crude oil prices

  Crude oil prices closed yesterday near their 7-year highs. What do you think are the main price drivers prevailing for this surge on crude oil prices? Geopolitical Situation Crude oil prices closed yesterday near their 7-year highs, as an attack on an oil site in Abu Dhabi further strained an already tense market. The concern about the deterioration of the situation between Ukraine and Russia, which has been occurring for several days, has been overtaken by the attack on the infrastructures of the United Arab Emirates. On Monday, an attack probably committed by drones blew up three tank trucks near the Abu Dhabi National Oil Company (ADNOC)’s reservoirs. This strike, claimed by the Houthi rebels in Yemen, killed three people and injured six others, without damaging the emirate's oil installations. Therefore, this attack increases the likelihood of seeing production losses at a time when supply is already very tight. On the other hand, the spread of the civil war in Yemen could signal that a new Iranian nuclear deal is out of the question anytime soon, thus depriving the market of Iranian crude oil barrels since the Houthi rebels are indeed close to Iran. Still, in the Middle Eastern region, yesterday an explosion damaged an oil pipeline linking Iraq to Turkey through which some 450,000 barrels of crude transit per day, thus cutting off flow from Iraq. This news has boosted prices, making them reach new records. It appears now that this Iraq-Turkey pipeline was back in operation earlier this morning, according to the Turkish public company Botas. Supply/Demand Dynamics As the market worries about supply, OPEC+ on Tuesday maintained its forecast for a rise in global demand for black gold in 2022, which would reach 100 million barrels per day. Even the IEA has raised its forecast for oil demand this year and warned that the market could experience another year of volatility if supply disappoints. According to the agency, total demand should thus reach a level close to 100 million barrels per day this year. WTI Crude Oil (CLH22) Futures (March contract, daily chart) As you can see, there is currently a lot going on in the energy markets to maintain a high level of volatility. In particular, some fundamental drivers and news of supply disruptions and geopolitical tensions often push prices significantly higher. However, it is also interesting to note that they do not seem to be falling back to their previous level once the issues are resolved or when the tensions de-escalate. PS: Don’t forget to switch to the March 2022 contract (CLH22) for WTI Crude Oil. Like what you’ve read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Oil Trading Alerts as well as our other Alerts. Sign up for the free newsletter today! Thank you. Sebastien BischeriOil & Gas Trading Strategist * * * * * The information above represents analyses and opinions of Sebastien Bischeri, & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Sebastien Bischeri and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Bischeri is not a Registered Securities Advisor. By reading Sebastien Bischeri’s reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Sebastien Bischeri, Sunshine Profits' employees, affiliates as well as their family members may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

  Gold soared as investors got scared by reports of an allegedly impending military conflict. Was it worth reacting sharply to geopolitical factors? Gold has been performing quite nicely in January. As the chart below shows, its price increased from $1,806 at the end of December to around $1,820 this week, strengthening its position above $1,800. Yesterday (January 19, 2022), gold prices went sharply higher, jumping above $1,840, as one can see in the chart below. What happened? Investors got scared of the Russian bear and inflationary hydra. President Biden predicted that Russia would move into Ukraine. The threat of invasion and renewal of a conflict weakened risk appetite among investors. To complete the geopolitical picture, this week, North Korea fired missiles again (on Monday, the country conducted its fourth missile test of the year), while terrorists attacked the United Arab Emirates with drones. The heightened risk aversion could spur some demand for safe-haven assets such as gold. The yellow metal tends to benefit from greater uncertainty. However, investors should remember that geopolitical risks usually cause only a short-lived reaction. Investors also recalled the ongoing global inflationary crisis. Some news helped them wake up. In the U.K., inflation surged 5.4% in December, the highest since March 1992. Meanwhile, in Canada, inflation jumped 4.8%, also the fastest pace in 30 years. Additionally, crude oil prices have jumped to around $86.5 per barrel, the highest value since 2014, as the chart below shows. The timing couldn’t be worse, as inflation is already elevated, while higher oil implies higher CPI in the future. Gold should, therefore, welcome the rise in oil prices. On the other hand, it could prompt the Fed to react more forcefully and aggressively to tighten its monetary policy.   Implications for Gold What does the recent mini-rally imply for the gold market? Well, it’s never a good idea to draw far-reaching conclusions from short-term moves, especially those caused by geopolitical factors. Risk-offs and risk-on sentiments come and go. However, let’s do justice to gold. It hit a two-months high, more and more boldly settling in above $1,800. All this happened despite rising bond yields. As the chart below shows, the long-term real interest rates have increased from about -1.0% at the end of 2021 to about -0.6%. Gold’s resilience in the face of rising interest rates is praiseworthy. Having said that, investors shouldn’t forget that 2022 will be a year of the Fed’s tightening cycle, rising interest rates, and also a certain moderation in inflation. All these factors could be important headwinds for gold this year. However, investors may underestimate how the Fed’s monetary policy will impact market conditions. After all, the Fed’s hawkish stance also entails some risks for the financial markets and the overall economy. Practically, each tightening cycle in the past has led to an economic crisis. As a reminder, after four hikes in 2018, the Fed had to reverse its stance and cut them in 2019. The Fed signaled not only a few hikes this year, but also a reduction of its balance sheet. Given the enormous indebtedness of the economy and Wall Street’s addiction to easy money, it might be too much to swallow. Importantly, when the Fed is focused on fighting inflation, its ability to help the markets will be limited. I thought that such worries would arise later this year, supporting gold, but maybe the gold market has already started to price in the possibility of economic turbulence triggered by the Fed’s tightening cycle. Anyway, next week, the FOMC will gather for the first time in 2022, and it could be an important, insightful event for the gold market. Stay tuned! If you enjoyed today’s free gold report, we invite you to check out our premium services. We provide much more detailed fundamental analyses of the gold market in our monthly Gold Market Overview reports and we provide daily Gold & Silver Trading Alerts with clear buy and sell signals. In order to enjoy our gold analyses in their full scope, we invite you to subscribe today. If you’re not ready to subscribe yet though and are not on our gold mailing list yet, we urge you to sign up. It’s free and if you don’t like it, you can easily unsubscribe. Sign up today! Arkadiusz Sieron, PhDSunshine Profits: Effective Investment through Diligence & Care

The year 2022 is seemingly a mixed bag, even as markets start reopening. The year looks promising, though, with issues like inflation and COVID to contemplate. Historic rallies in 2021 after lockdowns are looking to inspire trading in various industries, with some assets to look out for by investors. Growth will surely return at some point, but so will disappointing instances where tumbles will dominate trading desks. The S & P's historic gains of 30 percent dominated the press at the close of 2021, making investors using Naga and other optimistic platforms. The ended year had one of the longest bull markets. However, the Fed rate tightening and the direction the pandemic will take are some things to expect, notwithstanding that the stock market might grow by a whopping 10 percent in 2022. Trading Movements In Week One 2022 European markets have opened with a lot of optimism in 2022, the pan-European STOXX 600 closed at 489.99 points; this is 0.5 percent higher than the opening figure. The European benchmark was some percentage lower than the overall S&P 2021 performance, though with a surge of 22.4 percent. Record gains in the stock markets have relied on the positions taken by the governments during the pandemic. In the USA and Europe, increasing vaccination rates and economic stimulus measures have improved investor confidence. However, there are indications for more volatility in 2022, a situation investors must watch keenly. There has been little activity in London markets in the first week of 2022, while in Italy, France, and Spain gains of between 0.5-1.4 percent made notable highlights. European markets had diverse industries drive up the closing gains witnessed; the airline sector, in particular, has had a significant influence. Germany’s Lufthansa (LHAG.DE) had an impressive 8.8 percent jump while Air France KLM (AIRF.PA), a 4.9 percent gain. Factory activity is another factor to thank for the first week's gains all over Europe. Noteworthy, the Omicron variant influenced trading in the entirety of December, but the reports that it is milder than Delta has energized market activities coming into January. S&P and DOW Jones 2022 First Week Highs Across the Atlantic, the Dow Jones Industrial Average (DJI) and S&P 500 (SPX) closed at a record high, highlighting a similar aggressiveness as the European markets. While the jump was industrial-wide, Tech stocks continued to dominate, as Apple finally touched the $3 trillion valuation, though for a short time. Tesla Inc. (TSLA.O) posted a 13.5 percent jump thanks to increased production in China and an unprecedented goal to surpass its target. The US market, like the European market, is also in a fix; the Omicron variant of COVID-19 continues to cause concern with the wait-and-see approach, the only notable strategy. Currently, every country is reporting a jump in the number of Covid cases, with the UK going above 100K cases for the first time and the US recording some new records as well. School delays and increased isolation by key workers will surely debilitate the markets, with the global chip shortage another point to contemplate. However, markets can still ride on the increased development of therapies to help fight Covid. The U.S. Food and Drug Administration (CDC) has been quick, as now children can have their third doses as well. Industries to Look Out For In 2022 European automakers have seen early peaks, while the airline sector has also picked up fast. In the US, tech shares continue to dominate, and 2022 might witness new records never seen before. However, the energy sectors have also dominated the news in 2021, and in 2022; the confidence in them will continue to rise because of an anticipation of stabilization in energy prices. The same goes for crude oil prices. Regardless, shareholders will continue watching the decisions by the Federal Reserve, a review in the current interest rates will surely tame inflation. Conclusion 2022 will see its highs and lows in investments. Some assets will make the news and investors will be keen to use any information to make key decisions. Tech will continue to shine, but it is important to anticipate the direction of the pandemic, as it will be an important factor in investor decisions.

S&P 500 upswing attempt rejected, again – and credit markets didn‘t pause, with the dollar rush being truly ominous. Sign of both the Fed being taken seriously, and of being afraid (positioned for) the adverse tightening consequences. Bonds are bleeding, the yield curve flattening, and VIX having trouble declining. As stated yesterday: (...) It‘s nice to start counting with 5 rate hikes this year when taper hasn‘t truly progressed much since it was announced last year. The accelerated taper would though happen, and the following questions are as to hikes‘ number and frequency. I‘m not looking the current perceived hawkishness to be able to go all the way, and I question Mar 50bp rate hike fears. Not that it would even make a dent in inflation. Not even the shock and awe 50bp hike in Mar would make a dent as crude oil prices virtually guarantee inflation persistence beyond 2022. The red hot Treasury and dollar markets are major headwinds as the S&P 500 is cooling off (in a very volatile way) for a major move. As we keep chopping between 4,330s and 4,270s, the bulls haven‘t been yet overpowered. I keep looking to bonds and USD for direction across all markets. I also wrote yesterday: (...) All that‘s needed, is for bonds to turn up, acknowledging a too hawkish interpretation of yesterday‘s FOMC – key factor that sent metals down and dollar up. While rates would continue rising, as the Fed overplays its tightening hand, we would see them retreat again – now with 1.85% in the 10-year Treasury, we would overshoot very well above 2% only to close the year in its (2%) vicinity. That just illustrates how much tolerance for rate hikes both the real economy and the markets have, and the degree to which the Fed can accomplish its overly ambitious yet behind the curve plans. Still time to be betting on commodities and precious metals in the coming stagflation. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook Another setback with reversal of prior gains - S&P 500 is chopping in preparation for the upcoming move. Concerningly, the bears are overpowering the bulls on a daily basis increasingly more while Bollinger Bands cool down to accommodate the next move. Direction will be decided in bonds. Credit Markets HYG keeps collapsing but the volume is drying up, which means we could see a reprieve – happening though at lower levels than earlier this week. Quality debt instruments are pausing already, indicatively. Gold, Silver and Miners Gold and silver declined as yields moved sharply up and so did the dollar – but inflation or inflation expectations didn‘t really budge, and TLT looks ready to pause. The metals keep chopping sideways in the early tightening phase, which is actually quite a feat. Crude Oil Crude oil isn‘t broken by the Fed, and its upswing looks ready to go on unimpeded, and that has implications for inflation ahead. Persistent breed, let me tell you. Copper Copper is in danger of losing some breath – the GDP growth downgrades aren‘t helping. The red metal though remains range bound, patiently waiting to break out. Will take time. Bitcoin and Ethereum Bitcoin and Ethereum are pointing lower again, losing altitude – not yet a buying proposition. Summary S&P 500 bulls wasted another opportunity to come back – the FOMC consequences keep biting as fears of a hawkish Fed are growing. Tech still can‘t get its act together, and neither can bonds – these are the decisive factors for equities. As liquidity is getting scarce while the Fed hadn‘t really moved yet, risk-on assets are under pressure thanks to frontrunning the Fed. The room for a surprising rebound in stocks is however still there, given how well the 4,270s are holding in spite of the HYG plunge. And given the recent quality debt instruments pause, it looks approaching. Look for a dollar decline next to confirm the upcoming risk-on upswing. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.

By InvestMacro | COT | Data Tables | COT Leaders | Downloads | COT Newsletter Here are the latest charts and statistics for the Commitment of Traders (COT) data published by the Commodities Futures Trading Commission (CFTC). The latest COT data is updated through Tuesday January 25th and shows a quick view of how large traders (for-profit speculators and commercial entities) were positioned in the futures markets. Highlighting the COT energy data is the recent rise in bearish bets for the Brent Crude Oil (last day) futures bets. The speculative net position in the Brent Crude Oil futures has now seen higher bearish positions for three consecutive weeks. This comes after a streak of improving positions that culminated in speculator bets touching the least bearish level in the previous 167 weeks (on January 4th). The overall speculator standing in Brent oil have been in a continuous bearish position since December of 2013 (due to the unique positioning dynamics of the market) but positioning has been less and less bearish with crude oil prices rising in recent months. However, this recent 3-week streak of rising bearish bets brings the Brent net standing to the most bearish of the last fourteen weeks. Joining Brent Crude Oil (-5,730 contracts) in falling this week were Natural Gas (-6,488 contracts), WTI Crude Oil (-12,366 contracts) and Gasoline (-1,184 contracts) while Heating Oil (3,173 contracts) and the Bloomberg Commodity Index (2,177 contracts) saw higher bets on the week. Data Snapshot of Commodity Market Traders | Columns Legend Jan-25-2022OIOI-IndexSpec-NetSpec-IndexCom-NetCOM-IndexSmalls-NetSmalls-Index WTI Crude 2,095,994 35 373,415 28 -420,646 61 47,231 82 Gold 572,078 39 220,151 58 -249,746 41 29,595 48 Silver 151,779 18 32,141 54 -47,684 52 15,543 33 Copper 205,771 30 26,481 61 -32,836 37 6,355 62 Palladium 9,034 11 -1,988 10 2,274 90 -286 28 Platinum 53,390 10 13,792 22 -19,227 82 5,435 38 Natural Gas 1,141,796 7 -124,535 41 97,541 62 26,994 47 Brent 224,561 59 -25,936 73 23,862 29 2,074 37 Heating Oil 360,969 38 18,000 69 -40,959 28 22,959 78 Soybeans 735,966 30 148,872 67 -112,799 39 -36,073 12 Corn 1,539,124 28 439,098 86 -389,471 16 -49,627 14 Coffee 274,327 40 61,643 93 -64,950 9 3,307 11 Sugar 875,995 12 121,283 62 -142,972 41 21,689 35 Wheat 390,266 29 11,661 57 -3,525 37 -8,136 63   WTI Crude Oil Futures: The WTI Crude Oil Futures large speculator standing this week totaled a net position of 373,415 contracts in the data reported through Tuesday. This was a weekly decrease of -12,366 contracts from the previous week which had a total of 385,781 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 28.3 percent. The commercials are Bullish with a score of 60.7 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 81.6 percent. WTI Crude Oil Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 23.5 35.8 4.7 – Percent of Open Interest Shorts: 5.7 55.8 2.4 – Net Position: 373,415 -420,646 47,231 – Gross Longs: 492,310 749,821 98,250 – Gross Shorts: 118,895 1,170,467 51,019 – Long to Short Ratio: 4.1 to 1 0.6 to 1 1.9 to 1 NET POSITION TREND:       – Strength Index Score (3 Year Range Pct): 28.3 60.7 81.6 – Strength Index Reading (3 Year Range): Bearish Bullish Bullish-Extreme NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: 8.7 -11.3 12.5   Brent Crude Oil Futures: The Brent Crude Oil Futures large speculator standing this week totaled a net position of -25,936 contracts in the data reported through Tuesday. This was a weekly reduction of -5,730 contracts from the previous week which had a total of -20,206 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 73.3 percent. The commercials are Bearish with a score of 29.5 percent and the small traders (not shown in chart) are Bearish with a score of 37.3 percent. Brent Crude Oil Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 17.8 44.2 4.1 – Percent of Open Interest Shorts: 29.3 33.6 3.2 – Net Position: -25,936 23,862 2,074 – Gross Longs: 39,888 99,224 9,298 – Gross Shorts: 65,824 75,362 7,224 – Long to Short Ratio: 0.6 to 1 1.3 to 1 1.3 to 1 NET POSITION TREND:       – Strength Index Score (3 Year Range Pct): 73.3 29.5 37.3 – Strength Index Reading (3 Year Range): Bullish Bearish Bearish NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: -4.2 6.7 -20.4   Natural Gas Futures: The Natural Gas Futures large speculator standing this week totaled a net position of -124,535 contracts in the data reported through Tuesday. This was a weekly reduction of -6,488 contracts from the previous week which had a total of -118,047 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 41.2 percent. The commercials are Bullish with a score of 61.6 percent and the small traders (not shown in chart) are Bearish with a score of 47.4 percent. Natural Gas Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 20.5 42.7 4.5 – Percent of Open Interest Shorts: 31.4 34.1 2.2 – Net Position: -124,535 97,541 26,994 – Gross Longs: 233,870 487,342 51,865 – Gross Shorts: 358,405 389,801 24,871 – Long to Short Ratio: 0.7 to 1 1.3 to 1 2.1 to 1 NET POSITION TREND:       – Strength Index Score (3 Year Range Pct): 41.2 61.6 47.4 – Strength Index Reading (3 Year Range): Bearish Bullish Bearish NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: 1.7 -0.5 -10.1   Gasoline Blendstock Futures: The Gasoline Blendstock Futures large speculator standing this week totaled a net position of 59,605 contracts in the data reported through Tuesday. This was a weekly decline of -1,184 contracts from the previous week which had a total of 60,789 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 30.8 percent. The commercials are Bullish with a score of 69.8 percent and the small traders (not shown in chart) are Bullish with a score of 56.9 percent. Nasdaq Mini Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 29.2 49.2 6.1 – Percent of Open Interest Shorts: 12.8 67.6 4.0 – Net Position: 59,605 -67,195 7,590 – Gross Longs: 106,361 179,168 22,300 – Gross Shorts: 46,756 246,363 14,710 – Long to Short Ratio: 2.3 to 1 0.7 to 1 1.5 to 1 NET POSITION TREND:       – Strength Index Score (3 Year Range Pct): 30.8 69.8 56.9 – Strength Index Reading (3 Year Range): Bearish Bullish Bullish NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: 3.2 -5.3 12.5   #2 Heating Oil NY-Harbor Futures: The #2 Heating Oil NY-Harbor Futures large speculator standing this week totaled a net position of 18,000 contracts in the data reported through Tuesday. This was a weekly increase of 3,173 contracts from the previous week which had a total of 14,827 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 68.9 percent. The commercials are Bearish with a score of 27.6 percent and the small traders (not shown in chart) are Bullish with a score of 77.9 percent. Heating Oil Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 16.8 49.8 13.9 – Percent of Open Interest Shorts: 11.8 61.2 7.5 – Net Position: 18,000 -40,959 22,959 – Gross Longs: 60,678 179,923 50,189 – Gross Shorts: 42,678 220,882 27,230 – Long to Short Ratio: 1.4 to 1 0.8 to 1 1.8 to 1 NET POSITION TREND:       – Strength Index Score (3 Year Range Pct): 68.9 27.6 77.9 – Strength Index Reading (3 Year Range): Bullish Bearish Bullish NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: 19.5 -21.8 25.0   Bloomberg Commodity Index Futures: The Bloomberg Commodity Index Futures large speculator standing this week totaled a net position of -14,100 contracts in the data reported through Tuesday. This was a weekly gain of 2,177 contracts from the previous week which had a total of -16,277 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 53.6 percent. The commercials are Bearish with a score of 45.4 percent and the small traders (not shown in chart) are Bearish with a score of 39.5 percent. Bloomberg Index Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 65.3 28.6 1.2 – Percent of Open Interest Shorts: 93.9 1.2 0.1 – Net Position: -14,100 13,537 563 – Gross Longs: 32,288 14,137 596 – Gross Shorts: 46,388 600 33 – Long to Short Ratio: 0.7 to 1 23.6 to 1 18.1 to 1 NET POSITION TREND:       – Strength Index Score (3 Year Range Pct): 53.6 45.4 39.5 – Strength Index Reading (3 Year Range): Bullish Bearish Bearish NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: -21.1 21.0 1.8   Article By InvestMacro – Receive our weekly COT Reports by Email *COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) were positioned in the futures markets. The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators) as well as their open interest (contracts open in the market at time of reporting).See CFTC criteria here.

  While last week's geopolitical tensions have eased a bit, the OPEC+ members’ meeting knocks at the door. How will it affect crude inventories? Crude oil prices paused this morning in the European trading session, the day after a new technical increase linked to the expiration of futures contracts. OPEC+ members, including Russia, are due to hold a meeting tomorrow in which speculative talks suggest that OPEC+ could announce a quicker increase in supply. On the other hand, US crude inventories should be scrutinized this week, with the first figure to be released later today by the American Petroleum Institute (API) at 2130 GMT / 1530 Chicago Time. Therefore, we could see a new rise in crude stockpiles of 2 million barrels. As a result, the oil market could be set to start a pullback down to previous support – $ 85.80 could represent a level that would attract more bulls, eventually. Regarding OPEC+ output, Saudi Arabia could decide to add barrels on top of its quota, as the kingdom is one of the only members of the cartel able to ramp up production, if necessary. On the US dollar side, the recent rally of the greenback has propelled the dollar index (DXY) towards higher levels, even though it has not had a huge impact on crude oil. The overall inverted/negative correlation between the USD and black gold could catch up now as we have a greenback sliding after less hawkish comments from the Fed than expected and a barrel located in overbought territory. On the geopolitical scene, the slight ease of tensions from the past week – or, at least, the diminution of anxiety inducing news in the mainstream media headlines – is characterized by decreasing volatility. The latter is thus marked by a volatility index (VIX) – aka “Fear Index” sliding just below 25 today. WTI Crude Oil (CLH22) Futures (March contract, daily chart) Brent Crude Oil (BRNJ22) Futures (April contract, daily chart) RBOB Gasoline (RBH22) Futures (March contract, daily chart) In summary, after such a rally in January 2022 on crude oil prices, we may start to see a weakening of the momentum, which could result in correcting oil prices, if such a scenario of supply and demand dynamics is followed on both sides (input rise / stockpiles accumulation) of the market. Like what you’ve read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Oil Trading Alerts as well as our other Alerts. Sign up for the free newsletter today! Thank you. Sebastien BischeriOil & Gas Trading Strategist * * * * * The information above represents analyses and opinions of Sebastien Bischeri, & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Sebastien Bischeri and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Bischeri is not a Registered Securities Advisor. By reading Sebastien Bischeri’s reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Sebastien Bischeri, Sunshine Profits' employees, affiliates as well as their family members may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

By InvestMacro | COT | Data Tables | COT Leaders | Downloads | COT Newsletter Here are the latest charts and statistics for the Commitment of Traders (COT) data published by the Commodities Futures Trading Commission (CFTC). The latest COT data is updated through Tuesday February 22nd and shows a quick view of how large traders (for-profit speculators and commercial entities) were positioned in the futures markets. Highlighting the COT energy data is the continued decline in the WTI Crude Oil futures bets. The speculative net position in the WTI Crude Oil futures has decreased for five consecutive weeks and in thirteen out of the past fifteen weeks. The spec crude position has dropped by a total of -82,271 contracts over the past fifteen weeks and speculators have now pushed their current net positioning to the lowest level of the past seven weeks. These declines in speculator sentiment has brought the current speculator strength score level into a bearish-extreme standing of just 2.4 percent where the strength score measures the current speculator standing compared to past three years where above 80 is bullish-extreme and below 20 is bearish-extreme. Despite the speculator weakness, crude oil prices have shot up on the Russian invasion of Ukraine with WTI crude touching slightly above $100 per barrel late this week. Joining WTI Crude Oil (-9,052 contracts) with falling speculator bets this week were Brent Crude Oil (-30 contracts) and Heating Oil (-9,228 contracts) while Natural Gas (795 contracts), Gasoline (991 contracts) and the Bloomberg Commodity Index (4,874 contracts) saw higher speculator positions on the week. Data Snapshot of Commodity Market Traders | Columns Legend Feb-22-2022 OI OI-Index Spec-Net Spec-Index Com-Net COM-Index Smalls-Net Smalls-Index WTI Crude 2,058,132 29 339,041 2 -382,891 90 43,850 77 Gold 611,488 49 243,148 65 -269,722 35 26,574 40 Silver 163,745 29 30,302 53 -43,720 56 13,418 21 Copper 204,123 29 25,575 61 -34,754 36 9,179 78 Palladium 7,903 7 -1,429 13 1,118 83 311 63 Platinum 62,274 26 17,540 27 -22,887 76 5,347 37 Natural Gas 1,107,113 2 -130,629 39 95,974 61 34,655 67 Brent 215,908 52 -26,355 73 24,478 31 1,877 35 Heating Oil 349,618 31 6,455 52 -32,434 37 25,979 88 Soybeans 826,824 51 226,464 86 -196,755 20 -29,709 21 Corn 1,563,758 32 451,742 88 -410,962 13 -40,780 20 Coffee 252,688 24 67,791 98 -72,509 3 4,718 21 Sugar 857,376 8 75,246 52 -95,306 50 20,060 33 Wheat 379,308 23 -3,902 44 10,629 51 -6,727 69   WTI Crude Oil Futures: The WTI Crude Oil Futures large speculator standing this week came in at a net position of 339,041 contracts in the data reported through Tuesday. This was a weekly lowering of -9,052 contracts from the previous week which had a total of 348,093 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 2.4 percent. The commercials are Bullish-Extreme with a score of 89.9 percent and the small traders (not shown in chart) are Bullish with a score of 76.8 percent. WTI Crude Oil Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 21.5 36.1 4.9 – Percent of Open Interest Shorts: 5.0 54.7 2.8 – Net Position: 339,041 -382,891 43,850 – Gross Longs: 442,102 743,113 100,987 – Gross Shorts: 103,061 1,126,004 57,137 – Long to Short Ratio: 4.3 to 1 0.7 to 1 1.8 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 2.4 89.9 76.8 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bullish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -8.4 5.6 10.5   Brent Crude Oil Futures: The Brent Crude Oil Futures large speculator standing this week came in at a net position of -26,355 contracts in the data reported through Tuesday. This was a weekly reduction of -30 contracts from the previous week which had a total of -26,325 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 72.5 percent. The commercials are Bearish with a score of 30.6 percent and the small traders (not shown in chart) are Bearish with a score of 34.6 percent. Brent Crude Oil Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 17.3 46.9 4.2 – Percent of Open Interest Shorts: 29.5 35.6 3.4 – Net Position: -26,355 24,478 1,877 – Gross Longs: 37,283 101,361 9,173 – Gross Shorts: 63,638 76,883 7,296 – Long to Short Ratio: 0.6 to 1 1.3 to 1 1.3 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 72.5 30.6 34.6 – Strength Index Reading (3 Year Range): Bullish Bearish Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -17.6 19.9 -23.2   Natural Gas Futures: The Natural Gas Futures large speculator standing this week came in at a net position of -130,629 contracts in the data reported through Tuesday. This was a weekly boost of 795 contracts from the previous week which had a total of -131,424 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 39.4 percent. The commercials are Bullish with a score of 61.1 percent and the small traders (not shown in chart) are Bullish with a score of 66.7 percent. Natural Gas Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 21.9 43.8 5.4 – Percent of Open Interest Shorts: 33.6 35.1 2.3 – Net Position: -130,629 95,974 34,655 – Gross Longs: 241,913 484,856 60,026 – Gross Shorts: 372,542 388,882 25,371 – Long to Short Ratio: 0.6 to 1 1.2 to 1 2.4 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 39.4 61.1 66.7 – Strength Index Reading (3 Year Range): Bearish Bullish Bullish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -2.4 0.3 18.3   Gasoline Blendstock Futures: The Gasoline Blendstock Futures large speculator standing this week came in at a net position of 63,587 contracts in the data reported through Tuesday. This was a weekly gain of 991 contracts from the previous week which had a total of 62,596 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 34.8 percent. The commercials are Bullish with a score of 62.3 percent and the small traders (not shown in chart) are Bullish with a score of 78.0 percent. Nasdaq Mini Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 27.3 50.1 6.1 – Percent of Open Interest Shorts: 11.0 69.3 3.3 – Net Position: 63,587 -74,709 11,122 – Gross Longs: 106,356 194,978 23,947 – Gross Shorts: 42,769 269,687 12,825 – Long to Short Ratio: 2.5 to 1 0.7 to 1 1.9 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 34.8 62.3 78.0 – Strength Index Reading (3 Year Range): Bearish Bullish Bullish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 4.2 -9.2 30.3   #2 Heating Oil NY-Harbor Futures: The #2 Heating Oil NY-Harbor Futures large speculator standing this week came in at a net position of 6,455 contracts in the data reported through Tuesday. This was a weekly fall of -9,228 contracts from the previous week which had a total of 15,683 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 51.9 percent. The commercials are Bearish with a score of 36.7 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 88.4 percent. Heating Oil Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 17.0 50.8 14.4 – Percent of Open Interest Shorts: 15.1 60.1 6.9 – Net Position: 6,455 -32,434 25,979 – Gross Longs: 59,340 177,626 50,210 – Gross Shorts: 52,885 210,060 24,231 – Long to Short Ratio: 1.1 to 1 0.8 to 1 2.1 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 51.9 36.7 88.4 – Strength Index Reading (3 Year Range): Bullish Bearish Bullish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 4.2 -10.3 23.6   Bloomberg Commodity Index Futures: The Bloomberg Commodity Index Futures large speculator standing this week came in at a net position of -12,167 contracts in the data reported through Tuesday. This was a weekly lift of 4,874 contracts from the previous week which had a total of -17,041 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 60.9 percent. The commercials are Bearish with a score of 37.4 percent and the small traders (not shown in chart) are Bearish with a score of 44.3 percent. Bloomberg Index Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 65.4 29.1 1.9 – Percent of Open Interest Shorts: 94.6 1.5 0.2 – Net Position: -12,167 11,468 699 – Gross Longs: 27,191 12,091 770 – Gross Shorts: 39,358 623 71 – Long to Short Ratio: 0.7 to 1 19.4 to 1 10.8 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 60.9 37.4 44.3 – Strength Index Reading (3 Year Range): Bullish Bearish Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 36.1 -36.8 5.0   Article By InvestMacro – Receive our weekly COT Reports by Email *COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) were positioned in the futures markets. The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators) as well as their open interest (contracts open in the market at time of reporting).See CFTC criteria here.

The Russian invasion of Ukraine has produced a climate of anxiety around global supply disruptions. Don’t expect it to abate just yet. After witnessing crude oil prices slipping on Friday (Feb. 25) – as some major players sold off their positions before the weekend, which was still marked by a context of uncertainty regarding the evolution of the current Ukraine-Russia conflict – lots of concerns remain over potential global supply disruptions from a strengtening set of sanctions on major crude exporting country Russia. The sanction that is likely to impact the Russian bear the most in the long term was taken by Taiwan in the weekend (under rising pressure from the West) to block the sales of electronic microchips to the Russian Federation. OPEC+ will meet this Wednesday (Mar. 2) during a surge in the two black gold benchmarks, with little hope, however, that their action will dissipate the feverishness of the energy markets. British oil giant BP’s shares fell by nearly 7% this morning on the London Stock Exchange, the day after the announcement of its divestiture from the Russian giant Rosneft, in which it held a 19.75% stake. Technically, the sturdiest support seems to be located around the $93.36-95.01 area for Brent and around the $89.54-90.45 area for the West Texas Intermediate (WTI), as we recently saw some bulls entering long trades around those levels. We could see prices rebounding onto these support zones one more time as volatility stays high. Figure 1 - VIX "Fear Index" The VIX (aka “Fear Index”) – currently trading around 30 – could spike again depending on how the situation progresses. Regarding risk management, it is always best to define your strategy according to your own risk profile. For some guidance on trade management, please read this article on how to secure profits. Like what you’ve read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Oil Trading Alerts as well as our other Alerts. Sign up for the free newsletter today! Thank you. Sebastien BischeriOil & Gas Trading Strategist * * * * * The information above represents analyses and opinions of Sebastien Bischeri, & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Sebastien Bischeri and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Bischeri is not a Registered Securities Advisor. By reading Sebastien Bischeri’s reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Sebastien Bischeri, Sunshine Profits' employees, affiliates as well as their family members may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

S&P 500 bulls again missed the opportunity, and credit markets likewise. Not even the virtual certainty of only 25bp hike in Mar is providing much relief to the credit markets. Given that the real economy is considerably slowing down and that recession looks arriving before Q2 ends, the markets continue forcing higher rates (reflecting inflation). In a risk-on environment, value and cyclicals such as financials would be reacting positively, but that‘s not the case right now. At the same time, equal weighted S&P 500 (that‘s RSP) hasn‘t yet broken below its horizontal support above $145, meaning its posture isn‘t as bad as in the S&P 500. Should it however give, we‘re going considerably below 4,000. That‘s why today‘s article is titled hanging by a thread. Precious metals and commodities continue consolidating, and the least volatile appreciation opportunity presents the red metal. And it‘s not only about copper – crude oil market is going through supply realignment, and demand is not yet being destroyed on a massive scale. Coupled with the long-term underinvestment in exploration and drilling (US is no longer such a key producer as was the case in 2019), crude oil prices would continue rising on fundamentals, meaning the appreciation pace of Feb-Mar would slow down. Precious metals would have it easy next as the Fed is bound to be forced to make a U-turn in this very short tightening cycle (they didn‘t get far at all, and inflation expectations have in my view become unanchored already). Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 bears won the day, and Nasdaq remains in a sorry state. 4,160s are the line in the sand, breaking which would accelerate the downswing. Inflation is cutting into the earnings, and stocks aren‘t going to like the coming Fed‘s message. Credit Markets HYG didn‘t keep at least stable – the pressure in the credit markets is ongoing, and the stock market bulls don‘t have much to rejoice over here. Gold, Silver and Miners Precious metals downswings are being bought, and are shallow. The sellers are running out of steam, and the opportunity to go somewhat higher next, is approaching. Crude Oil Crude oil is stabilizing, but it may take some time before the upswing continues with renewed vigor. As for modest extension of gains, we won‘t be disappointed. Copper Copper had one more day of fake weakness, but the lost gains of Friday would be made up for next – and given no speculative fever here to speak of, it would have as good lasting power as precious metals. Bitcoin and Ethereum Cryptos remain undecided, but indicate a little breathing room, at least for today. Still, I wouldn‘t call it as risk-on constellation throughout the markets. Summary S&P 500 is getting in a precarious position, but the internals aren‘t (yet) a screaming sell. Credit markets continue leading lower, and the risk-off positioning is impossible to miss. Not even financials are able to take the cue, and rise. It‘s that the rise in yields mirrors the ingrained inflation, and just how entrenched it‘s becoming. No surprise if you were listening to me one year ago – the Fed‘s manouevering room got progressively smaller, and the table is set for the 2H 2022 inflation respite (think 5-6% year end on account of recessionary undercurrents) to be superseded with even higher inflation in 2023, because the Fed would be forced later this year to turn back to easing. Long live the precious metals and commodities super bulls! Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.

The week kicks off on a mixed note after the global equities recorded their best week since 2020. Hopes of a diplomatic progress and the Fed hawkishness were pointed as the major catalyzers of the positive move, while there is little to be optimistic about diplomacy in Ukraine, and a tighter monetary policy in the US. Meanwhile, the flattening, and inversion of the US yield curve hints at challenging times ahead. So, does it mean that investors are willing to go long no matter what? Maybe, but picking the right stocks will be more important than ever. For now, energy and commodity stocks, those who pay good dividend and food stocks are among investors’ darlings. Elsewhere, Bitcoin remains offered near the 100-DMA, gold is bid above the $1915 per ounce, and the week will be shaped by Ukrainian news, Covid evolution, British inflation and March flash PMI figures. Watch the full episode to find out more! 0:00 Intro 0:25 Market update 1:26 Is the end of the market crash? 3:10 EIA warns of rapid fall in Russian oil supply 4:22 Green energy stocks extend rally 5:36 Flattening, or inverting yield curve is a growing concern 6:48 What sectors are in demand as inflation rises? 8:19 The Week Ahead 9:15 Gold has potential to rebound 9:37 Bitcoin offered at 100-DMA Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020.

Current levels of oil and petroleum products are high. Given that, what can explain such a surprising drop in US crude inventories?Energy Market UpdatesCommercial crude oil reserves in the United States fell much more than expected in the week ended March 18, according to figures released on Wednesday by the US Energy Information Administration (EIA).US crude inventories have shrunk by more than 2.5 million barrels, which implies greater demand and is obviously another bullish factor for crude oil prices. Such a decline in inventories is particularly remarkable as the American strategic reserves have also recorded a significant drop. This is the 25th consecutive week of falling strategic reserves since the Biden administration started to make those adjustments in an attempt to relieve the market.(Source: Investing.com)WTI Crude Oil (CLK22) Futures (May contract, daily chart)Furthermore, some additional figures extracted from the same EIA report were released and surprised the markets.These are US Gasoline Reserves, which plunged by about 2.95 million barrels over a week, while the market was not even forecasting a two-million decline.(Source: Investing.com)Thus, US exports jumped by more than 30% compared to the previous week, not only due to large flows to Europe to replace Russian barrels, but also marked by a significant rebound in Asian demand.RBOB Gasoline (RBJ22) Futures (April contract, daily chart)Beware that a NATO summit, a G7 summit, and a European Union summit are being held on Thursday, when the various countries could set a new round of sanctions against Moscow.So, how will black gold progress from now on? Do you think that the on-going negotiations with Iran and Venezuela could flood the market with additional barrels? Let us know in the comments!That’s all folks for today. Happy trading!Like what you’ve read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Oil Trading Alerts as well as our other Alerts. Sign up for the free newsletter today!Thank you.Sebastien BischeriOil & Gas Trading Strategist* * * * *The information above represents analyses and opinions of Sebastien Bischeri, & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Sebastien Bischeri and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Bischeri is not a Registered Securities Advisor. By reading Sebastien Bischeri’s reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Sebastien Bischeri, Sunshine Profits' employees, affiliates as well as their family members may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

Coronavirus in China, fights in Ukraine, sanctions against Russia – what else could raise concerns about oil supply in an already tense market? An economic slowdown in China, which appears to have adopted a “zero-tolerance” epidemic policy, was weighing on oil prices as the country’s COVID case count rose. Lockdown that has locked 25 million people in their homes Finally, some restrictions in Shanghai are being eased in certain neighborhoods following growing dissatisfaction with the very strict lockdown that has locked 25 million people in their homes. That lockdown has caused food shortages and forced thousands of citizens into isolation in specialized centers, consequently causing a food delivery surge and staff shortages. Related article: ECB To Shock Markets In The Following Week!? US Dollar Rate Under Pressure As Well! 7 million barrels a day of Russian exports, supposed to be lost due to sanctions, could not be fully replaced In Ukraine, fears of fighting, which could intensify in the eastern region (around the Donbas), are also stirring the markets. Meanwhile, OPEC Secretary General HE Mohammad Sanusi Barkindo warned the European Union on Monday that the 7 million barrels a day of Russian exports, supposed to be lost due to sanctions, could not be fully replaced, reports the financial press. Such concerns may again raise fears about the supply of black gold in an already tight market. It was added that the current and future sanctions on Russia could create one of the worst oil supply shocks ever and it would be impossible to replace those volumes, as OPEC signaled it would not pump more. WTI Crude Oil (CLK22) Futures (May contract, daily chart) Henry Hub Natural Gas (NGK22) Futures (May contract, daily chart) Like what you’ve read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Oil Trading Alerts as well as our other Alerts. Sign up for the free newsletter today! Thank you. Sebastien BischeriOil & Gas Trading Strategist * * * * * The information above represents analyses and opinions of Sebastien Bischeri, & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Sebastien Bischeri and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Bischeri is not a Registered Securities Advisor. By reading Sebastien Bischeri’s reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Sebastien Bischeri, Sunshine Profits' employees, affiliates as well as their family members may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

Oil soars on EU oil sanctions, Fed Crude prices surged after EU outlined plans on phasing Russian oil and following the FOMC decision that signaled Wall Street has passed peak hawkishness. The oil market will remain tight going forward and now that a peak in the dollar is in place crude prices should have extra support here.  The latest EIA crude oil inventory report posted a surprise build but energy traders fixated over the strategic petroleum reserves falling to the lowest levels in over two decades. US production remained steady at 11.9 million barrels a day, which suggests producers are not rushing to increase output as rig counts have steadily been rising.  The focus will shift to OPEC+ and that is likely to be an easy meeting that keeps the gradual increase output strategy in place.   Gold Gold prices are embracing the FOMC decision that suggests Wall Street has passed peak hawkishness.  Fed Chair Powell removed the risk of 75 basis point rate increase at the June meeting and suggested that hikes could come down to 25 basis points once inflation comes down.  Gold got its groove back as a firm top has been put in for the dollar. Even if inflation continues to run hot, investors will take comfort from Fed Chair Powell’s words and that should be good news for gold investors.  Gold may find tentative resistance at the USD 1900 level, but momentum traders might pounce if price action breaks through over the next day.  This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. TEST

Oil once again needs to confirm its uptrend   WTI remains within the upward trend formed in early May. However, be prepared for another test of this trend support at $71 and a possible move lower.   The current upward trend in oil has been shaped by signs that the economy continues to outperform expectations, showing resilience despite tighter financial conditions.   On the side of oil buyers, there was a wide range of factors, from increased demand for risky assets to signals from the US president's administration that the strategic fuel reserve would soon begin to be replenished.     Despite all that, in the middle of last week, the rise in the price of a barrel of WTI stalled in the territory above $74.20. The local peak almost coincided with the 50-day moving average. In early May, we have already seen how aggressively the bears defend this trend indicator.    Last Thursday's sell-off brought oil back to test support again, allowing only a slight retracement of the previous local highs.   Among the fundamentals, oil traders should consider the start of the US holiday season, which is already evident in the methodical decline in gasoline inventories over the past three weeks. In addition, commercial crude stocks have fallen by 12.4 million barrels. Crude oil stocks are now 8.4% higher than in the same week a year earlier, but they were above 16% in February. At the same time, an additional 1.6m barrels were sold from the strategic reserve.     Moreover, Friday's data from Baker Hughes showed a new fall in the number of drilling rigs in the USA: from 575 to 570 and Crude plus Gas count from 720 to 711. Thus, producers are still not interested in ramping up production. The answer to this indifference on the part of oil producers is most likely to be found in unfavourable financial conditions due to high-interest rates and the promotion of a green agenda.   Short-term, oil is under pressure from reports that Russia is successfully selling its diesel to Saudi Arabia, and the latter is exporting it to Europe. Meanwhile, offshore oil exports from Russia continue to rise. Saudi Arabia has also joined the IEA in noting that Russia has not cut production by 500,000 BPD, as promised earlier in the spring.   Local negative factors can send oil to a new test of trend support, which is now near $71. A fall below that would be significant evidence of a victory for the bears, potentially triggering a downside momentum towards $68 or even $65.   If oil gets another bout of downside support, it could be followed by a rally to $74.60-75.0.  

The Commodities Feed: Oil recovers on demand hopes Prospects of Chinese stimulus and an unchanged demand estimate from OPEC were supportive of oil prices yesterday with ICE Brent recovering to above US$74/bbl. For agriculture, CONAB has raised its corn and soybean production estimates for Brazil on favourable weather.   Energy – OPEC keeps supply demand estimates unchanged OPEC released its latest monthly oil market report yesterday, in which it left global oil demand growth projections unchanged at around 2.3MMbbls/d for 2023 with global oil demand pegged at 101.9MMbbls/d. However. OPEC highlighted the uncertainties to this outlook due to global economic developments and ongoing geopolitical tensions that could change the demand dynamics.   On the supply side, non-OPEC supply growth estimates for the year were left unchanged at 1.4MMbbls/d with global non-OPEC oil supply estimated to be around 67.2MMbbls/d. The group continues to see the requirement for OPEC crude at around 29.3MMbbls/d for 2023 compared to the actual output of 28.8MMbbls/d for the first quarter and 28.1MMbbls/d in May 2023. OPEC’s crude oil production dropped by 464Mbbls/d in May 2023 due to supply cuts from Saudi Arabia (-519Mbbls/d) and the UAE (-140Mbbls/d).     Meanwhile, the API reported that the US crude oil inventories increased by around 1MMbbls over the last week, in contrast to the average market expectations of the addition of around 0.3MMbbls. Cushing crude oil stocks are reported to have increased by 1.5MMbbls. On the products side, API reported that gasoline and distillates inventories rose by 2.1MMbbls and 1.4MMbbls respectively, over the week ending 9 June. The more widely followed EIA report will be released later today.     The latest market reports suggest that the US could purchase around 12MMbbls of crude oil for its State Petroleum Reserves as soft crude oil prices provide comfort on the supply side. The abovementioned figure includes the 3MMbbls of crude oil that is scheduled for delivery in August and another 3MMbbls/d of purchase that the US approved last week. SPR witnessed a withdrawal of around 180MMbbls last year (pushing total SPR inventory to a 40-year low of 354MMbbls currently) due to crude oil supply shortages after the Russia-Ukraine war and these purchases are aimed to refill the inventory.

Yen in focus as it falls to multiyear lows   After 6 days of declines, European markets managed to break their recent losing streak yesterday, closing marginally higher after a day when the direction could have gone either way. The catalyst for the recovery off the day's lows was a strong US session which was driven by two sets of strong US economic numbers. US consumer confidence for June hit its highest levels in 17 months, while new home sales jumped by 12.2%, the highest number in over a year. If the US economy is starting to struggle then there is little evidence of that in yesterday's numbers, which in turn helped drive a strong finish for US markets, led by the Nasdaq 100.     Yesterday's resilience came in spite of another slide in crude oil prices, which have continued to suffer under the weight of concerns about a slowing global economy and a drop in demand over the second half of the year. The increased stridency of hawkish central bank rhetoric coming out of Sintra in Portugal at the ECB central bank conference, when it comes to future rate hikes is helping to drive yields higher, yet stock markets appear unfazed.     Yesterday we heard from several ECB governing council members, including President Christine Lagarde pushing back against the idea of rate cuts in 2024, as well as signalling a commitment to another rate hike at the July meeting. This seems set in stone now, although this week's June flash CPI number might cast some doubts as to whether the rate hikes might continue beyond July. Today's speaker slate at Sintra could well create more headlines with the likes of Bank of England Governor Andrew Bailey, Bank of Japan governor Kazuo Ueda, Fed chair Jay Powell and Christine Lagarde speaking on a panel discussing monetary policy.     Of particular interest will be any comments from Governor Ueda given the declinesseen in the Japanese yen over the past few days, seeing it sink to 15-year lows against the euro, as well as 8-year lows against the pound, and record lows against the Swiss franc in the last 24 hours. We've already heard from Japanese Finance Minister Suzuki in the last couple of days warning that excessive movements in the yen might prompt an appropriate response. While yen traders are focussing on the 145.00 area against the US dollar it can't have escaped their attention that their currency is getting hit even harder away from the spotlight of the greenback. If a response is coming it could well come soon.     Staying with currencies the Australian dollar plunged overnight after headline CPI slowed sharply on May from 6.8% to 5.6%, well below forecasts of 6.1%, and with the RBA meeting next week this slowdown could prompt the central bank to re-pause the pace of the current rate hiking cycle.   After the European close we also get the latest results from the US bank stress tests, which couldn't be more timely given recent events in March, however they aren't likely to offer much insight into what took place, as the US regional banks were not covered under the various scenarios, as they were considered too small and not systemically important enough. This was a major oversight, as recent experience in Europe has taught us, and particularly in Spain over 10 years ago, where a large cohort of Spanish Cajas nearly brought the economy to its knees and resulted in a banking bailout. Just because a bank is small doesn't mean it won't cause a financial meltdown if its troubles spread. The tests also had a rather big flaw in them in that they didn't factor a sharp rise in interest rates into any of the scenarios, the very scenario that started the dominos tumbling with the collapse of SVB.     EUR/USD – holding above the 50-day SMA and support at the 1.0870/80 area. We have resistance back at last week's high just above the 1.1000 level, with the main resistance at the April highs at 1.1095. Below 1.0850 signals a move towards 1.0780.     GBP/USD – a positive session yesterday holding above the lows of last week, and support at the 1.2680/90 area. Below 1.2670 could see a move towards the 50-day SMA. Still on course for a move towards the 1.3000 area but needs to clear 1.2850.      EUR/GBP – appears to be building up to move higher but needs to move through the 0.8630/40 area. The main support is at last week's low at the 0.8515/20 area. A move through 0.8640 could see a move towards 0.8680. While below the 0.8630 area the bias remains for a return to the recent lows.     USD/JPY – continues to edge higher towards the 145.00 area. We have support at the 142.50 area, which was the 61.8% retracement of the 151.95/127.20 down move. A fall below this support area could see a deeper fall towards 140.20/30.      FTSE100 is expected to open 19 points higher at 7,480     DAX is expected to open 45 points higher at 15,892     CAC40 is expected to open 25 points higher at 7,240       By Michael Hewson (Chief Market Analyst at CMC Markets UK)  

Strong data and soft inflation boost appetite US stocks shrugged off the early week pessimism on the back as of a set of strong economic data released yesterday.   The durable goods orders rose – along with strong jobs data, this is a sign that the US businesses are not in cash-saving mode, Richmond manufacturing index fell less than expected, house prices recovered and house sales beat expectations – in line with the rest of the strong data from US housing market over the past few weeks. US consumer confidence jumped more than expected in June, to the highest level since the beginning of last year.     We would've normally expected sentiment to be dampened by strong data because of more hawkish Federal Reserve (Fed) expectations, but the S&P500 jumped more than 1%, Nasdaq rallied almost 2%, while the Russell 2000 advanced around 1.5%.      Easing inflation is maybe why stock investors are happy with strong data The Australian inflation fell to a 13-month low, and the Canadian inflation fell more than expected, in a sign that the central bank efforts to pull prices lower is paying off. The AUDUSD was sharply sold below its 50-DMA which stands near the 0.6680 level, while the USDCAD rebounded off a fresh low since September on the back of soft inflation and a 2% fall in crude oil prices.   Across the Atlantic Ocean, some encouraging news came in regarding inflation, as well. The British shop prices dipped to 8.4% this month, down from 9% recorded in May. That was the sharpest decline in prices since the end of 2021 – when prices took a lift, and it was not thanks to the Bank if England (BoE) hikes, but it was because Tesco, Sainsbury's, Asda and Morrisons were asked to 'behave' in their pricing to prevent them from passing the higher costs, and higher wages on to their clients more than necessary. So, it is possible that Jeremy Hunt rolling up his sleeves would be more effective to bring inflation down than any BoE hike at this stage.   The good news for the Brits is that, Rishi Sunak and Jeremy Hunt have all the motivation in the world to bring inflation down if they don't want to be minced at next year's election. The bad news is that, if they don't achieve fast results, they will still be minced because the BoE will continue hiking rates and that will leave millions of households facing an enormous rise in their housing costs.   And the Bank for International Settlements, known as the central bank of the central banks, warned that the final stretch of the monetary tightening will likely be the toughest, with some 'surprises' on the way. Another banking crisis, real estate chaos, a financial crisis? We will see. Today, the Fed will reveal the result of its stress test for the banks. If they see no issue, they will keep pushing, until something breaks.     By Ipek Ozkardeskaya, Senior Analyst | Swissquote Bank

EIA Crude Oil Inventory Report expected at 11am EST. **Note API reported 4.4million draw last night. Fed’s rate path remains key for gold traders Bitcoin momentum capped on rising expectations BlackRock will get a US Bitcoin ETF approved Oil  Crude prices got a boost after the API report showed stockpiles declined by 4.4 million barrels per day. Energy traders are watching a tug-of-war between bullish bets that stem from expectations that OPEC+ will keep this market tight and as global recession fears grow.  Oil will struggle here if global economies continue to drag here. It seems the news flow is steadily turning to sluggish economic growth and that is bad news for the crude demand outlook. If the next week of economic data suggests the US economy is quickly slowing down, that might trigger a weaker dollar but also calls for a much weaker consumer.   WTI crude looks like it might be stuck in a range a little longer until inventory trends become a little bit clearer.       Gold Gold prices are wavering as global central bank tightening is dragging down stocks.  Gold is starting to see some safe-haven flows despite a global bond market selloff as investors start to plan for medium term dollar weakness.  Gold looks like it might be able to stabilize above the $1900 level even if Wall Street starts to think that the September FOMC will be a live meeting.  Bearish dollar views are growing and that should become stronger once we next week’s inflation report.      Bitcoin  Bitcoin hovers around the $31,000 level as optimism grows that BlackRock will get their Bitcoin ETF done.  BlackRock CEO Larry Fink told Fox Business that “We do believe that if we can create more tokenization of assets and securities – that’s what bitcoin is – it could revolutionize finance.”  This is a major pivot from Fink and provides optimism that other crypto skeptics could change their tune in the near future.   Bitcoin appears to be facing some price barriers ahead of the $32,000 level.  Bitcoin’s performance is gaining attention given some of the weakness that is emerging with global equities.  For the Bitcoin rally to continue, we will need to get a confirmation that the SEC will grant permission for a spot-Bitcoin ETF in the US. Bitcoin remains stuck in a range again, trading between $28,000 and $31,500.       

The Commodities Feed: Supply tightness could support copper Codelco has lowered its copper production guidance for the year due to production disruptions that could tighten the market. Meanwhile, copper inventories at LME and SHFE remain low.   Energy: EU gas inventory continues to increase at a stable pace Crude oil prices continued positive momentum on Friday and ended the week on a high note with ICE Brent rising to around US$85/bbl while NYMEX WTI also strengthened to US$80.6/bbl. Market expectations of an extension of the supply cut by Saudi Arabia remain supportive of oil prices in the immediate term. The price discount for Western Canada Select (WCS) crude oil over the WTI increased to around US$15.3/bbl last week as an unplanned outage and advanced maintenance schedule at BP’s Whiting refinery fuelled pessimistic sentiment. BP had to shut the 100Mbbls/d cat feed hydrotreater plant on Friday, which could push the maintenance schedule for the refinery from September to August. The 435Mbbls/d Whiting refinery is one of the major refiners of Canadian crude and early maintenance at the plant could result in lower demand for Canadian crude in the short term. Higher discounts also reflect the additional cost of transportation as the crude travels further for refining. TTF gas prices retreated to below €26/MWh on Friday after increasing to €32.6/MWh earlier in the week. The supply side remains healthy, as reflected by inflows of gas into storage tanks. The EU gas inventory increased by another 22.6TWh over the week, taking the gas storage to 85.4% full as of 29 July. European gas storage currently is comfortably above the five-year average of around 70% for this point in the season. The gas injection has been consistent at around 20-23TWh per week for the last two months and at this rate, European gas storage could reach near-full capacity by the end of September 2023. Meanwhile, the discount of European gas prices compared to Asian LNG prices increased to an average of around US$2.1/MMBtu in July compared to an average of around US$0.3/MMBtu in June 2023. The higher discount in the European gas market could help divert more LNG cargoes towards Asia and reduce the supply glut in the European market.    

European markets set to open lower after US rating downgrade     We saw a negative start to August for European markets with the DAX leading the way lower, having only put in a new record high the day before, after poor manufacturing PMIs and disappointing earnings prompted profit taking.   Yesterday's weakness appears to have been prompted by concern that the economy is a little bit weaker than perhaps people would like, raising concern for earnings growth heading into the second half of the year. US markets also finished the day lower, although closing well off the lows of the day with the Dow managing to eke out a gain. US yields also finished the day higher, on the rising realisation that rates may well have to stay at current levels for quite a while yet.     This profit taking has continued overnight after Fitch downgraded the US credit rating to AA+ from AAA, while simultaneously boosting demand for haven assets, with Asia markets falling sharply, and which looks set to translate into a sharply lower European open.   The increase in crude oil prices over the past 4 weeks is also raising concern that the falls in input prices that we've seen over the last few months might start to hit a floor and start rising again. Yesterday we got another snapshot of the US labour market as US job openings (JOLTS) fell to their lowest levels since April 2021, although they are still well above the levels, they were pre-pandemic. The latest employment component in the July ISM manufacturing survey also slowed to its lowest level since July 2020.     Today we get the latest insight into private sector hiring with the ADP employment report for July which is unlikely to repeat the bumper 497k seen in the June numbers. We should also be prepared for a downward revision to that report with July expected to see a more moderate 190k, as we look towards Friday's more important non-farm payrolls numbers. While stocks slipped back yesterday the US dollar rose to a 3-week high, gaining ground across the board on the grounds of the broader resilience of the US economy.     EUR/USD – still finding support at the 1.0940 lows from last week with further support at the 50-day SMA as well as the 1.0850 area. Resistance currently at last week's high at 1.1150.     GBP/USD – has continued to slide lower towards trend line support from the March lows at 1.2710, and the 50-day SMA at 1.2700. While above this key support the uptrend from the March lows remains intact. Resistance at the 1.3000 area.         EUR/GBP – popped briefly above the resistance at the 0.8600 area, before slipping back again, with the risk of a return to the recent lows at 0.8500/10. We need to see a concerted move above 0.8620 to target the July highs at 0.8700/10.     USD/JPY – continues to move through the 142.00 area, with the next target at the previous peaks at 145.00. Support comes in at this week's lows at 140.70.     FTSE100 is expected to open 30 points lower at 7,636     DAX is expected to open 88 points lower at 16,152     CAC40 is expected to open 36 points lower at 7,370   By Michael Hewson (Chief Market Analyst at CMC Markets UK)  

European markets set to open lower after US rating downgrade     We saw a negative start to August for European markets with the DAX leading the way lower, having only put in a new record high the day before, after poor manufacturing PMIs and disappointing earnings prompted profit taking.   Yesterday's weakness appears to have been prompted by concern that the economy is a little bit weaker than perhaps people would like, raising concern for earnings growth heading into the second half of the year. US markets also finished the day lower, although closing well off the lows of the day with the Dow managing to eke out a gain. US yields also finished the day higher, on the rising realisation that rates may well have to stay at current levels for quite a while yet.     This profit taking has continued overnight after Fitch downgraded the US credit rating to AA+ from AAA, while simultaneously boosting demand for haven assets, with Asia markets falling sharply, and which looks set to translate into a sharply lower European open.   The increase in crude oil prices over the past 4 weeks is also raising concern that the falls in input prices that we've seen over the last few months might start to hit a floor and start rising again. Yesterday we got another snapshot of the US labour market as US job openings (JOLTS) fell to their lowest levels since April 2021, although they are still well above the levels, they were pre-pandemic. The latest employment component in the July ISM manufacturing survey also slowed to its lowest level since July 2020.     Today we get the latest insight into private sector hiring with the ADP employment report for July which is unlikely to repeat the bumper 497k seen in the June numbers. We should also be prepared for a downward revision to that report with July expected to see a more moderate 190k, as we look towards Friday's more important non-farm payrolls numbers. While stocks slipped back yesterday the US dollar rose to a 3-week high, gaining ground across the board on the grounds of the broader resilience of the US economy.     EUR/USD – still finding support at the 1.0940 lows from last week with further support at the 50-day SMA as well as the 1.0850 area. Resistance currently at last week's high at 1.1150.     GBP/USD – has continued to slide lower towards trend line support from the March lows at 1.2710, and the 50-day SMA at 1.2700. While above this key support the uptrend from the March lows remains intact. Resistance at the 1.3000 area.         EUR/GBP – popped briefly above the resistance at the 0.8600 area, before slipping back again, with the risk of a return to the recent lows at 0.8500/10. We need to see a concerted move above 0.8620 to target the July highs at 0.8700/10.     USD/JPY – continues to move through the 142.00 area, with the next target at the previous peaks at 145.00. Support comes in at this week's lows at 140.70.     FTSE100 is expected to open 30 points lower at 7,636     DAX is expected to open 88 points lower at 16,152     CAC40 is expected to open 36 points lower at 7,370   By Michael Hewson (Chief Market Analyst at CMC Markets UK)  

Canadian Dollar Experiences Biggest Intra-day Gain Since End of July. The Canadian dollar has been experiencing a steady weakening against the US dollar since mid-July. The ongoing bullish uptrend of USD/CAD is meeting resistance as foreign exchange traders speculate on the possibility of the Fed and BOC being close to completing their tightening cycles with one more rate hike. Major resistance at the 1.36 level could hold, potentially leading to a pullback targeting the 1.3454 level, the current 200-day SMA. The upcoming week might bring a hawkish stance from Fed Chair Powell, which could revive the king dollar trade. Oil Market Rally Fizzles Amid Strong Dollar Trade and Rising Real Yields Crude oil prices initially rallied in the morning, driven by expectations of a tight oil market due to current backwardation trends. However, the surge in real yields and a potential strong dollar resurgence after Jackson Hole are contributing to the reversal of the oil price rally. While risks to crude demand are emerging, the oil market's tightness should provide some support.     Dollar supported as 10-year Treasury hits 4.34%, highest levels since financial crisis Oil market to remain tight, but so far offers little help for the loonie Loonie was having biggest intra-day gain since end of July   The Canadian dollar has been steadily weakening against the greenback since the middle of July.  The USD/CAD bullish uptrend appears to be facing some resistance as FX traders anticipate both the Fed and BOC are possibly one more rate hike away from being done with tightening. It appears that major resistance from the 1.36 level might hold, so if a pullback emerges, downside could target the 1.3454 level, which is currently the 200-day SMA.  If markets get a very hawkish Fed Chair Powell this week could see the return of the king dollar trade.   Oil The morning oil price rally is fizzling as the strong dollar trade might be back given the surge in real yields.  Crude prices were much higher in early trade on expectations that the oil market would remain tight given the current backwardation. Risks to the crude demand outlook are growing, especially after China disappointed with last night’s easing, but for now a tight market should keep oil supported. The biggest risk for energy traders is if we see a massive wave of dollar strength after Jackson Hole. Right now there are so many oil drivers and most support higher prices. Heating oil prices are elevated and that might continue.  Iran nuclear talks won’t be having any breakthroughs anytime soon. Gulf of Mexico oil production could be at risk as a few formations build on the Atlantic.     Gold Gold’s worst enemy is surging real yields.  It was supposed to be a quiet start to the week for gold with China coming to the rescue and some calm before Friday’s Jackson Hole speech by Fed Chair Powell.  There is a little bit of nervousness from the long-term bulls as gold futures are getting dangerously close to the $1900 level, which could trigger a wave of technical selling.  It seems gold needs some disorderly stress in financial markets for it to rally and that doesn’t seem like it is happening anytime soon. The outlook for the next few quarters is cloudy at best, but it seems that there is still too much strength in the economy that is dampening safe-haven flows for gold.  It doesn’t help that hedge funds are throwing in the towel for gold, which now has net-long positions at a five month low.        

The Commodities Feed: Russia to extend oil export curbs Crude oil prices have been trading firm this morning after Russia confirmed that it will extend export curbs, although the details are still not available. US natural gas inventory continue to increase at a strong pace providing some comfort to the market on natural gas supplies, even as uncertainty about Australian LNG continues.   Energy – Russian oil export cuts to continue ICE Brent prices traded firm yesterday and continued the gains this morning after Russia announced an extension of export curbs. Russia’s Deputy Prime Minister Alexander Novak said in a televised meeting that the country has agreed to extend the export curbs, although the details haven’t been provided yet. Russia made a voluntary cut to its oil exports of around 500Mbbls/d for August and 300Mbbls/d for September. Saudi is also likely to extend the voluntary production cuts of around 1MMbbls/d for October as demand concerns remain. China has issued an export quota of around 12m tonnes for clean refined products including gasoline, jet fuel and diesel in its third quota release for the year. China has so far issued an export quota of around 40m tonnes for clean products in 2023 compared to around 37.25m tonnes of export quota allocated for the full year 2022. Slow domestic demand and a ramp-up in refining capacity have been creating a surplus of products in the Chinese market and a higher quota is aimed at reducing this surplus. Finally, the Energy Information Administration in the US reported that natural gas inventory in the country increased by 32Bcf over the last week taking total inventory to 3,115Bcf as of 25 August. US inventory of natural gas is higher by around 484Bcf compared to year-ago levels and around 249Bcf higher than the five-year average for this point in the season. Higher gas stocks in the US and Europe provide some comfort to the gas market when a short-term supply disruption from Australia cannot be ruled out. The uncertainty over the Australian gas supply from two LNG plants (Gorgon and Wheatstone) continues, with workers rejecting the latest pay package from the company with negotiations set to resume. Without an agreement in place, workers could initiate industrial action from 7 September.

A busy week ahead By Ipek Ozkardeskaya, Senior Analyst | Swissquote Bank   The S&P500 ended last week on a meagre positive note, as the selloff in Apple shares slowed. Apple will be unveiling the new iPhone15 after the Chinese storm. Last week's selloff was certainly exaggerated. Once the Chinese dust settles, Apple's performance will continue to depend on the overall sentiment regarding the tech stocks, which will in return, depend on the Federal Reserve (Fed) expectations, the rates, energy prices, Chinese property crisis, deflation risks, and how that mix affects the global price dynamics.   China announced this morning that consumer prices rose by 0.1% y-o-y in August, slower than 0.2% penciled in by analysts and after recording its first drop in over two years of 0.3% a month earlier. Core inflation, excluding food and energy prices, rose 0.8% y-o-y, at the same speed as in July, and remained at the fastest pace since January. The numbers remain alarmingly low, and the recent stimulus measures announced by the government did little to boost investors' appetite. The CSI 300 was thoroughly sold on the rallies following stimulus news. And the yuan continued trending lower against the US dollar.  The US dollar is under a decent selling pressure this morning, particularly against the yen, after comments from the Bank of Japan (BoJ) Governor Ueda were interpreted as being 'hawkish'. Ueda said that 'there may be sufficient information by the year-end to judge if wages will continue to rise', and that will help them decide whether they would end the super-loose monetary policy and step out of the negative rate territory. The remarks were disputably hawkish, to be honest, but given how negatively diverged the Japanese monetary policy is, any hint that the negative rates could end one day boosts hope. The 10-year JGB yield jumped 5bp to 70bp on the news, and the USDJPY fell to 146.30. The USDJPY has a limited upside potential as the Japanese officials have been crystal clear last week that a further selloff would be countered by direct intervention. But the pair has plenty of room to drop significantly, when the BoJ finally decides to jump and leave the negative rates behind.   This week, the US inflation numbers will give the dollar a fresh direction, and hopefully a softish one. The headline inflation is expected to tick higher from 3.2% to 3.6% in August, on the back of rising energy prices, while core inflation may have eased from 4.7% to 4.3%. 'We've gotten monetary policy in a very good place' said the NY Fed President Williams last week. Indeed, the Fed hiked the rates by more than 500bp and shed its balance sheet by $1 trillion, while keeping the GDP around 2%, as inflation eased significantly from the 9% peak last summer to around 3% this summer. But crude oil cheapened by more than 40% between last summer and this spring, and the prices are now up by nearly 30% since then. The Fed will likely hold fire when it meets this month, but nothing is less sure for the November meeting. This week's inflation data will be played in terms of November expectations.   For the European Central Bank (ECB), the base case scenario is a no rate hike at this week's monetary policy meeting, but the European policymakers could announce a 25bp hike despite the latest weakness in economic data. The EURUSD is slightly better bid this morning, expect consolidation and minor correction toward the 200-DMA, 1.0823, into the meeting. The ECB, unlike the Fed, is not worried about surprising the market, on one side or the other. A no rate hike – even if it's a hawkish pause - could push the EURUSD to below 1.0615, the major 38.2% Fibonacci retracement, into a medium term bearish trend whereas a 25bp hike should trigger a rally toward the 1.09 level.   On the corporate calendar, ARM will go public this week, in what is going to be this year's biggest IPO. The company is expected to price on the 13th of September with a price range of $47-51 per share, and will start trading on Nasdaq the following day. ARM is expected to be valued at around $52bn, roughly 20 times its last disclosed annual revenue on expectation that the chips needed to power the generative AI will make ARM a sunny to-go place. Hope it won't be stormy.  

Investors were not impressed by the iPhone 15 and Apple Watch Series 9 reveal, causing Apple's shares to drop 1.8% and affecting the Nasdaq 100, which fell 1.1%. Adobe's stock also declined by 4% ahead of its upcoming earnings report. Meanwhile, OPEC's forecast of a tight oil market led to crude oil prices surging to 10-month highs. OPEC anticipates a significant 3.3mb/d supply deficit in Q4, one of the largest in over a decade. CAD outperformed in the G-10, while EUR made gains following an ECB leak about potential inflation forecast increases. Today's focus is on the US CPI report.     US Equities: Investors were not impressed by the iPhone 15 and Apple Watch Series 9 unveiled on Tuesday, seeing the shares of Apple drop by 1.8%. The Apple decline weighed on the Nasdaq 100 which slid 1.1%. Adding to the selling was a 4% decline in Adobe ahead of reporting on Thursday. Another focus in the tech space was Oracle, which plummeted 13.5% on weak cloud sales. The S&P500 shed 0.6%. Fixed income: The curve flattened as the 2-year yield rose 3bps to 5.02% while the 10-year yield slid 1bp to 4.28%. The short end was under some pressure ahead of today’s CPI data while the long ends held firm and absorbed the USD35 billion 10-year auction and around USD20 billion corporate bond issuance well. China/HK Equities: The Hang Seng Index ended a lackluster session with a thin trading volume session, down 0.4%. Energy and pharmaceutical names weighed on the benchmark. The Hang Seng Tech Index shed 0.5% as gains in Xiaomi and EV makers were offset by losses in Internet stocks. FX: Higher crude oil prices made CAD the G-10 outperformer with USDCAD down to 1.3550 from 1.3590 but EUR attempted to catch up in late NY/early Asian hours on ECB leak that inflation forecasts may be raised higher which are seen to be raising the prospect of a hike this week. EURUSD jumped higher to 1.0760 with EURGBP above the 0.86 hurdle as GBPUSD dipped below 1.25 on not-so-hawkish labor market. USDCNH sticking close to 7.30 and AUDUSD around 0.6425. Commodities: Crude oil prices rallied to fresh 10-month highs after OPEC forecast a significantly tight market. In its latest monthly outlook, the oil group said the market may experience a shortfall of 3.3mb/d in the fourth quarter of the year. This would make it one of the largest deficits in more than a decade. OPEC’s estimate was at odds with EIA’s predicted deficit of 230kb/d, and the IEA’s monthly report will be on watch today. Prices eased from the peaks as API reported a crude inventory build after four straight weekly draws although Cushing hub stockpiles declined, and official data will be reported today. Gold dropped below 200DMA as inflation concerns returned, bringing more fear of rate hikes and US CPI will be on watch today.    

The upswing in oil prices made CAD the G10 outperformer in yesterday’s session. USDCAD has room on the downside after the recent run higher but EUR and JPY have more to lose with oil prices rising which brings EURCAD into focus. Also, bets for an ECB rate hike have picked up after a recent Reuters report suggesting inflation forecasts may be adjusted higher, but boost to EUR could remain limited with stagflation concerns rising. CAD: Crude oil prices bring upside in Canadian dollar Crude oil prices extended its gains yesterday after the OPEC monthly report showed the oil market is going to be a lot tighter than initially thought. In its latest monthly outlook, the oil group said the market may experience a shortfall of 3.3mb/d in the fourth quarter of the year. This came in above expectations, and would make it one of the largest deficits in more than a decade. The oil market could get even tighter if the economic data starts to improve for China after a host of stimulus measures announced over the last several weeks. This has led to some analysts expecting $100 oil could be a possibility, despite scope for this artificially created tightness to soften from October when refinery demand for crude oil slows due to maintenance. Still, focus is likely to stay on crude oil for now as 10-month highs have been reached, and this is prompting a recovery in CAD. USDCAD retreated from last week’s highs of 1.3695 to test the short-term support at 0.236 retracement of 1.3553. The price of oil directly influences CAD as oil is one of Canada's major exports. Meanwhile, despite the central bank leaving its interest rate on hold at 5% at the last meeting, a stronger-than-expected jobs report on Friday has boosted the odds of another rate hike later in the year. Headline job gains came in at +39.9k for August vs. expectations of +20k with wages also firmer than expected. While possibility of more rate hikes may be low given Q2 GDP growth was negative, the wage pressures may also prevent the BOC from turning outright dovish anytime soon. This could open up the room for a recovery in CAD after the recent weakness, both from aa run higher in oil prices. Canadian economy also could benefit due to the resilience of the US economy. Meanwhile, USDCAD has rallied from lows of 1.3093 in mid-July to 1.3695 last week so correction may be due. However, worth noting that higher oil prices could also bump up the US inflation outlook once again while strengthening the economic outlook as US is also a net energy exporter. This could mean that King Dollar could continue to reign, and that could restrain oil for now. EUR and JPY could come under pressure with the increase in oil prices for being primarily energy importers.   Market Takeaway: USDCAD has room to retrace recent gains if oil prices continue to surge, but US CPI today could be key. EURCAD may be a more direct oil play as Canada benefits with higher oil prices while Europe stands to lose.  

 Following on from weakness in the US and Europe, stocks in Asia fell across the board as oil prices extended gains ahead of today’s key US inflation report. The weakness in US stocks was led by technology companies with Apple dropping almost 2%. The potentially tightest oil market in a decade lifted oil prices while raising fresh inflation concerns saw the 2-year Treasury yield back above 5%, while the dollar traded mixed against its G10 peers after seeing broad gains on Tuesday. US CPI the focus today given the current 50/50 split on whether the FOMC will hike rates one more time.   Equities: Nasdaq 100 futures are sliding further this morning to the 15,478 level as Apple’s iPhone event last night failed to muster any excitement, which means that the market is now in a wait-and-see mode ahead of today’s US inflation report. Energy stocks continue to be in focus given the rally in Brent crude on estimated oil supply shortfall due to Saudi Arabia’s oil production cuts. FX: Higher crude oil prices made CAD the G-10 outperformer with USDCAD down to 1.3550 from 1.3590 but EUR attempted to catch up in late NY/early Asian hours on ECB leak that inflation forecasts may be raised higher which are seen to be raising the prospect of a hike this week. EURUSD jumped higher to 1.0770 with EURGBP above the 0.86 hurdle as GBPUSD dipped below 1.25 on not-so-hawkish labor market. USDCNH takes another leg lower below 7.29 but AUDUSD also dipped to 0.64 handle in Asia. Commodities: Saudi Arabia’s ‘stable market’ reason for cutting production rings increasingly hallow after OPEC in their monthly report said the market may experience a shortfall of 3.3m b/d in the fourth quarter. With the EIA meanwhile only predicting a 230k b/d shortfall, OPEC could find themselves being accused of trying to inflate prices to meet big spending plans among its members. IEA’s report will be on watch today ahead of the US CPI print and EIA’s weekly stock report which according to API’s figures may show a rise. Oil’s rally to a fresh 10-month high and the stronger dollar saw gold drop below 200DMA as inflation concerns returned, bringing more fear of rate hikes. Fixed income: European sovereign curves are likely to bear-flatten this morning after Reuters reported that the ECB expects inflation to remain above 3% next year and growth to be downgraded for this and next year. Despite the upcoming forecasts painting the perfect stagflation picture for the eurozone, policymakers will weigh their options carefully and tilt towards a hawkish pause rather than a hike. Yet, they might need to reinforce their message by ending reinvestments under the PEPP facility. That would buy them enough time to wait for rate hikes to feed through the economy instead of adding pressure to the German and Dutch recessions. The focus today is on the US CPI numbers and the 30-year US Treasury auction. Volatility: VIX traded 43 cents higher at 14.23, but more importantly the VIX futures traded 1.31 higher, up to 15.95, indicating there is some uncertainty about the upcoming US inflation report. Adobe, which is scheduled to release its earnings report later this week, closed lower yesterday. Options traders were divided on the stock, with the put/call ratio at 1, indicating that equal amounts of calls and puts were traded. This might suggest that there is no clear consensus on how the earnings report will be received.  Macro: ECB’s new 2024 inflation projection could be raised above 3% vs 3% in June, firming case for interest rate hike. ECB also to cut 2023 and 2024 economic growth projections to broadly in line with market expectations. UK labor report was mixed with headline earnings up 8.5% YoY in July vs. 8.2% expected. For more, read our latest Macro/FX Watch. In the news: Europe's high gas prices hit industrial output – full story on Reuters. Apple unveiled four new iPhone models with a muted reaction from investors in extended trading – full story in FT. Technical analysis: S&P 500 rejected at 4,540 resistance level, expect set back, support at 4,340.Nasdaq 100 rejected at 15,561 key resistance level. USDJPY uptrend eyeing 149-150. EURUSD downtrend, support at 1.0685, Expect short-term bounce to 1.08. Brent oil uptrend potential to 98.50 Macro events: UK Industrial Production (Jul) exp. -0.7% m/m vs 1.8% prior (0600 GMT), US CPI (Aug) exp. 0.6% m/m and 0.2% core vs 02% and 0.2% prior (1230 GMT), US 30-year T-bond auction ($20 billion) Commodities events:  IEA’s Oil Market Report (0900 GMT), EIA’s Weekly Crude and Fuel Stock Report (1430 GMT) Earnings events: Inditex F424 1H results, which have already reported with EPS at €0.81 vs est. €0.80 and a small positive revenue surprise.  

Meanwhile, tensions have been rising again in Japan following Vice Finance Minister for International Affairs Masato Kanda's verbal intervention. Kanda said "looking at underlying moves, speculative action or activity that cannot be explained by fundamentals can be observed" and "we won't rule out any options if speculative moves persist."   Japanese authorities take more stringent tone Furthermore, at a press conference after the Cabinet meeting on 8 September, Finance Minister Shunichi Suzuki said "the government is closely monitoring developments in the currency market with a heightened sense of urgency." The authorities in Japan are taking an increasingly stringent tone in their communication. With the dollar strengthening across the board and diplomatic events such as this weekend's G20 meeting underway, we think this suggests moves to improve the environment are making progress. In any case, we expect the remarks to discourage further yen selling to some extent. Meanwhile, BOJ board members Hajime Takata and Junko Nakagawa spoke this week. This means that five of the nine policy board members, starting with Deputy Governor Shinichi Uchida, have spoken following the monetary policy meeting in July. Overall, they all saw an upside risk to inflation, and a consensus seems to have formed that monetary policy should start to be normalized once a solid rise in wages has been confirmed. However, opinions differed on the conditions for lifting negative interest rates, and this does not seem to be specifically on the agenda, even though the prospect is on the horizon. Such statements did not prompt the foreign exchange market to expect the disparity between domestic and overseas monetary policy to narrow, and the yen has continued to sell. In addition, crude oil prices have been rising recently. We expect Japan's trade balance to worsen as the value of imports rises if prices remain at this level or rise further. We also see the risk of yen selling picking up steam in anticipation of such real demand.

US and European equity futures trade mixed following Tuesday's US technology stocks led weakness after consumer confidence dropped to a four-month low and the expectations index fell below a level that in the past has signaled an incoming recession. The S&P 500 dropped to a June low as the Fed’s higher for long message drove US 10-year yields to a fresh 16-year high while the Dollar index reached a fresh year-to-date high. Overnight equities in Hong Kong gained with those on the mainland cooling after sharp gains earlier as China reported improved industrial profits Crude oil prices remain elevated adding to inflation concerns while gold trades soft near $1900. The Saxo Quick Take is a short, distilled opinion on financial markets with references to key news and events. Equities: The relentless rise in long-end US Treasury yields saw selling accelerate across US stocks on Tuesday with the S&P 500 dropping 1.5% to hit the lowest level since June 7. Technology stocks, which led the rally earlier this year, has been challenged all month on concerns the Fed’s higher for longer message is starting to hurt consumer confidence. A message that was strengthened after the Consumer Expectations Index declined below 80, the level that historically signals a recession within the next year. The S&P 500 will be looking for support around 4,200, the 50% correction of the March to July rally and the 200-day moving average. FX: The DXY dollar index broke higher to fresh YTD highs, having taken out the 105.80 resistance, as long-end Treasury yields continued to rise. Data remained soft, helping keep the short-end yields capped but Fed member Kashkari, who is usually a dove, noted he puts a 40% probability on a scenario where Fed will have to raise rates significantly higher to beat inflation and a 60% probability of a soft landing. USDCAD rose to 1.3528 while GBPUSD slid below 1.2150 and next target at 1.20. EURUSD plunged further to lows of 1.0556 while USDJPY is hovering close to the 150-mark as verbal jawboning continues to have little effect. Commodities: Crude oil remains rangebound with tight market conditions, as seen through the highest premium for near-term barrels in more than a year, being offset by a stronger dollar and the general risk-off tone. API inventory data showed a crude build of 1.6m barrels vs expectations of a 1.7m drop. Gold trades below $1900 on continued dollar and yield strength with focus on $1885 support while China property market concerns sees copper traded near a four-month low. Meanwhile in agriculture, El Nino has been confirmed, and it could be a strong one, potentially impacting food inflation from rising risks of droughts in Southeast Asia, Australia and Brazil-Columbia. Fixed Income. The Federal Reserve’s higher-for-longer message reverberates through higher long-term US Treasury yields. Unless there is a sign that the job market is weakening significantly, or that the economy is slowing down quickly, long-term yields will continue to soar. With 10-year yields breaking above 4.5% and selling pressure continuing to mount through an increase in coupon supply, quantitative tightening and less foreign investors demand, it’s not unlikely to see yields to continue to rise towards 5% until something breaks. This week, our attention turns to US PCE numbers and Europe CPI data and US Treasury auctions. Yesterday’s 2-year notes auction received good demand while offering the highest auction yield for that tenor since 2006. Yet, our focus is on the belly of the yield curve with the Treasury selling 5- and 7-year notes today and tomorrow. If demand is poor, it might mean that the yield curve is poised to bear-steepen further. Overall, we continue to favour short-term maturities and quality. Volatility: The CBOE Volatility Index jumped 2 on Tuesday to close at 18.94%, a four-month high after the underlying SPX index lost 1.5% to settle at the lowest level since June Macro: US consumer confidence fell for a second consecutive month to 103.0 from 108.7 (upwardly revised from 106.1) and beneath the expected 105.5. Present Situation Index marginally rose to 147.1 (prev. 146.7), while the Expectations Index declined further to 73.7 (prev. 83.3), falling back below 80 - the level that historically signals a recession within the next year. Inflation expectations for the 12 months ahead were unchanged at 5.7% in September. New home sales in the US fell 8.7% to 675k from 739k (upwardly revised from 714k), shy of the consensus 700k. Fed's Kashkari has published an essay where he says there is a 60% chance of a soft landing with a 40% chance the Fed will have to hike 'significantly higher'. In the news: FTC Sues Amazon, Alleging Illegal Online-Marketplace Monopoly (WSJ), Foreign brands including Tesla to face scrutiny as part of EU probe into China car subsidies (FT), Senate leaders agree on a short-term spending bill, aiming to avert a shutdown, extending government funding until November 17, pending House approval (CNN). What ‘peak oil’ will mean for China (FT), Americans finally start to feel the sting from the Fed’s rate hikes (WSJ), Exclusive: German economic institutes forecast 0.6% GDP contraction this year – sources (Reuters) Technical analysis: S&P 500 downtrend support at 4,200. Nasdaq 100 support at 14,254. DAX downtrend support at 14,933. EURUSD downtrend support at 1.05. GBPUSD below support at 1.2175, oversold, next support 1.2012. USDJPY uptrend stretched but could reach 150. Gold bearish could drop to 1,870. Brent and WTI Crude oil resuming uptrend. US 10-year T-yields uptrend expect minor correction Macro events: US Durable Goods Orders (Aug) est –0.5% vs –5.2% prior (1230 GMT), Feds Kashkari Speaks on CNBC (1200 GMT), EIA’s Weekly Crude and Fuel Stock Report (1430 GMT)

The Commodities Feed: Positive economic sentiment helps to boost prices The Fed’s decision to keep interest rate hikes on pause for a second consecutive time has bolstered economic sentiment and supported commodity prices, including energy and metals. Fresh mine closures have provided additional support to zinc, with prices climbing to around US$2,600/t yesterday.   Energy – OPEC oil output held stable ICE Brent has been trading firm this morning on positive economic sentiment after the US Fed continued to pause interest rate hikes. The hawkish tone remains in the accompanying statement. Lower crude oil inventory in the US and Europe also continued to be supportive of crude oil prices. Preliminary OPEC production numbers for October suggest a broadly stable output as the modest increases across most of its African members offset the declines elsewhere. According to a Bloomberg survey, OPEC output increased by 50Mbbls/d MoM to 28.1MMbbls/d last month. Nigeria led the gains, with their production rising by 60Mbbls/d to 1.5MMbbls/d followed by Venezuela (+30Mbbls/d), Congo (+20Mbbls/d) and Gabon (+20Mbbls/d). The output additions were partially offset by declining production in Iraq (-40Mbbls/d), Iran (-30Mbbls/d), Kuwait (-20Mbbls/d) and Libya (-20Mbbls/d). The latest numbers from the EIA weekly inventory report show that US commercial crude oil inventories increased by 0.8MMbbls over the last week. Earlier, API reported an inventory build of 1.35MMbbls while the market expected a build of around 1MMbbls. Total crude oil inventory (excluding SPR) at around 421.9MMbbls remains about 5% below the five-year average at this point in the season. US crude oil production remained unchanged at 13.2MMbbls/d. As for refined products, gasoline stocks rose by 0.1MMbbls, while distillate stocks fell by 0.8MMbbls. US refinery utilization softened further to around 85.4% as refineries aim to complete maintenance activity before winter demand kicks in.

The Commodities Feed: Sentiment improves The dovish comments from the Federal Reserve helped to improve sentiment yesterday, with gold prices recovering back to around US$2,030/Oz. Crude oil prices also gained on OPEC and EIA reports, although demand concerns continue to linger.   Energy – OPEC expects a tighter oil market The oil market recovered moderately yesterday as positive sentiment in the broader financial market pushed up oil prices as well. The monthly report from OPEC was constructive, with estimates of a huge deficit for the current quarter and next quarter. However, the market remains cautious as economic concerns continue to cloud demand prospects.   In its latest Monthly Oil Market Report, OPEC estimated a tighter crude oil market for the fourth quarter of this year and 2024 as supply falls short of market demand if announced OPEC+ cuts are maintained. The OPEC revised down its non-OPEC crude oil production estimates by around 190Mbbls/d for the fourth quarter on lower output in the US and Asia. The requirement for OPEC crude is estimated at around 31.1MMbbls/d for the fourth quarter compared to around 27.9MMbbls/d of production in the quarter so far. For 2024, the organisation expects the requirement for OPEC crude to increase by around 0.8MMbbls/d to 29.9MMbbls/d.   Meanwhile, OPEC also reported that crude oil production by member countries dropped marginally by 57Mbbls/d in November to 27.8MMbbls/d. Iraq and Angola reported major production losses of 77Mbbls/d and 37Mbbls/d respectively whilst Venezuela, Libya and Kuwait increased supplies at a moderate pace. OPEC production has largely been flat at around 27.8-27.9MMbbls/d for the last three months. The weekly report from the EIA has also been positive for the oil market yesterday, with crude oil inventory in the US falling by 4.3MMbbls over the last week against market expectations of around 1.5MMbbls of inventory withdrawal. Crude oil input to refineries increased by 0.2MMbbls/d to around 16MMbbs/d that have helped to increase demand for crude oil. Exports of crude oil remain constrained, largely due to congestion in the Panama Canal, with net imports increasing by 0.3MMbbls/d to 2.2MMbbls/d. Among refined products, gasoline inventory increased by 0.4MMbbls to 224MMbbls while distillate inventory also increased by 1.5MMbbls to 113.5MMbbls.

National Bank of Romania review: Not in a dovish mood yet As expected, the National Bank of Romania (NBR) kept its policy unchanged at 7.00% for the time being, welcoming the lower-than-expected inflation at the end of 2023 but not coming out with dovish hints just yet. The NBR opted to stand pat again with its policy stance and did not provide much new to chew on in its press release either. The Bank’s statement on the inflation rate resuming its downward trajectory after the January 2024 acceleration “on a lower path than that shown in the November 2023 medium-term forecast” is a rather neutral statement since the well-behaved price pressures of year-end 2023 naturally pull down the entire profile ahead. Moreover, the NBR attributed the subsequent fall of inflation (after the tax hikes get incorporated by firms) to supply side factors primarily – namely disinflationary base effects and downward corrections in agri-food commodity prices and crude oil prices. What stood out was rather the Bank’s stronger tone on the fiscal stance needed to keep the pressures stemming from the budget deficit in check. The wording on uncertainties and risks was changed from ‘’notable’’ to ‘’significant’’. Moreover, with the 2024 budget out and further clarity on the expenditures ahead, the NBR mentioned the possibility of an even higher tax burden, a possibility that is also in our scenario.   All told, we expect the first dovish hints at the 13 February meeting, when a new inflation report will also be published. As discussed above, we also expect the Bank to lower its inflation profile. We also think that the dovish hints to come will be, at least partially, counterbalanced by the caution against the strong annual wage increases which are likely to persist this year. We foresee the first rate cut in May, although April is equally likely if firms choose a more cautious pricing strategy in early 2024.