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Hong Kongs Hang Seng Index closed at 24,771.14 points, up 30.57 points, or 0.12%, on Wednesday, March 19; Hong Kongs Hang Seng Tech Index closed at 6,041.19 points, down 64.31 points, or 1.05%, on Wednesday, March 19; the CSI 300 Index closed at 9,163.67 points, down 14.13 points, or 0.15%, on Wednesday, March 19; and the H-share Index closed at 4,018.73 points, down 6.18 points, or 0.15%, on Wednesday, March 19.1. Goldman Sachs: The Fed is expected to reiterate that it is not in a hurry to cut interest rates further. The FOMC is still inclined to continue to show two rate cuts in the median of the dot plot in 2025. The core PCE inflation forecast for 2025 is expected to be raised, while the GDP growth forecast will be lowered. 2. Barclays: The Fed is expected to keep interest rates unchanged, inflation and unemployment expectations will rise, and GDP growth expectations will fall. The dot plot is expected to show a 25 basis point rate cut to 4.1% this year. 3. BNP Paribas: The Fed is expected to keep interest rates unchanged and continue to cut interest rates twice this year. The Feds views will begin to reflect the Trump administrations tariff policy. It is expected to lower economic growth expectations and raise inflation expectations. 4. Wells Fargo: The Fed is expected to keep interest rates unchanged. The latest dot plot may maintain the expectation of a 50 basis point rate cut this year, but it is reasonable to revise it up to 75 basis points. The GDP growth forecast for 2025 may be revised down, and the inflation forecast may face pressure to revise up. 5. Morgan Stanley: The Fed is expected to keep interest rates unchanged, moderately lower growth expectations for this year and next, and moderately raise inflation expectations. The FOMC will expect two rate cuts this year and two rate cuts next year. 6. Deutsche Bank: The Fed is expected to keep interest rates unchanged, and the dot plot may continue to show room for two rate cuts this year, but there is a risk that individual members will move the median upward, reducing the rate cut expectation to one in 2025. 7. SEB: The Fed is expected to keep interest rates unchanged, and the dot plot may continue to maintain the median path of two rate cuts in 2025 and 2026, and the core inflation forecast for this year and next may be slightly revised upward. 8. Pictet Wealth Management: The Fed is expected to keep interest rates unchanged, lower the GDP forecast for 2025, raise the inflation forecast, and acknowledge the increase in uncertainty. The dot plot will show that the median expectation of two rate cuts this year remains unchanged, and Powell may reiterate that he is not in a hurry to cut interest rates. 9. Generali Investments: The Fed is expected to keep interest rates unchanged and strengthen data-dependent policies. The Fed may cut interest rates twice this year. 10. Bank of America: It may implicitly acknowledge that the US economy is at risk of "stagflation", while lowering its GDP growth forecast for 2025 and revising up its core PCE inflation forecast. The dot plot is expected to show a forecast of a cumulative interest rate cut of 100 basis points from 2025 to 2026, but the decision to cut interest rates in 2027 may be canceled.Some star technology stocks fell before the market opened, with TSMC (TSM.N) and ASML (ASML.O) falling more than 1%, and Intel (INTC.O) falling 0.62%.On March 19, German central bank economists used their own artificial intelligence to screen about 50,000 sentences from the ECBs monetary policy statements and speeches, and asked Metas multilingual large language model to analyze the central banks hawkish stance on rhetoric since 2011. The study found that since then, the ECBs tone has been "mainly dovish," meaning that interest rate makers are not overly concerned about inflation risks, but instead emphasize economic weakness and signal monetary easing. Even after strengthening the rhetoric when inflation begins to rise in 2021, the central banks policy remains dovish.Germanys DAX30 index opened on March 19 (Wednesday) down 143.30 points, or 0.61%, at 23249.93 points; Britains FTSE 100 index opened on March 19 (Wednesday) down 19.13 points, or 0.22%, at 8686.10 points; Europes STOXX 50 index opened on March 19 (Wednesday) down 22.26 points, or 0.41%, at 5462.75 points; The Spanish IBEX35 index opened on March 19 (Wednesday) down 72.37 points, or 0.54%, to 13,276.93 points; the Italian FTSE MIB index opened on March 19 (Wednesday) down 141.71 points, or 0.36%, to 39,392.00 points; the French CAC40 index opened on March 19 (Wednesday) down 8.29 points, or 0.10%, to 8,106.28 points.

As EU sanctions worsen, Russia may increase supplies of petroleum to Asia

Haiden Holmes

Aug 24, 2022 10:45

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According to FGE, if European sanctions strengthen, Russia may increase exports of a critical oil product into Asia, maybe by blending it with crude oil, in an effort to find alternative markets.


Armaan Ashraf, the global head of natural gas liquids at the consultancy, expects that in February, when EU sanctions take effect, more naphtha, a fuel used mostly in the production of plastics, will relocate to hubs such as Singapore and Fujairah. In an interview, he suggested that as importers shy away from direct purchases from Russia, re-exports from these areas may become more widespread.


Russia's invasion of Ukraine has created havoc on the energy markets this year, and this disruption is anticipated to persist until 2023. In December, the European Union put a restriction on the majority of Russian crude exports, followed approximately two months later by a comparable prohibition on products including naphtha. Even if the Energy Information Administration forecasts a drop in Russian crude production as a result of the limitations, local refineries will still need to locate outlets for their naphtha.


According to preliminary data released by Vortexa Ltd., shipments of Russian naphtha to Asia soared by 84% in August, hitting approximately 130,000 barrels per day.


This increase happened despite terrible regional conditions, since local plastic producers, the key consumers, struggle with thin margins and little demand for Chinese plastics. In addition to diminishing gasoline margins, the market for converting naphtha into gasoline blendstocks is decreasing.


In Asia, the margins for naphtha production are negative, totaling to -$17 per barrel. In addition, gasoline short-term spreads are contango, a bearish trend signaling an abundance of supply in the near future.


According to Ashraf, Russian naphtha may have been combined with the country's Urals petroleum and shipped to India during the beginning of the current year. "The blending of heavy full-range naphtha or heavy naphtha in limited quantities might produce much bigger profits than selling naphtha cargo straight," he explained.

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