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On September 19th, the German government announced on the 18th that it had reached an agreement with the federal states on a package of tax relief measures, including a new round of fuel tax cuts and a fuel price cap, to alleviate the pressure on residents and businesses caused by persistently high fuel prices. According to the plan, the German government will reduce the energy tax, resulting in an actual reduction of approximately 17 euro cents per liter for gasoline and diesel. The measures are scheduled to be implemented by October 1st and will continue until the end of this year, with a total tax reduction of approximately 2.5 billion euros. This fuel tax cut is similar to the temporary measures implemented in May and June this year, which were expected to reduce tax revenue by 1.6 billion euros this year.On September 19th, Li Xunlei, Chief Economist of Zhongtai International, stated at the Tsinghua PBC School of Finance Chief Economist Forum that global economic imbalances are difficult to avoid; imbalance is the norm, and balance is temporary. Over time, any system will inevitably lead to imbalances; no system is perfect, therefore continuous reform and adjustment are necessary. Currently, in my countrys dual circulation economic model, the international circulation is relatively smooth, but the domestic circulation is not, and the latter is a problem that urgently needs to be addressed. Regarding smoothing the domestic circulation, Li Xunlei suggested promoting fiscal and tax reforms to increase the central governments financial resources. "Facts have shown that over the years, the efficiency of local government debt has been low. my countrys institutional advantages have not been well reflected in the fiscal and tax field. Promoting fiscal and tax reforms can greatly enhance fiscal support for investment and consumption," Li Xunlei said.Saudi Arabias Civil Defense Ministry announced that the alert for the Riyadh and Khairji areas has been lifted.Saudi Arabias civil defense has issued a warning of potential dangers in the Khairji region.Saudi Arabias civil defense has issued a warning about potential dangers in the Saudi capital, Riyadh.

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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