Stocks fall as oil declines and the US dollar weakens

Asian stocks decline as the dollar neared last week’s peak
but traders’ main focus was on central bank meetings
while oil prices fell after yesterday’s advance.

topıc

Asian stocks fall as traders look to central bank price plans

Oil prices fall after the sharp rise and the support of the weak dollar

The dollar falters slightly as the possibility of a rate hike declines

Asian stocks fall as traders look to central bank price plans

Asian stocks fell on Tuesday morning
after overnight declines on Wall Street and on the back of renewed concern over the COVID-19 outbreak in China.

MSCI’s broadest index of Asia-Pacific stocks outside Japan fell by 0.64 percent
reversing some of the previous day’s 1.8 percent gain, returning to a two-year low last week.

Chinese blue-chip stocks also fell 1.11 percent
abandoning gains a day earlier as mainland China reported 776 infections of the novel coronavirus
raising concern over renewed restrictions on activity to curb the outbreak.

European markets opened lower with futures falling by 0.75 percent
and FTSE futures losing 0.4 percent, while Japan’s Nikkei rose by 0.75 percent from Monday’s holiday.

EUROSTOXX 50

Oil prices fall after the sharp rise and the support of the weak dollar

Oil prices ran out of steam on Tuesday after rising by more than $5 a barrel in the previous session
with concern that a rise in crude oil could lead to a recession that would hurt demand a lot
slightly outweighing the ongoing concern over tight supply.

Brent crude futures for September settlement fell by 43 cents to $105.84 per barrel by 0446 GMT
and the futures contract increased by 5.1 percent on Monday, the largest percentage gain since April 12.

West Texas Intermediate crude futures for August delivery fell by 28 cents to $102.32 a barrel
and the futures contract increased 5.1 percent on Monday, the biggest gain since May 11.

Oil prices declined in supply concern as Western sanctions on Russian crude and fuel supplies
caused by Ukraine’s conflict, disrupted trade flows to refineries and end-users
and growing concern that the central bank’s efforts to tame rising inflation could lead
to a recession that would reduce fuel demand in the future.

US President Joe Biden visited Saudi Arabia last week
hoping to conclude an agreement on increasing oil production to tame fuel prices.

However, officials from Saudi Arabia, the de facto leader of the Organization of the Petroleum Exporting Countries (OPEC)
have not clearly ensured that production increases are secured.

Oil prices received support from a weakening US dollar on Tuesday
which stood near a one-week low,
making greenback-dominated oil slightly cheaper for buyers with other currencies.

The forecast for oil inventories in the United States of America

the world’s largest oil consumer, was that crude and
distillate supplies may have risen last week while gasoline inventories are likely to fall.

The dollar falters slightly as the possibility of a rate hike declines

On Tuesday, the US dollar moved above its one-week low reached
last night against key peers as markets slashed the prospect of a percentage-point Fed rate hike this month.

Bets on over-easing surged last week after data showed that inflation in the United States
already at a four-decade high, continued to accelerate in June.

Some Fed officials did not heed such talk
and figures from Friday showed consumer inflation forecasts falling to their lowest level in a year.

Futures traders tied to the Fed’s short-term federal funds policy rate
which tended to increase by a full percentage point in interest rates
shifted their bets strongly in favor of a 0.75 percentage point increase at the next meeting
with odds last seen at about 81 percent.

The dollar index, which measures the greenback against six currencies at 107.47
was far from yesterday’s low of 106.88, but also returned from a high of 109.29 last week
a level not seen since September 2002.

The euro, the most weighty currency in the dollar index, also fell by 0.08 percent to $1.01355
but this came after it posted about 0.6percent overnight for the second day of strong gains.

The single currency fell to a low of $0.9952 on Thursday for the first time since December 2002
under the pressure of uncertainty over the euro zone’s potential energy supply crisis.

Despite the uncertainty, the ECB is preparing to raise interest rates on Thursday for the first time in more than a decade
it has sent a 25 basis point telegraph, but sharp inflation has led some traders to raise by half a point.

Elsewhere, the yen approached a 24-year low before the Bank of Japan’s policy decision on Thursday
with the central bank repeatedly committing in recent days to continuing its ultra-easy preparations.

The dollar was little changed at 138.135 yen, not far from Thursday’s peak of 139.38
a level not seen since September 1998.

The risk-sensitive Australian dollar fell 0.06 percent to $0.6809
after rising to a week-long high of $0.6853 on Monday
from a low of $0.66825 on Thursday
the weakest in more than two years.

Stocks fall as oil declines and the US dollar weakens

Related Topics