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The preliminary figures for the UKs Q4 GDP annual rate, UK December industrial production month-on-month rate, UK December manufacturing output month-on-month rate, UK December seasonally adjusted goods trade balance, and UK December three-month GDP month-on-month rate will be released in ten minutes.Lenovo CEO: Lenovo raises PC prices to cope with soaring memory chip costs.On February 12th, Jeff Schulze of Clearbridge Investments noted in a report that the US January labor market data was positive for risk assets, as it showed a solid employment base that could further boost consumer spending. He stated that investors have postponed their expectations for a Federal Reserve rate cut from June to July, as the data indicates that the current labor market does not require additional monetary easing to maintain growth. While rising interest rates exert pressure, the improved economic growth outlook has completely offset this impact. Schulze also cautioned that although the report was generally positive, its important to note that January data is often heavily influenced by seasonal factors and may exaggerate the performance of the monthly jobs report.On February 12th, Nomura Research reported that WuXi Biologics (02269.HK) announced a profit forecast, expecting revenue to grow by 16.7% year-on-year to RMB 21.8 billion in 2025, slightly higher than the market expectation of RMB 21.5 billion. Gross margin improved by 5 percentage points year-on-year to 46%, also higher than the market expectation of 43%. Net profit and net profit attributable to shareholders increased by 45.3% and 46.3% year-on-year to RMB 5.7 billion and RMB 4.9 billion respectively, exceeding the market expectations of RMB 4.8 billion and RMB 4.4 billion. Non-IFRS net profit increased by 22% year-on-year to RMB 6.6 billion. The bank estimates that revenue in the second half of 2025 will grow by 17.2% year-on-year to RMB 11.8 billion, with profit increasing by 38%, both exceeding market expectations. Management attributed the growth to optimistic research service revenue performance and more projects entering later stages driven by improved service capabilities. The bank believes that its subsidiary, WuXi Biologics Associates (02268.HK), is a significant contributor to revenue growth. Excluding the contribution from the WuXi AppTec consortium, revenue is expected to grow by 12% year-on-year to RMB 9.9 billion in the second half of 2025, accelerating from 9% in the first half of 2025. The bank raised its target price from HK$37.36 to HK$50.54 and maintained its buy rating.On February 12th, Samsung announced that it has begun shipping the latest version of its HBM4 memory chips to customers, marking a significant milestone in the companys strategic lead in the AI memory market. Samsung is accelerating its efforts to meet strong demand for Nvidia graphics chips. Previously, competitor SK Hynix had taken a technological lead and dominated Nvidias high-bandwidth memory orders, a key component of AI accelerators. However, in recent months, Samsung has narrowed the gap with its rival.

WTI crude oil climbs above $80.00 as NFP and recession fears contend with an OPEC+ surprise

Daniel Rogers

Apr 07, 2023 11:36

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As energy markets celebrate the Good Friday holiday, WTI crude oil prices remain stable around $80.50, poised for a three-week uptrend. In doing so, black gold defends the week-beginning gains provided by the Organization of the Petroleum Exporting Countries (OPEC) and its allies, headed by Russia, known as OPEC+, who announced a surprise output cut. However, concerns of a recession and a cautious disposition ahead of the March US employment report have recently posed a challenge to the energy benchmark.

 

The OPEC+ group startled the market with a voluntary output decline of nearly 1.66 million barrels per day. The International Energy Agency (IEA) stated, in response to the OPEC+ announcements, that the OPEC+ decision to reduce oil output risks aggravating a stressed market by driving up oil prices in response to inflationary pressures.

 

On the other hand, the US Dollar's weakness, bolstered by disappointing US data, supported the recovery of the black gold.

 

In spite of this, the US Dollar Index (DXY) has a four-day losing streak and is currently trading around 102.000.

 

Initial Jobless Claims for the week ending March 31 increased to 228K from 200K expected and an upwardly revised 246K the previous week. Notable is that the Challenger Job Cuts for the given month increased from 77,77K to 89,703K. Previously, US JOLTS Job Openings fell to a 19-month low in February, and March's ADP Employment Change figures of 145K also disappointed markets. In addition, the US ISM Services PMI for March decreased to 51.2 compared to 54.5 anticipated and 55.1 previously.

 

China's optimism for economic development and optimistic activity data from the dragon nation could also support the oil price. Pan Gongsheng, the director of China's State Administration of Foreign Exchange (SAFE), stated on Friday that Beijing "will defend itself against external financial market shocks and risks."

 

It should be noted, however, that recent calls for a recession pose a challenge to WTI crude oil purchasers, and more signs of economic decline should be monitored for direction, particularly when commodity prices trade near the key short-term resistance line.

 

In addition to the news about the recession, the March US employment report will be crucial to monitor for direction. Analysts anticipate a decline in headline Nonfarm Payrolls (NFP) to 240K from 311K previously, with the unemployment rate remaining unchanged at 3.6%. However, the contradictory forecasts for Average Hourly Wages make the outcome even more intriguing.


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