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Futures July 2, as of June 28, Japans commercial crude oil inventories increased by 43,529 kiloliters from the previous week to 12,287,738 kiloliters. Japans gasoline inventories fell by 108,464 kiloliters from the previous week to 1,673,044 kiloliters. Japans kerosene inventories increased by 102,849 kiloliters from the previous week to 2,099,122 kiloliters. The average operating rate of Japans refineries was 88.2%, compared with 84.4% in the previous week.July 2, Phillip Nova senior market analyst Priyanka Sachdeva wrote in a report that oil futures may trade in a narrower range this week as OPEC+ is widely expected to agree to increase production by another 411,000 barrels per day in August. OPEC+ supply is under the control of investors; however, prices seem to have digested the increase in production and are unlikely to catch the market off guard again in the short term. However, a weaker dollar could prolong any upward momentum.July 2, Goldman Sachs said that if OPEC+ decides to increase production on Sunday, the market is not expected to react much, because the general market expectations have shifted to this result. Goldman Sachs expects the August production increase to be the last, as the large influx of shale oil from non-OPEC countries affects the supply and demand balance, but the risk tends to be a further increase in OPEC+ quotas after August.Canada remains committed to removing all Trump tariffs in its trade deal with the United States, the country’s ambassador to Washington said.Goldman Sachs: If OPEC+ decides to increase production on Sunday, the market is not expected to react much as the general market expectations have shifted to this outcome.

GBP/JPY falls below 161.50 as the rally pauses in the face of inflation concerns and remarks from BoE Governor Bailey

Alina Haynes

Mar 28, 2023 15:34

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GBP/JPY halted and attained a weekly high of 161.80 after a rapid ascent. Due to Monday's optimistic risk sentiment and rising global bond yields, the currency pair rose.

 

In a recent speech, Governor Bailey of the Bank of England (BoE) emphasized the need to remain vigilant for signs of persistent inflationary pressures. If these pressures manifest, he suggested, additional monetary tightening may be necessary. Although there are indications of economic resiliency, Bailey warned that the inflation trajectory may not be completely smooth. An important objective of monetary policy is to prevent persistent inflation resulting from external factors. Additionally, Bailey identified significant strains in portions of the global banking system, which could have implications for the global economy as a whole.

 

Bailey stated that the full impact of recent bank rate hikes has not yet been felt, and that inactivity due to early retirement may have contributed to an increase in cyclical rates. Due to these factors, the Bank of England has significantly raised interest rates. Bailey cautioned that inflation could be more persistent than anticipated, so it is crucial to remain vigilant for signs of inflationary pressure. If such pressures manifest, it may be necessary to tighten monetary policy further to contain inflation.

 

Overall, Bailey's speech emphasizes the Bank of England's commitment to economic growth and price stability. The Bank of England is assiduously managing risks to maintain inflation within its target range.

 

Due to the absence of a press conference at the March meeting of the Board of Governors, these remarks are notable. The majority of analysts predict that the BoE will suspend in May, while others anticipate that additional tightening will be necessary as inflation control remains the central bank's top priority over banking uncertainty.

 

The British Retail Consortium (BRC) reported that store price inflation rose to 8.9% in March, up from 8.2% in February, highlighting the inflationary pressure. Alternatively, Japan's Minister of Economy Goto announced plans to invest JPY 2,200,000,000,000 in a stimulus program.


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