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The German Finance Ministrys monthly report shows that the federal budget deficit will reach 41 billion euros as of the end of April 2026.Switzerlands industrial output fell 7.1% year-on-year in the first quarter, revised from -0.70% to -0.4% in the previous quarter.On May 21, Bank of Japan (BOJ) board member Junko Koeda stated on Thursday that she believes Japans nominal neutral interest rate is above 1%. Based on current staff estimates, the BOJ considers the real neutral interest rate to be around -0.9% to +0.5%. Assuming inflation fluctuates around the BOJs 2% target, this implies a nominal neutral interest rate range of 1.1% to 2.5%. "My view is that the lower bound of Japans neutral interest rate is likely higher than 1%," Koeda said at a press conference. The nominal neutral interest rate is closely watched by the market because it indicates how far the central banks short-term policy rate is from a level neutral to the economy. The BOJ currently sets its short-term policy rate at 0.75%.May 21 - According to the Iranian Students News Agency, Pakistani Army Chief of Staff Asim Munir will travel to Tehran on Thursday as part of Pakistans ongoing mediation efforts to broker negotiations and consultations between Tehran and Washington regarding the war with Iran.On May 21, Takeshi Minami, an economist at the Norinchu Kinko Research Institute, stated that if the Middle East conflict continues, even if Japans oil supply can be guaranteed until early 2027, the Japanese economy will find it difficult to avoid a downturn. He indicated that the conflict could trigger adverse effects through various channels, including economic contraction in emerging market economies and a sharp rise in inflationary pressures. Japan possesses ample oil reserves and is also working to secure oil imports via routes that avoid the Strait of Hormuz.

In a risk-on environment with a weaker US dollar, WTI consolidates weekly losses above $83,000

Alina Haynes

Sep 09, 2022 17:17

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The price of WTI crude oil is higher for the second day in a row while paring the weekly losses at the eight-month low on Friday during the Asian session. However, by the time of publication, the black gold has reached a new intraday high of around $83.50.

 

Recent news reports from the US Treasury Department regarding the oil price cap appear to have helped drive up energy prices together with stronger sentiment and a weaker US dollar. According to the US Treasury source, "the oil price cap should be set above the marginal production cost, taking into account past Russian oil prices."

 

In other news, stronger sentiment and slow US Treasury yields cause the US Dollar Index (DXY) to fall intraday by 0.55%, to 109.05 at the latest. It's interesting to see that after a solid day, the US 10-year Treasury yields are still stuck around 3.32%, while the S&P 500 Futures tracks Wall Street's gains at approximately 4,020.

 

Recent market sentiment appeared to be aided by remarks made by US Treasury Secretary Janet Yellen, which suggested that trade relations between the US and China were set to improve. The market's attitude also appeared to have been aided by recently stronger US statistics and expectations that global central bankers will be able to offset the shock caused by inflation with a comprehensive strategy and higher rates. The Wall Street Journal (WSJ) article, on the other hand, raises some concerns about the future of China's technological enterprises and casts some doubt on the optimism.

 

A price document examined by Reuters on Friday revealed that Kuwait has decreased the official selling prices for its oil grades for the month of October from the previous month. Before the present program ends in October, US Energy Secretary Jennifer Granholm said the administration of US President Joe Biden is considering whether additional releases of crude oil from the country's emergency stockpiles are necessary. Prior to that, a Department of Energy official reportedly told Reuters that the White House was only considering releasing the 180 million barrels from the US Strategic Petroleum Reserve (SPR) that the president had already stated.

 

It should be highlighted that the recent decline in China's inflation data, coupled with the hawkish central bank activities, presents a challenge to oil purchasers. Both China's Producer Price Index (PPI) and Consumer Price Index (CPI) show unfavorable results for August. However, compared to 2.8% market expectations and 2.7% in the prior year, the headline CPI declined to 2.5% YoY, and the PPI fell to 2.3% from 3.1% projected and 4.2% in the preceding year.


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