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Trends & Analysis
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Gold continues to shine amid geopolitical worries

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Crude oil dips for 3rd session after supply data

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Is there an AI upside for AMD?

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GBP/USD recovers following wage report

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Trends & Analysis
News

Gold continues to shine amid geopolitical worries

News

Crude oil dips for 3rd session after supply data

News

Is there an AI upside for AMD?

News

GBP/USD recovers following wage report

News

Buy the JPMorgan dip?

News

Goldman Sachs shares surge after earnings beat

News

Crude oil surges after Saudi Arabia’s price hike

 

Thursday, March 07, 2024

Today’s headlines

What’s happening: Oil recorded gains on Wednesday, after Saudi Arabia increased crude prices to Asia.

What happened: Oil prices were also driven by official data released on Wednesday showing a lower-than-expected increase in US crude inventories.

Some weakness in the US dollar also supported crude prices.

Why it matters: Saudi Arabian Oil Co. reported that it had increased the official selling price of its Arab Light crude by 20 cents from the benchmark price to $1.70 per barrel for buyers in Asia for April. Meanwhile, Aramco cut the premium for Europe by 60 to 70 cents per barrel.

The EIA (Energy Information Administration) said on Wednesday that US crude inventories climbed 1.4 million barrels during the week ended March 1. This was much lower than market expectations of an increase of 3.7 million barrels.

The EIA also said that gasoline inventories declined by 4.5 million barrels, while distillate stockpiles contracted 4.1 million barrels last week. Experts had projected a decline of 2.3 million barrels in gasoline stockpiles and a decline of 800,000 barrels in distillate inventories.

Late Tuesday, the API (American Petroleum Institute) said that US crude inventories had increased by about 400,000 barrels in the latest week.

On Sunday, the OPEC+ (Organization of the Petroleum Exporting Countries and its allies) announced an extension of voluntary output cuts of 2.2 million barrels per day (bpd) until the end of June in a bid to stabilise the market.

Weakness in the US dollar made crude cheaper for foreign currency holders, lending support to oil prices. The US dollar index, which measures the greenback’s performance versus a basket of major peers, fell around 0.4% to 103.37 on Wednesday.

WTI crude oil for April delivery gained 98 cents to close at $79.13 per barrel on the NYMEX (New York Mercantile Exchange). Brent crude for May delivery rose 92 cents to settle at $82.96 per barrel on ICE Futures Europe.

In other energy trading, April gasoline gained 2 cents to $2.55 a gallon, while April heating oil added 5 cents to $2.66 a gallon. April natural gas traded at $1.93 per million British thermal units, down 3 cents.

What to watch: Investors await the release of natural gas stockpiles data from the EIA today. US natural gas supplies, which fell by 96 billion cubic feet during the week ended February 23, are expected to decline by 40 billion cubic feet in the latest week.

Traders will also continue watching ongoing geopolitical concerns, which are expected to significantly impact oil prices ahead.

The markets today

European stocks will be in focus today, ahead of the ECB’s interest rate decision

Context: European stock markets settled higher on Wednesday as investors digested the UK 2024 budget statement.

Details: British Finance Minister Jeremy Hunt presented the Spring Budget, announcing plans for permanent tax cuts. The OBR (Office for Budget Responsibility) said it sees the country’s inflation rate falling below the Bank of England’s target in the coming months, while raising its growth projections.

Investors also monitored Federal Reserve Chairman Jerome Powell’s testimony before the House Financial Services Committee. Powell said that although he sees rate cuts beginning this year, he was unclear about the timing.

On the economic data front, retail sales in the Eurozone grew by 0.1% in January, after a 0.6% decline in December and in-line with market estimates. The HCOB Eurozone construction PM rose to 42.9 in February, from 41.3 in the prior month.

The STOXX Europe 600 Index gained 0.39% to settle at 498.21 on Wednesday, with most sectors closing in the positive zone. Tech stocks were among the top performers, rising around 1.35% during the session.

London’s FTSE 100 added 0.43% to close at 7,679.31 on Wednesday, recording gains for the second consecutive session. Germany’s DAX 40 rose 0.10% to 17,716.71, while France’s CAC 40 added 0.28% to settle at 7,954.74.

What to watch: Investors await the release of the European Central Bank’s interest rate decision today. The ECB is widely expected to keep interest rates unchanged at 4.5%.

Other Markets: US trading indices closed higher on Wednesday, with the Dow Jones index, S&P 500 and Nasdaq 100 up by 0.20%, 0.51% and 0.67%, respectively.

The news shaping the markets

During his visit to Odesa, Greece Prime Minister said that his country would continue providing support to Ukraine. The news sent the RUB/USD lower in forex trading this morning.


The Philippines said manufacturing production rose 0.9% year-over-year in January, slowing from the 2.2% surge recorded a month ago, which exerted pressure on the PHP/USD forex pair.


Australia’s trade surplus on goods widened to A$11.03 billion in January, from A$10.74 billion in the prior month, sending the AUD/USD pair higher in forex trading this morning.


Japan’s average cash earnings surged by 2% year-over-year in January, compared to a 1% increase in the earlier month, lending support to the JPY/USD forex pair.


Argentina’s industrial production declined by 12.4% year-over-year in January. This being lower than the 12.8% decline recorded in December sent the ARS/USD pair slightly higher in forex trading this morning.

What else to watch today

South Africa’s foreign exchange reserves and current account, Germany’s factory orders, UK’s house price index, France’s foreign exchange reserves, Singapore’s foreign exchange reserves, Brazil’s government debt to GDP, government budget value, new vehicle registrations and car production, Turkey’s gross foreign exchange reserves and treasury cash balance, Mexico’s inflation rate, US Challenger job cuts, balance of trade, initial jobless claims, continuing jobless claims, nonfarm business sector labour productivity, unit labour costs, Manheim used vehicle value index, consumer credit and Fed Chair Powell testimony, Russia’s foreign exchange reserves, Canada’s balance of trade, total value of building permits, as well as China’s foreign exchange reserves.


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