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The Stoxx Europe 600 index fell further to 1%, hitting a new intraday low.June 26 – Royal Bank of Canada remains optimistic about the medium- to long-term outlook for gold, believing that the “currency devaluation trade” still has room for further development. “We believe there could be more buying at $4,000 per ounce and below, but more importantly, the broader theme of the ‘currency devaluation trade’ remains intact,” said Chris Louney, commodities strategist at RBC. “In the long term, given concerns about issues such as rising government debt, we believe the drivers for gold remain in place.”On June 26th, Shenghe Jingwei announced that its first board of directors fourth meeting and the second extraordinary shareholders meeting of 2024, held on November 20th, approved the "Proposal on Investing in the Construction of Shenghe Jingweis Lingang Advanced Packaging Production Line Project," agreeing to invest in the construction of the Dongsheng Hexin 3D Integrated Chip Manufacturing (Phase I) project. The total investment for the project is approximately RMB 10 billion, with the final investment amount subject to actual project input. The company will invest as needed based on the projects progress. Currently, the project is actively preparing for various pre-construction matters, and construction will officially commence on June 29th after completing the relevant procedures in the coming days.On June 26, according to Irans Press TV, US President Trump has again ordered that all Iraqi oil revenues controlled by Iraq be deposited into accounts at the Federal Reserve Bank of New York. Executive Order 13303 was originally signed after the US military action against Iraq in 2003 and has been renewed annually since, always citing "national security" as the reason. The White House has not issued a press release on this matter, but Trump sent a formal notification to Congress on May 4 regarding the extension of the order. In the formal notification, Trump stated: "The various obstacles hindering the orderly reconstruction of Iraq, the restoration and maintenance of domestic peace and security, and the development of political, administrative, and economic institutions continue to pose an exceptionally significant threat to US national security and foreign policy. Therefore, this Executive Order must remain in effect beyond May 22, 2026."According to Iranian state television, three foreign oil tankers that attempted to pass through the Strait of Hormuz "without authorization" were forced to turn back after warnings from the Iranian Revolutionary Guard Navy.

WTI crude oil climbs above $80.00 as NFP and recession fears contend with an OPEC+ surprise

Daniel Rogers

Apr 07, 2023 11:36

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As energy markets celebrate the Good Friday holiday, WTI crude oil prices remain stable around $80.50, poised for a three-week uptrend. In doing so, black gold defends the week-beginning gains provided by the Organization of the Petroleum Exporting Countries (OPEC) and its allies, headed by Russia, known as OPEC+, who announced a surprise output cut. However, concerns of a recession and a cautious disposition ahead of the March US employment report have recently posed a challenge to the energy benchmark.

 

The OPEC+ group startled the market with a voluntary output decline of nearly 1.66 million barrels per day. The International Energy Agency (IEA) stated, in response to the OPEC+ announcements, that the OPEC+ decision to reduce oil output risks aggravating a stressed market by driving up oil prices in response to inflationary pressures.

 

On the other hand, the US Dollar's weakness, bolstered by disappointing US data, supported the recovery of the black gold.

 

In spite of this, the US Dollar Index (DXY) has a four-day losing streak and is currently trading around 102.000.

 

Initial Jobless Claims for the week ending March 31 increased to 228K from 200K expected and an upwardly revised 246K the previous week. Notable is that the Challenger Job Cuts for the given month increased from 77,77K to 89,703K. Previously, US JOLTS Job Openings fell to a 19-month low in February, and March's ADP Employment Change figures of 145K also disappointed markets. In addition, the US ISM Services PMI for March decreased to 51.2 compared to 54.5 anticipated and 55.1 previously.

 

China's optimism for economic development and optimistic activity data from the dragon nation could also support the oil price. Pan Gongsheng, the director of China's State Administration of Foreign Exchange (SAFE), stated on Friday that Beijing "will defend itself against external financial market shocks and risks."

 

It should be noted, however, that recent calls for a recession pose a challenge to WTI crude oil purchasers, and more signs of economic decline should be monitored for direction, particularly when commodity prices trade near the key short-term resistance line.

 

In addition to the news about the recession, the March US employment report will be crucial to monitor for direction. Analysts anticipate a decline in headline Nonfarm Payrolls (NFP) to 240K from 311K previously, with the unemployment rate remaining unchanged at 3.6%. However, the contradictory forecasts for Average Hourly Wages make the outcome even more intriguing.


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