Economic news

Marketmind: Runaway oil

2022.10.06 02:31


2/2

© Reuters. FILE PHOTO: An OPEC flag is seen on the day of OPEC+ meeting in Vienna in Vienna, Austria October 5, 2022. REUTERS/Lisa Leutner

2/2

A look at the day ahead in European and global markets from Anshuman Daga

Just when stock markets seemed to be regaining their footing after a wild third quarter – beset by rising interest rates and the dollar’s runaway gains – there’s more trouble brewing.

This time, oil prices are to blame.

futures rose to a three-week high of nearly $94 a barrel after OPEC+ agreed sharp oil production cuts, the largest reduction since 2020, causing one of its biggest clashes with the West.

President Joe Biden called the surprise decision “shortsighted” and called on his administration and Congress to explore ways to boost U.S. energy output and reduce OPEC’s control over energy prices

Oil’s upward march couldn’t have come at a worse time.

Markets are already pricing in a recession in major economies and a sharp increase in energy prices will add to already-high inflation and interest rates.

European Commission President Ursula von der Leyen pitched gas price caps to EU leaders in a bid to contain soaring energy costs.

While Asian equities clawed back on Thursday, the dollar clung onto gains as bets on further Fed hikes firmed up. [MKTS/GLOB]

“No Fed pivot is possible against a backdrop where oil prices march higher on supply destruction in response to demand destruction as monetary policy is tightened,” Michael Every, global strategist at Rabobank said in a note.

On Wednesday, San Francisco Federal Reserve President Mary Daly underscored the Fed’s commitment to curbing inflation with more interest rate hikes.

More gains are in store for the unstoppable dollar, according to a Reuters poll of foreign exchange strategists.

The , up a blistering 16% so far this year, is likely to extend its dominance beyond 2022, powered by more interest rates and the strength in the U.S. economy.

Britain’s pound held steady on Thursday after weakening a day earlier as British Prime Minister Liz Truss sought to restore her authority following a chaotic first month in power.

Fitch cut its outlook for its credit rating for British government debt to “negative” from “stable”, just days after a similar move from Standard & Poor’s following the government’s Sept. 23 fiscal statement.

Graphics: OPEC + agree to massive cut in oil supplies to boost prices

Graphics: The race to raise rates

Key developments that could influence markets on Thursday:

Economic data: Euro zone retail sales (August); Germany industrial orders, Netherlands CPI, U.S. initial jobless claims

Speakers: Fed’s Loretta Mester, Lisa Cook, Charles Evans and Christopher Waller all speak at various events

IMF’s Georgieva speaks ahead of IMF/World Bank meetings



Source link

Related Articles

Leave a Reply

Back to top button
bitcoin
Bitcoin (BTC) $ 98,338.35 0.19%
ethereum
Ethereum (ETH) $ 3,388.32 1.17%
tether
Tether (USDT) $ 1.00 0.04%
solana
Solana (SOL) $ 252.78 1.50%
bnb
BNB (BNB) $ 659.10 1.52%
xrp
XRP (XRP) $ 1.46 0.69%
dogecoin
Dogecoin (DOGE) $ 0.425612 3.17%
usd-coin
USDC (USDC) $ 1.00 0.01%
cardano
Cardano (ADA) $ 1.04 2.57%
staked-ether
Lido Staked Ether (STETH) $ 3,386.07 1.25%
tron
TRON (TRX) $ 0.208964 3.49%
avalanche-2
Avalanche (AVAX) $ 43.09 1.39%
stellar
Stellar (XLM) $ 0.515671 10.44%
the-open-network
Toncoin (TON) $ 6.11 5.53%
shiba-inu
Shiba Inu (SHIB) $ 0.000026 4.61%
wrapped-steth
Wrapped stETH (WSTETH) $ 4,012.60 1.05%
wrapped-bitcoin
Wrapped Bitcoin (WBTC) $ 97,996.26 0.41%
polkadot
Polkadot (DOT) $ 9.16 1.69%
chainlink
Chainlink (LINK) $ 18.03 1.04%
bitcoin-cash
Bitcoin Cash (BCH) $ 511.05 0.76%
weth
WETH (WETH) $ 3,386.45 1.32%
sui
Sui (SUI) $ 3.43 1.71%
pepe
Pepe (PEPE) $ 0.00002 3.58%
near
NEAR Protocol (NEAR) $ 6.90 2.58%
leo-token
LEO Token (LEO) $ 8.68 0.15%
litecoin
Litecoin (LTC) $ 96.59 5.40%
uniswap
Uniswap (UNI) $ 11.20 0.17%
aptos
Aptos (APT) $ 12.34 4.75%
wrapped-eeth
Wrapped eETH (WEETH) $ 3,567.68 1.18%
internet-computer
Internet Computer (ICP) $ 11.61 0.70%
hedera-hashgraph
Hedera (HBAR) $ 0.143216 5.53%
usds
USDS (USDS) $ 1.00 0.00%
crypto-com-chain
Cronos (CRO) $ 0.189075 5.13%
polygon-ecosystem-token
POL (ex-MATIC) (POL) $ 0.561732 2.97%
ethereum-classic
Ethereum Classic (ETC) $ 28.89 4.80%
render-token
Render (RENDER) $ 7.92 1.14%
bittensor
Bittensor (TAO) $ 527.33 2.98%
ethena-usde
Ethena USDe (USDE) $ 1.00 0.05%
fetch-ai
Artificial Superintelligence Alliance (FET) $ 1.48 3.83%
kaspa
Kaspa (KAS) $ 0.152321 1.65%
bonk
Bonk (BONK) $ 0.000047 1.37%
whitebit
WhiteBIT Coin (WBT) $ 24.45 1.23%
dai
Dai (DAI) $ 1.00 0.04%
arbitrum
Arbitrum (ARB) $ 0.847671 4.04%
vechain
VeChain (VET) $ 0.04255 1.40%
cosmos
Cosmos Hub (ATOM) $ 8.61 4.61%
okb
OKB (OKB) $ 55.83 2.99%
filecoin
Filecoin (FIL) $ 5.54 6.24%
blockstack
Stacks (STX) $ 2.22 4.11%
mantra-dao
MANTRA (OM) $ 3.69 3.04%