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April 5th - According to the Financial Times, International Energy Agency (IEA) Executive Director Fatih Birol warned that if the Strait of Hormuz does not reopen to shipping, the amount of crude oil and refined products lost in April will be double the amount lost in March. Even after the conflict ends, it will take a long time to return to normal. "We are monitoring all critical energy assets in the region hourly," he said, referring to oil and gas fields, pipelines, refineries, and liquefied natural gas terminals. "Currently, 72 energy assets have been damaged, and a third of them are severely or very severely damaged," he added. Birol praised Saudi Arabias swift response to the crisis, noting that the country diverted more than two-thirds of its oil exports via a pipeline to the Red Sea. Birol stated that Saudi Arabias highest authorities assured him that the critical pipeline was well protected. However, Birol pointed out that if this route were attacked, the consequences for the global economy would be extremely severe.April 5th - According to the Financial Times, International Energy Agency (IEA) Executive Director Fatih Birol warned that countries must resist the urge to hoard oil and fuel amid the energy crisis triggered by the US-Israel conflict with Iran. Supply is expected to decrease further if the Strait of Hormuz remains closed. "I urge all countries not to impose export bans or restrictions," Birol stated. "This is the worst time for the global oil market. If countries hoard oil and fuel, their trading partners, allies, and neighbors will suffer." This likely refers to the United States. With gasoline prices exceeding $4 per gallon and California facing jet fuel shortages, rumors are circulating in the US about a possible ban on refined petroleum product exports. US Energy Secretary Chris Wright has so far only ruled out a ban on crude oil exports. Birol stated that some countries are already hoarding energy, undermining the effectiveness of the IEAs release of 400 million barrels of crude oil and fuel from its emergency reserves to stabilize markets during the current conflict.UAE authorities say the UAE faces the threat of Iranian missile attacks.Market news: A missile launched from Iran has targeted oil storage facilities in Bahrain.According to the official measurement of the China Earthquake Networks Center, a 3.6-magnitude earthquake occurred at 10:39 on April 5 in Gaochang District, Turpan City, Xinjiang (43.34 degrees north latitude, 88.94 degrees east longitude), with a focal depth of 36 kilometers.

NZD/USD fades US inflation-driven increases below 0.64 in anticipation of China trade data

Alina Haynes

Jan 13, 2023 15:04

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During a lackluster Asian session on Friday morning, the NZD/USD consolidates the US inflation-driven advances within a range of 0.6390 to 0.6385. This underscores traders' nervousness ahead of China's December trade data and the initial January readings of the US Michigan Consumer Sentiment Index (CSI).

 

Notably, the weaker December US Consumer Price Index (CPI) fueled expectations of easy rate hikes and depressed the US Dollar the previous day. However, recent reports that the Fed's easy strategy could push the RBNZ to reverse its hawkish stance appeared to weigh on the NZD/USD exchange rate.

 

However, the US CPI for December met expectations of 6.5% YoY, compared to 7.1% before. In addition, the CPI excluding food and energy maintained the market consensus of 5.7% YoY, as opposed to the previous readings of 6.0%. Notable is the fact that the CPI MoM had its first negative result since June 2020, with a -0.1% figure for the designated month, compared to forecasts of 0.0% and the prior figure of 0.1%.

 

Fed Fund Futures related to the policy rate implied a nearly 100 percent chance of a 0.25% Fed rate hike in February, whilst the odds favoring a 50 bps rate hike in the same month fell to 8%.

 

Notably, President of the Federal Reserve Bank of Philadelphia Patrick Harker was the first to predict mild rate hikes after the US CPI, which weighed on the US Dollar. In a similar spirit, Thomas Barkin, president of the Federal Reserve Bank of Richmond, remarked that it "makes sense" for the Fed to take a more cautious approach to reducing inflation. However, James Bullard, chairman of the Federal Reserve Bank of St. Louis, emphasized that the most likely scenario is inflation continuing longer than 2%, thus the policy rate will need to be higher for a longer period of time.

 

Wall Street was able to close in the black despite these maneuvers, while 10-year and 2-year Treasury bond rates reached monthly lows. Notable is the fact that S&P 500 Futures register small gains while 10-year US Treasury rates remain under pressure near 3.44 percent.

 

In the absence of substantial local data or events, the NZD/USD exchange rate may remain muted until China and the United States announce their most significant numbers. If the anticipated data can convince policy hawks in Beijing and Washington, the New Zealand currency could extend its recent slide.


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