Currency Basket – Basket Village USA Wed, 23 Nov 2022 16:56:51 +0000 en-US hourly 1 Currency Basket – Basket Village USA 32 32 European markets climb ahead of FOMC minutes Wed, 23 Nov 2022 15:34:42 +0000


After getting off to an initially positive start, with the FTSE100 at a touching distance of 7,500, the session was fairly lackluster as investors assess tonight’s FOMC minutes release amid a weakening economic outlook, after that the PMIs all indicated further economic weakness in Q4. It also raises the possibility that this will lead central banks to refrain from any hikes as aggressive as previously thought.

With the World Cup well underway, we are seeing a second day of wins for Flutter Entertainment and Entain. The possibility of shocking results like the Argentina, Saudi Arabia game has the potential to lead to an increase in betting habits as the tournament progresses.

Halfords shares fell despite a 10.2% rise in total first-half revenue to £765.7m, but profits fell sharply from £64.3m a year ago at £29.3m, which, while better than pre-pandemic levels, was on earnings that were somewhat lower.

On the forecast, Halfords was quite pessimistic, warning that underlying pre-tax profits for the full year would be at the lower end of its previous forecast of £65-75m. This seems to be mainly due to the underperformance of its retail stores, which saw their revenues shrink in the first half compared to a year ago, while expecting its automotive centers to remain resilient. Revenue here has increased by more than £109.1m since the same period last year, helped by the acquisition of Lodge Tyre.

The long hot summer has been a boon for the likes of Britvic as the drink maker recorded a 15.5% rise in revenue to £1.62bn, which helped boost after-tax profits by 45.3% to £140.2m sterling. With no lockdown restrictions to contend with and hospitality returning, the business appears to have benefited from the double boost of a pandemic rebound and one of the hottest summers on record in the UK .

Boohoo shares fell sharply after reports emerged that workers at its Burnley warehouses face grueling working conditions. Following a 2020 scandal that saw some of the company’s suppliers paid less than minimum wage, there are concerns that despite an overhaul of its oversight procedures, some mindsets may be harder to change.


US markets opened slightly higher after weekly jobless claims and appear to be treading water ahead of the release of tonight’s FOMC minutes and after weekly jobless claims rose unexpectedly more than expected to 240,000 vs. 223,000. The latest November PMIs added to the positive tone, after unexpectedly falling into contractionary territory for manufacturing and services as well.

The poor numbers are also weighing on the US dollar as well as yields, adding to a narrative that rate hikes are working and the Fed may not have to adopt a full 5% terminal rate.

Manchester United shares are up sharply again following reports that the Glazers are open to a full sale of their stake in the club. Shares rose sharply yesterday on hopes that a sale process was imminent, with the club confirming in a statement that a process was underway.

resume Shares rose after the company announced it would cut 6,000 jobs over the next 3 years as the PC market struggled with weakening PC demand. In the third quarter, revenue was well below expectations due to weaker demand for PCs and its fourth quarter numbers also disappointed, with revenue coming in at $14.8 billion, although profits edged down to CA$0.85. For the new fiscal year 2023, the company offered an uncertain outlook with first quarter earnings expected to reach C$0.70 per share and adjustments for the full year. EPS between CA$3.20 and CA$3.60 per share.

At the end of the third trimester, Deere and Co lowered its full-year earnings forecast to $7 billion to $7.2 billion from $7 billion to $7.4 billion. due to downward pressure on operating margins. This morning’s fourth quarter numbers seem to suggest there was no need for caution, with fourth quarter revenue of $15.54 billion and profit of C$7.44, although above expectations of CA$7.10. Full-year profits were $7.13 billion, while revenue for the year was $52.58 billion, up 19% as the company managed to pass on price increases to its clients. The farm equipment maker also raised its 2023 profit forecast to between $8 billion and $8.5 billion, due to strong demand for tractors from farmers who are fetching higher prices for their crops.


The US dollar was already in decline even before the latest services and manufacturing PMIs unexpectedly slipped into contractionary territory in November. The latest 1-year inflation expectations from the University of Michigan also surprisingly fell from 5.1% to 4.9%.

The New Zealand dollar is one of the best performers against the US dollar after the RBNZ raised rates by 75 basis points, along with its projection of where interest rates are likely to peak.

The Pound also looks set for another strong day today, pushing above the 1.2000 area and to three-month highs against the US Dollar, as well as hitting record highs against the Euro in almost 3 weeks.

The rise appears to have coincided with news that the UK Supreme Court had ruled that the Scottish government had no right to hold a unilateral referendum without the UK government’s consent. Although a bit of a relief, the ruling will do little to alter the independence narrative that is a staple of the Scottish government.


Reports that the EU is considering capping Russian crude oil prices are dampening the broader oil complex, although the OECD’s pessimistic projections for the economic outlook for next year don’t really help either. As China also grapples with a record number of covid cases, the macroeconomic outlook continued to deteriorate for oil this week, with prices on course to fall for the third week in a row.


Oil prices remained very much in the spotlight on Tuesday, with OPEC hinting that it could consider cutting production in something of a reversal from its stance a few days ago. Crude edged higher as a result, but continues to trade near two-month lows. One-day flight over West Texas Intermediate printed 62.65% vs. 41.96% on the month.

This again fueled the price of oil and gas producing stocks, with CMC’s proprietary basket covering the sector finding support. The ten components thus made significant gains, with a daily flight of 59.2% against 49.16% for the month.

ADR DouYu managed to find support after the rout earlier in the week due to these disappointing results. The underlying appreciated by less than 2%, but this was still enough to take the daily volatility of the video streaming provider to 221.9% against 195.22% over the month.

Elsewhere, activity has been rather more limited, with fiat currency pairs all showing daily volatility levels below their one-month equivalents, while cryptos also remain somewhat subdued.

Ukrainian president denounces ‘short truce’ with Russia Sat, 19 Nov 2022 07:13:18 +0000

Ukrainian President Volodymyr Zelensky on Friday rejected the idea of ​​a “short truce” with Russia, saying it would only make things worse.

“Russia is now looking for a short truce, a respite to regain strength. Someone can call it the end of the war, but such a respite will only aggravate the situation,” the Ukrainian leader said in broadcast remarks. at the Halifax International Security Forum.

“A truly real, lasting and honest peace can only be the result of the complete demolition of Russian aggression,” Zelensky said.

The White House said earlier today that only Zelensky could decide when to open peace talks with Russia, dismissing the idea that it was pressing Kyiv to negotiate an end to the nearly nine-month war sparked by the invasion of Moscow in February.

General Mark Milley, the top US military officer, however, has suggested in recent weeks that Kyiv could capitalize on battlefield victories against Moscow forces and open talks to end the conflict.

Milley said Wednesday that while Ukraine has won key successes, Moscow still controls around 20% of the country and Kyiv troops are unlikely to force the Russians out of the country soon.

Sell ​​GBP/JPY, Target 158.00 Say MUFG Thu, 17 Nov 2022 08:35:00 +0000

A pick-up in risk appetite has helped support the pound, particularly against the dollar, but MUFG expects weak UK fundamentals to put the UK currency on hold and lead to medium-term weakness.

He adds; “We continue to believe the GBP remains vulnerable to further weakness due to the weakening outlook for the UK economy which has likely already slipped into recession.”

MUFG sees selling the pound against the yen as better value than selling against the euro, especially as it sees the yen as still significantly undervalued and likely to rally amid spike in global yields .

He recommends selling the Pound to Yen exchange rate (GBP/JPY) at 164.00 with a target of 158.00.

The recovery in risk will support the pound…

According to MUFG, the latest US CPI data has helped ease financial conditions, which will provide an element of support for the British pound. He adds; “The easing of global financial conditions creates a more supportive environment for the GBP in the near term and should make it less difficult for the UK to finance its high current account deficit.”

This is important given that MUFG analysis shows that GBP/USD movements have become more highly correlated with global equity markets this year.

According to the bank, a 1.0% advance in global equities results in a 0.61% gain for GBP/USD.

If equity markets are buoyed by expectations of a less aggressive stance from the Fed, GBP/USD will tend to benefit from broader support from sterling.

bannerHowever, the pound will be vulnerable if the stocks reverse.

…but weak UK fundamentals pose clear downside risks

MUFG still expects broader fundamental developments to undermine the pound and added; “We remain skeptical about the ability of the pound to strengthen on a more sustainable basis and against a broader basket of currencies given that the economic fundamentals in the UK remain unfavorable.”

According to the bank, the economy is being hit by multiple negative shocks, including deteriorating terms of trade due to rising energy and food prices, as well as tighter financial conditions as the Bank of England sells gilts.

The bank also stresses that fiscal policy will be tightened, which will have a negative impact on the economy.

Many measures will probably be postponed, which will help limit the short-term effects on the economy.

However, a lasting medium-term tightening would dampen the economy over a long period.

According to the MUFG, this tightening should help to further ease the BoE’s concerns about the medium-term inflation outlook and reduce the risk of further substantial rate hikes.

In this context, he added; “We still believe the BoE has room to disappoint these moderate rate hike expectations, which is dampening GBP performance going forward.”

The undervalued yen in global markets

The MUFG previously recommended selling the pound against the euro, but has now switched to recommending selling the pound against the yen.

He added; “Even after strong recent gains, we believe there is potential for the yen to rebound further as it remains deeply undervalued. He also expects a spike in global bond yields to support the Japanese currency.

South African rand strengthens in early trade as dollar retreats Tue, 15 Nov 2022 08:33:28 +0000

The South African rand strengthened in early trading on Tuesday as the dollar fell in global markets and risk appetite was boosted by policy measures in China.

As of 07:40 GMT, the rand was trading at 17.1900 against the dollar, around 0.7% higher than its closing level on Monday.

With no major economic data coming out of South Africa on Tuesday, traders looked to U.S. Producer Price Index data later in the day for more guidance on the pace of price increases. Federal Reserve rate.

The dollar index, which tracks the US currency against a basket of others, fell more than 0.6%.

Some Chinese cities have started reducing routine community testing, days after China announced a relaxation of some of its coronavirus measures. And Beijing has announced support measures aimed at increasing the liquidity of the real estate sector, the pillar of the second world economy.

These movements led to a rebound in Asian stock markets on Tuesday.

At the Johannesburg Stock Exchange, the Top-40 index rose about 0.9%. The government’s benchmark 2030 bond was slightly stronger in early trades, with the yield down 2 basis points to 10.185%. (Reporting by Nellie Peyton Editing by Alexander Winning and Angus MacSwan)

T-shirts set the stage to diversify RMG’s export basket Sun, 13 Nov 2022 02:00:00 +0000

The start of exporting T-shirts from Bangladesh has been considered a milestone in the history of garment manufacturing as it helped the country expand the product base.

In particular, a group of hosiery manufacturers based in Narayanganj, which produced men’s vests for domestic markets, ventured to explore overseas markets in the late 1980s and it worked.

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In the early days of Bangladesh’s foray into the global apparel market four and a half decades ago, the country’s apparel exports depended on the quota system. At that time, t-shirts played a vital role as vest manufacturers started exporting to European countries due to increased demand especially among expatriate Bangladeshis.

As soft and comfortable T-shirts made from cotton fiber were in high demand, local manufacturers began shipping in large quantities and in many varieties.

Today, t-shirts are the second most exported item from Bangladesh.

T-shirt shipping revenue was $7.15 billion in the last fiscal year, accounting for 23.11% of total apparel exports of $42.61 billion, according to data from Bangladesh Garment Manufacturers and Exporters Association.

Revenue was $7.23 billion in 2020-21 and $6.27 billion in 2019-20. European countries such as Germany, UK, Netherlands, France and Spain are the main export destinations for T-shirts.

During the Covid-19 pandemic, when the global supply chain was severely disrupted, the shipment of T-shirts compensated for the slowdown in overall exports, as demand for knitted items increased significantly in Europe and the United States. United as consumers are confined to their homes due to the deadly virus.

Now, local entrepreneurs are investing heavily in the production of fashionable high-end sportswear and t-shirts to boost exports.

Dollar plunges as U.S. inflation data spur crowded trade exodus Thu, 10 Nov 2022 20:37:00 +0000

NEW YORK, Nov 10 (Reuters) – Investors are moving away from the dollar as weaker-than-expected U.S. consumer prices raise hopes the Federal Reserve may need to tighten monetary policy less than expected in its fight against inflation and reinforce the case of risky assets.

Expectations of rising US interest rates, market volatility and geopolitical uncertainty have propelled the dollar over the past two years to its highest level in two decades against a basket of currencies.

While Thursday’s inflation data alone may not be enough to limit the scope of the Fed’s monetary policy tightening, it gave some investors reassurance that consumer prices may finally have started to fall, prompting them to reduce their long dollar positions and dive into riskier positions. assets such as stocks.

“The weaker-than-expected core CPI figure is behind the sharp decline in the dollar,” said Van Luu, global head of currencies at asset manager Russell Investments.

“With stretched valuation and sentiment…that explains the magnitude of the decline.”

The unwinding of dollar positions has led to dramatic moves in forex markets as investors pull back from trades in the forex market that many believe have become crowded by historical standards.

As of 2:45 p.m. (1945 GMT), the US currency was down 3.1% against the Japanese yen, its biggest one-day drop since June 2016. Against the euro, it was down 1 .5%, its biggest drop since November. 4. Against a basket of currencies, the dollar was down about 2%, on pace with its worst day in nearly seven years.

Meanwhile, stocks rallied, with the S&P 500 and Nasdaq Composite up 4.7% and 6.2% respectively, their biggest one-day gains since April 2020.

Reuters Charts

“The first big downside surprise in US inflation in some time has forced many leveraged trend followers to halt,” said Mike Riddell, senior fixed income portfolio manager at Allianz Global Investors in London. .

“The decline in the US Dollar today is what one would expect given the rally in risk assets, based on correlations to bonds and risk assets over the past several months.”

The consumer price index rose 0.4% in October to match the previous month’s increase, the Labor Department said. Economists polled by Reuters had forecast the CPI to rise 0.6%.

The data sent U.S. Treasury yields tumbling, with the benchmark 10-year index hitting 3.8387%, its lowest level in about a month, narrowing the spreads between U.S. and foreign government debt yields that have strengthened the attraction of the dollar.

Crowded trade

Concerns about a violent reversal in the dollar have grown in recent months as the greenback extended its rally to a two-decade high against a basket of currencies, gaining nearly 20% for the year.

As of November 1, international money market speculators were net short of 77,620 contracts in the Japanese yen, worth $6.54 billion, as well as large bets against the British pound, Australian and Canadian dollars. , according to CFTC data.

“Because positioning imbalances have been around for some time, there is a risk that we could see this period of dollar weakness extend as those still long in dollars are eliminated,” said Bipan Rai, northern official. American FX strategy manager at CIBC Capital Markets.

A weaker dollar would be a relief for U.S. exporters and multinationals, whose balance sheets have been battered by a stronger currency this year, as well as emerging market economies that have borrowed in dollars.

Daniel Wood, portfolio manager in the emerging market debt team at William Blair, raised bets on rising emerging market currencies against the dollar.

“The market is less concerned about tightening financial conditions. So the safe haven status of the dollar is not that important,” he said. “I think it’s a microcosm of what’s going to happen over the next year.”

Yet many investors are hesitant to bet on a sustained dollar reversal. The dollar index has fallen 3% or more three times in the past two years, resuming its upward trend, making some investors cautious about betting on a reversal.

Signs of a pick-up in inflation could quickly undermine the case for further dollar weakness, as could various other factors, including geopolitical or economic uncertainty that send investors back to so-called safe havens.

Jack Ablin, chief investment officer at Cresset Capital, is watching key technical levels, including the Dollar Index’s 200-day moving average for indications that the US currency may be on a longer bearish path – a potential signal of positive sentiment that would advocate increasing equity positions in one’s portfolios.

“If we start to see a real downward trend in the dollar, that to me is an indication that it’s safe to get back into equities,” he said.

Reporting by Saqib Iqbal Ahmed, Laura Matthews; Additional reporting by Dhara Ranasinghe; Editing by Ira Iosebashvili and Richard Chang

Our standards: The Thomson Reuters Trust Principles.

Vietnam welcomes over 300 boat people rescued from Sri Lanka Tue, 08 Nov 2022 11:08:49 +0000

ECONOMYNEXT – Sri Lanka recorded a balance of payments surplus in September 2022, official data shows, after rates were raised to reduce private credit, allowing the phasing out of money printing and the agency has also lacked reserve options to borrow and engage in sterilized operations. interventions.

Sri Lanka’s central bank began to lose the ability to collect reserves and manage balance of payments surpluses from around August 2019, as liquidity injections to target the yield curve began.

From December 2019 taxes were cut and from around February 2022 large amounts of money were printed and treasury bills issued to finance past and current deficits were purchased to mistarget rates.

In the 9 months to September, Sri Lanka recorded a balance of payments deficit of US$2,927 million, up from US$3,035 million a month earlier, indicating a monthly surplus.

Although a balance of payments surplus implies an increase in central bank foreign exchange reserves, the repayment of reserve liabilities may keep gross reserves unchanged.

An indexed central bank (intermediate regime) which applies an inflationary policy either by simply injecting liquidity to keep rates low, or by filling liquidity shortages after having defended indexation (by using reserves for imports and refinancing of private sector activity) to mistarget rates will trigger currency shortages and a balance of payments deficit.

Sri Lanka’s central bank stopped mistargeting rates around April 2022 and allowed market rates to rise, which helped reduce domestic private credit, generate more money towards the deficit and reduce money printing, causing currency shortages.

Sri Lanka has also increased taxes and utility charges to reduce public sector borrowing.

However, the Reserve Bank of India has granted deferred Asian Clearing Union dollars to Sri Lanka until June to continue creating balance of payments deficits by sterilizing interventions with borrowed money. (Sri Lanka owed the Asian Clearing Union $1.9 billion in June 2022)

However, after India ended ACU deferrals, the central bank lost the ability to manage balance of payments deficits.

Related Sri Lanka’s balance of payments deficit undermines its ability to create

A central bank that pursues a deflationary policy and reverses money printing will accumulate reserves and generate a balance of payments surplus.

In September, net central bank credit to the government declined slightly. However, the reserve currency also declined.


Central Bank of Sri Lanka credit negative in September 2022

Sri Lanka’s current major inflows exceed imports for fourth month in September

Sri Lanka now operates at peg around 360 – 370 against the US dollar, intervening both ways with the 3-month rate around 30%.

At least 8 to 10 basis points of the rate may be due to a loophole in a debt restructuring framework when there is uncertainty as to whether domestic debt, which has already reached a high level in a haircut IFR, will suffer a default and a second restructuring, according to some analysts.

Mainstream economists and analysts have previously urged the central bank to let the currency float after a rate hike, as this drives confidence back to a lower corrective interest rate than if a credibility-losing peg continued. (Sri Lanka needs to raise rates, tourism recovery won’t help end currency crisis)

A float consists of isolating the reserve currency from the balance of payments and stopping all intervention (suspending convertibility) in the foreign exchange markets, whether to buy or sell dollars.

Sri Lanka’s float in March failed due to low rates boosting credit and forcing dollar sales (a call bond or strong lateral convertibility pledge) of dollars to the central bank, further pushing the anchor down.

A float restores confidence in the exchange rate and encourages dollar holders to sell, exporters to convert early, and importers to postpone import payments to pre-crisis levels and lower interest rates further. rapidly.

The central bank was a net buyer of foreign currency from commercial banks in September and October, as private credit contracted and imports declined.

Under an International Monetary Fund program, a float is a prior action. The exchange rate is then pegged to collect reserves. IMF money is disbursed after balance of payments recovery and “import reserves” are no longer needed.

An IMF program will impose a net international reserve target where the central bank will pursue a stricter deflationary policy than a currency board to replenish reserves and sell its stock of treasury bills.

When reserves are collected under a deflationary policy (purchases in dollars are sterilized), it is possible to appreciate a currency parity because credit is weak and rates are above the required market rate.

However, due to a belief in (the politics of the basket, the strip, the crawl) peddled by theorists living in more stable single-anchor regime countries, and the lack of a doctrinal foundation in a currency healthy in countries with intermediate regimes, currencies are not allowed to bounce unlike a floating regime, tipping people partially out of poverty into the abyss and triggering social unrest, in one of the post-mercantilist strategies 1931 most ruthless.

In a shocking revelation, a World Bank survey found that only 2% of policymakers surveyed in South Asia knew that currency problems were caused by central banks.

Currency shortages and balance of payments deficits (as defined) are a problem with soft pegs or intermediate regimes. They are absent from floating regimes and hard anchors without key rates where interventions are not sterilized. A central bank is the only agency that can create currency shortages and balance of payments deficits and also the only agency that can stop them.

Under an IMF program, it is not possible to apply a clean floating exchange rate because there is a NIR target. Consequently, it is also not possible to apply an orthodox inflation targeting regime.

Under the IMF program, flexible inflation targeting where liquidity was injected for stimulus purposes, abusing the central bank’s statutory obligation to maintain stability, would be legalized in a new monetary law.

Continue Reading ]]> AUD/USD breaks back below US$0.63 as momentum is squarely behind the USD Thu, 03 Nov 2022 23:56:36 +0000

Daily Currency Update

The Australian dollar fell back below US$0.63 overnight as markets continue to readjust expectations following the Fed’s latest policy offer. While the FOMC is expected to slow the pace of rate hikes next month, Fed Chairman Jerome Powell’s message was openly hawkish, suggesting the interest rate outlook will be higher for longer. U.S. rates jumped in the wake, extending gains from Thursday’s trade and dragging the U.S. dollar higher. The AUD is down about 1% since this time yesterday after hitting intraday lows at US$0.6270. While the AUD enjoyed a brief respite, marking highs north of US$0.65 through the end of October, momentum is once again firmly behind the US dollar. Ongoing uncertainty surrounding the global growth outlook, weak Chinese economy and a divergence in the short-term outlook for the Fed and RBA will continue to weigh on the AUD and will likely limit any meaningful recovery. Our attention now turns to the RBA’s Monetary Policy Statement and the US non-farm payroll. While Tuesday’s RBA policy update provided insight into the forecast changes, indications of inflation and GDP expectations remain key in determining the RBA’s policy expectations in the near future. term. We expect job growth to have slowed in the US, but the US labor market remains remarkably resilient. That said, comments from a number of key business analysts suggest the landscape could be changing. With Morgan Stanley and Amazon reportedly set to announce hiring freezes and staff cuts, a slowdown in non-farm payrolls performance could help push the AUD higher at the weekly close.

Key Movers

Momentum remains firmly behind the USD as the fallout from the Federal Reserve’s latest hawkish policy bid fuels demand for the global base currency. The promise of higher rates and elevated risk aversion helped propel the USD higher against a basket of major counterparties. The BB DXY index rose three-quarters of a percent in trade on Thursday and is now just 1.5% off its recent 18-year high. The sustained hawkish outlook from the Fed contrasts sharply with the latest offers from other major central banks. The Bank of England, while raising rates by 75 basis points, forecasts a significant contraction in GDP and a sharp decline in inflation over the next three years. Bank of England Governor Bailey doubled down on the dovish tone, suggesting rates will rise less than what is currently priced in financial markets. The pound plunged on the wake of the BoE’s dovish statement, down almost 2% and is the worst performing currency over the past 12 hours. Elsewhere, the Euro is down around 0.7% under the weight of USD strength, while the Yen is trading above 148 as the rising rate backdrop strengthens again. pressure on the Ministry of Finance to intervene. Today, our attentions turn to the US Nonfarm Payrolls as a key marker guiding direction towards the weekly close.

Expected ranges

  • AUD/USD: 0.6230 – 0.6420 ▼
  • AUD/EUR: 0.6380 – 0.6520 ▼
  • GBP/AUD: 1.7680 – 1.8020 ▼
  • AUD/NZD: 1.0870 – 1.0930 ▼
  • AUD/CAD: 0.8580 – 0.8720 ▼

Show previous day

Oil Rises as Dollar Weakens, Traders Watch China’s COVID Policy Tue, 01 Nov 2022 12:13:42 +0000

Oil futures rose on Tuesday, looking to build on an October gain, as the U.S. dollar retreated and unconfirmed rumors swirled that China could ease COVID restrictions.

price action
  • West Texas Intermediate crude for December delivery CL.1,


    rose $1.16, or 1.3%, to $87.69 a barrel on the New York Mercantile Exchange.

  • January Brent crude BRN00,

    the global benchmark, rose $1.18, or 1.3%, to $93.99 a barrel on ICE Futures Europe.

  • Back to Nymex, December gasoline RBZ22,
    rose 1.4% to $2.561 per gallon, while December HOZ22 heating oil,
    rose 0.2% to $3.683 per gallon.

  • December natural gas NGZ22,
    fell 2.1% to $6.22 per million British thermal units after jumping more than 10% on Monday.

Market factors

The Wall Street Journal reported on Tuesday that Hong Kong stocks appeared to be rallying after an anonymous post on Chinese social media suggested the government may intend to ease pandemic-related restrictions from March. . Other media also reported the rumor.

See: Alibaba and Nio among booming Chinese stocks as hopes grow over potential reopening

China’s COVID restrictions have been seen as a ceiling on oil prices, limiting demand for crude from one of the world’s largest energy consumers.

WTI rose 8.9% in October, based on first-month contracts, while Brent gained 7.8%, with some support attributed to a move by the Organization of the Petroleum Exporting Countries and of its Russian-led allies, a combo known as OPEC+, to cut production by 2 million barrels a day from November. The actual reduction should be about half as several members were already producing below their targets.

“Obviously, the supply cuts announced by OPEC+ have stabilized the oil market to some degree. However, stabilization of this action in the medium to long term will really depend on the full impact of the EU ban. on Russian Oil,” which goes into effect Dec. 5 for crude oil and Feb. 5 for refined products, Warren Patterson, head of commodities strategy at ING, said in a note.

The ICE US Dollar Index DXY,
a measure of the currency against a basket of six major rivals, fell 0.6%. The sharp rise in the dollar in 2022 was also seen as a hurdle for oil bulls. A stronger dollar makes commodities valued in the unit more expensive for users of other currencies.

Gold Consolidates After Finding Support On Dollar Weakness Thu, 27 Oct 2022 11:30:00 +0000

By William Watts

Gold futures were slightly lower on Thursday, consolidating after hitting a nearly two-week high in the previous session as the US dollar’s pullback gave bulls some breathing room.

price action

Market factors

Gold and other commodities found support on Wednesday as the US dollar, which rallied in 2022, fell sharply against its main rivals, and Treasury yields continued to slide against at their highest levels in more than a decade.

A stronger dollar can weigh on commodities priced in the unit, making them more expensive for users of other currencies. Rising bond yields increase the opportunity cost of holding non-performing assets.

The ICE U.S. dollar index, a measure of the currency against a basket of six major rivals, rebounded 0.4% on Thursday but remained down 1.7% for the week. The yield on the 10-year Treasury note rose about 4 basis points on Thursday.

“There are early signs that the dollar and rates are beginning to reverse, but until we have more definitive evidence that both are actually peaking, it will be too early to call a bottom for l ‘gold,” analysts at Sevens Report Research wrote in a Thursday note.

-William Watts


(END) Dow Jones Newswire

10-27-22 0730ET

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