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Futures data from October 21st revealed that as of October 20th, the mainstream benzene market in East China closed at 5,535 yuan/ton, down 220 yuan/ton from 5,755 yuan/ton at the beginning of October. Looking at the post-holiday market, major ports in East China maintained a steady pace of destocking in early October, but concerns about crude oil oversupply intensified, with Brent crude futures falling to a five-month low and weakening market sentiment. Coupled with a lack of downstream market support, exacerbating losses, and a lack of new orders from end users, secondary downstream inventories remained high and difficult to reduce, creating significant price transmission resistance. The market may face downward pressure in late October.Futures News, October 21st: Crude oil prices have recently continued to decline, with overall weakness predominating. Market concerns are mounting about a global oil glut. On the one hand, Saudi Arabia has been increasing crude oil production, albeit at a slower pace, but the cumulative increase has been significant. On the other hand, the US has entered its seasonal off-season, resulting in lower oil demand and significant pressure on oil inventory. Zhuochuang Information predicts that the decline in oil prices reflects the realization of some negative factors. The market is focused on the progress of Sino-US trade negotiations. Current market news suggests expectations for a deal are stronger than previously anticipated, potentially providing support for oil prices. Whether this can stabilize remains to be seen.The Hang Seng Tech Index continued its strong performance, rising over 3%. Tech stocks performed strongly, with Bilibili (09626.HK) rising nearly 10%. The Hang Seng Index is now up nearly 2%.On October 21, it was learned from the Ministry of Natural Resources that due to the influence of strong cold air and this years No. 24 typhoon "Fengshen" (strong tropical storm level), the National Marine Forecasting Center continued to issue an orange alert for waves and a yellow alert for storm surges at 08:00 on October 21 in accordance with the "Marine Disaster Emergency Plan".The Hang Seng Tech Index continued to strengthen, rising by more than 2%. Bilibili (09626.HK) rose by more than 6%, leading the constituent stocks. The Hang Seng Index is now up 1.44%.

The euro/dollar exchange rate has dipped below 1.00 as markets await Jackson Hole and the Fed's inflation target

Alina Haynes

Aug 26, 2022 15:19

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Falling below 0.9965 during Friday's Asian session, the EUR/USD emerges from hiding after three days. Reports concerning the European Central Bank (ECB) and the Fed's cautious tone leading up to Chairman Jerome Powell's talk at the Jackson Hole Symposium, not to mention the critical US PCE inflation data, may be to blame for the recent dip in the main currency pair.

 

Bears in the EUR/USD pair, who are worried about higher inflation in the bloc, were faced with a challenge late Thursday when Reuters reported unnamed sources saying that ECB reinvestments could continue alongside rate hikes. The latest developments in China, Taiwan, and Iran might possibly drag the price down.

 

According to Reuters, the United States suspends 26 Chinese carrier flights in retaliation to China's stance, which renews Sino-American antagonism and bolsters demand for the US dollar as a safe-haven currency. The number of American diplomats stationed in Taiwan may have increased in tandem with the island's escalating military spending. In addition, the previously unconcerned attitude was called into question after a letter quoting Vice President Joe Biden said, "The United States bombed Iranian-backed troops in Syria to defend American people both at home and abroad."

 

It should be remembered that the mixed prints of Germany's IFO statistics and an upward revision to the country's Gross Domestic Product (GDP) for the second quarter (Q2) combined with the hawkish European Central Bank's (ECB) July policy meeting tended to favor the bulls prior.

 

On the other side, US dollar bulls were undeterred by higher US numbers and contradicting Fed statements. Furthermore, China's stimulus of nearly a trillion dollars may put downward pressure on the currency.

 

The Dow Jones Industrial Average posted its biggest daily gain in a week, while rates on 10-year US Treasuries declined to 3.03% from a high of 3.100% the day before. Consequently, the S&P 500 Futures are down 0.10 percent intraday as of press time.

 

Going forward, EUR/USD swings will depend on Fed Chair Jerome Powell's ability to defend bold moves during his yearly Jackson Hole address.

 

In addition, the Fed's preferred inflation gauge, the US Core Personal Consumption Expenditures (PCE) Price Index for July, will be quite important. According to projections, annual growth will slow to 4.7% from 4.8%, while monthly growth may slow to 0.3% from 0.6%. It's worth noting that the September GfK Consumer Confidence Survey results for Germany, forecast at -31.8 versus -30.6 previously, could possibly affect the EUR/USD in the short term.

 

The EUR/USD pair is now being capped by a declining trend line that has been in place for the past two weeks at the 1.0000 parity level. The bears are currently looking for the 0.9900 level before focusing on the 61.8% Fibonacci Expansion (FE) of the pair's May-August advances near 0.9855.


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