A forthcoming Fed meeting and oil posted weekly gains

2021-09-19T18:05:12
Fed meeting Federal Reserve meeting oil gains
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A forthcoming Fed meeting and oil posted weekly gains

A forthcoming Fed meeting and oil posted weekly gains:

Investors are looking forward to the Federal Reserve meeting,
where the monetary policy of the United States will be determined in the coming period. 

Evest follows all developments in the trading market and relays them in the following report:

 

Topics:

 

Fed meeting had a key role

Investors are beginning to prepare for the Fed meeting, which will take place this week.

The US central bank leadership is expected to announce the beginning of the gradual tapering of the Asset Purchase Program.

The two-day meeting of the American Regulatory Authority will be held from 21 to 22 September,
with results to be announced on Wednesday evening.

Statistics released earlier this week showed a slight slowdown in inflation, with an unexpected increase in retail sales.

Consumer confidence in the United States rose in September to 71 points from 70.3 points the previous month,
according to preliminary data calculating this indicator released by the University of Michigan on Friday.

Analysts expected the index to rise to 72 points on average, according to Trading Economics.

According to experts, the current week will be generally quiet until the middle of macroeconomic events,
after which the Fed will determine the mode of trading in hazardous assets.

It will stick to a cautious tone in terms of raising interest rates.

Previously, this situation was seen as moderately optimistic in stock markets,
but now that the stock exchanges are in a correction phase,
any tightening in the Fed’s tone may boost the trend towards profit-making.

Investors will focus on the Fed meeting next week.

The main issue is the announcement of quantitative easing options.

On the eve of the meeting, high volatility in the stock markets is not expected.

According to experts, strong aggregate data on the economy lead to expectations of a reduction in monetary stimulus from the Fed,
but the key point is the timing of its release.

 

Investors are worried

Global markets continue to repurchase failures, taking advantage of the ever-large liquidity provided by major central banks as part of the monetary stimulus to the economy.

However, the threat of tapering in these measures hampers the development of sustainable growth of hazardous assets.

The pandemic problem is creating more uncertainty.

New strains of the coronavirus have hampered its resolution through mass vaccinations.

Investors are increasingly concerned about the problems of China’s construction giant Evergrande,
which has the largest corporate debt in the world.

The risk of bankruptcy remains high, given its ability to hit the Chinese and the global financial system as well.

State authorities make it clear that they are not likely to save the developer and leave it alone with creditors.

The speed of the US economy’s recovery continues to depend on the course of the epidemic and the rate of vaccination.

Adding to the uncertainty is the statement by the Chairman of Moderna that three-stage vaccines may not be sufficient for Americans to protect against Covid-19.

 

Oil rises over 2.5% last week

Oil prices fell on Friday amid a gradual recovery in the US company’s production of oil and petroleum products in the region hit by Hurricane Ida.

Since the beginning of this week, the price of Brent crude has risen by 2.6% and West Texas Intermediate by 2.5%.

The cost of Brent crude futures for November on the London Stock Exchange ICE Futures on Friday is $74.74 per barrel,
$1.23 lower than the closing price of the previous session.

The price of West Texas Intermediate crude futures for October in electronic trading on the New York Mercantile Exchange (NMX) fell to $71.53 per barrel,
1.49٪ lower than the final value of the previous session.

According to the US Bureau of Safety and Environmental Control, in the Gulf of Mexico, after Hurricane Ida passed by the end of August,
the capacity to provide about 28% of oil production has not yet been restored.

 

English Research Corporation: Global oil demand will peak in a short time

Global demand for crude oil will peak sooner than previously thought,
as the Covid-19 pandemic and clean energy trends accelerate the transition from fossil fuels, according to IHS Markit.

The London-based research company’s latest long-term forecast cuts four years and 5.2 million barrels per day from its 2020 peak demand estimate. 

IHS Markit now expects global demand for crude oil to rise until 2033, peaking at 81 million barrels per day,
before beginning a long-term decline.

In the meantime, At the same time, the company’s new global demand scenario for refined products such as gasoline, diesel,
and jet fuel requires a peak in 2036, and demand in 2050 below 2019 levels.

“The energy transition accelerated during COFID- 19, and the combination of changing consumer habits
and a growing sense of urgency around climate change will lead to greater political commitment and financial support to decarbonize the industry.”
Sandeep Sial, IHS Markit Vice President and Head of Oil Markets and Refining said in a press release. 

The forecast coincides with OPEC warning that a delta version of the coronavirus will affect oil recovery until next year. 

OPEC expects oil demand to average 99.7 million barrels per day in the fourth quarter of 2021,
down 110,000 barrels per day from last month’s forecast.

These figures refer to total petroleum liquids, including crude oil and other refining inputs.

 

A positive weekend in Asia and negative in Europe

On Friday, the positive dynamics of the indices prevailed in Asia, where Japan’s Nikkei 225 index rose 0.6%,
China’s Shanghai composite -0.2% and Hong Kong’s Hang Seng added 1%,
but Europe declined in the evening, with France’s KAC, German Dax, and British Footsy down 0.8-1.2%.

The consumer confidence index at the University of Michigan rose to 71 points in September,
while it was expected to grow to 72 points from 70.3 points in August.

A forthcoming Fed meeting and oil posted weekly gains

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