Stocks declined and the dollar at its highs sending oil prices declining

Stocks declined on Wednesday morning and the Nikkei index
fell to a three-month low under recession concern,
and the dollar returned to 20-year highs on Wednesday,
adding to downward pressure on crude oil prices.

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Nikkei fell to a nearly 3-month low amid global recession concerns

Dollar back to a 20-year peak and FX in Asia affected by Fed hawkish talk

Oil recovery stalled as concern over recession outweighs supply crisis

Nikkei fell to a nearly 3-month low amid global recession concerns

Japan’s Nikkei fell to near three-month lows on Wednesday,
as recession concern grew after Wall Street stocks fell deeper in a bear market,
and after a report that Apple abandoned plans for more iPhones.

The Nikkei average fell by 2.21 percent to 25984.51 by midday,
from the psychological 26,000 level for the first time since July 4.

After opening, the index declined steadily, down about half a percent,
and mid-morning sales accelerated,
as Apple abandoned a plan to increase production of its new smartphones
after the expected surge in demand failed.

Of the index’s 225 components, 220 declined, three rose and two traded unchanged.

The broader Topix index also fell by 1.72 percent to 1840.78.

Investors globally are on the brink as high borrowing costs cause concern
over a widespread recession, with most of the world’s major central banks
focusing directly on tightening policies to contain hyperinflation.

Dollar back to a 20-year peak and FX in Asia affected by Fed hawkish talk

Asian currencies fell on Wednesday,
while the dollar rose to 20-year highs on hawkish statements from Fed officials
and growing demand for safe haven.

The dollar index jumped by 0.4 percent to a new 20-year high of 114.68,
while dollar futures rose in a similar range,
and a broad market flight in risk-driven assets increased demand for the dollar’s safe haven.

Asian currencies fell sharply as upbeat comments from some Fed
officials suggested more pain in the region due to the rate hike.

China’s overseas yuan was among the worst performers today,
falling by 0.7 percent to a record low of 7.2302 per dollar,
while its domestic counterpart traded at lows last seen during the 2008 financial crisis.

The People’s Bank of China (PBoC) is struggling to support economic growth severely
hampered by this year’s COVID-19 lockdown,
and China’s economy has barely grown in the second quarter,
likely to shrink in the coming months.

Overnight, St. Louis Fed President James Pollard warned that
the United States was facing a serious inflation problem,
likely indicating more tightening monetary policy
as the country struggles with inflation at 40-year highs.

Their comments come a few days after the Fed
raised interest rates for the fifth time this year and
warned it was ready to risk economic pain in its fight against runaway inflation.

US interest rates rose by 300 points during the year to 3.25 percent,
with 2022 widely expected to end by more than 4 percent.

Asian currencies have fallen this year as rising U.S.
interest rates narrow the gap between risky returns and low-risk returns,
with the region braced for more pain as interest rates rise.

The Japanese yen was among the few outliers,
rising 0.1 percent from a 24-year low,
and the currency likely benefited from the government’s intervention
in foreign exchange markets to prevent a further yen depreciation.

artical name Stocks declined and the dollar at its highs

Oil recovery stalled as concern over recession outweighs supply crisis

The oil price recovery is running out of fuel on Wednesday with
concern that short-term demand is slowing to offset a potential
supply shortage caused by OPEC production cuts
and a hurricane in the Gulf of Mexico.

Prices have remained near eight-month lows,
as rising interest rates and growing concern over the economic slowdown
have shaken short-term demand expectations.

London-traded Brent crude futures rose by 0.1 percent to $84.46 per barrel,
while US West Texas Intermediate crude futures fell
by 0.5 percent to $78.15 per barrel by 01:19 GMT,
and both futures rose by 2 percent on Tuesday.

Concern over slowing demand has returned after data from the US Petroleum
Institute showed US crude inventories rose far more than expected last week,
an increase of 4 million barrels compared with forecasts of 333 thousand barrels.

These figures have raised further concern that higher interest rates
and higher inflation in 40 years could affect demand in the near term.

About 11 percent of US oil production in the Gulf of Mexico,
or 190 thousand barrels per day, was closed this week with
major producers evacuating some offshore platforms
in anticipation of Hurricane Ian.

Russia remains ready to pressure OPEC + to cut supplies by at least 1 million barrels per day
(BPD) during its monthly meeting next week,
and other cartel members have also supported production cuts to stabilize oil prices.

While crude oil prices fell from their highs earlier this year,
reducing supply, especially from Russia,
could provide a bullish boost by the end of the year,
as well as demand for heating oil during the winter may also support prices.

artical name Stocks declined and the dollar at its highs

Stocks declined and the dollar at its highs

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