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On May 27, it was reported that US President Donald Trump and Israeli Prime Minister Benjamin Netanyahu spoke by phone on May 26 local time. An informed source stated that the two sides discussed the situation amidst regional tensions and as US-Iran diplomatic negotiations entered a crucial phase.On May 27th, according to Nikkei, Federal Reserve Chairman Neel Kashkari stated that the Fed may take a "series" of interest rate hikes to address inflation caused by the Middle East situation. During the FOMC meeting in late April, the Fed kept interest rates unchanged. Kashkari and two other officials objected to the Feds decision to include language in its statement hinting at future monetary easing. In a written interview, Kashkari stated, "I think the next rate adjustment could be a rate cut, or it could be a rate hike," expressing his differing opinion. Kashkari said the outcome depends on the trend of inflation, which in turn depends on whether the Strait of Hormuz reopens soon or remains effectively closed due to further damage to the regions infrastructure, the latter exacerbating the global energy shortage. Kashkari expressed concern that long-term inflation expectations for businesses and households "could get out of control." He stated that the FOMC "will likely need to take strong measures," and that rate hikes, or even a series of rate hikes, may be necessary.Federal Reserves Kashkari: A protracted war with Iran could trigger a "series" of interest rate hikes in the United States.May 27th - As of 2:30 PM closing, the Shanghai Gold futures contract fell 1.15% to 988 yuan/gram, the Shanghai Silver futures contract fell 1.38% to 18,601 yuan/kilogram, and the SC Crude Oil futures contract rose 0.81% to 610 yuan/barrel.Micron Technology (MU.O) surged over 20%, marking its biggest single-day gain since 2011.

Natural Gas: XNG/USD bears continue to monitor $2.13 in advance of EIA inventories

Daniel Rogers

Mar 30, 2023 15:59

 截屏2023-01-19 下午3.42.24.png

 

Natural Gas (XNG/USD) price fluctuates near the intraday low of $2.23, declining the previous day's corrective rebound off a five-week low ahead of Thursday's European session. In doing so, the energy instrument fails to bolster expectations of increased demand from China in the face of inflation concerns, hawkish central bank actions, and a stronger US dollar.

 

China's willingness to import 65,000 tonnes of Liquefied Natural Gas (LNG) from the United Arab Emirates (UAE) and Premier Li Qiang's upbeat comments have supported the XNG/USD. Premier Qiang of China stated that the economic situation in March is even better than in January and February. However, the policymaker also increased geopolitical tension by opposing trade protectionism and decoupling, which indirectly target the United States and stimulate the Natural Gas bulls.

 

On the other hand, rumors that German gas pipelines are once again reliable for transporting energy, following previous challenges from Russia, impact on the XNG/USD exchange rate. In addition, the majority of central bankers defend their prior bias regarding inflation, exerting downward pressure on the commodity. In addition, the Managing Director of the International Monetary Fund (IMF), Kristalina Georgieva, stated on Thursday, "Urgently need faster, more efficient mechanisms for providing debt support to vulnerable countries." Her remarks revive previously alleviated banking concerns.

 

The US Dollar Index (DXY) adheres to modest gains while S&P 500 Futures struggle around a one-week high set the day before. In addition, the yields on the 10-year and 2-year US Treasury bonds grind higher after tantalizing bond purchasers the day before.

 

Moving forward, Weekly Natural Gas Storage Change data from the US Energy Information Administration (EIA), preceding -72B, may influence XNG/USD price action. Nonetheless, the headlines surrounding inflation and the banking system, as well as China, should be given the utmost focus for direction.

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