Oil falls as the dollar declines and Asian stocks continue to rise

Oil prices fell moderately on Wednesday morning after rising on Tuesday to their highs since early July
while Asian stocks continued their global rally on Wednesday as strong US earnings
and an expected resumption of Russian gas supplies to Europe helped lift risk sentiment and ease recession concern
while the dollar declined to two-week lows.

topıc

Brent falls to $106.76 per barrel

Asian stocks continue to rise globally as the dollar weakens

The escalation of the gas crisis in Germany

Brent falls to $106.76 per barrel

By Wednesday morning, September Brent crude futures fell by $0.59, or 0.55 percent on the London Futures Exchange
to $106.76 per barrel.

Brent crude oil also rose on Tuesday by $1.08, or 1 percent, to $107.35 per barrel.

August WTI futures were at this moment cheaper in electronic trading on the New York Mercantile Exchange (NYMEX) by $0.34
or 0.33 percent, to $103.88 per barrel, during the previous session
where the futures contract rose by $1.62, advancing by 1.6 percent to $104.22 per barrel.

US President Joe Biden pledged on Tuesday to take “strong executive action” to combat climate change
and support renewable energy, without elaborating.

Data released overnight by the American Petroleum Institute indicated
that last week US oil inventories increased by about 1.5 million barrels.

Experts have forecast an increase of 400 thousand barrels,
and the US Department of Energy will publish its own inventory statistics later on Wednesday.

Asian stocks continue to rise globally as the dollar weakens

European futures also pointed to a stronger opening, with eurozone futures Stokes 50 rising by 0.2 percent.

S&P 500 futures and the Nasdaq rose by 0.5 percent, following stronger-than-expected results from US companies overnight
including Netflix Inc, allowing relief for investors concerned about rising inflation
and the Federal Reserve raising interest rates that affected corporate profits.

On Thursday, the S&P 500 rose by 2.8 percent while the heavy Nasdaq composite rose by 3.1 percent.

In Asia, MSCI’s broader index of Asia-Pacific stocks outside Japan rose by 1.2 percent
driven by a 1.6 percent jump in resource-intensive Australia and 1.7 percent in Hong Kong stocks
and Japan’s benchmark Nikkei index rose by 2.5 percent.

Chinese stocks rose by 0.4 percent, slowing in other markets
as the central bank kept record lending rates unchanged in a fragile economic recovery from COVID lockdowns.

In the analysts’ view, in addition to the technology-led rally in stocks
the flood of major news about Europe has mostly raised the euro again above 1.02 with European core yields also broadly rising.

The escalation of the gas crisis in Germany

The euro rose 0.2 percent to $1.0244 by Wednesday morning
after making the biggest one-day percentage gain in a month during the previous session
as traders raised their bets on interest rate hikes.

Russian gas flows through the Nord Stream 1 pipeline are expected to resume on time
on Thursday after scheduled maintenance is completed
easing investors’ concern about gas supplies to Europe.

It has been a positive night for risk, but concern about a recession has certainly not gone away
and a rebound in stocks over the past week could largely reverse the recovery
from saturation levels in the sale and extreme pessimism levels.

The Bank of Japan also issued a policy decision on Thursday
but no changes are expected to be made to its ultra-easy position.

On Wednesday

the US dollar slipped 0.1 percent against its main counterparts
bottoming out at two weeks’ lows as expectations that the Fed could turn to a 100 basis point
hike at its meeting next week eased.

Markets still expect the Fed to raise the rate significantly by 75 basis points to rein in inflation.

Other major currencies have likewise risen on the back of a weak greenback
and as banks globally become increasingly tight in their efforts to reduce high inflation.

The US dollar index against a basket of major currencies fell by 0.14 percent to 106.52
off a two-decade high of 109.29 last week.

The greenback’s decline also coincided with lower expectations
for a 100 basis point rate hike in next week’s Fed policy review.

The Australian dollar rose by 0.4 percent to $0.6925, after rising by 1.3 percent overnight
also the highest in a month.

Ahead of next week’s Federal Reserve meeting, markets had expected a 23.2 percent chance of a 100 basis point rate hike
with expectations of a massive rate hike tempered after policymakers rushed to water it down.

Earlier on Wednesday, Reserve Bank of Australia Governor Philip Lowe also suggested interest rates could at least double from current lows
similarly, the sterling advanced by 0.28 percent to $1.2031.

In contrast, the Japanese yen remained in the opposite position on Wednesday morning and was last traded at 138.155 against the dollar
as the Bank of Japan appears determined on its pessimistic stance.

A closely watched portion of the US yield curve remained inverted on Wednesday
with the last two-year yield at 3.2335 percent, and little changed from the previous close of 3.2310 percent.

Oil falls as the dollar declines and Asian stocks continue to rise

Related Topics