EUR/GBP: minutes of the ECB meeting in the focus of investors' attentionThe EUR/GBP pair is showing a moderate recovery, regaining positions after the "bearish" dynamics observed at the beginning of the week. The exchange rate is testing the 0.8380 level for an upward breakout, while traders are evaluating fresh macroeconomic data from the eurozone and the UK.In Germany, the consumer price index for September remained at 1.6% year-on-year, while the monthly indicator remained unchanged, fixed at 0.0%. The harmonized CPI index increased by 1.8% year-on-year, although it decreased by 0.1% on a monthly basis. Investors are also analyzing the minutes of the September meeting of the European Central Bank (ECB), where a reduction in inflationary pressure was discussed. Most ECB representatives called for further easing of monetary policy, despite the fact that inflation remains noticeable. At the same time, experts fear a possible slowdown in economic growth and admit that inflation may remain below the target level of 2.0% for a long time. The market expects that the ECB may cut rates twice more by the end of the year.The economic situation in the UK is also of interest. The country's GDP increased by 0.2% in August after stagnating in the previous month, while industrial production fell by 1.6% year-on-year, exceeding the projected -0.5%. At the same time, the monthly growth was 0.5%, exceeding expectations of 0.2%. The manufacturing sector showed a decrease of 0.3% compared to -2.0% in July, while monthly growth was 1.1%. Business activity in the services sector slowed to 0.1% in August, against 0.6% in July, which was below forecasts of 0.3%.Resistance levels: 0.8384, 0.8400, 0.8410, 0.8433.Support levels: 0.8370, 0.8350, 0.8338, 0.8326.USD/TRY: analysts predict a rate cut in JanuaryIn the Asian session, the USD/TRY pair shows a recovery after the unstable dynamics of this week, again testing the 34.2800 mark for an upward breakdown and updating the highs from August 28. The pair's movement is due to the publication of inflation data in the United States, which supported the American currency.Experts interviewed by Reuters suggest that the Central Bank of Turkey will change its plans to ease monetary policy. Out of ten respondents, six believe that the rate cut from the current 50.00% will take place in December, while four predict that it will happen in January. Most analysts expect an initial decrease of 250 basis points (to 47.50%), and one of the experts suggests a reduction of 500 basis points at once. These forecasts are in line with the expectations of economists from JPMorgan Chase & Co. and Goldman Sachs Group Inc. Industrial production data for August will be published today, October 11, in Turkey at 10:00 (GMT+2). The indicator is projected to grow by 2.5% compared to the previous month, which may strengthen the lira against the background of positive economic signals. At 12:00 (GMT+2), employment data will also be released, which will help assess the overall state of the labor market in Turkey and may affect expectations for inflation and the future policy of the Central Bank. In addition, tomorrow, October 12, at 11:00 (GMT+2), a report on Turkey's current account balance for August is expected to be published, which, according to forecasts, will show a deficit of $3.5 billion. This event may put pressure on the Turkish lira if the actual data exceed expectations, which indicates an increase in foreign economic risks for the country.Resistance levels: 34.3000, 34.3500, 34.4091, 34.5000.Support levels: 34.2325, 34.1800, 34.0939, 34.0000.USD/CHF: the decline in US inflation turned out to be weaker than expectedThe USD/CHF pair is at 0.8571 and shows potential for further growth, while the Swiss franc remains one of the most stable currencies among developed economies, thanks to stable macroeconomic indicators.The Swiss National Bank, according to a statement by its vice-chairman Antoine Martin, aims to continue reducing interest rates until the end of the year. Martin noted that key inflation and economic growth targets have been achieved, which allows the regulator to consider the possibility of another reduction by 25 basis points. This year, the cost of borrowing has already been adjusted three times, and in September 2024, the consumer price index reached the lowest level in the last three years — 0.8%. According to Martin, in the long term, the bank intends to return to negative interest rates, which, as before, will be an important incentive to attract investments into the economy.At the same time, the US dollar is at 102.60 on the USDX index, which is the highest since mid-August. A decrease in inflation in the United States from 2.5% to 2.4% in annual terms, while an increase in the basic consumer price index to 3.3% did not put significant pressure on the dollar. This dynamic may signal a further reduction in the interest rate by the Federal Reserve, but with minimal changes — by 25 basis points. Investors expect the Fed to make two such cuts by the end of the year, but San Francisco Fed Governor Mary Daley noted that the final decision would depend on incoming data, and the pace of adjustments could be adjusted.Resistance levels: 0.8610, 0.8750.Support levels: 0.8530, 0.8400.Oil market analysisWTI Crude Oil prices are showing mixed dynamics, remaining around the $75.00 per barrel mark. In the previous session, the instrument showed a noticeable increase, largely due to the publication of US inflation data for September.A significant factor supporting the quotes is the high demand for fuel in the United States, which increased against the background of a major hurricane that struck the state of Florida. In response to the approaching disaster, many oil companies have taken precautions by closing some platforms in the Gulf of Mexico. For example, Chevron Corp. It stopped the operation of one of its drilling rigs, which produced about 65 thousand barrels of oil per day.Geopolitical risks in the Middle East provide additional support for oil. Recall that on October 1, Iran fired more than 180 missiles in the direction of Israel, which was in response to the Israeli Defense Forces strikes on Lebanon, which killed one of the leaders of the Hezbollah group. These events raise concerns in the market about the possible closure of the Strait of Hormuz by Iran, which is a strategic route for oil transportation: up to 21% of the world's daily oil consumption passes through it.Resistance levels: 75.00, 76.00, 77.00, 78.00.Support levels: 74.00, 73.00, 72.17, ...
EUR/USD: the Bank of Italy insists on revising interest rate policyThe EUR/USD pair shows mixed dynamics, holding near the 1.0590 level. Trading activity remains elevated, but market participants have not decided on the direction of the trend after the growth recorded at the beginning of the week.Yesterday's macroeconomic statistics from the eurozone failed to provide significant support for the euro, which continues to trade near local highs due to the weakening of the dollar. In October, the core consumer price index in the region increased by 0.2% month-on-month and 2.7% year-on-year, which coincided with market expectations. The broader indicator also increased by 0.3% and 2.0%, respectively. These data indicate that inflation has stabilized at the target level, which causes uncertainty about the future steps of the European Central Bank (ECB). Particular attention was drawn to statements by the head of the Bank of Italy, Fabio Panetta, who advocated lowering interest rates to support an economy on the verge of stagnation. He noted that delay could lead to inflation falling significantly below the target level, which would complicate its recovery with the help of monetary instruments.The US dollar came under pressure after the publication of weak statistics. In October, the number of construction permits fell to 1.325 million after the September value of 1.430 million, and their volume decreased by 0.6% in percentage terms after a decrease of 3.1% a month earlier. The number of construction starts also decreased by 3.1% after a 1.9% decrease in September. However, a positive factor was the dynamics of the Redbook retail sales index, which accelerated from 4.8% to 5.1% in November. On Friday, S&P Global is scheduled to publish November indices of business activity in the manufacturing sector and the service sector in the United States and the eurozone, which may become key factors for the further movement of the pair.Resistance levels: 1.0600, 1.0630, 1.0665, 1.0700.Support levels: 1.0561, 1.0530, 1.0500, 1.0450.AUD/USD: the attention of market participants is focused on the RBA protocolsThe AUD/USD pair shows a corrective decline, trading around 0.6526, while the Australian currency remains positive, and the US dollar continues to weaken.The day before, the minutes of the Reserve Bank of Australia (RBA) meeting on November 5 were published. Representatives of the regulator confirmed that the key challenge for the country's economy is high inflation. Although the overall index shows a decline due to cheaper fuel, core inflation, reflecting long-term trends, continues to grow. According to RBA analysts, it will not return to the target range of 1.0–2.0% before 2026. In the current situation, the growth rate of gross domestic product (GDP) remains low, which necessitates maintaining a restraining monetary policy.The RBA left the key interest rate at 4.35%, stressing that the policy of strict borrowing conditions will remain in place until favorable macroeconomic conditions appear. The agency also pointed out that the transition to lower rates is possible only if there is a stable growth in consumption and a significant deterioration in the labor market situation. Experts believe that the regulator's further steps will depend on the dynamics of domestic demand and the state of global economic relations.Resistance levels: 0.6560, 0.6670.Support levels: 0.6490, 0.6400.Silver market analysisIn morning trading, the XAG/USD pair is holding around 31.16, supported by rising gold prices and statements by representatives of the US Federal Reserve.The US central bank continues to adhere to the strategy of easing monetary policy, planning to reduce the key rate by 25 basis points in December. Such a move could strengthen the position of assets competing with the dollar, especially in the long term. A reduction in the interest rate, according to analysts, will lead to a reduction in the debt burden, which will create conditions for expanding production and increasing consumption of industrial metals. According to the forecasts of the Silver Institute, the demand for this metal will reach 700 million ounces in 2024, which corresponds to an annual increase of more than 7%.On the other hand, data from the CME FedWatch Tool indicates a decrease in the probability of a December rate cut: over the past two weeks, it has decreased from 80% to 58.9%. Against the background of this uncertainty, investors may pay more attention to precious metals, which will potentially lead to an increase in their value closer to the Fed meeting.Resistance levels: 31.70, 33.70.Support levels: 30.70, 28.70.Crude Oil market analysisIn the morning, WTI Crude Oil quotes show multidirectional dynamics, trading around the 69.00 mark. The instrument remains near the local highs reached on November 11, but is under pressure from news about a decrease in the supply of hydrocarbons. The Norwegian company Equinor ASA announced a reduction in production at the largest Western European field Johan Sverdrup due to power outages. In turn, the American Chevron announced a temporary limitation of production capacities at the Tengiz field in Kazakhstan in connection with maintenance.Problems in the Chinese economy continue to have an impact on the oil market. Despite the efforts of the authorities, recovery remains limited, and experts from the International Energy Agency (IEA) predict that in 2024 the global surplus of hydrocarbon supply may exceed 1 million barrels per day. The key role in balancing the market will be played by the further policy of OPEC+ regarding the increase in production volumes.Additional pressure on the quotes was exerted by the report of the American Petroleum Institute (API), published the day before. In the week ending November 15, commercial oil reserves unexpectedly increased by 4,753 million barrels, while analysts had forecast an increase of 0.8 million barrels. Data from the U.S. Energy Information Administration (EIA) is expected to be published today at 17:30 (GMT+2). Preliminary estimates indicate a possible slowdown in stock growth from 2.089 to 0.800 million barrels, which may affect further price dynamics.Resistance levels: 70.00, 71.00, 71.60, 72.17.Support levels: 69.06, 68.15, 67.00, ...
NZD/USD: rising inflation in New Zealand pushes the pair downDuring the Asian session on November 13, the NZD/USD pair shows a downward trend, trading around 0.5970, which is 0.85% lower than the level of the previous session.The economic situation in New Zealand remains tense. As of September 2024, the unemployment rate rose to 4.8% from the previous 4.6%, indicating a slowdown in economic activity. The business confidence index stood at 65.7 points in October, up from 60.9 points in September, but remains below the long-term average. The index of business activity in the manufacturing sector (PMI) in September fell to 46.9 points from 45.8 points in August, remaining below the threshold level of 50, indicating a reduction in manufacturing activity. Retail sales in the second quarter of 2024 decreased by 1.2% compared to the previous quarter, reflecting a decrease in consumer spending. The Reserve Bank of New Zealand cut the interest rate from 5.25% to 4.75% in October in an attempt to stimulate the economy. Inflation data for October will be published today at 15:30 (GMT+2); analysts expect the consumer price index (CPI) to increase by 0.6% on a monthly basis and by 2.2% on an annual basis, which may affect further decisions of the regulator.In the United States, economic indicators show mixed results. GDP in the second quarter of 2024 decreased by 0.2% compared to the previous quarter, indicating a slowdown in economic growth. The unemployment rate in September was 4.8%, up from 4.6% in August, which may indicate a weakening of the labor market. The consumer price index (CPI) rose 0.6% month-on-month and 2.2% year-on-year in September, in line with analysts' expectations. The Federal Reserve System (FRS) left the interest rate unchanged at 5.25% in October, but in its statements indicated a possible tightening of monetary policy in the event of further inflation. Retail sales data for October will be published today at 15:30 (GMT+2); analysts predict an increase of 0.4% month-on-month and 1.3% year-on-year, which may support the position of the US dollar.Resistance levels: 0.6000, 0.6050.Support levels: 0.5950, 0.5900.USD/CHF: the growth of industrial production in Switzerland strengthens the francDuring the Asian session on November 13, the USD/CHF pair shows an upward trend, trading around 0.8753, which is 0.32% higher than the level of the previous session.In Switzerland, economic indicators show moderate growth. GDP in the second quarter of 2024 increased by 0.7% compared to the previous quarter, indicating stable economic growth. The unemployment rate in September was 2.3%, which corresponds to the previous month and indicates stability in the labor market. The consumer price index (CPI) rose 0.2% month-on-month and 1.5% year-on-year in October, which is below the target level of the Swiss National Bank (SNB). In October, the SNB left the interest rate unchanged at 1.5%, noting in its statement that the current monetary policy is in line with the economic situation. Industrial production data for September will be published today at 10:00 (GMT+2); analysts expect an increase of 0.5% month-on-month and 2.0% year-on-year, which may affect the position of the Swiss franc.Resistance levels: 0.8780, 0.8800.Support levels: 0.8730, 0.8700.Platinum market analysisDuring the Asian session on November 13, platinum quotes show a downward trend, holding around $990.55 per troy ounce, which is 1.60% lower than the level of the previous session.The economic situation in South Africa, one of the largest platinum producers, remains unstable. According to the World Platinum Investment Council (WPIC), production is expected to decrease by 2% in 2024 due to restructuring and staff reductions at enterprises in the region after the fall in prices for palladium and rhodium. This could lead to a 12% reduction in global platinum reserves in 2024. In addition, stocks have already declined by 17% in 2023, reaching a four-year low of 3.62 million ounces. This situation creates prerequisites for a shortage of metal in the market, which can support prices in the medium term.China, the largest consumer of platinum, is experiencing a slowdown in economic growth. According to the National Bureau of Statistics of China, GDP grew by 4.5% year-on-year in the third quarter of 2024, which is lower than analysts' expectations. The business activity index (PMI) in the manufacturing sector fell to 49.8 points in October, indicating a decrease in manufacturing activity. Reduced demand from the automotive industry, where platinum is used in catalysts, may put pressure on metal prices. Chinese industrial production data for October will be published today at 10:00 (GMT+2); analysts expect an increase of 3.9% year-on-year, which may affect the dynamics of platinum prices.Resistance levels: 1,008.50, 1,020.00.Support levels: 972.15, 960.00.Oil Market analysisDuring the Asian session on November 13, Brent crude oil quotes showed a slight increase, trading around $72.06 per barrel, which is 0.24% higher than the level of the previous session.Price dynamics are influenced by the recent revision by OPEC of the forecast of global oil demand growth in 2024 and 2025. The organization lowered its estimate of demand growth by 107 thousand barrels per day, expecting an increase of 1.8 million barrels per day in 2024. This is due to the slowdown in economic growth in China and other developing countries. Additional pressure on prices is exerted by the strengthening of the US dollar, which makes oil more expensive for holders of other currencies.On the other hand, the market is supported by concerns about possible supply disruptions due to geopolitical tensions in the Middle East, especially in light of recent events related to Iran. In addition, it is expected that the US Federal Reserve may revise its monetary policy towards easing, which could potentially stimulate economic activity and, consequently, energy demand.Resistance levels: $73.50, $74.80.Support levels: $71.00, ...
EUR/CAD: Canadian inflation and oil affect the pair's exchange rateAs of October 17, the EUR/CAD pair is trading near the level of 1.4937 and shows a slight decrease of 0.02% compared to the previous session. Markets remain waiting for key economic publications on both the euro and the Canadian dollar, which gives the pair low volatility and cautious sentiment among traders.The economic situation in the eurozone remains under pressure amid a slowdown in manufacturing activity. In September, the business activity index (PMI) in the eurozone manufacturing sector fell to 43.4 points, reflecting weak business confidence, while in the services sector the indicator was 48.7 points. Forecasts for the upcoming data point to a possible further decline, which reinforces expectations of additional stimulus from the European Central Bank (ECB). At the same time, the latest inflation data showed that the core consumer price index (CPI) remained at 2.7%, while the overall figure was 1.8% year-on-year. Experts suggest that a slowdown in inflation may push the ECB to cut interest rates by 25 basis points, which will be considered at the upcoming meeting.On the other hand, the Canadian economy is showing growth in the energy sector. Oil prices, Canada's main export commodity, remain high, supporting the Canadian dollar. In September, the inflation rate in Canada was 3.8% year-on-year, and the unemployment rate remained at 5.2%. The Bank of Canada is expected to decide at its next meeting to keep the interest rate at 5%, but rising inflation may force the regulator to reconsider its plans. Additionally, the market is waiting for the publication of retail sales data in Canada, which, according to forecasts, may show an increase of 0.4% in September.Resistance levels: 1.0850, 1.0940.Support levels: 1.0800, 1.0720.AUD/CHF: the Australian currency is declining amid weak unemployment dataThe AUD/CHF pair at the time of the trading session on October 17 shows a slight decrease and is trading at 0.5940, which is 0.32% less than in the previous session. The pair is under pressure against the background of unfavorable macroeconomic statistics from Australia and stable data on Switzerland.The economic situation in Australia remains tense. The published data on the labor market turned out to be worse than analysts' expectations: the unemployment rate increased from 3.6% to 3.7% in September, while analysts expected it to remain at 3.6%. The number of employed decreased by 9.6 thousand, which also became a negative signal for the economy. In addition, the consumer confidence index decreased by 2.3%, indicating a decrease in confidence in the national economy. These data may prompt the Reserve Bank of Australia (RBA) to consider further monetary easing at the next meeting.From the Swiss side, the economic situation looks more stable. The latest inflation data showed a decrease in the consumer price index from 1.5% to 1.3% year-on-year, which confirmed the downward trend in inflationary pressure. This strengthens the Swiss franc, as the market expects the Swiss National Bank to continue its current monetary policy without significant changes. In addition, Switzerland's external trade balance continues to remain positive, maintaining the national currency at a high level.Resistance levels: 0.5980, 0.6020.Support levels: 0.5900, 0.5860.Copper market analysisAs of October 17, 2024, the price of copper shows moderate growth, correcting after a decrease the day before. Trading opened at $8,000 per tonne and is moving towards $8,080, which is 1.00% higher compared to the previous session.The rise in copper prices is supported by a number of economic factors. First of all, macroeconomic data from China, the world's largest copper consumer, had a positive impact. Thus, industrial production in September increased by 4.5% year-on-year, exceeding analysts' expectations of 4.2%. The business activity index (PMI) for the manufacturing sector also showed an increase to 51.2 points, indicating an expansion of activity in the sector. In addition, China announced measures to boost domestic consumption and exports, which supports demand for copper and other commodities. The copper market also faces risks related to the geopolitical situation in South America, especially in Chile, the largest copper producer. Amid protests and possible strikes in the mining sector, there are concerns about the supply of metal to international markets.Resistance levels: 8,100, 8,200.Support levels: 7,950, 7,900.Oil market analysisAt the October 17 trading session, Brent crude oil is trading with upward dynamics, again breaking the $90 per barrel mark, which is 0.5% higher compared to the last session. The main factors supporting growth remain concerns about supply constraints due to geopolitical instability in the Middle East, where tensions in the sector have escalated, including the most important transport hubs in the Persian Gulf region.The economic situation in the United States, the world's largest oil consumer, adds to the uncertainty in the market. According to the latest EIA report released on October 8, crude oil inventories in the United States decreased by 3.6 million barrels, reflecting steady domestic demand and affecting the prospects for price growth. At the same time, expectations for global economic growth remain mixed, as data from China show a slowdown in economic activity: The country's GDP grew by 4.9% in the third quarter, below forecasts, which also prompted a revision of oil forecasts. In particular, Barclays lowered its forecast for Brent to $93 per barrel for 2024, citing declining demand in both China and the United States.Resistance levels: $75.50, $76.80.Support levels: $73.00, ...
OPEC+ is markedly reducing oil production - in fact, the exporting countries will pump about 1 million barrels less per day. We have written earlier on why this is so.As a result, supply at the market has become lower, so prices have gone up and are approaching $100 per barrel again.What will the U.S. do after the OPEC+ statement?The coming energy crisis and the high inflation it causes are scaring the whole world, but it's the States that are worried the most right now:expensive oil means expensive fuel;it's causing prices of almost all commodities to rise;inflation is going up - the Fed keeps tightening policy;high key interest rates are pushing the U.S. closer to recession;in addition, high fuel prices can cause social discontent.To prevent this, the U.S. is trying to influence the largest oil producers and keep prices down. Otherwise, the Democrats will most likely not win the congressional elections. They are due in a month.The U.S. started to prepare in advance: President Biden flew to Saudi Arabia this summer and persuaded the U.S. to bring down oil prices. But it did not work out very well: OPEC acts in its own way and does not want to listen to Americans. As a result, the failed negotiations with the Saudis have further diminished the credibility of Biden and the Democrats' ability to influence oil, inflation and economic stability in the United States.However, the Biden administration is not giving up; they have a few more options - rather radical ones - on how to lower oil prices.Additional Oil ReleaseThe safest, though least effective, option is to further draw oil from strategic U.S. storage facilities. In response to OPEC+'s decision to cut production, Biden announced that the U.S. would release 10 million barrels of oil, even as storage reserves are depleted.That would be all well and good, but the announcement had little or no effect on oil prices, especially compared to the previous similar decision to release 180 million barrels to the market. No wonder: the volumes are not comparable.In addition, since U.S. storage reserves are running out, there is a risk that they will not be enough for a rainy day: in case of sharp reductions in domestic production (for example, during hurricanes in the Gulf of Mexico) or imports (if OPEC+ countries reduce exports).Reducing military aid to the ArabsDemocrats have drafted a "Tense Partnership" bill in response to OPEC+ and specifically the alliance's leaders, Saudi Arabia and the UAE. They are accused of "a hostile act against the United States" and "siding with Russia in the conflict with Ukraine."As revenge, the U.S. could withdraw its troops from these countries and stop supplying weapons and other military aid to fight neighboring states and terrorists. This includes protecting oil infrastructure from attack.This option also has disadvantages: without U.S. military support in these countries, there could be problems that would inevitably affect the global oil supply. After all, if military actions or terrorist attacks affect the oil fields or storage facilities of Saudi Aramco, oil will cost even more, and such attacks occur quite often.So even if the Saudis and the UAE will not reduce exports in response to the withdrawal of troops and reduction of arms supply, there is a good chance that sooner or later the fighting will make prices go up.In addition, Saudi Arabia has already planned to prepare for a possible conflict with the United States. For example, in the spring the Saudis said they were going to explore ways to move away from the petrodollar - that is, not to use bucks in the black gold trade. In this case, the demand for the dollar could fall dramatically, especially if other oil-exporting countries do the same.NOPEC: Conflict with OPEC+Amid disagreements with OPEC, the U.S. may return to the "oil production and export cartel law," NOPEC, to have more leverage on oil exporters.In this case, U.S. courts will be able to consider antitrust suits against OPEC+ and in general against countries involved in cartel collusion in the oil market. Under the decision of their own courts, the U.S. will be able to impose sanctions, confiscate property of these countries and put pressure on them in other ways. At the same time, the U.S. itself will indicate what is legal and what is not, thus assessing any actions of the countries that regulate oil production and prices.This option also has a disadvantage: sanctions on exporters would also hit the U.S. itself. If oil prices become lower, the U.S. oil industry will also be hard hit: domestic production will decrease and it will have to import more. And since the market is competitive, and the U.S. in this case will be "enemies of OPEC +", they will have to buy oil more expensive.So, even if the U.S. takes a drastic step - provoking a conflict with Saudi Arabia or the UAE, or starting a sanctions war with OPEC+ - all this will have a negative impact on themselves.Can't sanctions be lifted on Venezuela?As we can see, the U.S. has almost no normal options left to influence the oil market. Nevertheless, the U.S. says it is not going to remove sanctions from Venezuela yet, despite the fact that this would help get more oil on the market and lower oil prices. We may see some new rhetoric in this regard, but no change for now.The Iran deal has also been stalled so far: there is no news or movement on it. Although it is possible that disagreements with the Saudis may attract the U.S. to support Iran, because these are the two sides of the Arab conflict.On the one hand, Iranian oil would help to increase supply, but there is a nuance here as well: the reserves in this country are not grandiose, moreover, most of the oil is already exported in circumvention of sanctions.So what to do with Brent and WTI crude oil prices in 2022?If we discard all of the above options, then all we have to do is sit back and watch oil go up in price. The outlook is also bad: even if the world starts a recession and the demand for oil decreases, OPEC+ is already reducing production and adjusting to negative expectations, and also the supply from Russia may decrease if the embargo comes into force.And if that's the case, U.S. inflation will be high. And given the strong labor market, the Fed may raise the rate even more than 1.25% by the end of the year, and it is not certain that it will slow down next year as well. If rates remain high for a long time, the risk of recession in the U.S. is very high, and stocks and cryptocurrencies will have no fuel for growth. As a result, the economy will have a hard time: liquidity is scarce.If the U.S. starts to act sharply, the dollar is at risk: the "oil" countries can give it up to reduce dependence on the United States. But if the U.S. does nothing, tightening Fed policy will keep the dollar very strong - though at the cost of high inflation and recession. 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In 2019, the "sub-sanctioned" Iran began to increase oil supplies in circumvention of sanctions. Mostly tankers went to China and the Mediterranean: Syria and Turkey. And by the beginning of 2022, the fleet for transporting sanctioned Iranian and Venezuelan oil had tripled. It accounted for approximately 400 million barrels per year. And such a "ghost armada" successfully undermines the business of transport companies.Why did Iranian tankers get such a name?Last year, The Mail on Sunday reported: 123 Iranian vessels circumvent sanctions on oil trade. They change their location to GPS and create the appearance that they are anchored at sea, but at this time they are loading/unloading at the port. They also actively forge documents, use flags of different countries, disable identification systems and use front companies. Oil is often loaded onto several vessels and mixed before reaching its destination. This is also the case with "toxic" Russian oil.At the same time, Iran has a whole "underground" financial system for trade bypassing sanctions, writes the WSJ. It includes accounts in foreign banks, intermediary companies outside the country and firms that coordinate prohibited trade. The annual turnover is estimated at tens of billions of dollars.And Iranian banks attract affiliated firms to manage trade under sanctions. They register "daughters" outside the country, become trusted for Iranian traders, and then trade with foreign buyers of Iranian oil in foreign currency through accounts in foreign banks.Will the "Iranian Armada" help Russia?She is already helping her to circumvent sanctions, writes the Daily Mail. The international non-profit organization United Against Nuclear Iran (UANI) accuses the Iranian navy of cooperating with Russian oil companies. Allegedly, Russian oilmen are using "Tehran's black market vessels" to circumvent the export ban. And the US, the EU and the UK are even calling for the formation of a team of "ghostbusters".At least 5 Iranian "ghost armadas" are transporting oil from Russia to China and India, according to UANI. And recently, the WSJ reported that Zamanoil from the UAE was linking Iranian and Russian oil workers. The US Treasury accused her of working with the Russian government and Rosneft on the supply of Iranian oil to Europe.However, at the end of March, Iran denied a "secret offer from Russia" to help it circumvent sanctions in exchange for support in concluding a nuclear deal. And in May, he noted that he could not be a competitor of Russia in the global oil and gas market. The country has its own regular customers, and Iran sells the maximum amount of oil.So officially, Iran does not seem to be planning to use its "army of ghosts" to help for the benefit of Russia, despite the fact that these countries have "converged" before. But then there was no question of an embargo on Russian oil and there was no ban on ship insurance. In the new reality, the actions of the "ghost armada" are quite difficult to ...
The year 2022 on world markets will largely be determined by the tightening of monetary policy in the United States, and the first week of the new year confirmed this. The minutes of the Fed's December meeting published last week showed a significant tightening of the position of the regulator's representatives – Fed members believe that the rate can be raised as early as March, and also see a faster reduction in the balance sheet as appropriate. Representatives of the regulator believe that the current economic conditions are already in many ways conducive to tightening the labor market, some even noted the recovery of the labor market already sufficient for such actions, although the majority still expects further improvement in the labor situation. Against this background, it is worth noting the publication of December labor data in the United States, which came out ambiguous. On the one hand, employment in December increased by only 200 thousand. The Bloomberg consensus forecast assumed an employment growth of 450 thousand, and the actual growth rate of the indicator was the lowest since the beginning of 2021. Nevertheless, in many respects such weak employment growth is explained by seasonal adjustment, and the unemployment rate in December fell more than expected. Thus, the indicator has updated the next lows since the beginning of the pandemic, dropping to 3.90% against the expected 4.10%. The unemployment rate continues to approach a historic low of 3.40%, and labor statistics have further increased fears in the market of an imminent tightening of the PREP in the United States. As a result, on Friday, the yields of ten-year US treasuries at the moment exceeded 1.80% per annum - the maximum since the beginning of the pandemic. Today they have returned to these levels again.This week, the dynamics in the market will continue to be determined by expectations for the actions of regulators - investors will follow the statements of representatives of the Fed and the ECB, as well as the publication of price data in the United States for December. Statistics published last week showed an increase in inflation in the EU to 5.00% YoY. As a result, the topics of price growth in December updated the historical maximum, while analysts expected a slight slowdown in price growth. The situation on the supply side also has high inflation in the United States. The December business activity indices indicated a slight easing of logistical problems, however, the further deterioration of the epidemiological situation again intensified disruptions in logistics chains, which does not lead to a significant slowdown in price growth. The FAO World Food Price index fell in December for the first time since July, but food inflation remains at elevated levels. Against this background, US inflation data is likely to continue to bring the Fed rate hike closer, intensifying the negative in the markets.The main event for the oil market in early 2022 was the OPEC+ meeting. However, as expected, it was decided to stick to the current plan to increase production. Nevertheless, the cartel lowered its forecasts for a surplus in the oil market, which allowed Brent crude futures to exceed the level of $80/bbl. Moreover, against the background of interruptions in the supply of black gold from Kazakhstan and Libya, quotations were close to $83/bbl. However, at the end of the week they declined from these levels, today Brent futures are growing by 0.35% and are trading around $82.05/bbl. The main negative for oil this week may be related to the potential strengthening of the dollar amid expectations of a tightening of the PREP in the United States. However, in the absence of a significant strengthening of the dollar, Brent futures may still exceed the levels of $83/bbl– - the quotes may be supported by another weekly decline in oil ...
Oil is getting more expensive on Friday morning. By 8.25 GMT, the price of a barrel of Brent oil rose to 70 dollars 89 cents, or 1.75%. The price of a barrel of WTI oil rose to 67 dollars 71 cents or 1.22%. According to the results of trading on Thursday, these oil standards rose by 1.2% and 1.4%, respectively. Investors evaluate the results of the last meeting of the countries participating in the OPEC+ agreement. Some market participants expected that the alliance would decide to reduce the volume of oil production. However, OPEC+ retained the current parameters of the deal. This means that the alliance will continue to increase the volume of raw material production by 400,000 b/s every month. At the same time, the participants of the meeting stated that they could make a different decision on the volume of production at any time. Everything will depend on the situation on the oil market and in the global economy. They noted the persistence of uncertainty. It intensified after the appearance of the next coronavirus strain omicron. Investors liked the alliance's statement about the possible holding of an extraordinary meeting, if the situation requires ...