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July 7 – The World Bank released its latest China Economic Brief in Beijing on July 7. The report states that despite facing strong supply and weak demand, as well as global energy supply shocks, Chinas economic growth has remained generally resilient. The report projects Chinas economy to grow by 4.4% in 2026, unchanged from the previous brief released in December last year.July 7 – Japanese Economy, Trade and Industry Minister Minoru Jonouchi stated that media reports claiming the government of Prime Minister Sanae Takaichi was attempting to lower interest rates were completely inaccurate. At a regular press conference in Tokyo on Tuesday, Jonouchi said, “Reports that the government is encouraging low interest rates as part of its fiscal expansion policy are baseless. If our intentions have not been accurately conveyed, we will work harder to improve understanding.” Jonouchi’s remarks come as financial markets closely watch how Takaichi will implement her economic strategy through large-scale investment without exacerbating the already heavy debt burden. Last month, Jonouchi represented the Japanese government at a Bank of Japan board meeting, where policymakers raised the benchmark interest rate to 1%, the highest level in 31 years.July 7th - It was learned today that the State Administration for Market Regulation has decided to conduct a centralized review of national metrological technical specifications from July to September. Through periodic reviews and dynamic monitoring, the review aims to promote the upgrading and optimization of metrological technical specifications. The centralized review covers currently effective national metrological technical specifications, focusing on issues such as outdated specifications, lagging content, and insufficient adaptability. It will conduct a thorough review from four dimensions: legality and compliance, scientific validity, applicability, and coordination. The review will benchmark against domestic regulations and standards and advanced international metrological technologies to comprehensively identify shortcomings and weaknesses in the system. Participating units are encouraged to submit optimization suggestions, and exemplary national metrological technical specifications will be selected to guide improvements in the quality and supply capacity of metrological technical specifications.Sources indicate that USD/KRW foreign exchange trading related to the SK Hynix ADR listing is expected to take place around July 15.July 7th - Abhijit Suria, senior Asia-Pacific economist at Capital Economics, stated that the slowdown in Japanese wage growth in May is unlikely to prevent the Bank of Japan from further interest rate hikes. He pointed out that preliminary data released earlier showed that the growth rate of Japanese labor cash income slowed to 3.2% in May from 3.6% in April. Suria said, "Despite the recent slowdown, various indicators of basic wage growth remain well above the 2025 average and are still high relative to historical levels." He added, "We believe that todays data is unlikely to change the Bank of Japans fundamental assessment that the labor market remains tight." Capital Economics maintains its view that the Bank of Japan will raise interest rates to 2% by the end of 2027.

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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