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Japan Meteorological Agency (JMA): An earthquake occurred in Higashioki, Chiba Prefecture, with a focal depth of 30km and a magnitude of M5.0. This earthquake will not cause a tsunami.Futures News on April 7, the foreign oil price has plummeted by nearly 14% compared with last Friday, and the probability of the domestic market falling to the limit is relatively high. In the short term, the market is extremely panic, among which Brent may continue to trade the recession test of $55/barrel, and pay attention to the multi-allocation opportunities after stabilization and bottoming out in the medium and long term. Reasons: First, in the short term, the market is trading deflation caused by tariffs between major countries and economies, and the panic sentiment is difficult to alleviate, and major asset classes fall in resonance; second, the current gold-oil ratio has continued to soar, and the cumulative decline is fully priced according to the relationship between crude oil demand and global economic fluctuations in 2024. There is a risk of oversold in the short term, and it is not the best short-allocation target; third, in the long term, there are several potential positives for oil prices, including a sharp contraction in Irans crude oil supply under US sanctions, low absolute inventories in major regions, OPEC+ production cuts, and a slowdown in the growth of US shale oil supply. Once the macro sentiment stabilizes, the trend rebound is likely to occur.Futures on April 7, overnight crude oil plummeted, and the U.S. market opened in the early morning to continue the decline. There is an oversold hint in the short term. Whether there is a rebound and the strength remains to be seen. Looking back, whether the market bearish sentiment caused by Trumps tariff policy will continue to be observed, OPEC+ plans to speed up production in May, which is a significant negative (but it has not been implemented, and there may be changes), and the markets concerns about the U.S. economic recession may continue to trade. The overall demand is weakening and supply growth expectations are expected. There may be new geopolitical information disturbances in the middle (around Iran), but if there is no logic to reverse supply and demand expectations, the oil price may point to the cost of major suppliers after the sharp drop. From the perspective of technical analysis, oil prices have fallen below the bottom of production cuts for many years in the form of a sharp drop, and the bearish trend is obvious. There may be some repetitions in the short term, mainly due to the probability of technical adjustments. SC crude oil is expected to open at the limit and may be difficult to open throughout the day. The trading end is short-term, and put option positions can consider cashing in profits, or consider locking in part of the profits by selling options on the premise of holding put options or Sc short positions.Japans five-year government bond yield fell to 0.725%, the lowest since December 26 last year.Futures news on April 7, crude oil fell sharply, which was bearish for the trading confidence of fuel oil market players. Downstream purchasing sentiment was wait-and-see, market trading was sporadic, refinery sales pressure increased, and the market atmosphere was dominated by wait-and-see. It is expected that the center of gravity of fuel oil bargaining will fluctuate downward today.

GBP/USD hits 1.16 because to Truss' fiscal boost and rising BOE rates

Alina Haynes

Sep 06, 2022 15:27

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GBP/USD receives bids to retest the intraday high above 1.1590 as bulls embrace Lizz Truss' leadership amid expectations of a large stimulus and a push to the Bank of England (BOE). Consequently, throughout Tuesday's Asian session, the Cable pair led the G10 currency pairs with intraday gains of 0.65%.

 

"Incoming Prime Minister Liz Truss has drafted plans to stabilize annual energy and gas costs for a typical UK residence at or below the current level of £1,971," As a result of Russia's decision to shut off gas supplies to Europe in response to sanctions imposed in response to the invasion of Ukraine, she is under pressure to find a solution to increasing energy prices that are crushing individuals and businesses in the United Kingdom.

 

After the results were revealed, Truss declared, "I will submit a solid proposal to cut taxes and stimulate the economy." According to Reuters, UK prime ministerial candidate Truss stated, "I would resolve the energy crisis by tackling people's energy prices and our long-term energy supply problems."

 

Aside from that, her criticism of the BOE's slow response to the fight against inflation is well-known, which suggests that the "Old Lady," as the UK's central bank is often known, will increase interest rates more quickly.

 

The dollar's loss also contributes to the GBP/USD recovery, it should be noted. Despite this, the US Dollar Index (DXY) fell 0.35 percent to 109.43 at press time, failing to justify higher US Treasury yields. In doing so, the dollar index versus the six major currencies extended its drop from yesterday's 20-year high.

 

The decrease in the DXY may also be attributable to the market's cautious optimism, as indicated by mildly optimistic stock futures, in anticipation that global authorities will be able to address the energy crisis. The recent reduction in hawkish Fed predictions, particularly in the wake of Friday's mixed US employment report, provides additional support for the GBP/USD recovery.

 

Alternatively, according to data released by payments provider Barclaycard on Tuesday, a decrease in Consumer Spending investigates the bears. The Financial Times said that "UK consumers cut spending on clothing, home improvement, and cosmetics in August, while business activity declined, a symptom of "collapsing" demand due to the escalating cost of living crisis" (FT).

 

Amid crowded markets, risk catalysts are likely to occupy pair traders in the future. Also essential will be the ISM Services PMI for August, which is predicted to be 55.5 as opposed to the prior reading of 56.7.

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