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A Reuters poll showed that 65% of economists surveyed expect the Bank of Japan to raise its key interest rate to 1.00% in June.A Reuters poll shows that the Bank of Japan is expected to raise interest rates to 1.25% in the fourth quarter and to 1.50% in the third quarter of 2027 (unchanged from the April poll results).The Governor of the Central Bank of Malaysia stated that the country will inevitably be directly and indirectly affected by the Middle East conflict. The Malaysian economy is expected to remain resilient in 2026, with growth projected at 4%-5%. Despite external headwinds, technological expansion will support export growth. Strong domestic demand will provide strong support against external headwinds.Central Bank of Malaysia: Indicators show that overall price conditions remained relatively under control as of early May. Overall inflation is expected to rise slightly in 2026. The ringgit remains resilient despite ongoing Middle East conflicts.On May 15th, the Bank of Japan stated that Japan may face another round of across-the-board price increases around the summer as businesses ranging from food manufacturers to hot spring resorts consider passing on soaring energy costs caused by the Middle East conflict to consumers. In a report based on a survey of regional businesses conducted from January to April, the Bank of Japan noted that many service sector companies are gradually passing on rising raw material and labor costs to consumers, abandoning their long-standing practice of maintaining low prices. The report stated that rising energy costs due to the Middle East conflict have also prompted companies to accelerate price increases in their fiscal year business plans starting in April. Some companies, including those in the food, restaurant, and hot spring resort industries, have decided to raise prices at a faster pace. The report stated, "Other companies indicated they will soon decide whether to raise prices. As for the specific timing, some companies indicated they will decide around the summer or later." This report highlights the Bank of Japans growing concern about accumulating inflationary pressures in the economy, which could provide further justification for a near-term interest rate hike.

Despite weakening China inflation, WTI crude oil prices surpass $80 per barrel. API inventories are scrutinized

Daniel Rogers

Apr 11, 2023 14:34

 截屏2023-04-06 下午4.29.32_1024x576.png

 

WTI crude oil reaches a new intraday high near $80.40, buoyed by marginally bullish market sentiment and a weakening US Dollar ahead of Tuesday's European session. Even so, the price of black gold remains within a one-week trading range of approximately $2.0 upon the resumption of full markets following the weekend break.

 

Consequently, the US Dollar Index (DXY) breaks a four-day uptrend by falling to 102.35 at press time, down 0.20 percent intraday. In doing so, the greenback bears the weight of remarks made by the president of the Federal Reserve (Fed) Bank of New York and the vice chairman of the Fed's rate-setting committee, John Williams, who cites rising chances of benign inflation. Rick Rieder, Chief Investment Officer of global fixed income at BlackRock, the world's largest asset manager, said late Monday, according to Reuters, "The Federal Reserve may not need to raise interest rates further to fight inflation, as the aftermath of last month's turmoil in the banking sector and a series of recent labor data point to a slowing US economy."

 

On a separate page, the conclusion of China's military exercises near Taiwan is combined with the Australian-Chinese trade agreement and expectations for increased investment in Japan to illustrate the cautious optimism in the markets. Positive headlines from the International Monetary Fund's (IMF) Managing Director Kristalina Georgieva, who stated on Monday that the global economy is expected to grow less than 3% in 2023, with India and China expected to account for half of the global growth this year, also favored the optimists.

 

In spite of this, CME's FedWatch Tool forecasts that the US Central Bank will raise rates by 0.25 percentage points in May, which challenges market sentiment and WTI crude oil purchasers. Also weighing on risk appetite and energy benchmark prices could be China's disappointing inflation data and a cautious tone ahead of high-profile US data/events.

 

Above all, the OPEC+ supply limits and rising expectations of increased energy demand from the world's largest energy consumer, China, support the upward momentum of WTI crude oil.

 

Moving forward, the weekly report of Oil inventories from the American Petroleum Institute (API), which was -4,346,000 barrels the week prior, could influence WTI prices. For unambiguous direction, the IMF's spring summit and US inflation, as well as the Fed Minutes, will receive the most attention.

 


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