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On September 21st, Tomo Kinoshita, a strategist at Invesco Asset Management (Japan), stated in a report that following last Fridays increase of the policy rate to 1.25%, the Bank of Japan (BOJ) may further raise the rate to 1.50% in December. Despite the BOJs recent multiple rate hikes, its quarterly corporate surveys show that corporate financing conditions have barely deteriorated. Upside risks to inflation have increased due to rising energy prices and a weaker yen. The Federal Reserves hawkish shift is also increasing the risk of yen depreciation. Kinoshita predicts that the BOJ will raise rates further in March and July next year, bringing the rate to 2.0%, thereby ending the current tightening cycle.September 21 - The State Council Information Office will hold a press conference on the theme of "Starting the 15th Five-Year Plan" at 10:00 a.m. on Tuesday, September 22, 2026. Liu Guohong, Secretary of the Party Leadership Group of the Ministry of Natural Resources and Inspector General of the National Natural Resources, and Yan Zhen, Deputy Director of the National Forestry and Grassland Administration (National Park Administration), will introduce the relevant situation on promoting the safe, efficient and sustainable use of natural resources and answer questions from reporters.On September 21, Westpac Chief Economist Lucie Ellis moved her expectation for a Reserve Bank of Australia (RBA) rate hike forward to September, stating that the RBA governors remarks met the committees conditions for further rate increases set in August. She acknowledged tactical reasons for waiting, including the release of the August monthly CPI the following day and the potential for awkward public perception due to a slight easing of tensions in the Middle East, fuel tax adjustments, or a weak employment report. However, she concluded that hawkish comments carried more weight than these factors. Westpac anticipates a divided vote due to differing views on trend productivity, labor supply, and the degree of labor market slack, while underemployment has risen significantly.September 21st - The Mid-Autumn Festival holiday in 2026 will be from September 25th to 27th, a total of 3 days. Guangzhou South Railway Station expects to handle 1.796 million passengers, primarily for family visits, supplemented by students and business travelers, showing a surge in short-distance travel within Guangdong Province. To meet passenger demand, 270 additional peak-hour or temporary high-speed trains are planned from September 24th to 28th, including 36 overnight high-speed trains on September 25th and 28th.SoftBank Group issued $10 billion and $1 billion in European bonds to invest in OpenAI.

WTI struggles to prolong its two-day uptrend below $78, as negative sentiment undermines expectations for China-led oil demand

Daniel Rogers

Mar 02, 2023 15:46

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Following a two-day uptrend that reached the greatest levels in a fortnight, the price of WTI crude oil fluctuates between $77.80 and $90 early Thursday.

 

The recent struggles of the black gold may be related to the contradictory signals encircling China and the Oil equities. However, negative sentiment and the resurgence of the US Dollar appear to be the quote's greatest obstacles to the upside.

 

In addition, higher-than-anticipated US inventories weigh on the energy benchmark. The weekly data from the US Energy Information Administration (EIA) indicates a 1.165M increase in Oil inventories, compared to the expected 0.45M increase and the previous level of 7.648M.

 

The willingness of US President Joseph Biden to continue pumping the markets with the Strategic Petroleum Reserve (SPR) and the absence of offers for Russian Oil also exert downward pressure on the price of WTI crude oil.

 

The latest New York Times (NYT) headlines suggest a potential rift between the United States and China at the important event. According to the news, "China is urging the start of peace talks, and some Group of 20 nations may support that notion when they meet in India, but U.S. officials contend Russia would not negotiate in good faith."

 

It should be noted, however, that the recent uptick in China activity data and optimistic remarks from the dragon nation's policymakers keep black gold purchasers optimistic. China's Minister of Human Resources recently stated, "China's employment will continue to increase this year and remains stable overall." On Wednesday, China's Finance Minister Liu He expressed a willingness to increase the country's fiscal expenditure while noting that the foundation of China's economic recovery remains fragile.

 

However, hawkish remarks from policymakers of the US Federal Reserve (Fed), the Bank of England (BoE), and the European Central Bank (ECB) highlighted the need for additional rate hikes to combat inflation issues, which exerted downward pressure on the price of oil.

 

In response to these events, 10-year US Treasury bond yields surpassed 4% for the first time since early November 2022, while 2-year yields ascended to their highest levels since June 2007 by flashing 4.91%. The increase in US Treasury bond yields reflects the market's concerns, which in turn have impacted on bulls on Wall Street, S&P 500 Futures, and WTI bulls recently. Consequently, S&P 500 Futures were down 0.5 percent as of press time despite the varied closing of Wall Street benchmarks.

 

Moving on, G20 updates could be combined with comments from central bankers and secondary US data to amuse Oil traders.


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