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The Peoples Bank of China (PBOC) announced today that it conducted 4 billion yuan of 7-day reverse repurchase operations, with both the bid and winning bids amounting to 4 billion yuan. The interest rate was 1.40%, unchanged from the previous rate.On September 11, it was reported that on the afternoon of September 10, Ling Ji, Vice Minister of Commerce and Deputy Representative for International Trade Negotiations, and Hilstad, State Secretary of the Norwegian Ministry of Industry, Commerce and Fisheries, co-chaired the 22nd meeting of the China-Norway Joint Committee on Economic Cooperation in Beijing. Ling Ji stated that in recent years, under the strategic guidance of the leaders of both countries, China-Norway economic and trade relations have continued to develop positively, with strong growth in bilateral trade and more diversified two-way investment. China welcomes Norways role as the guest of honor at the 2026 China International Fair for Trade in Services and is willing to strengthen cooperation in the service sector and deepen practical cooperation with Norway in areas such as green environmental protection, energy transition, shipbuilding, and maritime shipping. Both China and Norway firmly support free trade and market openness, welcome Norwegian companies to invest in China, and hope that Norway will create a fair, transparent, and non-discriminatory business environment for Chinese companies investing and operating in Norway.On September 11, local time, US President Trump stated on a Fox News program on September 10 that although the war against Iran might affect the upcoming US midterm elections, he does not regret launching the war. Trump said he "doesnt agree with the word regret," adding, "If I could do it all over again, I would do it exactly the same way." Trump also refuted speculation among some of his supporters that they were "dissatisfied and demoralized because of the war." He said, "I dont think theyre demoralized. I think theyre very proud because I didnt let Iran have nuclear weapons." Trump also reiterated that the war would end immediately after the midterm elections.Futures Commentary by Everbright Futures: Overnight, London spot precious metals weakened significantly, falling 1.91%. COMEX December gold futures closed at $4358.5, down 1.99%. On one hand, the US August PPI was higher than expected, further raising expectations for a Fed rate hike in September, causing a sharp rise in US Treasury yields. On the other hand, the ECBs 25bp rate hike resonated with global tightening expectations, while crude oil prices surged, further shifting inflation expectations upward. Attention should be paid to tonights US CPI data, which could further exacerbate gold price volatility. 1. On the macro front, US August pending home sales fell 2% month-on-month, higher than the expected 1.6%, with the annualized rate dropping to 3.98 million units, the lowest level in over a year. At the current sales rate, existing inventory is equivalent to 4.9 months of supply, the highest in over a decade. More importantly, the US August PPI rose 5.4% year-on-year, higher than the market expectation of 5.3% and the previous value of 4.7%; core PPI rose to 4.6% year-on-year, the highest since June. 2. Regarding central banks, the European Central Bank raised interest rates by 25 basis points yesterday, its second rate hike this year, and revised its inflation forecasts for the next two years. The market expects one more rate hike this year. Geopolitically, according to Wall Street News, the Houthi rebels seized a key Red Sea port, escalating the conflict with Saudi Arabia. Following the release of US PPI data, the probability of a Fed rate hike in September increased to over 70%, leading to another collective correction in precious metals. With the US August CPI data to be released today, caution is still advised.September 11th - The first International Space Summit concluded in Paris, France on the 10th local time. European Commission President Ursula von der Leyen stated in Paris that the EU has proposed updated merger guidelines to support European aerospace giants in creating space joint ventures. She emphasized that European companies need to reach a certain size to invest and compete globally.

WTI crude oil drifts above $80.00 amidst a US Dollar rebound and supply shortage concerns

Alina Haynes

Apr 10, 2023 14:16

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In the early hours of Monday, purchasers of WTI crude oil struggled to maintain the price above $80.70 as risk aversion and hawkish Fed forecasts bolstered the US Dollar. However, threats to Oil supplies, primarily emanating from China and OPEC+, appear to keep purchasers of black gold optimistic.

 

US Dollar Index (DXY) reverses a four-day downtrend near 102.25 despite the inability of US Treasury bond yields to recover due to recession concerns. However, US 10-year and 2-year Treasury bond yields remain under pressure near 3.37 percent and 3.95 percent, respectively. In doing so, the benchmark bond coupons extend the previous day's losses and illustrate the market's flight to protection in response to concerns of an economic decline.

 

In spite of this, the recent disappointing US data reignite concerns of a recession in the world's largest economy and challenge the optimists in the energy sector. However, the positive US Nonfarm Payrolls (NFP) data enabled Fed hawks to return to the table and renew demands for a 0.25 percentage point rate hike in May. The same constrains the value of the US dollar and stimulates demand for WTI crude oil.

 

On the other hand, geopolitical concerns surrounding China, particularly after the dragon nation's military exercises near Taiwan, combine with last week's unexpected OPEC+ production cut to keep Oil purchasers optimistic.

 

China's willingness to defend the global economy through robust monetary and fiscal easing at home also enables Oil purchasers to maintain optimism in the face of optimism among the world's largest Oil consumers.

 

The Easter Monday holiday in spot markets may limit Oil price movements, but the investors appear to be out of steam, so US inflation and Fed Minutes will be closely monitored for signs of a pullback.


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