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1. The three major U.S. stock indexes closed slightly higher. The Dow Jones Industrial Average rose 0.36% to 46,669.88 points, the S&P 500 rose 0.44% to 6,611.83 points, and the Nasdaq Composite rose 0.54% to 21,996.34 points. Boeing rose nearly 2%, and American Express rose more than 1%, leading the Dow Jones gains. The Wind U.S. Tech Seven Giants Index rose 0.42%, with Amazon and Google rising more than 1%. The Nasdaq China Golden Dragon Index fell 0.21%, with BaWangChaJi rising more than 3% and iQiyi falling more than 4%. 2. Major Asia-Pacific stock indexes closed higher across the board. The Nikkei 225 rose 0.55% to 53,413.68 points. The South Korean KOSPI rose 1.36% to 5,450.33 points. The Indian SENSEX 30 rose 1.07% to 74,106.85 points. 3. The WTI crude oil futures contract closed up 0.96% at $112.61 per barrel; the Brent crude oil futures contract rose 0.61% to $109.7 per barrel. 4. International precious metals futures generally closed lower. COMEX gold futures fell 0.08% to $4676.10 per ounce, and COMEX silver futures fell 0.15% to $72.81 per ounce. 5. US Treasury yields were mixed. The 2-year Treasury yield rose 2.06 basis points to 3.850%, the 3-year Treasury yield rose 0.57 basis points to 3.874%, the 5-year Treasury yield was unchanged at 3.983%, the 10-year Treasury yield fell 1.00 basis point to 4.333%, and the 30-year Treasury yield fell 2.35 basis points to 4.886%.Market news: The Artemis 2 mission crew has reached its closest point to the moon.Samsung Electronics: First-quarter revenue is expected to be 133 trillion won (institutional estimates are 119.2 trillion won).Samsung Electronics: First-quarter operating profit is expected to be 57.2 trillion won (institutional estimates are 40.6 trillion won).Market news: Saudi Arabia shot down four Iranian ballistic missiles.

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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