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On October 20th, with the US government shutdown resulting in a lack of key data this week, US dollar and US Treasury investors will carefully scrutinize Fridays delayed inflation data to assess the outlook for US interest rates. Kudotrade analyst Konstantinos Chrysikos noted, "A reading that meets or falls short of expectations could reinforce market expectations for deeper policy easing in 2025-2026, thereby renewing downward pressure on yields and the US dollar." In his view, only data that significantly exceeds expectations could materially challenge current expectations for a series of further rate cuts.On October 20th, XTB analyst Kathleen Brooks noted that the expected acceleration in UK inflation in September will strengthen the Bank of Englands case for delaying further interest rate cuts until next year, providing support for the British pound. According to a Wall Street Journal survey of economists, data on Wednesday is expected to show that UK year-on-year inflation rose to 4.0% in September. Brooks said the next Bank of England rate cut is expected as early as February of next year, by which time inflation should have begun to moderate. She said that upward inflationary pressures and expectations of no more rate cuts before 2026 are likely to boost the British pound in the coming months.U.S. Transportation Secretary Duffy: SpaceX is behind schedule, and the contracts currently held by SpaceX will be made public to introduce a competitive mechanism.On October 20th, Capital Economics economist Adrian Prettejohn predicted that the Swiss National Bank (SNB) would revert to negative interest rates as inflation approaches zero and geopolitical risks continue to push up the Swiss franc. He stated that with inflation expected to average zero in 2026, the SNB could lower its key interest rate from the current 0% to -0.25% sometime next year. The Swiss franc is likely to see a new wave of safe-haven inflows in the coming months, further justifying the central banks actions. Prettejohn also emphasized that negative interest rates will not reappear elsewhere, as Switzerlands inflation and neutral interest rate are lower than those of other countries.Pakistans Defense Minister: Ceasefire agreement with Afghan Taliban depends on whether they can control armed attacks on Pakistan from their territory.

Oil Prices Stabilize After Sliding on Rate Rise Concerns, While Russian Crude Flows

Haiden Holmes

Jan 31, 2023 11:30

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Oil prices stabilized in early Asian trade on Tuesday, after plunging more than 2% in the previous session due to the possibility of additional interest rate hikes and ongoing Russian oil exports.


By 01:55 GMT, Brent crude prices rose 28 cents to $85.18 per barrel, while U.S. West Texas Intermediate (WTI) crude futures rose 9 cents to $77.99 per barrel.


Investors anticipate that the U.S. Federal Reserve will boost interest rates by 25 basis points on Wednesday, followed by a half-point hike by the Bank of England and European Central Bank on Thursday. Increasing interest rates could slow the global economy and reduce oil demand.


The market also focused on a planned virtual conference of the ministers of the Organization of the Petroleum Exporting Countries (OPEC) and others, including Russia, on February 1 at 1100 GMT. This group is known as OPEC+.


Five OPEC+ members told Reuters on Monday that the panel is anticipated to propose maintaining the oil producing group's existing output policy intact when it meets this week.


In October, OPEC+ agreed to reduce its production target by 2 million barrels per day (bpd), or around 2% of global demand, from November through the end of 2023.


Russia continues to provide oil to the global market despite a European Union boycott and G7 price ceiling imposed in response to its invasion of Ukraine, which pushed up prices.


Providing some support for oil prices, the U.S. dollar index has declined 1.3% thus far in January. A weakening dollar reduces the price of crude oil for foreign buyers.

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