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The Eurozones ZEW economic sentiment index for July was 23.4, down from 9.5 in the previous month.Germanys ZEW Economic Situation Index for July was -77.6, compared to a forecast of -77.8 and a previous reading of -81.Germanys ZEW economic sentiment index for July was 26.3, below the expected 17.5 and the previous reading of 10.5.HSBCs chief multi-asset strategist, Max Kettner, stated that a market correction is possible as market sentiment overheats, the effects of fiscal stimulus diminish, and uncertainty surrounding the US midterm elections rises. Investors should consider moderately reducing their equity positions after the earnings season ends. Kettner, who has maintained a top-weighted overweight rating on equities since mid-March, noted that current positioning and market sentiment are approaching levels seen during the economic reopening trading period in 2021, while some US credit card data indicates that consumer spending has begun to slow. He pointed out that the fiscal stimulus from the "Big and Beautiful Act" is comparable to that of the 2009 financial crisis, but the stimulus is primarily concentrated in the first half of 2026, with limited incremental support available in the future. Regarding specific midterm election risks, Kettner pointed out that current polls show a close Senate race, increasing uncertainty surrounding AI and data center regulations. This uncertainty could drag down the entire technology sector, not just the divergence between semiconductors and hyperscale cloud service providers; technology stocks as a whole could be affected. However, he also believes that such a correction could present buying opportunities.The ZEW economic sentiment index for Germany and the Eurozone in July will be released in ten minutes.

WTI struggles at $87 as recession worries probe OPEC's forecast and supply deficit fears intensify

Daniel Rogers

Sep 14, 2022 11:42

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After reverting from the weekly high, WTI crude oil traders seek clear direction around $87.50 during Wednesday's Asian session. However, the present hesitation in the price of black gold may be attributable to the mixed concerns regarding the demand-supply matrix.

 

The Organization of the Petroleum Exporting Countries (OPEC) indicated in a monthly report that oil consumption will climb by 3,1 million barrels per day (bpd) in 2022 and by 2,7 million barrels per day (bpd) in 2023, which is unchanged from last month. Despite obstacles such as rising prices, the news also highlighted indications that major economies were performing better than projected.

 

The news that the United States intends to replenish its emergency oil reserves, as well as the German and European move to control Russian oil and gas prices, could also be favorable for energy prices. In addition, rumors that the Western oil deal with Iran is a long way off are bolstering fears of a supply bottleneck and should have helped energy bulls.

 

Tuesday's US inflation statistics revived concerns about the Federal Reserve's fast rate hike and exacerbated recession concerns. Also acting as downward drivers for WTI crude oil are expectations of economic slowdown due to China and Russia-related concerns.

 

In spite of this, the US Consumer Price Index (CPI) for August increased by 8.3% year-over-year, surpassing market expectations by 0.1%. However, the monthly data increased to 0.1%, exceeding the -0.1% projected and the 0.0% shown in previous assessments. The core CPI, or CPI excluding food and energy, likewise exceeded the 6.1% consensus and 5.9% prior to printing at 6.3% for the month in question.

 

It should be mentioned that the weekly prints of the American Petroleum Institute's (API) industry inventory report also contributed to the commodity's downfall. The API Weekly Crude Oil Stock climbed to 6,035 million during the week ending September 9, up from 3,645,000 the previous week.

 

In the future, the price of black gold may stay under pressure due to a stronger US dollar and economic troubles. Before today's official weekly inventory data from the U.S. Energy Information Administration, however, the supply crisis concerns could test the bears (EIA). Thursday's US Retail Sales for the month of August and Friday's preliminary reading of the September Michigan Consumer Sentiment Index will also warrant close attention.

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