Crude Oil, US Dollar, WTI, Brent, OPEC+, China PMI, USD/CNH – Talking Points
- Crude oil prices steadied in Asia after weakening in the face of bullish news
- Chinese PMI numbers have given some hope to the regional growth outlook
- Central banks will take on inflation. Will higher rates hurt growth and WTI prices?
Crude oil is relatively stable through the Asian session today after giving up some ground overnight. Currencies were relatively quiet and equity markets took stock of the implication of leading central bankers duking up to knock out inflation.
Talks with Iran came to nothing overnight with the US State Department expressing disappointment at the Iranian effort in regard to reviving the 2015 nuclear deal.
The U.S. Energy Information Administration (EIA) registered 2.8 million barrels less of crude inventories to the end of last week. Political tensions in Ecuador and Libya continues to plague supply from those nations.
Elsewhere, OPEC+ are holding a meeting online and while nothing of significance has emerged so far, talks later today are expected to deliver more on production targets and capabilities.
Chinese manufacturing PMI for June printed at 50.2 against 50.5 anticipated and the non-manufacturing came in at 54.7, a massive beat on the 50.5 forecast.
This combined to give a composite PMI read of 54.1 against 48.4 previously. USD/CNH drifted lower as a result while the Chinese mainland CSI 300 equity index is having a good day, up over 1.5%.
The ECB forum concluded yesterday and the biggest take away appeared to be that the world’s central banks are serious about fighting inflation. Fed Char Powell made it clear that they are prepared to risk recession when he said that the biggest risk at the moment would be to let price inflation get away.
Federal Reserve Bank of Cleveland President Loretta Mester backed up the hawkish stance. She said that she would vote for a 75 basis point hike at the next meeting if conditions remain as they are now.
Gold is easing lower on a firming US Dollar, trading around US$ 1,816 at the time of going to print.
There is a slew of data releases today. The European highlights are UK GDP, Swiss retail sales, French CPI and German unemployment. Then across the Atlantic, Canada will get GDP numbers and the US will get personal income and spending figures.
The full economic calendar can be viewed here.
Crude Oil (WTI) Technical Analysis
Crude oil rejected a move below an ascending trend line and the 100-day simple moving average (SMA).
The reversal occurred after the price moved back and closed inside the 21-day simple moving average (SMA) basedBollinger Band after displaying a bullish Spinning Top Candlestick.
Support could be at the ascending trend line, currently at 107.50, or at the prior low of 101.50.
On the topside, resistance might be at the break point of 116.57 or the previous peak of 123.68.
— Written by Daniel McCarthy, Strategist for DailyFX.com
To contact Daniel, use the comments section below or @DanMcCathyFX on Twitter
Be the first to comment