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On February 13th, JPMorgan strategists recommended selling two-year U.S. Treasury bonds as a "tactical" move, arguing that the U.S. economic growth outlook remains robust, making it difficult for the Federal Reserve to cut interest rates significantly. The strategist team wrote in a report, "The economic fundamentals are strong, and once Kevin Warshs nomination is confirmed and he takes over as Fed chair, it will be very difficult for him to influence the decisions of the Federal Open Market Committee (FOMC)." The U.S. will release a key inflation report on Friday, which could provide clues to the Feds next move. If it shows easing price pressures, demand for short-term, policy-sensitive Treasuries may rise. This week, Treasury yields fluctuated, influenced by a sell-off in tech stocks and strong U.S. jobs data, sparking discussions about how Warsh, Trumps nominee for next Fed chair, will handle policy.February 13th - The overnight SHIBOR was 1.2710%, down 9.70 basis points; the 7-day SHIBOR was 1.4300%, down 8.80 basis points; the 14-day SHIBOR was 1.5110%, down 7.20 basis points; the 1-month SHIBOR was 1.5500%, unchanged from the previous trading day. The 3-month SHIBOR was 1.5790%, down 0.10 basis points.On February 13th, Futures News reported that regarding refining costs, crude oil prices rose due to geopolitical risk premiums, resulting in high refining costs. Gasoline wholesale prices rebounded before the holiday, leading to a corrective improvement in the gasoline refining spread. Diesel demand remained weak, with wholesale prices hovering at low levels, causing the diesel refining spread to continue declining. As of the crude oil closing price on February 11th: the domestic gasoline refining spread was 791.74 yuan/ton, a rebound of 63.23 yuan/ton compared to the end of January; the domestic diesel refining spread was 214.31 yuan/ton, a decrease of 51.54 yuan/ton compared to the end of January. The high crude oil costs are unlikely to diminish their suppressive effect on gasoline and diesel refining spreads in the future.Huawei Chinas official Weibo account announced that the Huawei China Partner Conference 2026 will be held from March 19th to 20th.February 13th - The National Hydrogen Energy Storage and Transportation Equipment Quality Inspection and Testing Center (Guangdong) has recently received formal approval from the State Administration for Market Regulation for its establishment. The Guangdong Provincial Special Equipment Inspection and Research Institute (Guangdong Provincial Special Equipment Accident Investigation Center), under the Guangdong Provincial Administration for Market Regulation, is responsible for its construction. The establishment of this center is an important measure by the State Administration for Market Regulation to promote the construction of a manufacturing powerhouse and a quality powerhouse, marking a new stage in the high-quality development of the hydrogen energy industry in South China. Located in Foshan, a hydrogen energy industry cluster, the center will provide crucial support for the safe development, technological innovation, and standard setting of the hydrogen energy industry in the Guangdong-Hong Kong-Macao Greater Bay Area and even nationwide.

WTI bulls enter at critical support and eye the Federal Reserve

Daniel Rogers

Sep 20, 2022 14:31

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West Texas Intermediate is currently up 0.11 percent on the day and has traded between $82.11 and $86.21 bbls. The black gold was reversing early offers that led to the lows even as US dollar bulls came in as markets awaited the Federal Reserve and a multitude of other central banks this week.

 

Fed funds futures have priced in a 79% chance of a 75-basis-point rate hike this week and a 21% chance of a 100-basis-point boost at the conclusion of the two-day Fed policy meeting. Nonetheless, some analysts predict that the central bank could move to increase interest rates by a full percentage point after August inflation exceeded expectations. The DXY index indicates that the demand for safe haven assets, such as the U.S. dollar, is close to its 20-year high. As a result, the demand for oil may decrease, and the dollar's demand as a safe haven asset nears a 20-year high.

 

Nonetheless, China eased a two-week lockdown on the 21 million residents of Chengdu, restoring normal activity to the capital of Sichuan, which may have contributed to the increase in oil prices at the beginning of the week. The Department of Energy said on Monday that the United States will sell 10 million barrels of oil from its strategic reserve for delivery in November.

 

"The markets are increasingly pessimistic about the likelihood of a rapid resolution to the Iran issue, which has resulted in a revival in energy supply risks despite the continuous decline in prices. As markets reprice supply risk premiums, the lack of liquidity might amplify crude's upward volatility, according to TD Securities analysts.