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The U.S. NAHB Housing Market Index for June will be released in ten minutes.On June 15th, Ben May and Bridget Payne of Oxford Economics stated in a report that while future setbacks are possible, the US-Iran agreement has reduced the risk of a continued decline in oil inventories, ultimately triggering a surge in global energy prices and leading to an economic recession. However, they noted that this does not automatically mean that the amount of oil flowing through the Strait of Hormuz will increase faster than previously expected. "We had assumed that shipping through the Strait of Hormuz would resume by the end of July. Nevertheless, our current short-term oil price forecasts still look overly optimistic," they added. They further reinforced their view that the Federal Reserve and the Bank of England will not raise interest rates, and other central banks that have already raised rates are unlikely to do so again, as the reopening of the Strait of Hormuz is likely to help lower inflation but has a limited impact on economic growth.On June 15, French President Emmanuel Macron responded to US President Donald Trumps tariff threats, stating that France would not succumb to US threats and cancel its digital tax targeting US tech giants. Speaking to France 1 television in Evian-les-Bains, Macron said the digital tax is part of the European legal system and has already been implemented in some countries; the US has no right to make laws for Europeans or the French.The Dow Jones Industrial Average opened 634.80 points higher, or 1.24%, at 51,837.06 on Monday, June 15; the S&P 500 opened 104.15 points higher, or 1.40%, at 7,535.61; and the Nasdaq Composite opened 597.62 points higher, or 2.31%, at 26,486.47.Bahrains Foreign Ministry welcomes the memorandum of understanding reached between the US and Iran on negotiations and a ceasefire.

The price of steel rises somewhat despite contradictory signals from China

Daniel Rogers

Aug 24, 2022 15:14

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The price of steel continues to hover near its one-week high, which was signaled the day before. Notable is the fact that the latest comeback in metal prices is supported by promises for additional stimulus from China and the retreat of the U.S. dollar, despite the fact that recession concerns pose a challenge to bulls.

 

The most active steel rebar contract on the Shanghai Futures Exchange (SFE) jumped 0.50 percent, while the price of hot-rolled coil increased 1.4 percent. Moreover, stainless steel prices increased 0.4% to 15,430 yuan per tonne.

 

China's willingness to combat the effects of the recession with a substantial injection of funds appears to have contributed to the recent optimism among metal purchasers. "Additional measures taken by China to bolster its struggling real estate market provided additional help. Reuters reports that China slashed its benchmark lending rates and mortgage reference rates by a larger margin on Monday in an effort to stimulate its economy, which has been hampered by COVID-19 breakouts and a housing crisis.

 

On the other hand, Reuters reported that the longer-term situation remained uncertain as a recurrence of COVID-19 cases and a worldwide economic recession continued to weigh on steel demand.

 

It should be noted that the US Dollar Index (DXY) retreats from its intraday high as traders await the US Durable Goods Orders for July, which are anticipated to increase by 0.6% versus the prior increase of 2.0%, for fresh impetus. Expectations that Fed Chairman Jerome Powell will repeat his attempt to soothe hawks at Friday's speech at the Kansas City Fed's Jackson Hole conference may have also impacted on the dollar.

 

Aside from this, predictions of a recession in Europe, primarily owing to the energy crisis, and India's desire to become the world's leading steel manufacturer appear to exert downward pressure on the steel price.


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