level in a month against the dollar.
Stocks rose from Australia to Japan and China, pushing regional market indices higher for the second consecutive day.
In contrast, the Hang Seng Index fluctuated at the beginning of trading sessions. U.S. futures saw a decline after the S&P 500 index rose by 0.5% yesterday, reaching 5100 points, and the Nasdaq 100 index advanced by 0.7%.
The Yen traded at its highest level in a month, rising to levels below 150 against the dollar yesterday. This increase was partly due to a faster wage growth since last June. The Bank of Japan faces pressure to end its current policy of negative interest rates, with expectations that this might happen this month or the next. Reports suggest implicit approval from some government officials for this move by the central bank, while investors will closely monitor further statements from the Bank of Japan when board member Junko Nakagawa speaks later today.
Expectations
Increasing expectations of ending negative interest rate policies in Japan boosted bank stocks today, with bank stocks rising by 2.3% on the TOPIX index. During the appropriate period for interest rate cuts, the U.S. dollar index declined after yesterday’s drop in U.S. bond yields. The ten-year index stabilized in Asia after losing five basis points to 4.1% during the previous session.
In his testimony before the House committee, Jerome Powell affirmed that, despite not seeing an urgent need to cut interest rates due to the strength of the U.S. economy, it is likely to be appropriate to do so “at some point this year.” Jose Torres of Interactive Brokers noted that Powell’s positivity regarding inflation trends and confidence in achieving the current peak interest rate were sufficient for market participants. Powell also added that the central bank is likely to make significant changes to its plan to impose additional capital on large banks, a major win for major U.S. banks.
In other news, New York Community Bancorp, operating in the commercial real estate mortgage sector, secured a $1 billion investment in its stocks, leading to a decline in its stock price. Job opportunities in the United States remained high, with private wages recording a strong increase in February, slightly below estimates. A survey by the Federal Reserve’s “Beige Book” revealed that the U.S. economy has been growing at a moderate pace since the beginning of the year, while consumers show increased sensitivity to rising prices.
In Asia, upcoming data includes Australian trade data, Taiwan’s inflation rate, and China’s trade and external balance data, while Malaysia will announce its monetary policy decision. The annual parliamentary session in China continues, with Foreign Minister Wang Yi’s conference expected to address various issues, including U.S.-China relations and Taiwan.
Chinese Economy
Regarding the Chinese economy, the head of the People’s Bank of China told reporters yesterday that there is still an opportunity to reduce the reserve ratio that banks must hold, a type of monetary easing. At the same time, senior Chinese securities regulators warned that authorities would intervene to rectify “market failure” in emergency situations. Attention is also focused on the Chinese technology sector, with shares of JD.com in Hong Kong rising by up to 9.2% after the company began a $3 billion share buyback program following better-than-expected earnings.
On the other hand, Bitcoin experienced a slight decline, trading at around $66,000, after reaching its highest level earlier this week. Gold prices stabilized after achieving record numbers, with the volatility in cryptocurrencies and precious metals sending conflicting messages to market participants. The oil price did not see significant changes after yesterday’s rise, as additional tensions in the Middle East pushed the U.S. WTI crude oil price up by 1.3%. These tensions marked the first confirmed attacks in the region after Houthi fighters initiated their attacks.
Surge in Asian Markets and Yen Reaches One-Month High
AI Revolutionizes the Gaming Industry: Major Players Ready to Thrive
The gaming industry is standing at the threshold of a groundbreaking transformation,
all thanks to the advent of artificial intelligence (AI).
In this article, we’ll delve into the seismic shifts AI is about to bring to the gaming sector.
The heavyweights in the industry, such as Microsoft’s Xbox, Sony’s PlayStation, Unity Software,
Roblox, and Tencent Holdings, are poised to reap enormous benefits from this technological revolution.
These insights are derived from the discerning analysis of Matthew Cost and his team at Morgan Stanley,
providing us with a tantalizing glimpse of the future of gaming.
Artificial intelligence is set to be a game-changer in the gaming industry.
Experts predict that AI will revolutionize the traditional gaming landscape by slashing the cost of producing
and operating AAA games by a whopping 15%.
This reduction in costs is monumental and promises to leave an indelible mark on the industry.
Reshaping Business Models
AI is positioned to be the linchpin in reshaping the gaming industry’s business models.
The current models have often faced criticism for being bloated and formulaic.
The introduction of AI holds the promise of injecting innovation and efficiency into these models,
paving the way for a more dynamic and player-centric gaming experience.
Benefits for Major Platforms
Major gaming platforms like Microsoft’s Xbox, Sony’s PlayStation, Unity Software, Roblox,
and Tencent Holdings are well-placed to enjoy substantial benefits from AI integration.
They are expected to take the lead as the primary distributors of AI tools,
further cementing their dominance in the industry.
These platforms are strategically positioned to harness the full potential of AI.
Boosting Earnings for Game Publishers
The reduction in the cost of producing and operating AAA games isn’t just a game-changer for the industry;
it’s a potential goldmine for major game publishers.
Ubisoft Entertainment, Nexon, and Take-Two Interactive Software are anticipated to witness
a remarkable 10% increase in earnings due to these reduced costs.
This financial windfall can translate into more resources for creating innovative and captivating games.
Japan’s Antimonopoly Probe into Google’s Search Dominance
While AI reshapes the gaming industry, other tech giants are under scrutiny in different sectors.
Japan’s competition watchdog has initiated an antimonopoly probe into Google’s search dominance.
This move echoes similar investigations in Europe and other major economies,
raising questions about Google’s practices and their compliance with antitrust laws.
Investigating Antimonopoly Laws
The Japan Fair Trade Commission (JFTC) has set its sights on Google,
scrutinizing potential violations of Japan’s Antimonopoly Act.
Of particular concern is Google’s practice of returning a portion of its revenues to
Android smartphone makers on the condition that they do not install rival search engines.
This practice has sparked antitrust concerns, and authorities are keen to ensure fair competition.
Global Antitrust Scrutiny
Japan’s investigation follows in the footsteps of antitrust regulators in the European Union
and the United States, underscoring a global push to hold tech giants accountable.
The outcomes of these investigations will have far-reaching implications for
the tech industry and competition standards worldwide.
Conclusion
The advent of AI in the gaming industry promises to be a transformative force,
with major platforms and game publishers poised to benefit significantly.
This technological revolution is expected to reduce costs, enhance business models,
and ultimately provide gamers with more innovative and immersive experiences.
Simultaneously, global antitrust investigations into tech giants like Google underscore
the need for fair competition
and accountability in the digital age.
As the gaming industry evolves, AI will play a central role in shaping its future.
Markets welcome a new week full of European and American data.
Pressures continue and impose themselves on the European Central Bank
due to inflation approaching a record level,
according to surveys that indicate less than the 10% level,
at a time when the Central Bank is not seeking to tighten to raise interest rates further,
and expectations also indicated an increase in interest rates.
The consumer price index reached 9.7%,
and the markets are about to announce a very important report next Friday,
which is the inflation report for the eurozone after the announcement
of some reports issued by the three largest economies in the European continent,
in addition to an assessment of the sentiment of some companies in the region.
Previously, the European Central Bank found an incentive
to move towards a tight monetary policy during the last two meetings.
Will the next decision lead to a further rise in interest rates by the Central Bank?
This is what will be announced in the next decision within a month,
and this comes in light of the presidential elections in Italy on Sunday,
which is the main focus of European Central President Chris Lagarde’s
speech at the testimony session tomorrow in Brussels.
US economic data
This week is witnessing a set of strong data that has a direct impact
on the American economy, which will end next Friday with the personal income
and spending report for August.
Very important in determining whether the pace of economic growth
in the third quarter of the year has made progress or not,
while income data shows insight into the financial strength of consumers,
it also includes a set of dialogues that will be exchanged between officials of the Federal Reserve regarding the recent interest rate hike,
at a time when expectations indicate more hikes
to face the specter of persistent inflation.
Asia
After the Japanese central bank decides to stick to low-interest rates last week,
the focus is now on the government’s position in the face of the weak yen’s intervention,
while in China, the markets are awaiting the PMIs to assess the recovery and
whether there was a clear improvement in September or is it still in a faltering stage.
Germany seeks to obtain gas and fuel from the Gulf in the context of diversifying energy sources.
Germany’s plan to confront the gas and energy crisis with the advent of winter,
as well as suffering from the repercussions of the Russian war on Ukraine,
which increased the suffering of the largest economy in Europe,
so it seeks with all its energy to solve the problem from
its roots so as not to be under pressure again,
through diversifying energy sources In this context, German Chancellor Olaf Scholz revealed that the talks between Germany
and the Arab Gulf states have reached advanced stages and
are approaching the final agreement for the purchase of gas.
Concerns for industrial companies in Europe
In light of this current energy crisis, giant industrial companies in Europe
have been suffering from a shortage of gas for months,
which in turn was reflected in production, which declined significantly,
and currently, the European dollar pays 7 times what the United States pays for gas,
and this reflects the weakness The European economy in the face of other economic
forces if the problem is not resolved as soon as possible,
and at the level of Germany, producer prices jumped in August by about 46%
Like Germany, Britain seeks to secure the long-term for its energy needs
Before the crisis reaches its full consequences with the advent of winter,
Britain is seeking to solve the gas shortage problem
by relying on American liquefied natural gas,
and this comes at a time when most European countries
are trying to store natural gas before winter,
and also diversify in energy sources, In the long run,
Britain’s problem is less because it does not depend on Russian gas imports,
but depends primarily on its domestic production,
in addition to its supplies from Norway.
And this has not yet been announced by governments about any quantities that
the United Kingdom wants, but at the same time it seeks to buy LNG in the United States,
provided that the process is done with a prior agreement on the port
and also that the shipment will be delivered to a specific buyer and
also be delivered in a position is determined before
artical name Markets welcome a new week full of data.
Asian stocks rise on Tuesday morning as oil prices decline and the US dollar falls
Asian stocks rallied on Tuesday after China promised to
accelerate policy changes to boost weak economic growth,
while oil prices fell early on Tuesday,
narrowing the previous session’s gains by 3 percent,
and the dollar index fell by 0.2 percent
after approaching a 20-year peak in the previous session.
Asian stock markets recover supported by the Chinese stock rise
Chinese stocks rose on Tuesday after the government pledged to take further action to support economic growth,
while most other Asian stocks recovered slightly from recent losses.
Shanghai gained while Hong Kong retreated, and Tokyo and South Korea remained unchanged at midday.
China’s cabinet planning agency promised on Monday to accelerate concessional lending
and other policies but did not announce new spending,
while economic growth fell to 2.5 percent during the previous year in the second half,
less than half of the official annual target.
The Shanghai Composite Index rose by 1 percent to 3232 .24,
while Tokyo’s Nikkei 225 Index was unchanged at 28618 .62,
and Hong Kong’s Hang Seng fell by 0.2 percent, falling to 19188.25 points.
Seoul’s Kospi was unchanged at 2403.90,
Sydney’s S & P-ASX 200 rose less than 0.1 percent to 6855.50,
and New Zealand fell while Southeast Asian markets rose.
US markets were closed on Monday for Labor Day.
European markets sank after Russian gas giant Gazprom announced on Friday
that the suspension of supplies via the Nord Stream 1 pipeline would be extended indefinitely,
adding to shortages in Germany and other economies.
China’s Deputy Director of the National Development and
Reform Commission said the agency would expedite the promulgation
of an effective policy to compensate for the losses caused by the epidemic in the second quarter.
The government has cut interest rates, given entrepreneurs a break in rent
and promised other aid to revive the economy after Shanghai and
other industrial centers were temporarily closed to fight the virus outbreak,
but avoids significant spending, possibly because it is worried about reigniting the rise in housing
and debt costs that Chinese leaders are worried will rise dangerously.
Also on Monday, Beijing freed up more foreign currency holdings for Chinese commercial
banks to lend and trade by reducing the amount they should hold in reserve.
The move reverses an increase imposed last year to curb speculative trade and
restrict the rise in the Chinese yuan’s exchange rate, which has since fallen.
artical name Asian stocks rise on Tuesday morning as oil prices decline
Oil prices decline as OPEC + production falls symbolically
Oil prices fell on Tuesday to reduce gains from the previous session,
as the OPEC + deal to cut output by 100 thousand barrels per day (BPD)
in October was seen as a largely symbolic move to support prices after the market’s recent downturn.
Brent crudefutures declined by 81 cents, 0.9 percent to $94.93 per barrel at 0354 GMT.
US West Texas Intermediate (WTI) crude futures rose from Monday to $88.57 per barrel,
and rose by $1.70, or 2.0 percent, from Friday’s close.
The Organization of the Petroleum Exporting Countries (OPEC) and its allies,
led by Russia, called the OPEC + community,
have decided to reverse an increase of 100 thousand barrels per day (BPD) for September,
after Saudi Arabia and other members expressed concern about falling prices since June despite scarce supplies.
Analysts, who did not expect the agreement even
after Saudi Arabia said it wanted to support prices,
said the cut was mostly symbolic and had a limited impact on
actual supplies given that OPEC + was producing less than production targets.
Analysts also consider that other factors affecting the market include weak
oil demand expectations due to renewed closures in some parts of China
as well as an agreement to set limits on Russian oil export prices.
Russian Energy Minister Nikolai Shulzhenov told reporters
at the Eastern Economic Forum in Vladivostok on Tuesday
that in response to restrictions on oil prices from Russia,
that country would ship more to Asia.
The EuropeanUnion’s foreign policy chief said, in light of rising prices,
he was less hopeful of an agreement on reviving the Iran nuclear deal,
which would delay any return of about 1 million barrels a day of Iranian crude to the market.
artical name Asian stocks rise on Tuesday morning as oil prices decline
The dollar stumbles temporarily from a broad rally in Tuesday trading
The dollar took a break on Tuesday after a big rally,
slightly lower than its highs against the euro, yen and sterling,
but not so much as Europe suffers from recession,
and US interest rates are bracing for sharp hikes.
The euro rose by 0.3 percent to $0.99545 in Asian trading,
after hitting a two-decade low of $0.9876 on Monday
as the prospects for benefiting from Russian gas in the winter diminished.
Overnight trade dwindled due to a US holiday,
and Australia’s central bank meeting will be the highlight of Tuesday’s Asian trading session,
with markets setting a 64 percent chance of raising the interest rate by 50 basis points.
Sterling last rose by 0.48 percent to $1.1578,
having declined to a two-and-a-half year low of $1.1444 on Monday.
The dollar index fell by 0.06 percent to 109.53 after rising to 110.27 on Monday,
and the Japanese yen, which declined as US interest rates rose and
the gap widening in Japan’s stable interest rates at 140.51 per dollar,
was trading not far from its lowest in 24 years at 140.80 which it recorded last week.
artical name Asian stocks rise on Tuesday morning as oil prices decline
Oil soars as European stock futures rise while Asian stocks decline
Oil prices rose on Wednesday,
rebounding after heavy losses in the previous session on signs of strong fuel
demand in the United States, and Chinese and Hong Kong stocks decline,
while European stock futures rose.
Oil prices rebounded slightly on Wednesday as data pointed
to strong fuel demand in the United States,
providing relief after a 5 percent fall a day earlier due to concern over the suffering of demand
caused by China’s growing COVID-19 restrictions and a central bank hike in interest rates.
US WestTexas Intermediate (WTI) crude futures jumped by 85 cents,
or 0.9%, to $92.49 per barrel at 0456 GMT after falling by $5.37 in the previous session,
prompted by concern over a recession.
Brent crudefutures for October, due to end on Wednesday,
rose by 70 cents, or 0.7 percent, to $100.01 per barrel,
trimming Tuesday’s loss of $5.78.
The most active futures contract for November rose by 93 cents,
or 1 percent, to $98.77 per barrel.
Price volatility since the start of the conflict in Ukraine six months ago has negatively affected
hedge funds and speculators and declined trading,
which in turn has led to the market falling further, as seen on Tuesday.
In support of market sentiment on Wednesday
data from the American Petroleum Institute (API)
showed gasoline inventories fell by about 3.4 million barrels,
while distillate inventories, including diesel and aviation fuel,
fell by about 1.7 million barrels for the week ending August 26.
American Petroleum Institute data showed
crude inventories rose by about 593 thousand barrels,
against analysts’ estimates of a decline of about 1.5 million barrels.
The weakness of the United States dollar has also boosted the market,
thus becoming cheaper for buyers with other currencies.
Price gains have been curbed by concern that some of China’s largest cities
– from Shenzhen to Dalian, are imposing lockdowns
and business closures to curb COVID-19 at a time
when the world’s second-largest economy is already experiencing weak growth.
The main factor supporting prices at present is the talk of members
of the Organization of the Petroleum Exporting Countries (OPEC) and its allies (OPEC +),
that they may reduce production to stabilize the market,
and OPEC + is scheduled to meet on September 5.
artical name Oil soars as European stock futures rise
Chinese and Hong Kong stocks plunged by automakers
Chinese and Hong Kong stocks slid Wednesday,
declining by major automakers after Warren Buffett’s Berkshire Hathaway
(NYSE: BRKa) cut its stake in BYD,
while broader Asian markets were mixed amid uncertainty over US monetary policy.
Hong Kong’s Hang Seng fell by 0.2 percent,
with BYD Co HK:1211 falling nearly 10 percent
after a statement showed Berkshire Hathaway
had narrowed its stake in the company.
China’s Shanghai Shenzhen CSI 300 index declined by 0.6 percent,
while the Shanghai Composite index lost 1.2 percent.
Sentiment toward China also fell through data showing the country’s
manufacturing sector shrank for the second consecutive month in August,
but the pace of its contraction was slightly lower than expected.
The broader Asian markets were mixed on Wednesday as concern
grew over higher US interest rates,
following stronger-than-expected US overnight employment data.
In Asia, Japan’s Nikkei 225 index fell by 0.5 percent,
while Taiwanese stocks rose by 0.8 percent, rebounding from a four-week low.
artical name Oil soars as European stock futures rise
European stock futures rise
European stock markets are expected to rise at the opening on Wednesday,
as investors absorb the latest Chinese manufacturing activity data
ahead of the eurozone’s major inflation release.
At 02:00 GMT, Germany’s DAX futures rose by 0.7 percent,
France’s CAC 40 futures rose by 0.4 percent and
the UK’s FTSE 100 futures index rose by 0.3 percent.
The official manufacturing PMI was at 49.4 for August,
while this was below 50 indicating a contraction in the sector,
it is still an improvement from 49.0 in July.
This is likely to make the start of the day positive in Europe,
although the focus is likely to be on issuing the latest consumer price index in the eurozone.
The European inflation, which hit a record high of 9 percent in August,
is expected to show further pressure on the European Central Bank
to raise interest rates strongly next month.
Gas prices
in Europe fell below record highs,
but this could be a temporary measure as Russia halted
the flow of gas along the Nord Stream pipeline to Germany,
for the second time in several months.
The EU is on track to meet targets for filling up gas inventory,
but analysts warn that the biggest factor for energy security
this winter is whether countries can cut consumption enough to ensure
that the fuel stored continues through cooler months.
After scrambling for fuel during the summer following Russia’s invasion of Ukraine,
Europe’s largest gas supplier, Europe’s gas inventory is now 79.94 percent full,
according to gas infrastructure data in Europe,
leading countries to exceed their target of having 80 percent full storage by November.
In addition, gold futures fell to $1735.90 per ounce,
while the euro traded against the US dollar 0.2 percent higher at 1.0034.
artical name Oil soars as European stock futures rise
