Markets are watching the US-China relations’ development and oil is rising again

2021-11-16T18:00:57
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Markets are watching the US-China relations’ development and oil is rising again with news of the sale of the strategic reserve to the United States

 

Markets are watching the US-China relations’ development and oil is rising again with news of the sale of the strategic reserve to the United States :The prospects for tightening the Fed’s monetary policy mainly affect the dynamics of the dollar, U.S.

Treasury bonds and gold today, with US Treasury bonds on 10-year and 30-year bonds are up 5-6 basis points.

Overall, Asian markets are trading in different directions, while oil is rising.

Evest follows market developments in the following report.

Topics:

A virtual meeting between Biden and Xi Jinping 

US retail sales data had a key role

US indices decline at the beginning of the week

Mixed trends in Asia

Oil rises again 

 

 

A virtual meeting between Biden and Xi Jinping 

A virtual meeting of the presidents of the United States and China was held.

Biden and Xi Jinping confirmed their determination to develop bilateral relations,
which did not harm the world economy and the capital market. 

During a virtual summit with President of the People’s Republic of China, Xi Jinping, US President Joe Biden stated ,
that conditions must be ensured so that competition between the two countries does not escalate into deliberate or unintended conflict.

In the meantime, Xi Jinping has called for peaceful coexistence and cooperation between the two countries, CCTV reported. 

“China and the United States should respect each other, peaceful coexistence and cooperation on the mutual benefit basis,” he said.

According to him, “the development of the situation between China and the United States is currently at a critical stage,”
and the international community is facing new problems and challenges.

US retail sales data had a key role

Foreign markets have exhausted the fear they suffered after the release of inflation data in the United States,
which has risen to the most in more than 30 years.

In addition, Chinese industry growth accelerated slightly in October to 3.5% instead of falling to 3.0%.

Tuesday’s focus will be on U.S. retail sales data in October,
which will help assess current consumer demand and expectations in the context of high inflation. 

Investor morale improved following the recovery in oil prices and a marked decline in dollar prices,
with positive media remarks about the start of negotiations between US and Chinese leaders. 

US statistics (in addition to retail sales, with expected data on industrial production in the country)
will probably not provide a clear negative surprise and will also support the commodity and stock markets.

For the statistics released in the afternoon, attention is drawn to United States industrial production,
manufacturing, warehouse stocks and retail sales data.

 

US indices decline at the beginning of the week

US indices declined by 0.04% the previous day, and traders’ attention remains focused on issues of strong inflation ,
and how the world’s central banks will react to rapid growth in consumer prices, according to MarketWatch.

The inflationary background increases the political importance of choosing the incoming Federal Reserve Chairman to US President Joe Biden. 

The Wall Street Journal reported that a choice could be made between extending the term of the current Chairman of the Federal Reserve Board, Jerome Powell,
and appointing Lil Brennand, a member of the Federal Reserve Board of Governors.

Furthermore, the president may announce the decision this week.

The Empire New York manufacturing index jumped 30.9 points in November,
while growth predictions rose to 21.2-22 points from October’s 19.8.

In the meantime, the sub-index, which assesses the likelihood of improving the business environment in the next six months,

fll to 36.9 points from 52.

Index dynamics in Asia were mixed, with Japan’s Nikkei index rising by 0.1%,
China’s Shanghai index falling by 0.4%, Hong Kong’s Hang Seng rising by 1.1%, and US S&P 500 futures losing less than 0.1%.

Reserve Bank of Australia (RBA) Governor Philip Lowe expects consumer price hikes to slow over the next 18 months. 

According to him, the Central Bank would raise interest rates only when it made sure that the situation was stable under inflation.

The central bank kept the interest rate at a record low of 0.1% per year on Tuesday.
and said it would continue to buy back A$4 billion ($3 billion) in government bonds each week until at least mid-February 2022.

 

Oil rises again 

Prices on the oil market rebounded on Tuesday in the absence of U.S. statements of intent,
to start selling raw materials from the Strategic Petroleum Reserve (SPR), which the market had been waiting for.

The cost of Brent crude futures for January on today, Tuesday, is $82.85 per barrel (+ 1% and -0.2% the previous day),
and the December price for West Texas Intermediate crude was $81.45 per barrel (+ 0.7% and + 0.1% the previous day).

Reportedly, Senate Majority Leader Charles Schumer called on President Joe Biden last weekend
to start selling oil from the Strategic Petroleum Reserve,
noting that Americans need immediate help, given the rise in gasoline prices they are suffering. 

US Energy Secretary, Jennifer Granholm,
told CNN that Biden is considering taking advantage of the tools available to him, including selling oil from the strategic reserve.

According to monthly forecasts released by the U.S. Department of Energy’s Energy Information Administration (EIA),
released Monday, oil production in the country’s seven largest shale fields will increase by 85 thousand barrels per day in December,
to 8.316 million barrels per day.

The Energy Information Administration predicts that oil production in the Permian basin could rise next month to 4.95 million barrels per day,
which will exceed the record level recorded in March 2020.

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