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1. All three major U.S. stock indices closed higher, with the Dow Jones Industrial Average up 1.12%, the S&P 500 up 1.07%, and the Nasdaq up 1.37%. Salesforce rose over 4%, led by Apples nearly 4% gain. The Wind S7 Index rose 1.44%, with Facebook up over 2% and Tesla up over 1%. Chinese concept stocks generally rose, with iQiyi up over 8% and 21Vianet up about 7%. 2. All three major European stock indices closed higher, with Germanys DAX up 1.8%, Frances CAC 40 up 0.39%, and the UKs FTSE 100 up 0.52%. 3. U.S. Treasury yields fell across the board, with the 2-year Treasury yield falling 1.47 basis points to 3.451%, the 3-year down 1.67 basis points, the 5-year down 2.44 basis points, the 10-year down 3.45 basis points, and the 30-year down 3.80 basis points. 4. International precious metal futures generally closed higher, with COMEX gold futures up 3.82% at $4,374.30/oz and COMEX silver futures up 2.59% at $51.40/oz. The US government shutdown and expectations of a Federal Reserve rate cut have boosted golds safe-haven appeal. The EUs energy policy shift has heightened inflation expectations, and central banks around the world continue to increase their gold reserves. 5. The main US oil contract closed down 0.38% at $56.93/barrel, while the main Brent crude contract fell 0.57% to $60.94/barrel. 6. Most of the base metals in London rose, with LME zinc futures up 1.45% at $2,976/ton, LME lead futures up 1.22% at $1,994/ton, LME copper futures up 1.02% at $10,712.50/ton, LME tin futures up 0.75% at $35,300/ton, LME nickel futures up 0.69% at $15,230/ton and LME aluminum futures down 0.40% at $2,766.50/ton.According to the Wall Street Journal: A group of banks including JPMorgan Chase, Bank of America and Goldman Sachs are working to raise $20 billion in loans for Argentina.On October 21st, the Russian Ministry of Defense reported on the 20th that Russian forces had taken control of the Lenino settlement in the Donetsk region. Over the past day, Russian forces continued operations in multiple directions, including Sumy, Kharkiv, and Donetsk, striking targets such as energy facilities supporting the Ukrainian defense industry, drone storage sites, and temporary deployments of Ukrainian troops. Russian air defense systems shot down three guided air-to-air bombs and 129 fixed-wing drones. On the same day, the General Staff of the Ukrainian Armed Forces reported that 168 engagements had taken place in the frontline areas over the past day, with Ukrainian forces repelling Russian offensives launched from multiple directions. Ukrainian Air Force, missile units, and artillery units struck Russian personnel, weapons, and military equipment concentrations, as well as drone control points and artillery positions.On October 21st, the U.S. Senate voted on the government funding bill for the 11th time on October 20th local time, but still failed to pass it, thus continuing the U.S. government shutdown that began on October 1st. The bill was originally intended to extend government funding until November 21st, but ultimately failed to reach the 60 vote threshold required for passage with 50 votes in favor and 43 votes against.According to Japans Sankei Shimbun: Former Secretary-General of the Liberal Democratic Party of Japan Toshimitsu Motegi will serve as the head of trade negotiations.

WTI Anticipates Additional Losses Below $77.00 As Global Central Banks Prepare For a New Rate-Hiking Cycle

Daniel Rogers

Apr 21, 2023 13:54

Futures for West Texas Intermediate (WTI) on the New York Mercantile Exchange (NYMEX) have estimated a cushion around $77.00 during the Tokyo session. After a four-day adverse spell that raised doubts about further monetary policy tightening by global central banks, oil prices have heaved a sigh of relief.

 

The price of crude oil has surrendered the majority of its gains since OPEC+ announced unexpected production limits. A further decline in the price of oil would expose it to the crucial support level of $75.60. Growing concerns about a global economic downturn, coupled with the fact that central banks are preparing for a new cycle of rate hikes to combat persistent inflation, will have a significant impact on global oil demand.

 

Along with the Federal Reserve (Fed), it is anticipated that the European Central Bank (ECB) and the Bank of England (BoE) will increase interest rates to combat persistent inflation in their respective economies. The Fed and BoE are expected to raise rates by an additional 25 basis points (bps), while investors are divided over the path of rate increases by the ECB, with options ranging from 25 to 50 bps.

 

No one could deny that a more conservative approach to monetary policies by the world's central banks would reignite concerns of a global recession as manufacturing activities are severely hampered.

 

Aside from that, investors have disregarded China's robust Gross Domestic Product (GDP) figures, which have bolstered signs of economic recovery and, ultimately, oil demand in the world's second-largest nation. Notably, China is the world's greatest importer of oil, and the economic recovery in China would support oil prices.

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