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What’s the price level exit for the black gold? The new front month contract (as we switched now to Dec’21) for WTI Crude Oil futures closed the week at $82 per barrel on Friday (Oct. 15th). Fundamentally, nothing seems to be able to stop, in the short term, the surge in crude oil prices which continued to rise on Friday amid concerns over supply, since the WTI hit a new high in almost seven years. In addition, the slight decline of the US dollar may signify a more marked optimism of the markets in the perspectives of a gradual recovery of the global economy. OPEC+ remains stuck in its timetable for the gradual increase in production, thus tightening a market which suffers from insufficient supply. If a return in global demand appears to be faster than that of supply (as we are getting close to the winter season and its cooler temperatures), more shipping and other requirements are needed. WTI Crude Oil (CLZ21) Futures (December contract, daily chart) In summary, in times of uncertainty, we are wondering where the oil market is going to drive us with such directional moves. So far, it’s in the fast lane on the highway. However, the question now is: which exit is it going to take? $82? Or is it driving with a sufficiently full fuel tank in order to reach the psychological $100 exit? For now, let’s just enjoy the road and let us know what you think! 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 Bischeri Oil & 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.

  Have you ever tracked your progress during your oil and gas trading journey and seen such trades? Read on… and come aboard! In the previous edition published last week and updated on Monday, I projected the likelihood of a sturdy support level on the gas market – Henry Hub Natural Gas (NGZ21) Futures – for going long around the $5.268-5.361 zone (yellow band), with a relatively tight stop just below $5.070 and targets at $5.750 and $5.890. So, the market indeed sank just below that band to trigger an entry on Monday, and then it was suddenly pushed back up by the bulls waiting to take over the price to the upward direction. This long trade was also supported by the fundamentals, as the heating needs for the month of November were gradually increasing. The weather forecasts appeared to orientate the demand upwards backed by an uninterrupted demand for Liquefied Natural gas (LNG) US exports. Then, Nat-Gas hit the first target at $5.750 on Wednesday, and stopped at the $5.876 mark – located just $0.014 below the second projected target at $5.890 – on Thursday! Regarding Crude Oil, a new entry, provided to our premium subscribers on Wednesday has just being triggered. The black gold is now attempting to rebound onto that support, which acts as a new floor. Trading Charts Chart – Henry Hub Natural Gas (NGZ21) Futures (December contract, daily chart) Now, let’s zoom into the 4H chart to observe the recent price action all around the abovementioned levels of our trade plan: Chart – Henry Hub Natural Gas (NGZ21) Futures (December contract, 4H chart) In conclusion, my trading approach has led me to suggest some long trades around potential key supports - natural gas recently offered multiple opportunities to take advantage of dips onto those projected levels. If you don’t want to miss any future trading alerts, make sure to look at our Premium Section. Have a nice weekend! 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.

Investors await Bank of England decision Markets await today's highly anticipated Bank of England decision as expectations are mixed for today's meeting after yesterday's FED decision to start the QE tapering process. While some analysts think the central bank will raise interest rates by 15 points, others believe the bank will follow in the Fed's footsteps and leave rates unchanged while adjusting government asset purchasing. The uncertainty surrounding today's decision could lead to some added volatility once it is announced as many believe that rising inflation must be addressed by the Bank since it is having a significant impact on the economy as a whole. Whatever the BoE decides to do, it is clear that the global situation is beginning to shift as more central banks start to take steps towards normalising monetary and fiscal policy after nearly two years of emergency measures.  OPEC meeting remains in focus as Oil prices rebound Oil prices continued to trade higher in recent times, reaching new multi year highs and benefitting from the last OPEC decision to not increase monthly output further. While that decision caught markets slightly by surprise as many were expecting an increase in order to cope with rising demand and several supply issues, today's decision could be equally as important as it could set the tone for the final part of the year. OPEC is expected to leave the production increase at the previously agreed upon 400K, but any major surprises could potentially impact the prices of oil either by pushing them higher once again or by pressuring them back down if the group were to decide to unexpectedly increase levels. Download our Mobile Trading App:   Google Play   App Store

Was the adage "buy the rumor, sell the news" also verified with that new trading position? It was Thursday (Nov. 4) that the following rumor had flourished: a possible coordinated action which was supposed to consist of drawing on the strategic reserves of several countries, including the United States, which were leading the dance. Meanwhile, our subscribers were just getting ready to go long around the $76.57-79.65 support zone (yellow band), with a stop placed on lower $76.48 level (red dotted line) and targets at $81.80 and $83.40 (green dotted lines). As a result, oil prices had contracted in stride (trading just into our entry area), just before the rumor effect faded shortly on Friday (Nov. 5), to push them back up. In fact, with oil prices picking up momentum on Friday, once again settling firmly above $80 per barrel, and with a market still showing doubts on the possible use of strategic crude reserves, the proposed trade entry on the black gold, triggered on Thursday – following my last post – was thus profitable since it already turned into a partial profit-taking at the end of the week. Then, on Saturday, Joe Biden said that his administration had the means to cope with the rise in energy prices, in particular after the OPEC+'s decision not to raise their production to more than 400,000 barrels per day. in a context of global imbalance between supply and demand. In addition, Joe Biden also insinuated that the organization (and its allies) might actually not do its best to pump enough volume of crude oil. Trading Charts Chart – WTI Crude Oil (CLZ21) Futures (December contract, daily chart) Now, let’s zoom into the 4H chart to observe the recent price action all around the above-mentioned levels of our trade plan: Chart – WTI Crude Oil (CLZ21) Futures (December contract, 4H chart) In summary, my trading approach has led me to suggest some long trades around potential key supports, as this dip on crude oil offered a great opportunity for the bulls to enter long whilst aiming towards specific projected targets. If you don’t want to miss any future trading alerts, make sure to look at here. . Moreover, for those interested in Forex trading, please note that I am currently preparing some new series about the co-existing links and relationships between commodities and currencies. Stay tuned – 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.

Let’s face it, the metals are not having an easy time breaking out. Short-term rallies end up going nowhere and bearish signs are still in abundance. Yesterday’s session was once again quite informative, and so is today’s pre-market trading. In yesterday’s analysis, I emphasized the importance of the relative weakness that we just saw in mining stocks, so let’s start with taking a look at what mining stocks did yesterday. At first glance, yesterday’s performance might look like a bullish reversal, but zooming in clarifies that something else was actually in the works. Let’s take a look at the GDXJ 1-hour candlestick chart for details. Yesterday’s “reversal” was actually a breakdown below the previous (mid-October) intraday lows along with the verification thereof. The GDXJ moved below the above-mentioned lows and – while it moved back up – it ended the session below them. This is a bearish type of session. Also, if you were wondering about the high volume in the final hour of trading – that’s relatively normal as that’s when bigger trades tend to take place. And while mining stocks were busy verifying the breakdown, gold tried to break above its declining, red resistance line, and verify that breakout. While yesterday’s session didn’t bring much lower gold prices (and the invalidation), today’s pre-market trading makes it clear that the attempt to break higher failed. Just like I had indicated yesterday. This time the rising short-term support line is not there to prevent further declines as the breakdown below it was also confirmed. What does it mean? It means that gold is likely to fall, and quite likely it’s going to fall hard. Besides, silver price is after a major short-term breakdown, too. After a powerful short-term rally, silver had reversed, and now it broke below its rising support line. That’s yet another bearish indication. Please note that at first silver was reluctant to decline while mining stocks moved decisively lower, which was normal during the early part of a given decline. Silver did some catching-up action yesterday, but since miners are not showing strength, I’d say that we’re getting to the regular part of a short-term move, not close to its end. And the move lower is likely to continue, just as the move higher is likely to continue in case of the USD Index. The USDX is after a verification of the breakout to new 2021 highs and after an about monthly consolidation above them. This is a perfect starting point for a major upswing, and we’re likely to see one soon. All in all, while the outlook for the precious metals sector is very bullish for the following years, it’s very bearish for the following weeks. Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today. Przemyslaw Radomski, CFAFounder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care * * * * * All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA 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. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families 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.

Powell vs Brainard Fed chair nomination  Covid trends and restrictions in Europe US core PCE inflation (Thursday at 2 am AEDT) RBNZ and Riksbank central bank meeting US cash markets shut Thursday for Thanksgiving (Pepperstone US equity indices still open)  Eurozone PMI (Tuesday 20:00aedt) – ECB speakers in play BoE speakers to drive the GBP – will they cast doubt on a December hike? With Covid risks on the rise in Europe and ultimately restrictions being implemented we’ve seen renewed selling interest in the EUR, and the oil-exporting currencies (NOK, CAD, MXN). Certainly, the NOK was the weakest G10 currency last week, and GBPNOK has been a great long position – a pair to trade this week, but consider it is up for 9 straight days and has appreciated 5.2% since late October.  I questioned last week if the divergence in EURCHF plays out, and the break of 1.05 negates that, suggesting staying short this cross for now as the CHF is still a preferred safe-haven.  EURUSD has been in free-fall EURUSD has been in free-fall and will likely get the lion’s share of attention from clients looking for a play on growing restrictions and tensions across Europe. The pair has lost 3.5% since rejecting the 50-day MA on 28 Oct and has consistently been printing lower lows since May – predominantly driven by central bank divergence and a growing premium of 2-year US Treasuries over German 2yr - with the spread blowing out from 78bp to 128bp, in favour of USD. For momentum, trend followers and tactical traders, short EUR remains attractive here.  It will be interesting to see if we see any pickup in shorting activity in EU equities – notably the GER40, with the German govt warning of lockdowns ahead. A market at all-time highs (like the GER40) is a tough one to short, but if this starts to roll over then I’d go along for a day trade. There is a raft of ECB speakers also to focus on, notably with President Lagarde due to speak on Friday.  Playing restrictions through crude While we can play crude moves in the FX, equity and ETF space, outright shorts in crude have been looking compelling. Although we see SpotCrude now sitting on huge horizontal support and a break here brings in the 50-day MA. Of course, as oil and gasoline fall, the prospect of a release of the SPR (Strategic Petroleum Reserves) diminishes, however, the Biden administration could use this move lower move to their advantage and capitalize to keep the pressure on.  (SpotCrude daily) A rise in restrictions also means market neutral strategies (long/short) should continue to work, and long tech/short energy has been popular. We can express this in our ETF complex, with the XOP ETF (oil and gas explorers) -8.1% last week and that works as a high beta short leg. Long IUSG (growth) or the QQQ ETF against this would be a good proxy on the opposing leg. In fact, looking at the moves in Apple, Nvidia, Alphabet and Amazon, and we can see these ‘safe haven’ stocks are working well again, as is Tesla although for different reasons.  Stocks for the trend-followers For the ‘buy strong’ crowd, I have scanned our equity universe for names above both their 5- and 20-day MA AND at 52-week highs. Pull up a daily chart of any of these names - they should nearly always start at the bottom left, and end top right. Playing the RBNZ meeting tactically By way of event risks, the RBNZ meeting (Wed 12:00 AEDT) is one of the more interesting events to focus on. Will the RBNZ raise by 25bp or 50bp? That is the question, and of 19 calls from economists (surveyed by Bloomberg) we see 17 calling for a 25bp hike – yet the markets are fully pricing not just a 25bp hike but a 43% chance of 50bp – from a very simplistic perceptive if the RBNZ hike by ‘just’ 25bp, choosing a path of least regret, then we could see a quick 25- to 30-pip move lower in the NZD. The focus then turns to the outlook and whether the 8 further hikes priced over the coming 12 months seems to be one shared by the RBNZ.  Traders have been keen to play NZD strength via AUD, as it is more a relative play and doesn’t carry the risk on/off vibe, which you get with the USD and JPY. I’d be using strength in AUDNZD as an opportunity to initiate shorts, especially with views that RBNZ Gov Orr could talk up the possibility of inter-meeting rate hikes.  GBP to be guided by the BoE Chief The GBP is always a play clients gravitate to, with GBPUSD and EURGBP always two of the most actively traded instruments in our universe. A 15bp hike is priced for the 16 Dec BoE meeting after last week’s UK employment and inflation data, but consider we also get UK PMI data (Tuesday 20:30 AEDT), and arguably, more importantly, speeches from BoE Governor Bailey and chief economist Huw Pill – perhaps this time around expectations of hikes can be better guided – although, a bit of uncertainty into central bank meetings is very pre-2008 and makes things a little spicy/interesting.  (BoE speakers this week) GBPUSD 1-week implied volatility is hardly screaming movement, and at 6.5% sits at the 10th percentile of its 12-month range. The implied move is close to 130pips, so the range at this juncture (with a 68.2% level of confidence), although I multiple this by 0.8 to get closer to the options breakeven rate. So at this stage, 100 pips (higher or lower) is the sort of move the street is looking for over the coming five days, putting a range of 1.3557 to 1.3349 in play – one for the mean reversion players. Personally, I would let it run a bit as that volatility seems a little low, and a break of 1.3400 could see volatility pick up. I’d certainly be looking for downside if that gave way.  Happy trading.

S&P 500 recaptured 4,700s on little change in market breadth and ever so slowly coming back to life HYG. Credit markets made a risk-on move, but HYG isn‘t leading the charge on a medium-term basis in the least – it‘s improving, but the stiff headwinds in bonds are being felt. Given the CPI discussed at length on Friday, it‘s still a relative success. Make no mistake though, time is running short in this topping process, and trouble is going to strike earliest after the winter Olympics. Global economic activity might be peaking here, and liquidity around the world is shrinking already – copper isn‘t too fond of that. The Fed might attempt to double the monthly pace of tapering to $30bn next, but I doubt how far they would be able to get at such a pace. Inflation and contraction in economic growth are going to be midterms‘ hot potatoes, and monetary policy change might be attempted. Tough choices for the Fed missed the boat in tapering by more than a few months. 2022 is going to be tough as we‘ll see more tapering, market-forced rate hikes (perhaps as many as 2-3 – how much closer would yield curve control get then?), higher taxes and higher oil prices. Stocks are still likely to deliver more gains in spite of all the negative divergences to bonds or other indices (hello, Russell 2000). Copper would be my indicator as to how far further we have to go before GDP growth around the world peaks. Oil is ready for strong medium-term gains, and I‘m not looking for precious metals to yield much ground. Silver though is more vulnerable unless inflation returns to the spotlight. Cryptos do likewise have issues extending gains sharply. All in all, volatility is making a return, and it isn‘t a good news for the bulls. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 advance continues, and I‘m looking for ATHs to give in. It will take a while, but the balancing on a tightrope act continues. Credit Markets HYG strength didn‘t convince, but it didn‘t disappoint either – the constellation remains conducive to further stock market gains. So far and still conducive. Gold, Silver and Miners Precious metals are stronger than miners, and the lackluster, sideways performance is likely to continue for now – fresh Fed policy mistake is awaited, and it‘s actually bullish that gold and silver aren‘t facing more trouble when the consensus expectation is faster taper. Crude Oil Crude oil upswing is still struggligh at $72, and remains favored to go higher with passage of time as excess production capacity keeps shrinking while demand isn‘t being hit (no, the world isn‘t going the lockdowns route this time). Copper High time copper stopped hesitating, for its sideways trading is sending a signal about future GDP growth. The jury is still out in the red metal‘s long basing pattern – a battle of positive fundamentals against shrinking liquidity and possibly slowing growth. Bitcoin and Ethereum Bitcoin and Ethereum bottom searching goes on, and I suspect at least a test of Friday‘s lows is coming. I don‘t see too many signs of exuberance returning right away as Ethereum hasn‘t yet started to outperform. Summary S&P 500 bulls continue climbing a wall of worry even if credit markets don‘t confirm entirely. Risk-on and real assets rally is likely to continue, and the road would be getting bumpier over time. The Fed won‘t overcome market expectations, and the last week of Nov (first week of balance sheet contraction) pace wouldn‘t be consistently beaten without consequences down the road. Select commodities and precious metals are already feeling the pinch, but there is no sending them to bear markets. Get ready for the twin scourge of persistent inflation and slowdown in growth to start biting increasingly more. 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.

One swallow doesn't make a summer, but when it comes to slower inflation pressure, there have been several. Will the narrative change soon? While Fed Chairman Jerome Powell had been preaching his “transitory” doctrine for months, the thesis was obliterated once again after the headline Consumer Price Index (CPI) surged by 6.8% year-over-year (YoY) on Dec. 10. Additionally, while the Commodity Producer Price Index (PPI) – which will be released on Dec. 14 – is likely provide a roadmap for inflation’s next move, signs of deceleration are already upon us.  For example, supply bottlenecks, port congestion, and rapidly rising commodity prices helped underwrite inflation’s ascent. However, with those factors now stagnant or reversing, inflationary pressures should decelerate in 2022. To explain, Deutsche Bank presented several charts that highlight 2021’s inflationary problems. However, whether it’s suppliers’ delivery times, backlogs of work, port congestion, bottleneck indices, or the cost of shipping and trucking, several inflationary indicators (excluding air cargo rates) have already peaked and rolled over.  Please see below: To that point, global manufacturing PMIs also signal a deceleration in input price pressures. With input prices leading output prices (like the headline CPI), the latter will likely showcase a similar slowdown if the former’s downtrend holds. Please see below: Source: IIF/Robin Brooks To explain, the colored lines above track the z-scores for prices paid within global manufacturing PMI reports. In a nutshell: regions were experiencing input inflation that was ~2 and ~4 standard deviations above their historical averages. However, if you analyze the right side of the chart, you can see that all of them have consolidated or come down (the U.S. is in light blue). As a result, it’s another sign that peak input inflation could elicit peak output inflation. As mentioned, though, the commodity PPI is the most important indicator and if the data comes in hot on Dec. 14, all bets are off. However, the monthly weakness should be present since the S&P Goldman Sachs Commodity Index (S&P GSCI) declined by 11.2% in November.   Also noteworthy, Morgan Stanley’s Chief U.S. Economist, Ellen Zentner, also sees signs of a deceleration. She wrote: “We are seeing nascent signs that pipeline inflation pressures are easing – based on evidence from company earnings transcripts, ISM comments, Korea trade data, China's inflation data, the Fed's Beige Book, a department huddle with our equity analysts, and our own survey.” To explain, the green, gold, and blue lines above track Morgan Stanley’s core inflation estimates for emerging markets, developed markets, and global markets. If the predictions prove prescient, the 2022 inflation narrative could look a lot different than in 2021. However, please remember that inflation doesn’t abate without direct action from the Fed, and with a hawkish Fed known to upend the PMs (at least in the short- or medium run), the fundamental environment has turned against them. For example, when the Fed turns hawkish, commodities retreat, and with U.S. President Joe Biden showcasing heightened anxiety over inflation, more of the same should materialize over the medium term. To explain, Morgan Stanley initially projected no rate hikes in 2022. Now, Zentner expects “2 hikes in 2022, followed by 3 hikes plus a halt in reinvestments in 2023.” She wrote: “Before investors close out the year, we need to get past the FOMC's final meeting next week, and it comes with every opportunity for surprise. On Wednesday, we expect the Fed to move to a hawkish stance by announcing that it is doubling the pace of taper, highlighting continued inflation risks and no longer labeling high inflation as transitory, and showing a hawkish shift in the dot plot. We think this shift will shake out in a 2-hike median in 2022, followed by 3.5 hikes in 2023 and 3 hikes in 2024.” Furthermore, upping the hawkish ante, Goldman Sachs initially projected no rate hikes in 2022. Then, the team moved to three rate hikes in 2022 (June, September, and December 2022). Now, Goldman Sachs expects the FOMC to hike rates in May, July, and November 2022 – with another four hikes per year in 2023 and 2024.   The Fed’s Time to Shine “The FOMC is very likely to double the pace of tapering to $30bn per month at its December meeting next week, putting it on track to announce the last two tapers at the January FOMC meeting and to implement the last taper in March,” wrote Chief Economist Jan Hatzius. “We expect the Summary of Economic Projections to show somewhat higher inflation and lower unemployment. Our best guess is that the dots will show 2 hikes in 2022, 3 in 2023, and 4 in 2024, for a total of 9 (vs. 0.5 / 3 / 3 and a total of 6.5 in September). We think the leadership will prefer to show only 2 hikes in 2022 for now to avoid making a more dramatic change in one step, especially at a meeting when the FOMC is already doubling the taper pace. But if Powell is comfortable showing 3 hikes next year, then we would expect others to join him in a decisive shift in the dots in that direction.” Speaking of three hikes, the market-implied probability of three FOMC rate hikes in 2022 has risen to 96%. Please see below: For context, I’ve been warning for months that surging inflation would force the Fed’s hand. I wrote on Oct. 26: Originally, the Fed forecasted that it wouldn’t have to taper its asset purchases until well into 2022. However, surging inflation pulled that forecast forward. Now, the Fed forecasts that it won’t have to raise interest rates until well into 2023. However, surging inflation will likely pull that forecast forward as well. More importantly, though, while the PMs have remained upbeat in recent weeks, the forthcoming liquidity drain will likely shift the narrative over the medium term. The bottom line? While inflation shows signs of peaking, there is a vast difference between peak inflation and the Fed’s 2% annual target. As a result, even if a 6.8% YoY headline CPI was the precipice, it’s nothing to celebrate. Thus, the Fed needs to tighten monetary policy to control inflation, and anything less will likely re-accelerate the cost-push inflationary spiral.  To that point, with the precious metals extremely allergic to a hawkish Fed, I’ve highlighted on numerous occasions how the GDXJ ETF suffered following the 2013 taper. With 2022 Fed policy looking even more hawkish than in mid-2014, the latter’s downtrend should have plenty of room to run. In conclusion, the PMs were mixed on Nov. 10, and the scorching inflation print was largely ignored by investors. However, with the Fed poised to provide another dose of reality on Dec. 15, the recent volatility should persist. To that point, it’s important to remember that the S&P 500’s volatility increased materially after the Fed tapered in 2013. With stock market drawdowns bullish for the USD Index and bearish for the PMs, there are plenty of technical, fundamental, and sentiment factors brewing that favor the theme of ‘USD Index up, PMs down’ over the medium term. Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today. Przemyslaw Radomski, CFAFounder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care * * * * * All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA 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. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families 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.

  Inflation is high and doesn’t seem to be going away anytime soon. However, gold is not rising. The question is – what does the Fed have to do with it? Inflation is not merely transitory, and that’s a fact. Why then isn’t gold rallying? Isn’t it an inflation-hedge? Well, it is - but gold is a lazy employee. It shows up at work only when inflation is high and accelerating; otherwise, it refuses to get its golden butt up and do its job. All right, fine, but inflation is relatively high! So, there have to be other reasons why gold remains stuck around $1,800. First of all, central banks are shifting their monetary policy. Global easing has ended, global tightening is coming! Actually, several central banks have already tightened their stance. For example, among developed countries, New Zealand, Norway, and South Korea have raised interest rates. Brazil, the Czech Republic, Hungary, Mexico, Poland, Romania, and Russia are in the club of monetary policy hawks as well. Even the bank of England could hike its policy rate this year, while the Fed has only announced tapering of its asset purchases. So, although central banks will likely maintain their dovish bias and real interest rates will stay negative, the era of epidemic ultra-loose monetary policy is coming to an end. We all know that neither the interest rates nor the central banks’ balance sheets will return to the pre-pandemic level, but the direction is clear: central banks are starting tightening cycles, no matter how gentle and gradual they will be. This means that monetary policy is no longer supportive of gold. The same applies to fiscal policy. It remains historically lax despite fiscal stimulus being pulled back. Even though Uncle Sam ran a fiscal deficit of $2.8 trillion in fiscal year 2021 - almost three times that of fiscal year 2019 ($0.98 trillion) - it was 12% lower than in fiscal year 2020 ($3.1 trillion). This implies that the fiscal policy is also tightening (despite the fact that it remains extravagantly accommodative), which is quite a headwind for gold. Investors should always look at directional changes, not at absolute levels. What’s more, we are still far from stagflation. We still experience both high inflation and fast GDP growth, as well as an improving labor market. As a reminder, the unemployment rate declined from 5.2% in August to 4.8% in September. The fact that the labor market continues to hold up relatively well is the reason why the so-called Misery Index, i.e., the sum of inflation and unemployment rates, remains moderate despite high inflation. It amounted to 10.19 in September, much below the range of 12.5-20 seen during the Great Inflation of the 1970s (see the chart below). So, the dominant narrative is about both inflation and growth. When people got vaccines, markets ceased to worry about coronavirus and started to expect a strong recovery. Commodity and equity prices are rising, as well as real interest rates. These market trends reflect expectations of more growth than inflation – expectations that hurt gold and made it get stuck around $1,800. Having said that, the case for gold is not lost. Gold bulls should be patient. The growth is going to slow down, and when inflation persists for several months, the pace of real growth will decline even further, shifting the market narrative to worrying about inflation’s negative effects and stagflation. Gold should shine then. Wait, when? Soon. The Fed’s tightening cycle could be a turning point. The US central bank has already announced tapering of quantitative easing, which could erase some downward pressure on gold resulting from the anticipation of this event. Additionally, please remember that every notable market correction coincided with the end of QE, and every recession coincided with the Fed’s tightening cycle. Moreover, don’t forget that gold bottomed in December 2015, just when the Fed started hiking the federal funds rate for the first time since the Great Recession, as the chart below shows. However, when it comes to tapering, the situation is more complicated. The previous tapering was announced in December 2013, started in January 2014, and ended in October 2014. As one can see in the chart above, the price of gold initially increased, but it remained in its downward trend until December 2015 when the Fed started hiking interest rates. Hence, if history is any guide, there are high odds that gold may struggle further for a while before starting to rally next year, which could happen even as soon as June 2022, when the markets expect the first hike in interest rates. Thank you for reading today’s free analysis. We hope you enjoyed it. If so, we would like to invite you to sign up for our free gold newsletter. Once you sign up, you’ll also get 7-day no-obligation trial of all our premium gold services, including our Gold & Silver Trading Alerts. Sign up today! Arkadiusz Sieron, PhDSunshine Profits: Effective Investment through Diligence & Care.

XAUUSD seeks support Gold softens as the US dollar edged higher. A surge above 1788 and then 1808 has prompted the bears to cover. The precious metal is looking for support after the breakout stalled with an overextended RSI. A bearish MA cross may weigh on short-term sentiment. The base of the initial breakout around 1770 is a key support. A deeper correction would lead to the daily support at 1753, a critical level to keep the rebound relevant. Gold may climb towards 1850 if the bulls succeed in pushing above 1814. USDCAD consolidates gains The Canadian dollar recouped some losses after better-than-expected retail sales. A break above the major daily resistance at 1.2930 has put the bulls back in control of the direction. The RSI’s repeated overbought situation may cause a temporary pullback. Trend followers would be looking to jump in at a better price. 1.2880 is the closest support. Sentiment would remain upbeat as long as price action is above 1.2770. A rally above the intermediate resistance at 1.2960 may trigger an extended rally towards 1.3200. UK 100 makes a bullish attempt The FTSE 100 recovered some ground after the Omicron sell-off. The index has found solid buying at 7110. An oversold RSI has attracted a buying-the-dips crowd. A tentative break above 7300 suggests strong interest in keeping the market afloat. A bullish MA cross could lead to an acceleration on the upside. 7385 is a major hurdle on the daily chart. Its breach could cause a runaway rally and resume the uptrend. On the downside, 7250 is the first support, and 7110 is the second line of defense in case of weakness.

S&P 500 bulls stood their ground nicely, and the key sectors confirmed little willingness to turn the very short-term outlook more bearish than fits the little flag we‘re trading in currently – it‘s a bullish flag. Given the continued risk-off turn in bonds, the stock market setback could have been more than a tad deeper – that would be the conclusion at first glance. However, high yield corporate bonds held up much better than quality debt instruments, and that means the superficial look would have been misleading. Likewise as regards my other 2 signs out of the 3 yesterday presented ones – tech held up fine, and cryptos have practically erased yesterday‘s hesitation during today‘s premarket. The Santa Claus rally indeed hasn‘t yet run its course, and the slighly better than a coin toss odds of us not facing more than a very shallow correction, look to be materializing. As I wrote 2 days ago – What‘s Not to Love Here – we‘re entering 2022 with great open profits in both S&P 500 (entered aggressively at 4,672) and crude oil (entered with full force at $67.60). Both rides aren‘t yet over, copper is primed to catch up in the short run to the other commodities, gold is well bid at current levels, and together with silver waiting for a Fed misstep (market risk reappreciation) and inflation to start biting still some more while the real economy undergoes a soft patch (note however the very solid manufacturing data) with global liquidity remaining constrained even though the Fed didn‘t exactly taper much in Dec, and nominal yields taking a cautious and slow path towards my 2022 year end target of 1.80-2.00% on the 10-year Treasury. As I wrote prior Monday, we‘re looking at still positive 2022 returns in stocks – of course joined by commodities and precious metals. The path would be though probably a more turbulent one than was the case in 2021. We had a good year of strong gains, and I hope you have benefited. Thank you for all your appreciation and best wishes sent my way throughout all of 2021 and now by email or via Twitter – I would love to wish you a very Happy New Year – may 2022 keep bringing you happiness, success and good health. Enjoy the New Year‘s Eve celebrations, and see you again on Jan 03, 2022! Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 consolidation is still shaping up finely – and does so on solid internals. Particularly the tech resilience is a good omen. Credit Markets HYG could have indeed declined some more, but didn‘t. While I‘m not reading all too much into this signal individually, it fits the (still bullish) mozaic completed by other markets on my watch. That‘s the strength of intermarket analysis. Gold, Silver and Miners Gold and silver got on the defensive, but the bears didn‘t get too far – and the chance they could have, wasn‘t too bad. Rising yields were though countered by the declining dollar. Crude Oil Crude oil is likely to pause today, and will rally again once risk-on returns broadly, including into credit markets. For now, backing and filling above $76 is my leading very short-term scenario – Monday though will be a fresh day. Copper Copper is pausing, but the downswing didn‘t reach far, and was bought relatively fast. More consolidation above $4.40 looks likely, and it would come with a generally bullish bias that‘s apt to surprise on the upside. Similarly to precious metals though, patience. Bitcoin and Ethereum Bitcoin and Ethereum are staging a daily comeback, and as long as mid-Dec lows don‘t come in sight again, crypto prices can muddle through with a gently bullish bias. Summary Santa Claus isn‘t willing to give much ground, and the table is set for this nice rally to modestly continue today – somewhere more pronouncedly (S&P 500, cryptos) than elsewhere (commodities and precious metals). I‘m still looking for a positive first day of 2022 trading to help make up for end of this week‘s headwinds – it has been great that the bears couldn‘t find more strength yesterday. 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.

After what appeared to be a mixed Asian session, European indices started Monday's trading session attempting to regain some ground after significant fluctuations seen last week. While there is a lack of major data releases today, this week could be very important for investors as the US earning season begins and as we await Powell’s testimony related to his renomination as FED chair which has proven to be quite positive for markets this far. In addition, news regarding the ongoing spread of the Omicron variant could continue to significantly impact both stocks and commodities, which as of late have been increasingly uncertain assets. Oil traders focus on OPEC production as prices fluctuate As mentioned previously, oil prices have been increasingly volatile as uncertainty grows regarding the balance between supply and demand with OPEC on one side determining the production and rate of increase, while we’ve seen a situation of significant fluctuation in demand in the short term as news continues to noticeably impact prospects for oil. On the other hand, traders await reassurance from oil producing countries as some doubts have emerged regarding their ability to maintain an adequate supply as demand continues to rebound as a result of the post pandemic recovery. While there is also the possibility that the Iran nuclear talks could bring an increase of oil supply to the market, most traders are focusing on whether or not there could be actual shortages which could cause significant increases in price volatility and ultimately lead to a domino effect across various sectors.

S&P 500 pushed sharply higher, squeezing not only tech bears even if yields didn‘t move much – bonds actually ran into headwinds before the closing bell. With my 4,500 target reached, the door has opened to consolidation of prior steep gains, and that would be accompanied by lower volatility days till before the positioning for Friday‘s non-farm payrolls is complete as talked on Sunday. So, we have an S&P 500 rally boosting our open profits while the credit market‘s risk-on posture is getting challenged, and divergencies to stocks abound – as I wrote yesterday: (…) any stock market advance would leave S&P 500 in a more precarious position than when the break above 4,800 ATHs fizzled out. But a stock market advance we would have, targeting 4,500 followed by possibly 4,600. We‘re getting there, the bulls haven‘t yet run out of steam, but it‘s time to move closer to the exit door while still dancing. But the key focus remains the Fed dynamic: (…) Fed‘s Kashkari ... helped mightily on Friday – that implicit rates backpedalling was more than helpful. Pity that precious metals haven‘t noticed (I would say yet) – but remember the big picture and don‘t despair, we‘re just going sideways before the inevitable breakout higher. Back to rates and the Fed, there is a key difference between the tightening of 2018 and now – the economy was quite robust with blood freely flowing, crucially without raging inflation. With the Fed sorely behind the curve by at least a year, it‘ll have to move faster and have lower sensibility to market selloffs caused. Stiff headwinds ahead as liquidity gets tighter. Suffice to say that precious metals did notice yesterday, and copper looks ready to work off its prior odd downswing. Remember that commodities keep rising (hello the much lauded agrifoods) while oil enteredd temporary sideways consolidation. Look for other base metals to help the red one higher – the outlook isn‘t pessimistic in the least as the recognition we have entered stagflation, would grow while the still compressing yield curve highlights growing conviction of Fed policy mistake. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 bulls proved their upper hand yesterday, and the question is where would the upswing stall – or at least pause. Ahead soon, still this week. Credit Markets HYG caught a bid yesterday too, but the sellers have awakened – it appears the risk-on trades would be tested soon again. Bonds are certainly less optimistic than stocks at this point, but the S&P 500 rickety ride can still continue, and diverge from bonds. Gold, Silver and Miners Gold and silver retreat was indeed shallow, did you back up the truck? The chart hasn‘t flipped bearish, and I stand by the earlier call that PMs would be one of the great bullish surprises of 2022. Crude Oil Crude oil bulls rejected more downside, but I‘m not looking for that to last – however shallow the upcoming pullback, it would present a buying opportunity, and more profits on top of those taken recently. Copper Expect copper‘s recent red flag to be dealt with decisively, and for higher prices to prevail. Other base metals have likewise room to join in as $4.60 would be taken on once again. At the same time, the silver to copper ratio would move in the white metal‘s favor after having based since the Aug 2020 PMs top called. Bitcoin and Ethereum As stated yesterday, crypto bulls are putting up a little fight as the narrow range trading continues – I‘m not looking at the Bitcoin and Ethereum buyers to succeed convincingly. Time for a downside reversal is approaching. Summary S&P 500 bulls made a great run yesterday, and short covering was to a good deal responsible. Given the credit market action, I‘m looking for the pace of gains to definitely decelerate, and for the 500-strong index to consolidate briefly. VIX is likely to keep calming down before rising again on Friday. Should credit markets agree, the upcoming chop would be of the bullish flavor, especially if oil prices keep trading guardedly. And that looks to be the case, and the rotation into tech can go on – $NYFANG doing well is one of the themes for the environment of slowing GDP growth rates, alongside precious metals and commodities embracing inflation with both arms. 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.

December 1, 2021 The fourth quarter of 2021 is approximately two-thirds over and we wanted to highlight some of the Top Energy Companies that have been analyzed by our QuantStock system so far. Our QuantStock system is a proprietary algorithm that takes into account key company fundamentals, earnings trends and other strength components to find quality companies. We use it as a stock market ideas generator and to update our stock watchlist every quarter. The QuantStock system does not take into consideration the stock price or technical price trends so one must compare each company idea against the current stock prices. There are a plethora of professional studies that continue to show stock markets are overvalued and this is always a key component to consider when researching any stock market idea. As with all investment ideas, past performance does not guarantee future results. Suncor Energy Energy Stock | Medium Cap | 5.42 percent dividend | 15.22 P/E | Our Grade = C+ Suncor Energy Inc. (NYSE: SU) is one of Canada’s biggest energy stocks. It is an integrated energy company engaged in producing synthetic crude from oil sands. Suncor last announced its financial results for the third quarter on October 27. It came up with earnings of 56 cents per share and revenue of $8.11 billion for the three months ended September 30. The results showed significant improvement from the comparable quarter of 2020 but missed the consensus forecast of 58 cents per share for profit and $8.5 billion for revenue. Despite missing expectations, Suncor Energy stock climbed to a new high of $26.97 earlier this month. Matador Resources Co. Energy Stock | Small Cap | 0.51 percent dividend | 16.78 P/E | Our Grade = C- Matador Resources Co. (NYSE: MTDR) is an energy company based in Texas, United States. The company last month announced impressive financial results for the third quarter. Matador earned $1.25 per share during the three months ended September 30, beating the consensus forecast of 96 cents per share. Moreover, it generated revenue of $472.351 million during the quarter, ahead of analysts’ average estimate of $387.950 million. In addition, Matador stock has also performed exceptionally well so far in 2021. The company’s share price has skyrocketed more than 200 percent on a year-to-date basis. The 52-week range of the stock is $10.16 – $47.23, while its total market value stands close to $4.5 billion. Magnolia Oil & Gas Corp. Energy Stock | Small Cap | 0.84 percent dividend | 11.29 P/E | Our Grade = C- Magnolia Oil & Gas Corp. (NYSE: MGY) is another Texas-based oil producer. The company posted solid financial results for the third quarter earlier this month. Magnolia reported adjusted earnings of 67 cents per share on revenue of $283.58 million. The results easily surpassed analysts’ average estimate of 61 cents per share for earnings and $274 million for revenue. If we quickly look at its key financial metrics, Magnolia stock is currently trading around $18.82, against its 52-week range of $18.38 – $19.07. Moreover, the company’s market value is just over $3.4 billion, while its P/E ratio stands at 11.03. China Petroleum & Chemical Corp. Energy Stock | Medium Cap | 10.26 percent dividend | 3.71 P/E | Our Grade = C China Petroleum & Chemical Corporation (NYSE: SNP), commonly known as Sinopec, is a leading oil and gas company based in China. Besides its listing in the New York Stock Exchange, it also trades in Hong Kong and Shanghai. Sinopec last month announced mixed results for the third quarter. Its reported earnings of $2.64 per share, representing a sharp decline from $5.54 per share in the comparable period of 2020. On the positive side, its revenue for the third quarter grew over 52 percent to $114.58 million. If we look at its share price, Sinopec stock has struggled to gain value so far in 2021. The stock has only increased nearly one percent on a year-to-date basis. Petróleo Brasileiro S.A. Energy Stock | Medium Cap | 19.49 percent dividend | 2.71 P/E | Our Grade = C Petróleo Brasileiro S.A. (NYSE: PBR) is one of the leading energy stocks based in Rio de Janeiro, Brazil. The company, also called Petrobras, is engaged in the exploration and production of oil and natural gas. Petrobras last released its quarterly financial results on October 28. The company reported earnings of $5.9 billion for the third quarter, down 26.9 percent from Q2 but significantly higher than the comparable period of 2020. In addition, its quarterly revenue of $23.3 billion was also well above $13.15 billion in the year-ago period. If we talk about its share price movement, Petrobras stock hasn’t performed well this year. The stock is still down nearly six percent on a year-to-date basis. Article by InvestMacro – Be sure to join our stock market newsletter to get our updates and to see more top companies we add to our stock watch list.

XAUUSD attempts to bounce The bullions bounce higher as the US dollar softens across the board. Gold is looking to claw back losses from the liquidation in late January. A close above the psychological level of 1800 would be the first step, pushing short-term sellers into covering their bets. The previous support at 1817 coincides with the 30-day moving average, making it an area of interest and important resistance. A bullish breakout may send the metal to the previous high at 1847. On the downside, 1780 is a fresh support. SPX 500 tests resistance The S&P 500 rallies over better-than-expected corporate earnings. A break above 4490 has eased the selling pressure on the index. The former daily support at 4600 is now a key resistance that lies over the 30-day moving average. A close above this congestion area could turn sentiment around, paving the way for a recovery towards 4750. The RSI’s overbought situation may keep the momentum in check temporarily. A pullback may see buying interest in the demand zone between 4410 and 4490. USOIL consolidates gains WTI crude continues to climb as OPEC+ refuses to raise its output limit. The RSI inched into the overbought territory on the daily chart after a new high above 85.00. The bulls could be wary of chasing after the extended rally. 85.00 has turned into a support and a pullback could be an opportunity to accumulate again. Further down, 82.00 on the 30-day moving average is a major floor for the current rally. The milestone at 90.00 would be the next target when momentum makes its return.

However, these gains attracted some profit-taking at prices around US$1,850. And in the aftermath of last week’s FOMC meeting, gold sold off for three days in a row. This merciless sell-off only ended at US$1,780 wiping out nearly all gains since mid of December. It was some form of the classic “the bull walks up the stairs and the bear jumps out the window” pattern, which is a typical behavior within an uptrend.Hence and exactly for this reason, the deep pullback did not necessarily end the recovery in the gold market. Of course, in the bigger picture, the entire precious metals sector is still stuck in this tenacious correction which has been ongoing since August 2020. In the short-term, however, the pullback has created an oversold setup and once again proved that there is buying interest at prices below US$1,800.US-Dollar index, daily chart as of February 3rd, 2022. False breakout?US-Dollar index, daily chart as of February 3rd, 2022.It also seems that the US-Dollar might have hit an important top last Thursday and is now moving lower, which would be very supportive for gold, of course. Everyone is expecting the US-Dollar to go up as the FED is expected to raise interest rates. But the US-Dollar has been discounting this “hike and taper scenario” for several months already. Actually, the US-Dollar index has been rallying +8.8% since May 2021! During the recent FOMC meeting, however, big money might have used the seeming breakout to sell their dollar longs into a favorable high-volume setup. At the same time, stock market sentiment was extremely bearish. Hence, last week likely triggered a top in the US-Dollar and a violent back and forth bottoming pattern for the stock-market.US-Dollar index, monthly chart as of February 3rd, 2022. A series of lower highs!US-Dollar index, monthly chart as of February 3rd, 2022.In the big picture, a top in the US-Dollar would continue the series of lower highs for the dollar. As well, the US-Dollar is moving within a huge triangle since 2001. After a series of three lower highs since December 2016, a test of the lower boundary of the triangle would give gold prices an extreme tailwind in the coming years. Hence, even if it´s hard to come up with any bearish arguments for the dollar at the moment, technically it looks like the dollar could roll over.Gold in US-Dollar, daily chart from February 3rd, 2020. Gold’s behavior is changing.Gold in US-Dollar, daily chart as of February 3rd, 2022.For gold, a weaker US-Dollar would be very helpful. In fact, since the beginning of this week, we perceive an ongoing change in gold’s behavior. We are getting impressed by its intraday strength! Every small pullback around and below US$1,800 was rather quickly bought again. So far, gold has only recovered 38.2% of last week’s nasty sell-off and currently sits pretty much exactly at its 200-day moving average (US$1,805).But the fresh buy signal from the slow stochastic oscillator on the daily chart promises more upside. Hence, we see gold fuming its way higher in the coming weeks. In the next step, gold will have to overcome the 38.2% resistance around US$1,808.50 and then continue its recovery towards US$1,830. In any case, the seasonal component is at least very favorable until the end of February. Therefore, even higher price targets are conceivable too. But gold needs to breakout above the triangle and clear US$1,850. Only then a more sustainable bullish momentum would emerge which could last further into spring.If, on the other hand, gold takes out US$1,780, the recovery since mid of December might be over already and the medium-term correction might likely pick up again.Conclusion: Seasonality favors another wave upOverall, we assume that seasonality favors another wave up in the gold market. Thus, another rally towards at least US$1,830 is realistic. We are short-term bullish, mid-term neutral to skeptic and long-term very bullish for gold.Feel free to join us in our free Telegram channel for daily real time data and a great community. If you like to get regular updates on our gold model, precious metals and cryptocurrencies you can also subscribe to our free newsletter.Disclosure: Midas Touch Consulting and members of our team are invested in Reyna Gold Corp. These statements are intended to disclose any conflict of interest. They should not be misconstrued as a recommendation to purchase any share. This article and the content are for informational purposes only and do not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision. The views, thoughts and opinions expressed here are the author’s alone. They do not necessarily reflect or represent the views and opinions of Midas Touch Consulting.By Florian Grummes|February 3rd, 2022|Tags: EUR/USD, Gold, Gold Analysis, Gold bullish, gold chartbook, Gold neutral, precious metals, Reyna Gold, US-Dollar|0 CommentsAbout the Author: Florian GrummesFlorian Grummes is an independent financial analyst, advisor, consultant, trader & investor as well as an international speaker with more than 20 years of experience in financial markets. He is specialized in precious metals, cryptocurrencies and technical analysis. He is publishing weekly gold, silver & cryptocurrency analysis for his numerous international readers. He is also running a large telegram Channel and a Crypto Signal Service. Florian is well known for combining technical, fundamental and sentiment analysis into one accurate conclusion about the markets. Since April 2019 he is chief editor of the cashkurs-gold newsletter focusing on gold and silver mining stocks. Besides all that, Florian is a music producer and composer. Since more than 25 years he has been professionally creating, writing & producing more than 300 songs. He is also running his own record label Cryon Music & Art Productions. His artist name is Florzinho.

NIO stock gets a strong rating from latest Barclays research. NIO remains bearish and is down 25% year to date. NIO and other Chinese EV names remain in growth mode as the latest delivery data showed. NIO stock remains mired as it ended Monday virtually flat. The stock is down over 40% from three months ago as Chinese names see international investors flee on regulatory concerns. NIO Stock News It has been a turbulent time for holders of Chinese tech stocks. Alibaba's ANT Group spin-off set things off. Then the DIDI delisting not long after its IPO added to woes. Then a host of regulatory crackdowns was the final straw for international investors who bailed out of the names en masse. This is despite the EV names in particular remaining on track from a growth perspective as all have posted strong delivery data. While January deliveries slowed from December, the yearly growth rates still are impressive. January is traditionally the slowest month of the year in China though due to the lunar new year. NIO for example delivered 7.9% fewer vehicles in January versus December. On a yearly basis, January deliveries were 33.6% higher. This was replicated across many other Chinese EV names. Now Barclays has picked up the theme as it issues a bullish note this morning. "We believe that the rapid adoption of EVs around the world and booming EV sales have presented China’s EV makers a rare opportunity to not only take a sizable market share of the domestic auto market – the largest in the world with about 25-30% global share by units sold per annum – but also build a dominant position on the world stage." Barclays put a $34 price target on the shares. This does highlight the potential growth potential of Chinese tech stocks and the EV space in particular. We question whether investors will reenter, however, having been let down previously. Fool me once, shame on you, fool me twice... Ok, let's not have another George W. Bush moment! The point is a valid one. It will likely take more than analyst upgrades to tempt investors back to the space. Goldman, the king of investment banks, has previously been strongly bullish on NIO and to no avail. It will take a series of strong earnings and relative calm in terms of regulatory concerns to eventually tempt investors back. NIO Stock Forecast The recent spike lower did fill the gap from back in October 2020. The market just loves to fill gaps. We also note this spike lower created a shooting star candle, a possible reversal signal. There is already a bullish divergence from the Relative Strength Index (RSI) as shown. The area around $27.34 is the first resistance. Getting back above indicates the bearish trend may finally be slowing. That would then bring NIO into a range-bound zone from $27 to $32. Only breaking $33.80 from January 3 ends the downtrend. Support is at $14 from the strong volume profile. Look for an RSI breakout as that could signal more gains. The RSI has been shrinking in range and may test an upside breakout. NIO 1-day chart

Tesla bounces strongly on Tuesday as risk assets surge. TSLA stock gains just over 5% on Tuesday. Geopolitical tensions falling help risk appetites return. Tesla (TSLA) shares bounced strongly on Tuesday, eventually closing up over 5% in a strong day for equities. The stock market was buoyed by news of some Russian deployments returning to their bases. Russia then appeared to confirm this as hopes grew for a diplomatic solution. This saw an obvious bounce in equities (https://www.fxstreet.com/markets/equities) with the strongest names being those that were previously the weakest. Understandable, but is this gain sustainable? NATO this morning has said it sees no sign of Russian troops pulling back from the Ukraine border. NATO has said it sees Russian troop numbers still growing along the Russian-Ukraine border. This news (https://www.fxstreet.com/news) still has legs. Volatility has been high as a result and will likely continue that way. Tesla Stock News The latest quarterly SEC filings have provided much information to pore over. In particular, Tesla, they do note some hedge fund selling. This is not too surprising given the record highs TSLA stock pushed on to before Elon Musk sold a stake. Benzinga reports that the latest filing shows Ray D'Alio's Bridgewater cutting its stake in Tesla. Cathie Wood of ARK Invest was regularly top-slicing her firm's stake in Tesla recently. CNBC also reported yesterday that hedge fund Greenlight Capital had made a bearish bet on Tesla shares. Greenlight, according to the report, has been a long time Tesla bear. Apart from those snippets though, macroeconomic factors are the main driver of the Tesla stock price currently. Electric vehicle stocks have not been a strong sector so far in 2022 as growth, in general, is out of favor with investors. This has led to steep falls in other names such as Rivian (RIVN) and Lucid (LCID). Both are at a much earlier stage of development than Tesla (TSLA) and on that basis, we would favor Tesla (TSLA) over them. But we must stress we would ideally avoid the sector entirely until perhaps the second quarter. Once markets have adjusted to the prospect of higher rates, some high-growth stocks may benefit. historical in a Fed (https://www.fxstreet.com/macroeconomics/central-banks/fed) hiking cycle the main indices do advance but growth sectors struggle. Rivian so far is down 36% year to date, Lucid is down 24% while Tesla is the outperformer, down 12% for 2022. Tesla Stock Forecast We remain in the chop zone between the two key levels of $945 and $886. Breaking $945 should lead to a move toward $1,063. That would still be consistent with the longer-term bearish trend. Nothing goes down or up in a straight line. TSLA is unlikely to be able to fight the current overpowering macroeconomic backdrop of rising rates (https://www.fxstreet.com/rates-charts/rates) hitting high growth stocks. But breaking $945 is still significant in the short term and should see some fresh momentum. While $886 is significant, the 200-day moving average at $826 should have our real attention on the downside. Tesla has not closed below this level in over 6 months, so that would be significant and again lead to a fresh influx of momentum. Just this time though, it would be selling momentum. Tesla (TSLA) chart, daily Short-term swing traders should note the volume momentum behind moves. Once volume dries up, Tesla tends to fall off intraday. From the 15-minute chart below, we have an opening gap from Tuesday down to $880. This is short-term support, but a break will see the bottom of Monday's range at $840 tested. Tesla (TSLA) 15-minute chart

  Not only won’t inflation end soon, it’s likely to remain high. Whether gold will be able to take advantage of it will depend, among others, on the Fed. Do you sometimes ask yourself when this will all end? I don’t mean the universe, nor our lives, nor even this year (c’mon, guys, it has just started!). I mean, of course, inflation. If only you weren’t in a coma last year, you would have probably noticed that prices had been surging recently. For instance, America finished the year with a shocking CPI annual rate of 7.1%, the highest since June 1982, as the chart below shows. Now, the key question is how much higher inflation could rise, or how persistent it could be. The consensus is that we will see a peak this year and subsequent cooling down, but to still elevated levels. This is the view I also hold. However, would I bet my collection of precious metals on it? I don’t know, as inflation could surprise us again, just as it did to most of the economists (but not me) last year. The risk is clearly to the upside. As always in economics, it’s a matter of supply and demand. There is even a joke that all you need to turn a parrot into an economist is to teach it to say ‘supply’ and ‘demand’. Funny, huh? When it comes to the demand side, both the money supply growth and the evolution of personal saving rate implies some cooling down of inflation rate. Please take a look at the chart below. As you can see, the broad money supply peaked in February 2021. Assuming a one-year lag between the money supply and price level, inflation rate should reach its peak somewhere in the first quarter of this year. There is one important caveat here: the pace of money supply growth has not returned to the pre-pandemic level, but it stabilized at about 13%, double the rate seen at the end of 2019. Inflation was then more or less at the Fed’s target of 2%, so without constraining money supply growth, the US central bank couldn’t beat inflation. As the chart above also shows, the personal saving rate has returned to the pre-pandemic level of 7-8%. It means that the bulk of pent-up demand has already materialized, which should also help to ease inflation in the future. However, not all of the ‘forced savings’ have already entered the market. Thus, personal consumption expenditures are likely to be elevated for some time, contributing to boosted inflation. Regarding supply factors, although some bottlenecks have eased, the disruptions have not been fully resolved. The spread of the Omicron variant of the coronavirus and regional lockdowns in China could prolong the imbalances between booming demand and constrained supply. Other contributors to high inflation are rising producer prices, increasing house prices and rents, strong inflation expectations (see the chart below), and labor shortages combined with fast wage growth. The bottom line is that, all things considered – in particular high level of demand, continued supply issues, and de-anchored inflation expectations – I forecast another year of elevated inflation, but probably not as high as in 2021. After reaching a peak in a few months, the inflation rate could ease to, let’s say, around 4% in December, if we are lucky. Importantly, the moderate bond yields also suggest that inflation will ease somewhat later in 2022. What does it mean for the gold market? Well, I don’t have good news for the gold bulls. Gold loves high and accelerating inflation the most. Indeed, as the chart below shows, gold peaks coincided historically with inflation heights. The most famous example is the inflation peak in early 1980, when gold ended its impressive rally and entered into a long bearish trend. The 2011 top also happened around the local inflationary peak. The only exception was the 2005 peak in inflation, when gold didn’t care and continued its bullish trend. However, this was partially possible thanks to the decline in the US dollar, which seems unlikely to repeat in the current macroeconomic environment, in which the Fed is clearly more hawkish than the ECB or other major central banks. The relatively strong greenback won’t help gold shine. Surely, disinflation may turn out to be transitory and inflation may increase again several months later. Lower inflation implies a less aggressive Fed, which should be supportive of gold prices. However, investors should remember that the US central bank will normalize its monetary policy no matter the inflation rate. Since the Great Recession, inflation has been moderate, but the Fed has tightened its stance eventually, nevertheless. Hence, gold may experience a harsh moment when inflation peaks. Thank you for reading today’s free analysis. We hope you enjoyed it. If so, we would like to invite you to sign up for our free gold newsletter. Once you sign up, you’ll also get 7-day no-obligation trial of all our premium gold services, including our Gold & Silver Trading Alerts. Sign up today! Arkadiusz Sieron, PhDSunshine Profits: Effective Investment through Diligence & Care.

The possibility of another round of discussion between Russia and Ukraine and Jerome Powell’s more dovish than expected testimony saved the day for equity investors yesterday. The S&P500 rallied 1.86%, while Nasdaq gained 1.62% on Wednesday, but the 50-DMA finally crossed below the 200-DMA confirming a long-awaited death cross formation on Nasdaq’s daily chart. Elsewhere, according to S&P Global Market Intelligence, the short interest against the energy stocks has peaked to the highest levels in more than a year, as the latest rally in global energy stocks ‘may be petering out, even with oil prices surging to their highest levels since 2014’. But US and Brent crude continue their jaw-dropping advance this morning as OPEC+ decided to maintain its production target unchanged at 400’000 extra barrels per day from April. Among safe havens, demand in US dollar remains strong. Gold performs well, but Bitcoin becomes a risky safe haven as the latest news suggests that the US Department of Justice announced a new task force broadly designed to enforce sanctions, which will also target efforts to use cryptocurrency to evade US sanctions. Watch the full episode to find out more! 0:00 Intro 0:28 Powell cheers up investors 2:38 Market update 3:40 Short bets against energy stocks increase, as oil rallies 8:34 Bitcoin risks sanctions from the West, as well 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.

EURUSD sees limited bounce The euro retreats as the ECB may dial back normalization amid the Ukraine crisis. A fall below the daily support at 1.1130 was an invalidation of the February rebound and forced buyers to bail out. The lack of support means that short-term sentiment has turned bearish once again. An oversold RSI may lift the pair temporarily due to profit-taking, but trend followers could be looking to sell into strength. 1.1230 is the closest resistance. A new round of sell-off may push the euro beyond 1.1050. USDCAD breaks support The Canadian dollar jumped after the Bank of Canada raised its key interest rate to 0.5%. A break below the demand zone, around 1.2680, has put buyers on the defensive. The daily support at 1.2640 was a major level. And its breach could trigger a sell-off towards 1.2560, threatening the rally from late January. Further south, January’s low at 1.2450 is a key floor to keep the greenback afloat. An oversold RSI may lead short-term sellers to exit, driving up the price briefly, but a rebound may be capped by 1.2700. USOIL bounces higher WTI crude skyrocketed as the war in Ukraine could drag on pushing up energy prices. The rally accelerated after it broke above the psychological tag of 100.00. The RSI’s overbought situation in both hourly and daily charts indicates overextension. Profit-taking may drive the price back down and let the bulls take a breather. 104.00 is the immediate support in this case. Sentiment is overwhelmingly bullish and pullbacks could be limited. 120.00 would be the next stop when volatility comes around again.

Price has been in this range since 23rd February till date within $0.0168 & $0.0217. Price has tested this price level serving as support and resistance twice. Price is approaching the support at $0.0168 to test it the 3rd time. The question on our mind is “will price break this support or rise to the resistance zone at $0.0217?” There’s no answer to that yet. We need confirmation to know what price is going to do. Therefore, this is the possible direction to which it can follow. What do you think? Share your opinion in the comment section You can also demand for analysis of your preferred coin Happy Trading https://www.tradingview.com/chart/SLPUSDT/HD1GITO6-SLP-CONSOLIDATION-WITHIN-0-0168-0-0217-STILL-ACTIVE/ Join my FREE Telegram Channel for daily updates and signals https://t.me/Petrock_Signals

The CBOE Volatility Index (VIX) is a real-time index. It is derived from the prices of SPX index options with near-term expiration dates that are utilized to generate a 30-day forward projection of volatility. The VIX allows us to gauge market sentiment or the degree of fear among market participants. As the Volatility Index VIX goes up, fear increases, and as it goes down, fear dissipates.Commodities and equities are both showing renewed strength on the heels of global interest rate increases. Inflation shows no sign of abating as energy, metals, food products, and housing continues their upward bias.During the last 18-months, the VIX has been trading between its upper resistance of 36.00 and its lower support of 16.00. As the Volatility Index VIX falls, fear subsides, and money flows back into stocks.VIX – VOLATILITY S&P 500 INDEX – CBOE – DAILY CHARTSPY RALLIES +10%The SPY has enjoyed a sharp rally back up after touching its Fibonacci 1.618% support based on its 2020 Covid price drop. Money has been flowing back into stocks as investors seem to be adapting to the current geopolitical environment and the change in global central bank lending rate policy.Resistance on the SPY is the early January high near 475, while support remains solidly in place at 414. March marks the 2nd anniversary of the 2020 Covid low that SPY made at 218.26 on March 23, 2020.SPY – SPDR S&P 500 ETF TRUST - ARCA – DAILY CHARTBERKSHIRE HATHAWAY RECORD-HIGH $538,949!Berkshire Hathaway is up +20.01% year to date compared to the S&P 500 -4.68%. Berkshire’s Warren Buffet has also been on a shopping spree, and investors seem to be comforted that he is buying stocks again. Buffet reached a deal to buy insurer Alleghany (y) for $11.6 billion and purchased nearly a 15% stake in Occidental Petroleum (OXY), worth $8 billion.These acquisitions seem to be well-timed as insurers and banks tend to benefit from rising interest rates, and Occidental generates the bulk of its cash flow from the production of crude oil.As technical traders, we look exclusively at the price action to provide specific clues as to the current trend or a potential change in trend. With that said, Berkshire is a classic example of not fighting the market. As Berkshire continues to make new highs, its’ trend is up!BRK.A – BERKSHIRE HATHAWAY INC. - NYSE – DAILY CHARTCOMMODITY DEMAND REMAINS STRONGInflation continues to run at 40-year highs, and it appears that it will take more than one FED rate hike to subdue prices. Since price is King, we definitely want to ride this trend and not fight it. It is always nice to buy on a pullback, but the energy markets at this point appear to be rising exponentially. The XOP ETF gave us some nice buying opportunities earlier at the Fibonacci 0.618% $71.78 and the 0.93% $93.13 of the COVID 2020 range high-low.Remember, the trend is your friend, as many a trader has gone broke trying to pick or sell a top before its time! Well-established uptrends like the XOP are perfect examples of how utilizing a trailing stop can keep a trader from getting out of the market too soon but still offer protection in case of a sudden trend reversal.XOP – SPDR S&P OIL & GAS EXPLORE & PRODUCT – ARCA – DAILY CHARTKNOWLEDGE, WISDOM, AND APPLICATION ARE NEEDEDIt is important to understand that we are not saying the market has topped and is headed lower. This article is to shed light on some interesting analyses of which you should be aware. As technical traders, we follow price only, and when a new trend has been confirmed, we will change our positions accordingly. We provide our ETF trades to our subscribers, and somewhat surprisingly, we entered five new trades last week, four of which have now hit their first profit target levels. Our models continually track price action in a multitude of markets, asset classes, and global money flow. As our models generate new information about trends or a change in trends, we will communicate these signals expeditiously to our subscribers and to those on our trading newsletter email list.Sign up for my free trading newsletter so you don’t miss the next opportunity! Furthermore, successfully trading is not limited to when to buy or sell stocks or commodities. Money and risk management play a critical role in becoming a consistently profitable trader. Correct position sizing utilizing stop-loss orders helps preserve your investment capital and allows traders to manage their portfolios according to their desired risk parameters. Additionally, scaling out of positions by taking profits and moving stop-loss orders to breakeven can complement ones’ success.WHAT STRATEGIES CAN HELP YOU NAVIGATE The CURRENT MARKET TRENDS? Learn how we use specific tools to help us understand price cycles, set-ups, and price target levels in various sectors to identify strategic entry and exit points for trades. Over the next 12 to 24+ months, we expect very large price swings in the US stock market and other asset classes across the globe. We believe the markets have begun to transition away from the continued central bank support rally phase and have started a revaluation phase as global traders attempt to identify the next big trends. Precious Metals will likely start to act as a proper hedge as caution and concern begin to drive traders/investors into Metals and other safe-havens.We invite you to join our group of active traders and investors to learn and profit from our three ETF Technical Trading Strategies. We can help you protect and grow your wealth in any type of market condition by clicking on the following link: www.TheTechnicalTraders.com

Bitcoin wins the race   While Russia accepts hard currencies like gold, a move like this shows that the efficient attributes of bitcoin come to the forefront in times of crisis and are accepted for large business transactions between nations. Bitcoin, daily chart, price breakout: Bitcoin in USD, daily chart as of March 29th, 2022. Shortly after, president Putin confirmed this new way of doing business. In addition, China and Russia agreed to a thirty-year contract in the gas sector, transacted in Euros. We can see that we find ourselves in times of currency warfare and that it is essential to pay close attention to where and in what form we store our values. The daily chart above reflects this recent news in a price advance of bitcoin from US$37,567 to US$47,701. A 28% advance in just two weeks. Bitcoin broke through the sideways range, and this week shall show whether this breakout will be a successful one or not. In this case, the bulls have their odds much in favor over the bears.     Bitcoin, weekly chart, price left the station: Bitcoin in USD, weekly chart as of March 29th, 2022. We have now left the entry zone (green box) compared to last week’s chart book and the published weekly chart. While the crowd now chases a trade, struggling with the typical inefficiencies of volatility breakouts (bad fills, slippage, being late), we are established in our positioning with the sum of 9 accumulated runners. The runners being the last 25% of each initial position. A fully de-risked or more precisely no-risk venture (see quad exit)! Looking at the weekly chart, we find the resistance distribution zones at around US$49,650 and US$52,430. We place additional entries if the price returns to the entry box top. Bitcoin, monthly chart, if March closes strong: Bitcoin in USD, monthly chart as of March 28th, 2022. The price has entered the confirmed buy zone from a monthly perspective. The dual chart shows the progression from last week’s anticipation to this week’s chart book release. Should prices within this week stay within the green box, all-time frames are in alignment. A picture of a confirmed bullish bitcoin trend. It is a rare occurrence and confirmation for larger time frame traders and a call to look for low-risk entries, if no sufficient exposure is at play yet. Bitcoin/Gold-Ratio, daily chart, Bitcoin wins the race: Bitcoin/Gold-Ratio, daily chart as of March 28th, 2022. Another split-screen view of a chart (a daily chart of the bitcoin/gold ratio) shows the progression of last week’s chart book publication and the situation right now. We had a triangle breakout last week and a substantial advance since then. The suggested rotation out of gold and into bitcoin was/is a successful one. The overall move was 30% in just two weeks. One can use this relationship as well to indicate bitcoins’ recent gain in strength and direction. Bitcoin wins the race: Change is never accepted lightly. We typically resist change and prefer an existing state of affairs as human beings. Nevertheless, we find ourselves in less than average circumstances with a worldwide pandemic, a never-ending war, and a general divide in opinions. Russia’s recent move towards approval of bitcoin shows that when the rubber meets the road, what works and is practical in times of crisis and need, wins the race. While governments around the globe feverishly try to get their electronic payment systems developed, bitcoin already finds its use spreading, and successfully so.    Feel free to join us in our free Telegram channel for daily real time data and a great community. If you like to get regular updates on precious metals and cryptocurrencies, you can also subscribe to our free newsletter. Disclosure: This article and the content are for informational purposes only and do not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision. The views, thoughts and opinions expressed here are the author’s alone. They do not necessarily reflect or represent the views and opinions of Midas Touch Consulting. By Korbinian Koller|March 29th, 2022|Tags: Bitcoin, Bitcoin bounce, Bitcoin bullish, Bitcoin consolidation, bitcoin/gold-ratio, crypto analysis, crypto chartbook, DeFi, low risk, quad exit, technical analysis, trading education|0 Comments About the Author: Korbinian Koller Outstanding abstract reasoning ability and ability to think creatively and originally has led over the last 25 years to extract new principles and a unique way to view the markets resulting in a multitude of various time frame systems, generating high hit rates and outstanding risk reward ratios. Over 20 years of coaching traders with heart & passion, assessing complex situations, troubleshoot and solve problems principle based has led to experience and a professional history of success. Skilled natural teacher and exceptional developer of talent. Avid learner guided by a plan with ability to suppress ego and empower students to share ideas and best practices and to apply principle-based technical/conceptual knowledge to maximize efficiency. 25+ year execution experience (50.000+ trades executed) Trading multiple personal accounts (long and short-and combinations of the two). Amazing market feel complementing mechanical systems discipline for precise and extreme low risk entries while objectively seeing the whole picture. Ability to notice and separate emotional responses from the decision-making process and to stand outside oneself and one’s concerns about images in order to function in terms of larger objectives. Developed exit strategies that compensate both for maximizing profits and psychological ease to allow for continuous flow throughout the whole trading day. In depth knowledge of money management strategies with the experience of multiple 6 sigma events in various markets (futures, stocks, commodities, currencies, bonds) embedded in extreme low risk statistical probability models with smooth equity curves and extensive risk management as well as extensive disaster risk allow for my natural capacity for risk-taking.

Summary:  Crude oil, in a downtrend since June, is showing signs of selling fatigue with the technical outlook turning more price friendly while fresh fundamental developments are adding some support as well. The energy crisis in Europe continues to strengthen, most recently due to lower water levels on the river Rhine preventing the movement of barges carrying coal and fuel products such as diesel. The result being an increased gas-to-fuel switching supporting the demand outlook for crude oil. Crude oil, in a downtrend since June, is showing signs of selling fatigue with the technical outlook turning more price friendly while fresh fundamental developments are adding some support as well. Worries about an economic slowdown driving by China’s troubled handling of Covid outbreaks, and its property sector problems as well as rapidly rising interest rates, were the main drivers behind the selling seen across commodities in recent months. Crude oil with its strong underlying fundamentals, with tight supply driven by Russia sanctions and OPEC struggling to lift production, was the last shoe to drop and since the mid-June peak, speculators and macroeconomic focused funds have been net sellers of both WTI and Brent crude oil futures. With most of these market participants using the front of the futures curve, the selling has seen the forward curve flatten, a development that is normally viewed as price negative as it signals reduced tightness in the market. However, for that to ring true we should see inventory levels of crude oil and fuel products rise while refinery margins should ease. None of these developments have occurred and it strengthens our belief that the weakness sign has more to do with position adjustments and short positions being implemented by traders focusing on macro instead of micro.  In the week to August 9, the combined net long in Brent and WTI slumped to 304k lots a level last seen in April 2020, and 209k lots below the mid-June peak.  While the macro-economic outlook is still challenged, recent developments within the oil market, so-called micro developments, have raised the risk of a rebound. The energy crisis in Europe continues to strengthen, most recently due to lower water levels on the river Rhine preventing the movement of barges carrying coal and fuel products such as diesel. The result being surging gas prices as utilities are forced to buy more gas to keep the turbines running. This week the cost of Dutch TTF benchmark gas reached $400 per barrel of crude oil equivalent. Such a wide gap between oil and gas has and will continue to attract increased demand for fuel-based product at the expense of gas and this switch was specifically mentioned by the IEA in their latest update as the reason for raising their 2022 global oil demand growth forecast by 380k barrels per day to 2.1 million barrels per day. Since the report was published the incentive to switch has increased even more, adding more upward pressure on refinery margins, so called crack spreads (EU diesel crack shown below as an example) As mentioned, the recent selling pressure together with a deteriorating macro-economic backdrop have been the main drivers behind crude oils near 40-dollar slump since mid-June. The WTI chart below points to support at $85.50, a level almost reached on Tuesday. The price action is currently confined within a declining wedge and a break to the upside could trigger a strong buying response. For that to happen the price first needs to go back above $92 and the 21-day simple moving average, currently at $92.85. Source: Saxo Bank   How to invest in energy and the unfolding energy crisis? By Peter Garnry, Head of Equity StrategySummary:  We are used to not think about the energy sector, but the galloping global energy crisis has illuminated our deficits in primary energy due to years of underinvestment in fossil fuels and renewable energy sources inability to scale fast enough with the green transformation and electrification of our economy. It seems more likely now that the non-renewable and the renewable energy sector will both provide attractive returns as we will need both to overcome our short-term energy crisis and long-term aspirations of a greener energy future.   Source: Refinery margin jump lends fresh support to crude

  Summary:  The European energy crisis faces a Lehman moment, and Europe will engage in a large-scale fiscal expansion to counter the high energy prices. Any production cuts at the OPEC+ meeting may further tighten the energy markets. EU emergency meeting at the end of the week will be key to addressing the short-term pain and riding out the winter demand, and tough decision may be ahead. A jumbo ECB rate hike, along with another tightening move by the RBA, will also pave the way for the Fed meeting later this month. China’s trade and inflation data is also due this week but the resurgence of the pandemic is further weighing on the economic outlook and garners greater attention. NIO and Bilibili earnings will be in focus. ECB rate hike in focus after front-loading chatter The European Central Bank meeting will be in focus after plenty of chatter around front-loading rate hikes in the last few days. Most members have come out in support of a 75 basis point rate hike for the September, and the market pricing suggests 125 basis points between September and October meetings (so one 75bps and one 50bps). Only Philip Lane seemed to strike a different tone, saying that he would prefer step-by-step hikes to make sure the financial markets have time to absorb the tightening in a measured manner. August inflation for the Euro area, reported last week, also suggested further price pressures with a 9.1% YoY print from 8.9% YoY previously. EU emergency meeting to face some tough decisions The panic button on European energy crisis has been pressed. With Russia cutting off gas supplies, even the built-in storage levels will not be able to meet the winter demand. Many businesses have reported shutdown, and households are reeling under a cost crisis. As a result, government support has started to flow in with Germany unveiling a €65 billion package to shield consumers and businesses from energy price hikes on Sunday. The package will be paid for via an energy windfall tax and bringing forward a planned 15% global minimum corporate tax. Sweden and Finland have announced liquidity guarantees of USD 23bn to electricity companies. All eyes are now on the EU emergency meet scheduled for Friday, 9 September, which may include discussions around price caps or rationing. The EU should also take this as an opportunity to address the long term energy supply issues, and a possible discussion around nuclear supplies may be warranted. OPEC+ members meet to discuss supply Oil prices have seen a downward pressure last week following demand concerns with China announcing fresh lockdowns and North Asian and Euro-area PMIs disappointing. However, the supply situation seems to have worsened over the weekend with a possible scale back in Russian exports due to the G7 price cap. The prospect for additional barrels from Iran also hangs in the balance after Iran said the US response was “not constructive”. The OPEC+ meeting today attracts greater attention after Saudi Arabia openly floated the possibility of cuts to output. But the recent price action and dwindling Iran situation suggests we could see a price supportive action from OPEC.  China Caixin Services PMI and credit data The week kicks off with Caixin Services PMI, which is expected to stay in the expansion territory (Bloomberg consensus: 54.0). The most watched data will be the August aggregate financing and RMB loans.  Chinese policymakers are determined to boost loan growth. After the disappointing July loan growth data, the PBoC cut its policy medium-term lending facility rates unexpectedly.  The release date of the credit data is not fixed but it is expected to come between Sept 9 to 15.  Analysts are expecting new RMB loans in August to come in at RMB1,500 billion (Bloomberg survey) versus RMB679 billion in July.  The outstanding RMB loans are expected to grow 11% YoY in August, the same rate as last month.  New aggregate financing is expected to rise to RMB2,100 billion versus RMB756 billion in July, but much lower than the RMB2,989 billion in August 2021.  China’s exports in August are expected to have slowed China’s exports in August would probably come in weaker (Bloomberg consensus: 12.3% vs 18.0% in July) as container throughput data suggested. The resurgence of pandemic control restrictions, production disruptions due to power rationing, and a high base last year could have contributed to the deceleration.  China’s PPI is expected to have risen as CPI remained stable in August PPI is expected to fall sharply to 3.2% (Bloomberg consensus) in August from 4.2% in July.  Base effect and a decline in coal prices in August could be factors contributing to the deceleration in producer price inflation.  CPI, however, is expected to edge up to 2.8% in August from 2.7% in July.  Analysts suggest that favourable base effect was offset by vegetable price increases amidst the heatwave. The resurgence of Covid-19 cases and Chengdu lockdown Chengdu, a city of 21 million residents and the largest city in western China, is under lockdown to fight an outbreak of Covid-19 cases.  Shenzhen, the southern technology and manufacturing hub has imposed a number of restrictions on business operations and the mobility of its residents.  Likewise, Guangzhou, Tianjin, Shanghai, Urumqi, Wuhan, Dalian, and Shijiazhuang are imposing various degrees of restrictions and PCR test requirements.  Investors will watch the development of these pandemic control measures closely this week.  Australia’s RBA to continue to hike rates, take away stimulus punchbowl. Could RBA hikes cause a property market collapse? Australia’s central bank holds its monthly meeting tomorrow (Sept 6), with the RBA expected to raise rates by 0.25% (according to Bloomberg Economics) in a bid to slow inflation. However, futures market pricing suggests a 0.4% hike will be made, which will take the cash rate to 2.25% (up from 1.85%). Pricing also suggests the RBA will raise rates from 1.85% to ~3.2% by December 2022, before taking rates to 3.8% in July 2023. If the RBA does raise rates by an additional ~2% between now and July 2023, the average $600,000 mortgage will cost another A$727 / month or A$8,724 a year. But the RBA believes that consumers will be able to absorb higher interest rates allowing the A$10 trillion property market to avoid forced sales, given that many mortgage holders have already made advance repayments. However, pricing in the property market suggests it is struggling to absorb the 1.75% in hikes from May. In August property prices fell at their quickest pace since 1982, and levels of construction activity saw their biggest decline since 2016. Australian households are some of the most indebted in the world with household debt to GDP sitting at 126% (vs US Debt to GDP 80%), leading us to think that debt to income ratios could spike to their highest levels since the GFC. For investors, it’s worth noting; we continue to monitor the health of local banks as well as property stocks and property ETFs, which will likely come under further pressure. Conversely, we continue to see upside for energy prices (which is the biggest component of inflation). For traders, this could flow into currency markets where we will be watching the AUDEUR, and AUDCNH pairs. Australian economic growth data released on Wednesday will be a key focus Australian economic growth is expected to have shown the A$2.2 trillion economy grew at 1.2% in the second quarter through to June (consensus estimate), and 3.8% from a year earlier. Second quarter GPD will likely get a boost from record retail sales, and a pickup in overseas travel. However, construction costs and hampered residential construction activity could weigh on the headline GPD figure. Policy makers are trying to avoid a hard landing, while at the same time slowing runaway record inflation. A Bloomberg survey suggests Australia could avoid a recession, but data suggests there could still be a 23% chance of one over the next 12 months. Kingsoft Cloud, Nio, Brilliance China, and Bilibili are expected to report earnings The week kicks off with Kingsoft (KC:xnas) reporting on Tuesday. Analysts in general expect that the recent resurgence of Covid-19 pandemic control measures has negatively affected enterprise cloud business.  On Wednesday, automakers NIO (NIO:xnys/09866:xhkg) and Brilliance China Automotive (01114:xhkg) are going to report results. Investors will focus on NIO’s margins (which disappointed in Q1) and the management’s updates on 2022 delivery guidance. The highlight for the week in corporate earnings may be Bilibili (BILI:xnas/09626:xhkg) reporting on Thursday. The median forecast of analysts surveyed by Bloomberg is calling for a 9% growth in Q2 revenue to RMB4.9billion and a larger loss of RMB1.74 billion (vs RMB1.12 billion in Q2, 2021).  Apple ‘Far Out’ event this Wednesday Apple (APPL:xnas) is holding its annual fall event, dubbed “Far Out” this year on Wednesday, Sept 7 at 10:a.m. pacific time.  In the event, Apple is due to reveal its iPhone 14. There is speculation that iPhone 14 will come with mobile satellite connectivity, working with a satellite company, Globalstar (GSAT:xase).   Key economic releases & central bank meetings this week Monday 5 September China: Caixin China PMI Services (Aug)S&P Global Worldwide manufacturing PMIsAustralian Retail Sales (Jul)Thailand Core Inflation (Aug)Singapore Retail Sales (Jul)Eurozone Retail Sales (Jul) Tuesday 6 September S&P Global Construction PMIsUnited Kingdom BRC Retail Sales Monitor (Aug)Japan Household Spending (Jul)Philippines Inflation Rate (Aug)Australia RBA Interest Rate DecisionGermany Factory Orders (Jul)Taiwan Inflation Rate (Aug) Wednesday 7 September China: Exports, Imports & Trade Balance (Aug.)China: Foreign reserves (Aug)Australia GDP Growth Rate (Q2)Japan Coincident Index Prel (JUL)Germany Industrial Production (Jul)United Kingdom Halifax House Price Index (Aug), BBA Mortgage Rate (Aug)Italy Retail Sales (Jul)Eurozone GDP (Q2)United States MBA Mortgage Applications (02/SEP), Balance of Trade (Jul), Fed Beige BookCanada Balance of Trade (Jul), BoC Interest Rate decision Thursday 8 September Japan GDP (Q2), Eco Watchers Survey (Aug)Australia RBA Gov Lowe Speech, Balance of Trade (Jul)Eurozone ECB Interest Rate Decision, ECB Press ConferenceUnited States Jobless Claims (Sep), Consumer Credit (Jul)New Zealand Electronic Retail Card Spending (Aug) Friday 9 September China: CPI & PPIChina: Aggregate Financing, New Yuan Loans, Money Supply (Sept 9 to 15)Brazil Inflation Rate (Aug)Canada Employment Change (Aug)United States Wholesale Inventories (Jul)Russia GDP (Q2), Inflation Rate (Aug) Key earnings releases this week Tuesday: Ashtead Group, Kingsoft Cloud Wednesday: People’s Insurance Co Group, Exor, Copart, NIO, Brilliance China Thursday: Sun Hung Kai Properties, Sekisui House, Zscaler, DocuSign, Bilibili Friday: Dollar Stores, Kroger

Retail Sales in Australia Today at 3:30 CET Australia released monthly retail sales data. Retail sales in Australia started the year high at 7.3%. Unsettled at the end of January, and at the beginning of February, it dropped sharply to the level of -4.4%. After that, it recovered significantly to 1.8%. In the steppe it slightly decreased to the level of 0.9% and in July to the level of 0.2%. At the end of last month, positive changes appeared and the index will reach 1.3%. It was much higher than forecasted, the weather forecast for this period was 0.3%. According to the data, the current change in the total value of sales adjusted for inflation at the retail level remains at the level of 1.3%. This is the expected level. Source: investing.com PMI Index will drop? The UK awaits Composite PMI Index results. The level of activity of purchasing managers in Great Britain remained at the level of 53.6 at the beginning of the year. It reached the highest level in March (60.9). After that, it began to decline gradually. In May it fell to 51.8. In the following two months, it remained at 53.1 and 52.8, respectively. Although the index was above 52, it is forecast to drop to 50.9. Official data will be released at 10:30 CET. Source: investing.com Read next: ECB Will Continue To Hike Rates To Slow Inflation? | FXMAG.COM The U.K. Services Purchasing Managers Index At 10:30 CET UK will also publish the results of the monthly activity level of purchasing managers in the service sector. For the first 3 months of this year, this activity was in a rising trend. In January, the index reached the level of 54.1, and then rose to the levels of 60.5 and 62.6, respectively. In April, it began to decline, reaching the level of 58.9. In May, it fell to 53.4. In June, it increased by 0.9. The lowest level of 52.6 was recorded in July. The current forecasts show a slight decrease in the ratio to 52.5. The visible decline, that will begin in April, may be largely due to the geopolitical situation. Source: investing.com Important Speech and Meeting Today at 17:30 CET there will be a speech from the Monetary Policy Committee of the Bank of England, Dr Catherine L Mann. Its public involvement is often used to throw up subtle hints about future monetary policy. OPEC is responsible for nearly 40% of the world's oil supplies. An OPEC meeting will be held at 12 CET in the United States. Representatives of 13 oil-rich countries take part in OPEC meetings. The situation of energy markets and the quantity of oil produced is most often discussed at such meetings. Will the indicator go down again ? The PMI monthly Composite Reports on Manufacturing and Services are based on research by more than 300 business executives at private manufacturing companies and 300 private service companies, due to be published today at 10 CET. In the initial periods, there was an increase. In January, the index was recorded at 52.3. Later, it also increased and fluctuated between 54 and 55. Since June, the trend was reversed, the indicator in this period reached the level of 52. In the following month it dropped below the level of 50. In July, the PMI monthly Composite Reports on Manufacturing and Services was 49.9. It is forecasted that the result will decrease to the level of 49.2. Source: investing.com The Russia HSBC Services PMI Index Russia today released HSBC Services PMI data at 8 CET. The results for the last period are much lower than before. The current reading is at 49.9. Meanwhile, the result for July was quite high at 54.7. Such a decrease is perceived negatively for the RUB. The HSBC Services PMI Index is developed for providing the most up-to-date possible indication of what is really happening in the private sector economy by tracking variables such as sales, employment, inventories and prices. Source: investing.com Source: https://www.investing.com/economic-calendar/

There is plenty going on in energy markets at the moment, which should keep prices volatile . The market has largely ignored the G-7 agreeing to a Russian oil price cap, instead focus is on today’s OPEC+ meeting. In addition, supply concerns in the European natural gas market have grown once again, with Nord Stream gas flows not resuming Energy - OPEC+ likely to keep output targets unchanged G-7 nations agreed on a price cap for Russian oil at the end of last week. This is an idea that has been pushed for several months now by the US with the hope that it would offer some relief to the oil market. However, looking at the price action since the announcement (prices have moved higher), it is pretty clear that the market is not convinced that the cap will work. The idea of the cap is to allow buyers to access G-7 and EU insurance and shipping services for Russian oil, if the price is at or below the price cap. However, there are still a lot of obstacles and unknowns regarding the cap. Firstly, EU members will have to accept the proposal and changes will need to be made to the sanctions package. It could be difficult getting all member states to agree to this latest proposal. Secondly, and even if all EU members agree to the cap, G-7 nations need to ensure that buyers are willing to take part in the price cap plan to make it effective. This means that larger buyers such as China, India and Turkey would need to take part. There is no guarantee they will, particularly after Russia has said that it will not supply any country who follows the price cap. In addition, a big unknown is what price level the cap will be set at. It is pretty clear that it will need to be set above Russian production costs, otherwise there is little incentive for Russia to maintain production at current levels. Finally, monitoring and enforcing the price cap will be a significant challenge as well. While there is plenty of uncertainty over Russian flows, there is also quite a bit of uncertainty over OPEC+ output policy and what the group will decide today at its monthly meeting.  Previous comments from the Saudi energy minister suggested that the group may have to cut output due to a dislocation between the physical and paper markets. Several OPEC producers have since echoed these comments. However, we believe that OPEC+ will leave output targets unchanged for next month. It is difficult to justify cutting output when the market is trading near US$100/bbl. In addition, Russia is reportedly against cutting output as it sends the wrong signal to the market about the supply and demand picture. Furthermore, it would make more sense for OPEC+ to wait for further clarity on Iranian nuclear talks before taking any action. These talks appear to have taken a turn for the worse, with the US saying that Iran’s latest response was “not constructive’. Finally, we are likely to see further volatility in the European gas market this week. And this is after gas flows along the Nord Stream pipeline did not resume over the weekend, following maintenance. Gazprom claims that an oil leak at the Portovaya compressor station means that the Nord Stream pipeline will be fully shut down “until the operational defects in the equipment are eliminated”. Prior to last week’s maintenance, Nord Stream was operating at only 20% of capacity. The halting of flows means that Europe will lose close to 1bcm of natural gas supply per month. The market will now likely become increasingly nervous about flows via Ukraine as well as TurkStream. What is clear is that the more Russia reduces gas flows to Europe, the less leverage they have over Europe. Metals - more supply woes for aluminium While most industrial metals ended lower on Friday, LME aluminium managed to eke out a small gain due to persistent supply risks (especially from Europe and China as the power crisis lingers). As per the latest reports, Dutch aluminium smelter Aldel is going to suspend its remaining capacity due to high energy prices and a lack of government support. The smelter has an annual production capacity of 110kt for primary aluminium and 50kt for recycled aluminium. Meanwhile, there are some concerns that Yunnan province in China could see some similar power rationing to what has been seen in Sichuan province, due to lower hydro power output. Yunnan province is home to a large amount of aluminium smelting capacity, which stands at around 5.6mtpa, accounting for 12.7% of China’s total installed aluminium smelting capacity according to Shanghai Metals Market. Novelis Inc. joins the list of industrials trying to avoid exposure to Russian metal since the invasion of Ukraine. A new tender issued for 2023 supply to its European plants specifies that no metal of Russian origin would be allowed as part of any deal. Existing Novelis contracts won’t be affected by the new conditions and would allow the supply of Russian metal. The latest CFTC data shows that speculators increased their bearish bets in COMEX copper by 3,544 lots over the last reporting week, leaving them with a net short position of 8,312 lots as of last Tuesday. Moving to precious metals - speculators decreased their bullish bets in COMEX gold by 9,600, to leave them with a net long of 20,726 lots at the end of the last reporting week. Agriculture – speculative interest in corn remains high It was another week of strong buying interest from speculators in CBOT corn as adverse weather in the US and parts of Europe is keeping current crops in poor condition and is weighing on supply prospects. CFTC data shows that money managers increased net longs in CBOT corn by 39,251 lots over the last week, with them holding a net long of 221,467 lots as of 30 August. The move higher was predominantly driven by fresh longs, with the gross long position increasing by 30,446 lots.  Meanwhile, the managed money net long in CBOT soybeans fell by 2,670 lots over the week to 101,801 lots last week, whilst the managed money net short in CBOT wheat declined by 3,822 lots over the week, to leave net shorts at 22,247 lots. Ukraine has increased exports of agricultural products to around 5mt in August according to Ukraine’s Ministry of Infrastructure, which has been driven by a ramping up of shipments through sea ports. Ukraine reportedly shipped around 1.7mt of product through the three ports that opened after the Russia-Ukraine deal, around 1.6mt through the Danube port, and rest by rail and road . Ukraine aims to increase exports to around 8mt in September. Read this article on THINK TagsRussian oil price cap Russia-Ukraine OPEC+ Nord Stream Gazprom Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

European stock markets are plunging at the start of the week following a day of mixed trade in Asia, with Gazprom’s announcement on Friday weighing heavily on the bloc. In the USA there is a bank holiday, Euro goes down as Nord Stream 1 is shut down A bank holiday in the US often results in relatively quiet trade everywhere else but that’s certainly not looking the case today. The decision not to restart gas flows via Nord Stream 1 after an oil leak was apparently discovered has created enormous uncertainty in Europe going into the winter. The euro slipped to a new 20-year low against the dollar in response to the shutdown. The decision conveniently came hours after the G7 agreed to an oil price cap and as countries announced they’re ahead of schedule in filling gas reserves. Many would argue it was only a matter of time until the decision was taken, with Europe having been squeezed over a number of months for one reason or another. There have been reports that Gazprom could increase deliveries via Ukraine as a result of the shutdown but it’s not clear whether this would be enough to offset the loss of Nord Stream 1. And considering Siemens has claimed that such a leak would not ordinarily affect the operation of a turbine and is easily fixed, you have to wonder whether Russia would actually take that decision. A painful winter lies ahead. A massive job for the incoming UK PM The UK will discover who its new Prime Minister will be today, with Liz Truss the standout favourite to win the run-off against Rishi Sunak. Whoever is victorious, the job facing them is enormous, with the economy facing a long recession and eye-watering inflation. Alleviating one while not exacerbating the other will be the first job for the incoming Prime Minister and it won’t be easy, to put it mildly. There’s a huge amount of pessimism around the UK at the moment, as evident by the pound, which looks on course to fall to its lowest level since 1985 against the dollar. Chinese headwinds strengthen China is also facing numerous headwinds going into the end of the year, with Covid once again creating huge uncertainty. Beijing’s commitment to its zero-Covid policy has created major challenges for the economy this year and with mass testing taking place over the weekend and lockdowns being extended in Chengdu, that’s going to persist. ​ The pressure is being felt in the yuan which fell for a sixth month in August and is continuing to fall against the dollar. That’s despite the best efforts of the PBOC which continues to set the yuan fix stronger than markets expect. To make matters worse, US President Biden is reportedly weighing up measures to limit US investment in Chinese tech firms. The US is becoming increasingly hawkish toward China and the latest move is another blow to its tech space. Major support being tested Bitcoin is continuing to show resilience around $20,000 but that’s really being put to the test as risk aversion sweeps through the markets once more. It’s down 1% so far today and trading a little below that crucial support level. A significant break at this point could be really damaging, with the following key level below here being the June lows around $17,500. Considering the outlook for risk appetite in the near term, it’s not looking good. For a look at all of today’s economic events, check out our economic calendar: www.marketpulse.com/economic-events/ 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. Risk aversion sweeps across Europe - MarketPulseMarketPulse

OPEC+ meets after price cap announcement Today’s OPEC+ meeting has been somewhat overshadowed by all the talk of oil price caps and Nord Stream 1. The group is expected to leave output targets unchanged but it’s likely that a cut will be at least discussed which, if followed through on, would create more volatility and uncertainty at a time of considerable unease. The economic outlook and potential for a new nuclear deal have weighed on prices recently, much to the frustration of Saudi Arabia in particular. An output cut won’t make them any friends at a time when the world is facing a cost-of-living crisis already and the group has failed to keep up with demand this year. The more sensible option may be to hold this month and revisit in the future when there’s more clarity; something that is seriously lacking at this moment in time. ​ Gold holding up for now Gold is treading water at the start of the week even as the dollar rallies strongly once more. Traders are favouring the safety of the greenback this morning but that’s not damaging appeal for the yellow metal. It’s come under considerable pressure in recent weeks as yields have risen and the dollar has bounced back and it’s now trading around a key area of support, which may be why we’re seeing more resilience. While $1,700 looks like a psychological barrier, $1,680 is key. A break of that could signal further pressure on gold, especially if accompanied by more aggressive tightening from central banks. 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. Oil eyes OPEC and Nord Stream 1, gold steady - MarketPulseMarketPulse

OPEC+ members surprised the market yesterday by agreeing to cut their output target by 100Mbbls/d for October. However, given that OPEC+ has been producing well below production targets for some time now, the impact of this cut on actual supply is limited What was agreed? OPEC+ agreed to cut production in October by 100Mbbls/d, which would take production targets back to the same levels as in August. The group highlighted volatility and reduced liquidity in the market as justifications for the move by helping improve stability and ensuring that the market functions in an efficient manner. Given the volatility in the market coupled with plenty of uncertainty, OPEC+ has not ruled out further action if and when it is needed. Is a 100Mbbls/d cut really a 100Mbbls/d cut? While the headline number is for a 100Mbbls/d cut, in reality, the actual cut will be much smaller. It is important to remember that OPEC+ have failed to hit their production targets all year. In July, OPEC+ output was actually more than 2.7MMbbls/d below the target production. Most producers have not been able to hit their targets and are producing quite some distance below where they should be. It is only Saudi Arabia, the UAE and Kuwait that have been producing at or near their agreed output levels. Therefore, it will likely be only these producers that will need to reduce output by their share of the 100Mbbls/d. Combined, these three producers would need to reduce output by around 40Mbbls/d from September levels. What does this mean for the market? Fundamentally this changes little in our supply and demand balance, and we will be keeping our oil price forecasts unchanged for the remainder of this year and 2023. However, the action from OPEC+ does seem to confirm that the floor for Brent is not too far below US$90/bbl. And while little changes in the supply/demand balance, it does not send a great message to the US administration, which has been putting pressure on OPEC for much of the year to increase output more aggressively. Read this article on THINK TagsSaudi Arabia Russia-Ukraine OPEC+ Oil Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

Brent steadies after OPEC+ boost Brent crude is a little lower today after seeing decent gains at the start of the week following the OPEC+ output announcement. The decision to reverse the 100,000 barrel per day increase in September was more symbolic than fundamentally significant, in that it doesn’t really change the dynamics in the market but it will make traders think twice about driving prices lower in the way they have recently. Read next: Interest rates hiked. The most important indicators continue their downward trend| FXMAG.COM The disturbing global economic outlook combined with the prospects for a nuclear deal between the US and Iran created a bearish case for oil prices, something that hasn’t been the case for much of the year. But the cartel has sought to quash that quickly by not just signalling a willingness to cut output but also leaving the door open to emergency meetings in order to address market volatility. In other words, if the market tries to drive the price much lower again, or the fundamentals change, the group will cut again and it won’t wait until 5 October. As far as Brent is concerned, that may have reinforced support around $90, with the group clearly favouring a price closer to $100. It will be interesting to see if the market tries to test the group’s resolve again or if this initial warning shot will prove enough. Recovering but for how long? Gold is enjoying a bit more of a recovery today, this time aided by a pullback in the US dollar. The greenback has been a strong headwind for the yellow metal and, along with rising yields, has driven it back towards $1,680 where it has once again run into firm support. While some may be encouraged by the rebound we’ve seen, I wonder how much appetite there’ll actually be for a significant and sustainable rebound. We’re seeing it face its first test now around $1,730 which until recently was a key area of support. If it overcomes this, further resistance could be found around $1,750-1,760 which would be a big test. A move above here could inspire some optimism but in this environment, that will be easier said than done. 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. Brent edges lower after OPEC, gold rises - MarketPulseMarketPulse

Oil prices fell as traders weighed in OPEC's production cuts, as well as further lockdowns in China. WTI dropped below $89 immediately after the group agreed to cut production by a modest 100,000 barrels a day. Following this surprising decision, Saudi Arabia said OPEC is ready to take additional action to support the oil market if needed. Oil prices have been declining since early June, and signs of a global slowdown, monetary tightening and lockdowns in China threaten to undermine energy demand. This prompted OPEC withdraw barrels of oil from the global market, changing course to restoring supply cuts imposed during the pandemic. The decision shows that the group is serious about managing oil markets, and that they are ready to take preemptive action.       Relevance up to 10:00 2022-09-07 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320921

The head of the Federal Reserve (Fed) Jerome Powell is expected to deliver a speech on Friday at Jackson Hole annual symposium. Investors are completely focused on Powell’s testimony mostly ignoring incoming macroeconomic data. However, some economic data was a matter of concern. Shocking PMI Prints PMI indexes in the United States and in some other countries came out shocking as Services PMI in the U.S. dropped in august to 44.1 points, while Production PMI in the United Kingdom fell to 46.0 points. The3se are worst reading since 2020. PMI’s in other countries with a minor exclusion are pointing to a global economic slowdown. Some positive tunes were brought by the Q2 2022 second GDP estimate in the U.S. and Germany. Estimates were upgraded to -0.6% from the previous -0.8% in America and to 0.1% from 0.0% in Germany. This could hardly comfort investors, but together with lower Initial Jobless Claims in the U.S. it leveled up the market before the weekend. Read next: Interest rates hiked. The most important indicators continue their downward trend| FXMAG.COM Stock Market Could Plunge! S&P broad market index lost around 2% this week. Major investment houses are warning its clients that a rise of monthly bond sales by the Fed to $95 billion in September would plunge the stock market by another 25-30%. Technical picture of the S&P 500 index demonstrates a downside patter of the index with primary target at 3900-4000 point. The U.S. stock market benchmark fell below the support at 4220 points close to the gap of the beginning of this week. It is quite possible this gap could be closed after Powell’s testimony. . During two previous week short positions for the 70% of targeted amount for S&P 500 index were opened at the average price at 4285-4290 points. The rest of the targeted volume would be used once new technical signals would emerge. The target area is located at 2100-2300 points that is expected to be reached by the end of 2022. Technical Analysis Suggest Brent Crude Oil Could Even Hit $50-60 Oil market is short of time to active an upside scenario with targets at $135-145 per barrel of Brent crude benchmark. There are no triggers for such a scenario to become real at the moment. Moreover, if Brent prices would close this week below $106 per barrel an aggressive downside formation could pressure prices to $75-85 per barrel, and even to the extreme targets at $50-60 per barrel by the end of November. So, the Powell’s speech at Jackson Hole could be the last chance for bulls to avoid this scenario. What Are Gold's Downisde Targets? Gold prices slightly rebounded from the support at $1700-1730 per troy ounce to $1760. However, it does not change much as the decision to open short positions has to be made in the first half of September either from $1800-1820 per ounce, or after prices drop below the support at $1700-1730. Both scenarios have downside targets at $1350-1450 per ounce.  Powell's Can Make EUR/USD Go Much Below Parity! EURUSD met its primary target at 0.99500-1.00500, and has missed a chance for a rebound. The pair is likely to continue diving deep below after it tested 0.99500 support level several times this week. Next week the euro may fell to 0.98500 is Powell’s speech would be disappointing. GBP/USD - It Seems It's Not The Best Moment To Start GBPUSD continues aggressive downside with the completed primary target at 1.18000-1.19000 with the remaining secondary targets at 1.15000-1.16000 that are becoming more as the Euro goes down. However, there are no good entry points to open any trade positions so far. Read next: ECB Will Continue To Hike Rates To Slow Inflation? | FXMAG.COM

Summary:  While the US markets were closed overnight for Labor Day, the futures this morning in Asia are indicating some respite after weeks of red. The US dollar was also softer in early Asian hours, while the focus remains on the European energy crisis and the EU emergency meeting scheduled for Friday. A token cut by OPEC+ and diminishing hope of a revival of the Iran nuclear deal supported oil prices, although China’s tightening restrictions continue to pose demand concerns. Sterling made a sharp recovery after new UK PM Liz Truss announced plans to freeze energy bills, easing some short-term concerns. Consensus expects another 50 basis points rate hike from Reserve Bank of Australia today, and US ISM services will be on the radar later. What is happening in markets? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I)  U.S. stock markets were closed for Labor Day. U.S. treasuries (TLT:xnas, IEF:xnas, SHY:xnas) The treasury market was closed for Labor Day. Hong Kong’s Hang Seng (HSIU2) and China’s CSI300 (03188:xhkg) Hang Seng TECH Index (HSTECH.I) plunged 1.9% as a Bloomberg story, citing people familiar with the matter, said that the Biden administration is considering imposing restrictions on US investments in Chinese technology companies, Bilibili (09626:xhkg) -3.2%, JD.COM (09618:xhkg) -3.0%, Tencent (00700:xhkg) -2.9%, Alibaba (09988:xhkg) -2.4%. Hang Seng Index fell 1.2%. Chengdu, the largest city in western China, extended its pandemic control lockdown for another three days. The spread of Covid-19 cases and pandemic control measures fueled risk-off sentiment in the market.  Over the weekend, the U.S. Trade Representative said that it received requests from more than 350 American companies to plead for keeping the “Section 301” tariff on goods imported from China, and the Biden administration will remain in place during the review. BYD (01211:xhkg) fell 5.9%, as exchange filing showed that Berkshire Hathaway continued to off-load its stake in BYD.  Other car makers lost as well, Geely (00175) -7%, NIO -6,9, Li Auto 02.3(August).  Thermal coal prices surged in China, following the news that Russia’s Gazprom suspended the supply of natural gas to Germany on the Nord Stream pipeline.  Share prices of coal miners gained, Yancoal Australia (03668:xhkg) +6.6%, Yankuan (01171:xhkg) +12.2%, China Coal (01898:xhkg) +8.3%.  Caixin China Services PMI came in at 55.0, edging down slightly from 55.5 in July but above market expectations. CSI300 spent the day in range-bound trading.  GBPUSD falls to fresh lows, EUR in focus this week The USD lost some ground early in Asia on Tuesday with GBPUSD making the most gains to rise towards 1.1600 as the appointment of new Prime Minister and her plan to freeze energy bills spelled some short-term relief. EURUSD saw a brief drop to 20-year lows below 0.99 yesterday but rose back to 0.9960+ levels in early Asian trading. EURGBP seen sliding slower to 0.8600 but downside may be limited if ECB decides to go for a 75bps rate hike today. But the energy situation and the EU summit on Friday certainly garners more attention with some tough decision ahead. USDJPY retreated from Friday’s 24-year highs of 140.80 to 140.30-levels with Japan’s household spending underperforming expectations at 3.4% y/y vs. expectations of 4.6% y/y. Wage pressures, which remain a key focus for Bank of Japan, also eased with labor cash earnings up 1.8% y/y from last month’s 2.0% y/y. Crude oil prices (CLU2 & LCOV2) Crude oil prices rose on Monday as OPEC+ announced an output cut of 100k bpd in October (more details below). The intention appears to be to keep Brent prices capped at $100/barrels. WTI futures rose to $89/barrel while Brent was above $95/barrel. Price action was also supported by a diminishing hope of a revival of the Iran nuclear deal. US and Iranian positions have diverged in recent days, and it is now expected that the negotiations could stretch beyond the US midterm elections in November. Still, it is key to watch the demand concerns picking up as well, particularly as China lockdowns were extended and will likely remain strict ahead of the CCP meeting on October 16. What to consider? OPEC+ announced a production cut by 100k bpd A token cut by OPEC+ last night of 100k barrels per day just reverses the output increase agreed to last month. The decision was ‘symbolic’, with the new quotas taking effect for October. The amount is significantly small compared to a 100 million bpd market but it shows that OPEC+ wants to set a floor near $100/barrel in Brent. Saudi Arabian oil minister Prince Abdulaziz bin Salman had warned last week that a cut was a possibility given what he said was a disconnect between financial and physical oil markets. The RBA meets today, and is expected to raise rates to 2.35% regardless of the property market struggling Consensus expects the RBA to hike rates by 0.5% which will take Australia’s official interest rate to 2.35%. That will be the highest rate since 2015. However, interest rates futures are pricing in a smaller hike, of just 0.4%. The RBA will likely then proceed to rise rates over the rest of 2022 and then continue to rise rates into the 2023, in a bid to stave off inflation. The issue is, the RBA only has one tool to fight inflation, which is rising rates. But the property market is already struggling to absorb the 1.75% in hikes from May, with property prices falling at their quickest pace since the 80s and construction seeing its biggest decline since 2016. This has seen banks margins (profits) be squeezed, and they face a further squeeze. Why? Australia has one of the highest debt levels in the world (Debt to GPD is 126%). So if the RBA keeps rising rates to slow inflation, it could cause a credit issue and debt to income levels are at risk of hitting GFC highs. RBA outcomes for investors, traders and the macro landscape We highlighted sectors to watch and why yesterday in the Saxo Spotlight. That's worth a quick read. Today, we will be watching what the RBA estimates inflation to be, at the end of the year, remembering the RBA previously said it expects inflation to peak at under 8%. But consider, we traditionally see peak energy (coal) demand later this year, which is likely to support coal prices higher. As such, we think the RBA will rise its inflation target and may allude to commentary about keeping rates higher. For investors and traders, we will be watching energy stocks, which will likely get extra bids today and see momentum rise (not only because of the energy crisis in Europe), but also because Australian energy prices (coal) remains supported, with Australian energy reserves expected to also run out next year. For traders, the currency pair that we are watching is the AUDEUR for an extension to the upside, on the basis that Europe will need to increase energy imports and its balance of trade will likely continue to worsen, vs the Australian balance of trade, likely to hit another record high, with Australian LNG and coal exports to see a lift in demand.    PBOC cuts FX deposit reserve requirement ratio by 200 bps to restrain yuan weakness The PBoC announced that the central bank is cutting the reserve requirement ratio for foreign exchange deposits (the “FX RRR”) to 6% from 8%, effective September 15.  The cut is expected to release about USD19 billion (2% of the USD954 billion FX deposits outstanding) in FX liquidity for banks to make loans in foreign currencies.   The PBoC last cut the FX RRR to 8% from 9% on May 15, in an attempt to send a signal to the market to put a pause to the depreciation of the USDCNY which had weakened from 6.40 to 6.80 in one month (April 15 to May 13, 2022).  After the surge of the USDCNY from 6.75 to above 6.90 in about half a month since Aug 15, the PBoC apparently wants to send a signal again to the market to slow the speed of the renminbi depreciation against the U.S. dollar. Liz Truss won the contest to become the next UK Prime Minister In the UK, the Conservative party has voted for Liz Truss as the new party leader, making her the UK’s next Prime Minister. Her promises range from quick action on energy security to alleviating the cost-of-living crisis for the hardest hit by price rises, all while cutting corporate and other taxes. She has announced a GBP 130bn plan to freeze energy bills, a recipe for ballooning fiscal deficits, an issue that is already an ingredient in sterling’s steep fall this year, so an even steeper recession is in the wings. This could come either from a drop in real GDP due to soaring inflation aggravated by further sterling declines or as demand is crushed by a steep recession due to the need for the Bank of England to accelerate its pace of rate hikes or more likely a combination of the two. Longer term, investments in fracking shale gas and new North Sea exploration could pay dividends. Russia makes a clear case of weaponizing gas supplies While the Kremlin had earlier said that they were halting gas supplies on Nord Stream 1 for a technical fault, it has now clearly said that gas supplies to Europe via the Nord Stream 1 pipeline will not resume in full until the “collective west” lifts sanctions against Moscow over its invasion of Ukraine. Russia is still supplying gas to Europe via Soviet-era pipelines through Ukraine that have remained open despite the invasion, as well as the South Stream pipeline via Turkey. But supplies along the northern pipeline routes, including Nord Stream 1 and the pipelines through Ukraine, have fallen by more than 90% since September last year. Higher supplies from Norway, the UK, north Africa and increased imports of LNG have helped to an extent offset the loss of Russian supplies. Energy summit in EU on Friday EU leaders will meet this Friday to discuss a cap on energy prices across EU countries to limit the disruptions from soaring and illiquid pricing markets, although given limits on generation capacity, much of them due to Russia’s cutting off of gas supplies - possibly semi-permanently in the case of the Nord Stream 1 pipeline – some sort of rationing plan may be required. See our colleague Christopher Dembik’s piece on at the difficult choices Europe faces on this issue here. US ISM services PMI due today With the services sector of the US economy slowing, there are expectations of a slight retreat in August US ISM services, but it should still remain above the 50-mark which differentiates between expansion and contraction. The S&P services PMI for August had also shown a slight decline to 44.1, with the payroll data hinting at still-strong labor market conditions in the services economy.   For a week-ahead look at markets – tune into our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: https://www.home.saxo/content/articles/equities/apac-daily-digest-6-sept-2022-06092022

AUDUSD struggles for bids The Australian dollar takes a hit as risk appetite continues to recede across markets despite the RBA’s 50bp hike. A bearish MA cross on the daily chart shows a deterioration in sentiment. A fall below the demand zone near 0.6800 has left the aussie vulnerable. A lack of buying interest may send the pair to the recent lows around 0.6680, which is a critical floor to keep the price afloat in the medium-term. 0.6830 is a fresh hurdle but rebounds have so far been opportunities to sell at a better price. USOIL tests critical floor WTI crude weakens due to lingering concerns over demand. The recent bounce has failed to clear the daily resistance at 109.00, given back all its gains instead by retesting the base at 91.50. As sentiment remains pessimistic, the path of least resistance might still be down. A bearish breakout would force the bulls to bail out and attract momentum sellers, exacerbating volatility in the process. A drop below the psychological level of 90.00 could extend losses beyond 85.00. A recovery may be brief with 97.20 as the first resistance.   UK 100 in limited recovery The FTSE 100 struggles as the UK's finances might over-stretch with the energy crisis. On the daily chart, the index is going sideways between two boundaries 7000 and 7640. A breakout on either side would dictate the next direction in the weeks to come. In the meantime, range trading could be the name of the game. The short-term recovery is heading up to 7380, but 7480 from a faded bounce could be a tough level to crack. On the downside, 7180 is the immediate support and 7050 a major level to test the bulls’ resolve.

Oil prices came under further pressure yesterday, despite OPEC+ agreeing on a small supply cut for October. Meanwhile, supply disruption in the metals market continues to grow, with further aluminium supply cuts in Europe due to high energy prices Source: Shutterstock Energy- OPEC+ cut does little to support the market The decision by OPEC+ to cut output by 100Mbbls/d over October does not appear to have had the intended impact on the market. Instead, Brent settled a little over 3% lower yesterday. And this pressure has continued in early morning trading in Asia today. As we wrote yesterday, while on paper the cut is small, in reality, it is even smaller, given that most OPEC+ members are already producing below their target production for October. If this downward pressure continues we cannot rule out OPEC+ holding an emergency meeting, which they have made very clear could happen if necessary. The Saudis released their official selling prices (OSP) for October and there were some fairly large cuts for Asia and Europe. Arab Light into Asia was lowered by US$3.95/bbl MoM to US$5.85/bbl over the benchmark. Expectations were for an even larger reduction, given the narrowing that has been seen in the Brent/Dubai spread. All other grades into Asia also saw reductions, whilst all grades into Europe were also cut. It seems that Europe is moving closer toward a gas price cap, as Russia continues to reduce gas flows to the region. According to reports, the European Commission is looking at options including a price cap on gas imported from Russia and a country-by-country cap system, which would depend on a country's energy mix. While price caps may offer some much-needed relief in terms of prices, it will do little to help balance the market through demand destruction. If we look to Spain, which introduced a price cap on gas for the power market earlier in the year, gas demand in June increased by more than 14% MoM and 7% YoY. Metals - aluminium stocks jump higher LME exchange inventories for aluminium rose by 31.3kt (the largest daily addition since 10th February) to 308kt yesterday; with the majority of inflows at Malaysia’s Port Klang warehouses. These large inflows have put pressure on the market, with prices settling a little more than 1% lower yesterday. However, this weakness comes despite further aluminium supply cuts in Europe. France’s largest aluminium smelter, Aluminium Dunkerque, announced that it will cut production by 20% due to soaring power prices. The smelter, which has a capacity of 285ktpa, is expected to operate at a reduced rate until early next year. In addition, Norsk Hydro said that it will not restart operations at its Karmoey and Husnes plant (after completing maintenance), as demand for the metal remains sluggish. The producer said that “a few tens of thousands of tonnes” could be impacted out of the 1.1mt of aluminium produced annually in Norway. The difficulty in the aluminium market at the moment is trying to balance the number of supply cuts we are seeing with weaker downstream demand. In mine supply, copper output in Peru fell 1.6% MoM to 195kt in July. The majority of the decline was due to production losses from the Cia Minera Antamina mine (-9.1%) and the Southern Peru Copper Corporation mine (-14.5%). Among other metals, zinc production fell 2.9% YoY, while silver output declined 15.4% YoY last month. Agriculture – favourable weather conditions in Australia Australia’s Bureau of Agricultural and Resource Economics and Sciences (ABARES) estimates that winter wheat production in Australia will reach 32.2mt in 2022/23, slightly below the all-time high of 36.3mt reported last year. The latest forecast is 6.3% higher than the previous estimate of 30.3mt, as overall crop production has benefited from favourable weather conditions. Australia is expected to export 25.8mt of wheat to global markets in 2022/23, marginally lower than last season’s record 26mt. The  USDA’s weekly export inspection data shows that demand for US corn and wheat remained soft over the last week. US weekly inspection of corn for export fell to 518kt over the last week, compared to 689kt in the previous week. Similarly, wheat shipment inspections fell to 478kt over the last week, compared to 631kt from a week ago. However, soybean inspections rose last week from 440kt to 496kt; while also coming in well above the 94kt seen for the same week last year. Read this article on THINK TagsWheat OPEC+ Natural gas Energy crisis Aluminium Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

The broader strength seen in the USD has weighed heavily on the commodities complex, whilst Chinese demand concerns are certainly not helping. For oil, we will need to keep an eye on OPEC+ and how they might react to the more recent weakness in the market Energy - Brent breaks below $90/bbl The oil market continues to come under pressure. Brent settled more than 5% lower yesterday at US$88/bbl. This morning we are seeing somewhat of a relief rally. The strength that we have seen in the USD is not helping oil or the broader commodities complex, whilst there are clear demand concerns, particularly when it comes to the continued Covid-related lockdowns that we are seeing across parts of China. Chengdu has seen another extension to its lockdown. The more recent weakness in oil prices does increase the risk that we see some form of intervention from OPEC+. The group made it clear that further action could be taken if they felt it was necessary, and the market is likely trading towards levels where they are starting to get a bit uncomfortable.   While there are clear demand concerns in China, imports of crude oil rebounded in August. Imports averaged 9.54MMbbls/d over the month, up 8.1% MoM and the highest import volumes seen since May. These flows are still down 9.4% YoY, while cumulative imports over the first 8 months of the year are down 4.7% YoY. We will get a better idea on how much of these imports in August went towards stock building once output data is released. In its latest Short Term Energy Outlook, the EIA made revisions lower to its US oil production forecasts. US crude oil output in 2022 is expected to average 11.78MMbbls/d, up around 540Mbbls/d YoY. In August the EIA was forecasting output to average 11.86MMbbls/d. As for 2023, output is expected to grow by around 850Mbbls/d to average 12.63MMbbls/d. This is down from a previous forecast of 12.7MMbbls/d. Finally, comments from Putin yesterday were a clear sign of an escalation in the use of energy as a weapon. The Russian president threatened that any country which adopts the G-7 oil price cap would see all flows of Russian energy stop - including oil, refined products, natural gas and coal. While Russia may be able to afford taking this action if big buyers don’t take part in the cap, it becomes a little bit more difficult to follow through with this threat if the likes of China and India were to join the price cap. Clearly that is a big "if", as it could be a significant challenge for G-7 nations to convince China and India to take part in a price cap. Metals - rising USD weighs on the complex Weaker-than-expected trade data from China along with a stronger USD weighed on the metals complex yesterday. Copper settled lower on the day, whilst aluminium fell to an intra-day low of US$2,233/t (the lowest levels since April 2021) yesterday. Aluminium supply cuts in Europe continue to get more severe as yet another smelter announced production cut plans yesterday. Speira GmBH announced it will curb production by 50% at its smelter in Germany due to elevated energy costs. The smelter expects the curtailment process to be completed in November for an indefinite period. Speira's plant in Germany can produce about 160ktpa of aluminium, however, current output is around 140kt. The market continues to ignore these cuts, with the market of the view that downstream demand is taking a bigger hit than supply. The latest trade numbers from China Customs shows that imports for unwrought copper rose 7.4% MoM and 26.4% YoY to 498kt in August. Cumulative imports over the first 8 months of the year are up 8.1% YoY to total 3.9mt. Meanwhile, copper ore and concentrate imports rose 19.5% MoM and 20% YoY to a record high of 2.27mt last month. Iron ore imports saw somewhat of a recovery, rising 5.4% MoM to 96.2mt in August and reaching their highest levels since February. Lower prices and peak construction season are likely to have supported imports. However,  YTD inflows are still down 3% YoY to total 723mt. Agriculture – Putin questions Ukrainian grain deal Wheat prices surged higher yesterday, trading almost 7% higher at one stage during the day. This comes after Putin questioned the Ukrainian grain export deal from the Black Sea, claiming that poorer countries are not benefiting from this supply and that instead the bulk of these supplies are going to Europe. Ukraine has pushed back on these comments, saying that two thirds of shipments from the deal have gone to Africa, Asia and the Middle East. The latest trade data from China Customs shows that soybean imports fell by 24.5% YoY (down 9% MoM) to 7.17mt in August, as higher prices and softer demand for edible oils weighed on import requirements. Soybean crushing margins in China have been in negative territory for quite some time now, with current margins at around negative CNY170/t. Although a significant improvement in hog farming profits in recent months should support soymeal demand in the latter half of the year. Read this article on THINK TagsRussian oil price cap Russia-Ukraine OPEC+ Energy crisis China Trade Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

OPEC+ will be watching closely Oil prices are rebounding slightly on Thursday, up almost 1%, after collapsing more than 5% a day earlier on renewed global growth concerns. With policymakers around the world still hawkish on interest rates, most notably in the US, and China locking down major cities in its zero-tolerance fight against Covid, the demand outlook is weakening. After such a long period of supply driving the crude price, it’s demand that appears to be dominating now with traders anticipating a slowdown, maybe even a recession next year. I can only imagine how OPEC+ is taking the recent price moves, with its warnings and token cut seemingly falling on deaf ears. An emergency meeting may well be on the cards ahead of its scheduled October gathering. Gold recovers as dollar pares gains Gold enjoyed a little reprieve on Wednesday, as yields pared recent gains and the dollar pulled off its highs. I’m not sure we should get too excited about gold’s resurgence just yet, in fact, it’s already slipping a little today. The rebound means crucial $1,680 support continues to hold for now but given the backdrop of hawkish central banks and immense uncertainty in the markets, I’m not sure traders are ready to abandon the dollar just yet. That said, it will be interesting if gold can manage to catapult itself back above $1,730 as that would suggest – in the short term at least – it has found some favour in the markets. With a double bottom perhaps forming in gold, a break of $1,730 could indicate a much more significant corrective move, even if the longer-term trend is still very much against it. ​ 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. Oil bounces back, gold recovers - MarketPulseMarketPulse

Metals have received somewhat of a boost, with supply risks growing and some optimism in Chinese construction. For energy markets, all attention will be on EU energy crisis talks today Source: Shutterstock Energy - EU energy crisis talks today The oil market yesterday managed to recoup some of its declines from earlier in the week. ICE Brent continues to trade below US$90/bbl and the market will be watching for any signs from OPEC+ of possible intervention. The partial recovery in the market comes despite fairly bearish EIA numbers. The EIA reported that US commercial crude oil inventories increased by 8.85MMbbls over the last week - the largest increase seen since April. When you factor in the SPR release, total US crude oil inventories increased by a more modest 1.32MMbbls. An increase in crude imports, lower exports and lower refinery utilization (due to the BP Whiting outage) over the week all contributed to the crude build. Despite lower refinery activity, gasoline and distillate fuel oil stocks increased by 333Mbbls and 95Mbbls respectively. European gas prices continue to trade in a volatile manner, with TTF breaking below EUR200/MWh at one stage yesterday, only to finish the day above EUR220/MWh. The market will be sensitive to developments today, given that EU ministers will be meeting to go through proposals to tackle the energy crisis. These proposals include various forms of a price cap, along with potentially mandatory demand cuts not just for gas but also the power market. Liquidity measures for European power companies will also be pretty high on the priority list. As we have mentioned before - while price caps will offer some relief to consumers, it doesn’t help the market try to balance itself through demand destruction.   Metals – Escondida strike lifts copper prices LME copper prices ended the day higher, amid reports of potential mine strikes in Chile. Workers at BHP’s Escondida, the world’s largest copper mine, voted to go on a partial strike from next week over safety concerns, according to the mine’s union. The strike will result in a partial stoppage on 12 and 14 September and will be followed by an indefinite strike lasting until a deal with BHP is reached. Spread action also suggests a tightening in the prompt copper market. The LME copper cash/3m backwardation reached US$145/t (highest since November) yesterday, compared to a backwardation of US$76/t a day earlier and a contango of US$7.75/t at the start of 2H22. Vale SA raised its nickel production guidance to reach 230-245kt per year in the medium term, higher than its previous forecast of 200-220kt in May, the battery metal producer announced. In the long-term, Vale expects annual nickel production to reach over 300kt to tap into the growing demand for the metal. In ferrous metals, the most active SGX iron ore contract moved above US$100/t yesterday amid hopes of a recovery in construction activity in China. According to the latest market reports, the Chinese city of Zhengzhou will resume all stalled housing projects by 6 October, by making use of special loans, asking developers to return misappropriated funds, and encouraging some real estate firms to file for bankruptcy, according to Reuters reports. Read this article on THINK TagsOil Nickel Natural gas Energy crisis Copper Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

Oil higher despite demand concerns Oil has recovered earlier losses to trade around 1% higher on the day. Crude could extend its winning run to three sessions if it holds on, recovering from the lows which came on the back of lower global growth expectations and Covid lockdowns in China. Those restrictions could see annual Chinese demand fall for the first time in 20 years in a further sign of the struggles facing the world’s second-largest economy. While the focus may be on the demand side at the minute, we can’t ignore OPEC+ and its recent warnings about volatile price action and the disconnect with fundamentals. The group sent a warning shot earlier this month and may be tempted to send another prior to the October meeting. The recovery in the price may be supported by that, alongside a broader improvement in risk appetite in the markets and a weaker dollar. Gold’s cautious recovery Gold is continuing to enjoy a small recovery, albeit one that is not without resistance. Since hitting a bottom earlier this month, it’s been a stuttered rebound in gold which perhaps highlights the hesitance to get behind it in the markets. The dollar has pared gains in recent days which has helped gold to add to those gains but even now it’s seeing strong resistance around $1,730 which was previously a key level of support. We could see it overcome that if the dollar continues to trend lower but that ultimately depends on the US inflation data tomorrow. 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.

Your daily roundup of commodities news and ING views Energy - oil bounces The retreat in the USD has provided a boost to oil prices, with ICE Brent briefly trading back above US$95/bbl at one stage yesterday. Despite this rebound, there are still some clear downside risks for the market. The most important continues to be China’s zero covid policy. The latest data from the US Department of Energy (DOE) shows that US strategic petroleum reserves (SPR) fell by 8.4MMbbls over the last week to 434.1MMbbls, the lowest level that the SPR has seen since October 1984. The current releases are set to come to an end in October. However, there are reports that the US is looking to potentially extend SPR releases. Clearly, the US administration is concerned about what happens to oil prices once the current releases come to an end. EU ministers continue to work towards coming up with a plan to intervene in European energy markets. A draft proposal suggests that the EU will look to enforce mandatory demand cuts for power- overall demand cuts as well as during peak hours. In addition, the EU is also proposing a levy on energy companies’ extra/abnormal profits. Finally, the EU also wants to cap revenues for power generators, with the exception of gas fired power capacity. This is still a proposal, but the hope is that a deal is finalised before the end of September.   Metals - weaker dollar boosts prices Base metals prices started the week higher, boosted by the weaker dollar as the US currency retreated from a record high it reached last week. Aluminium supply risks were exacerbated amid talks of potential power cuts to smelters in China’s Yunnan province. The province, which accounts for more than 12% of the country’s production, may begin reducing operating rates by 20-30% this month amid a drought-induced shortage of hydropower. Meanwhile, the European Union said it will outline this week concrete measures to address the worsening energy crisis, including a proposal for targets to reduce electricity demand as well as aiming to cap excessive revenues of companies producing power from sources other than gas, through a limit on the price of electricity generated from technologies such as renewables, lignite or nuclear energy. Agriculture - USDA revisions push soybeans higher The latest USDA WASDE report shows expectations of further tightening in US corn and soybean supply.  For corn, the USDA has revised its 2022/23 ending stocks to 1.22bn bushels a previous estimate of 1.39b bushels. This was still somewhat higher than the 1.19bn bushels the market was expecting. US corn output was revised down from 14.36b bushels to 13.94bn bushels. This lower output was partly offset by lower domestic demand as well as exports. US soybean production estimates were revised down, from 4.53b bushels to 4.38b bushels, due to lower acreage and yield estimates. As a result, US ending stocks for soybeans were lowered from 245m bushels to 200m bushels for 2022/23, some distance from the 246m bushels the market was expecting. The USDA left US wheat supply and consumption unchanged. For the global market, the USDA estimates corn ending stocks to fall from 306.7mt to 304.5mt for 2022/23, still above the 301.7mt the market was expecting. Global corn production estimates were lowered by 7mt to 1,172.6mt due to supply losses from the US (-10.5mt) and the EU (-1.2mt). Similarly, soybean global ending stocks were lowered from 101.4mt to 98.9mt, lower than market expectations of a little over 101mt. Finally, global wheat ending stocks were increased from 267.3mt to 268.6mt, largely on the back of an increase in production estimates for 2022/23. Read this article on THINK TagsWASDE Oil Energy crisis Aluminium Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

A still uncertain outlook for oil demand Oil prices suffered alongside risk assets on Tuesday, albeit to a much lesser extent, with the threat to the US economy of much higher interest rates a downside risk. Of course, it’s yet another risk that I’m sure OPEC+ will be keen to stress it would adapt to in its desperation to ease market volatility and keep prices high. The oil price is a little higher after the IEA monthly report which claimed oil use for power generation will hit 700,000 barrels per day, while at the same time indicating that demand growth will halt in the fourth quarter before rising by 2.1 million barrels per day next year. It, therefore, lowered its forecast for world oil demand growth this year by 110,000 BPD to two million while warning of downside risks including the faltering Chinese economy and a slowdown in OECD countries. Ultimately, the outlook is heavily subject to revisions given the still rapidly evolving environment. A nervy week ahead It won’t come as a surprise to anyone that gold went into freefall following the US inflation report as it became clear that the Fed is in no position yet to ease its foot off the brake. Suddenly the yellow metal is looking down rather than up, with $1,730 remaining strong resistance to the upside but $1,680 now very vulnerable. It’s going to be a nervy week for gold bulls. 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. Oil outlook uncertain, gold under pressure - MarketPulseMarketPulse

Sentiment in the oil market remains fairly negative due to continued concerns over Chinese demand Energy - China demand drop Despite concerns over demand, the oil market is holding up relatively well. In its latest monthly market report, the IEA estimates that Chinese oil demand will fall by 420Mbbls/d this year, which would be the first annual decline since 1990. Chinese demand has clearly suffered due to the zero covid policy that China continues to follow. Weaker Chinese demand was partly offset by the expectation that we will see a significant amount of gas to oil switching, given the high gas price environment. As a result, the IEA estimates that global oil demand will grow by 2MMbbls/d this year and by 2.1MMbbls/d in 2023, slightly below their previous forecasts.  With Russian oil flows holding up better than expected, the IEA expects that the global market will be in surplus of close to 1MMbbls/d in 2H22 and then more balanced over 2023 as the EU ban on Russian oil comes into full effect. Weekly EIA data shows that US commercial crude oil inventories increased by 2.44MMbbls over the last week. When SPR releases are taken into consideration, total US crude oil inventories declined by 5.97MMbbls. Gasoline inventories declined by 1.77MMbbls, whilst distillate fuel oil stocks increased by 4.22MMbbls. This is the largest weekly increase in distillate stocks so far this year, which would be welcome to the market given the tightness in middle distillates. Despite the increase, inventories are still around 30MMbbls below the 5-year average. The EU’s final proposal for intervention in the European energy markets was broadly in line with the draft proposal. First, the EU proposes that power demand should be cut, including a mandatory cut of 5% from selected peak hours, as well as aiming to reduce overall power demand by 10% until the end of March next year. Secondly, the EU wants to impose a temporary revenue cap on some power generators (renewables, nuclear and lignite) at EUR180/MWh. Finally, the EU also proposes a levy on excess profits from the oil, gas coal and refining sector. Metals – risk-off sentiment weighs on the complex Copper and aluminium prices fell yesterday as investors continue to digest the high CPI print from the US earlier this week, and what it could mean for Fed policy. Rising LME aluminium inventories only put further pressure on the market, with stocks increasing by 12,700 tonnes to 345,600 tonnes. China is stepping up its efforts to boost its housing sector with more Chinese cities announcing credit support and subsidies for home purchases. This week, China’s Evergrande Group removed most of its construction-project freezes as China enters its peak building season, which traditionally lasts until the end of October.  In precious metals, gold has unsurprisingly come under pressure over the course of the week- trading below US$1,700/oz. Higher than expected US inflation data has reinforced expectations of another big interest-rate increase from the Fed. Read this article on THINK TagsOil demand IEA Gold Energy crisis Covid-19 China Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

US commercial oil inventories rose by 2.4M barrels last week following an increase of 8.8M earlier. This dynamic fits in with seasonal trends, with inventories starting to fill at some point in September. Around the same time and volume levels, net accumulation was reversed in 2018 and 2019. Note, however, that before 2014 (the shale boom), the fluctuations in stocks were mainly within the 300-360M range. So, here we see some business as usual for commercial producers. A vital point of the picture is the 30% drop in strategic reserves over the last year, almost equal to commercial reserves. In other words, a net fall in overall inventories could have stimulated a ramp-up in production. But we see a slow increase in volumes in comparison to the 2011-2015 and 2016-2020 episodes. And there are a couple of significant reasons for this. First, the sale of oil from reserves is aimed at bringing down the final price, which is not to the producers' liking and is holding back investment. In the last couple of weeks, the number of working rigs in the US has been falling, clearly showing that businesses are in no hurry to sell oil at a discount from the free market, topping up reserves. Secondly, production in the Permian Basin - the main shale production region of recent years - is declining. New drilling is going to make up for the exhausted fields. Increased rates and the promise to raise more, combined with rising wages, further hold back the process. As if that were not enough, US producers said Europe should not expect further supply increases. Perhaps this signals that companies following OPEC have switched from fighting for market share to maximising profits. Read next: Australian Dollar (AUD): Reserve Bank Of Australia May Choose Less Aggresive Varaint As Unemployment Increased A Bit| FXMAG.COM As a result, we see gains in oil and gas prices over the last week against a general decline in financial markets. At the same time, we believe that the US government is unlikely to quickly abandon its oil price restraint policy, postponing the restocking momentum. Investors and traders should also remember that a decisive policy tightening, by historical standards, puts additional pressure on prices. In our view, the downward momentum in oil prices is not over yet, although local attempts for WTI to exceed $91.50 and for Brent to return to $97 cannot be ruled out.

Oil steady after inventory data Oil prices have steadied a little after rebounding strongly this past week. There are many forces dictating the price action in oil markets right now, with economic uncertainty right up there alongside a potentially unpredictable OPEC+. The stronger dollar is potentially another headwind, with the rally losing steam earlier this week as the greenback surged in the aftermath of the inflation release. The inventory data on Wednesday didn’t cause much of a wobble despite surpassing forecasts with a 2.442 million barrel build against expectations of something far more modest. Of course, this was still much smaller than what the API number indicated a day earlier so perhaps that limited the surprise factor. Has the damage been done? Gold is still hurting after the inflation data on Tuesday. It was just starting to find its feet again ahead of the data and the report delivered a crushing blow. The yellow metal is off around four-tenths of one percent this morning and comfortably below $1,700. The key level though is $1,680 and a significant break of this could be painful, with it having been a floor over the last couple of years. We could then see some support around $1,660 but at that point, the damage will have been done. For a look at all of today’s economic events, check out our economic calendar: www.marketpulse.com/economic-events/ 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. Oil steady, gold vulnerable - MarketPulseMarketPulse

Oil falls as US economy slows Crude prices got knocked again as demand fears intensified after a wrath of economic data shows the US economy is slowing down. ​ Oil fundamentals are still mostly bearish as China’s demand outlook remains a big question mark and as the inflation fighting Fed seems poised to weaken the US economy. ​ The US Department of Energy also clarified that the restocking of the Strategic Petroleum Reserve (SPR) won’t happen due to prices falling at a certain level and that they won’t take action until after fiscal 2023. ​ This clarification from the DOE tentatively removed any support crude had just ahead of the $80 a barrel level. ​ Despite all the doom and gloom across the world, the oil market remains tight and prices should outperform all the other commodities. Gold Gold got pummeled ruthlessly after another round of economic data supported the Fed’s case to remain very aggressive with fighting inflation. While both Fed regional surveys offered some relief that price increases are slowing, the rest of the data paints a picture of a very strong labor market that is still seeing decent spending and production activity. Until the bond market selloff eases, gold is in trouble. ​ Once gold fell below the prior summer low of $1690, momentum selling took over. ​ If Treasury yields keep going up that will keep the selling pressure on bullion. Gold should find support soon as investors will refrain from any overweight positions until they hear directly from the Fed. ​ The last hurdle for gold is in the University of Michigan inflation expectations. ​ Unless markets are surprised with an increase in inflation expectations, gold should stabilize above the $1650 region. ​ ​ 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. Crude lower, gold pummeled - MarketPulseMarketPulse

Oil Crude prices were under pressure as fears of an aggressive central bank tightening are driving concerns for a quickly weakening global economy and as the UAE plans to increase oil output. ​ The global economy is slowing and that has been troubling for the crude demand outlook. ​ Oil pared losses as Wall Street saw a broad reversal at the NY open. While pessimism remains elevated for global growth, extreme positioning before the Fed seems unlikely. ​ Gold Gold is breaking as surging real rates show no signs of easing and as it fails to act like a safe-haven. ​ This is a brutally tough weak for bullion as so many central banks this week are contemplating jumbo-sized interest rate hikes. It is hard to get a handle on what will be the peak for the Fed and until that happens, gold will remain vulnerable. ​ Gold will eventually resume its role as a safe-haven, but the peak in the dollar needs to be put in place and that won’t happen for a couple of meetings. ​ What is driving the hesitation for scaling into a long-term position with gold is that investors are not convinced that even when the Fed pauses, that might not guarantee they are done hiking. ​ The risk that the Fed will pause and then have to restart raising rates is elevated and that has completely upended the gold trade. ​ Gold is due for a bounce and even if that happens post-Fed this week, a sustained rebound will only occur if more signs emerge that inflation is easing. ​ 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. - MarketPulseMarketPulse

WTI oil suffered an intraday drop of more than 4.5% to $81.70 yesterday but managed to regain all losses by the end of the day, trading now at $85.40. The $85 area has repeatedly acted as the Rubicon since 2007. In 2008, the failure was provided by the near collapse of the financial system. Oil only fell below that level after the bankruptcy of Lehman. At that time, oil didn’t get firm footing until $35. In 2014, the world feared a then unknown “tapering” from the Fed, but Saudi Arabia had the final knockdown for prices, temporarily switching to fight for oil market share. A return to the firm ‘quota’ policy, but now with Russia, did not occur until early 2016, and prices went as low as $30. On the other hand, we saw prices steadily above $85 between 2010 and 2014, when the global economy was recovering strongly from oil consumption thanks to stimulus and near-zero interest rates. In 2022, the move above resulted from Europe’s severe energy crisis and fears of production cuts due to Russia’s rapid oil abandonment. And now, the price remains above that level, despite heightened equity market volatility and a stronger dollar in forex. However, these are the most influential factors affecting the price. A high-profile event or shock in geopolitics or financial markets could break the steady support of oil buyers on the downturn in the coming days. For example, it could be a new round of tightening Fed rhetoric consisting of a 100-point rate hike at once or a hint of further hikes as long as the rate markedly exceeds inflation. Read next: How High Will The Bank Of England Raise Rates?| FXMAG.COM The converse cannot be ruled out either: the Fed could hint at a move to more fine-tuning policy in the future, promising less harsh decisions. Such a bullish market reversal could validate fundamental price support at current levels. However, knowing how central bankers like to leave all doors open, it is also worth being prepared for the Fed to try to soften the effect on the markets by extending the period of uncertainty as much as possible. In the latter case, geopolitics could prove decisive. However, there are still no clear signals of a change in the geopolitical setup around the energy market. Gas prices in Europe and the USA have retreated from their highs; OPEC+ made a symbolic move in early September by limiting production, and the USA continues to sell off reserves.

Markets have been trading in a fairly choppy manner, while sentiment remains relatively negative for risk assets. Participants will be focused on the Fed meeting later this week and expectations in the lead-up to the meeting have been fairly hawkish Energy - US SPR release The oil market continues to trade in a relatively choppy manner. ICE Brent traded in a US$4/bbl range yesterday, and managed to settle higher on the day, after trading weaker earlier in the session. A weaker USD would have provided some support to oil prices. However, like for most risk assets, market participants will be waiting for some clarity from the Fed when it meets later this week. The big question is how aggressive will it be in terms of hiking. Our US economist is of the view that we will see the Fed hiking by 75bps at this week’s meeting. Also not helping sentiment in the oil market at the moment is the weakness that we are seeing in refinery margins. Margins have come under pressure, with reports that China could release 15mt of export quotas for refined products. The refined product market, particularly middle distillates, has faced significant tightness for much of the year, and so increased Chinese supply would be welcomed by many in the market. The US Department of Energy (DOE) announced that it will be selling an additional 10MMbbls of crude oil in November from its Strategic Petroleum Reserve (SPR). This sale would be part of the Biden administration’s announcement back in March to release stocks from the SPR to combat higher prices. Under that initial announcement the DOE authorized the release of 180MMbbls of crude oil from the SPR. According to the DOE, roughly 155MMbbls has been released up until now - this further sale would take the total volume to around 165MMbbls. According to Bloomberg the UAE is wanting to bring forward its plans to increase crude oil production. Adnoc is wanting to have the capacity to pump 5MMbbls/d of oil by 2025, rather than by 2030 as previously planned. The UAE currently has production capacity of a little over 4MMbbls/d - due to the OPEC+ supply deal, production is closer to around 3.16MMbbls/d at the moment. Agriculture – Ukraine grain exports According to the latest update from the United Nations, almost 3.9mt of agricultural products have been exported from Ukrainian Black Sea ports under the export corridor deal since early August. Corn makes up almost 50% of these exports, whilst wheat makes up around a quarter of exports under the deal. Latest trade data from China shows that corn imports dropped 44.% YoY to 1.8mt in August, while YTD imports are down 21% YoY to total 16.9mt. Among other grains, China’s wheat imports fell 25% YoY to 530kt over the month, while cumulative imports declined 10% YoY to total 6.25mt over the first eight months of the year. The USDA’s weekly export inspection data shows the demand for US grains remained strong over the last week. US weekly inspection of corn for exports rose to 549kt over the last week, up from 474kt in the previous week and 403kt from the same time last year. Similarly, soybean shipment inspections rose to 519kt over the last week, compared to 342kt from a week ago and 279kt at the same time last year. Read this article on THINK TagsUS Federal reserve UAE SPR Oil Grains Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

Oil goes on rollercoaster ride Oil prices went on a rollercoaster as energy traders watched President Putin escalate the war in Ukraine and as the EIA report signals some crude demand weakness. ​ The EIA crude oil inventory report was a lot to process, but it really didn’t deliver that many surprises: Production remains steady at 12.1 million b/d, which is impressive considering oil rig counts have been declining, Imports from Canada are roaring back and that should help restore stockpiles, Jet fuel demand is rather soft despite solid TSA passenger throughput data, and the Strategic Petroleum Reserve steadily draws down. ​ WTI crude seems to have solid support at the $80 level and even as the Fed seems positioned to deliver a hard landing, the oil market should still remain tight over the short-term. ​ ​ ​ ​ ​ Gold Gold is breathing a sigh of relief as Fed funds futures are gaining confidence that the Fed will be cutting rates during the latter half of next year. ​ The hawkish Fed projections are a rather grim outlook for the economy and that could eventually trigger a resumption of a safe-haven role for gold. ​ The Fed acknowledged that we’re at the very lowest levels of what is restrictive and that they are prepared to soften this labor market. ​ This inflation fight is going to get ugly for the economy, but right now it seems the Fed will be done hiking in February. Gold will remain vulnerable to selling pressure if inflation does not continue to ease, but it could start to stabilize now. ​ ​ 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. FOMC React: Hard landing will lead to a pause, housing market cools, Putin’s escalation, bitcoin stabilizes - MarketPulseMarketPulse

The macro picture continues to weigh on the commodities complex and the hawkish FOMC meeting certainly hasn't helped. However, there are clear supply risks still facing the market following Putin’s latest escalation Russian President Vladimir Putin Energy: supply uncertainty grows Energy markets had a choppy day yesterday. Overall sentiment in the market remains negative following the US Federal Reserve rate hike and expectations that the Fed will be more aggressive in terms of tightening over the remainder of the year. This does add to a gloomier demand outlook. However, there are still clear supply concerns in the market. This was highlighted yesterday following Putin’s announcement of a “partial mobilisation” and plans for sham referenda across parts of Eastern Ukraine. This is a clear escalation and raises concerns over what the implications could be for Russian energy flows. There is the potential that we see the West having to become more aggressive in terms of energy sanctions or the potential for Putin to weaponise energy even further. For natural gas, Russia has limited leverage left, given that flows to the EU are down around 70% year-on-year. Where Russia has more leverage is oil, but even this will reduce in the coming months as the EU’s ban on Russian oil and refined products comes into effect. Yesterday’s weekly EIA report showed that US commercial crude oil inventories increased by 1.14MMbbls over the last week. However, total US crude oil inventories fell by 5.76MMbbls when taking into account the release of stocks from the Strategic Petroleum Reserve (SPR). This again highlights the effectiveness of the significant SPR releases we have seen this year in limiting the drawdown in commercial inventories. However, when the SPR releases come to an end, there is clearly the risk that we start to see large commercial inventory drawdowns once again, which would be supportive for prices. As for refined products, gasoline and distillate fuel oil stocks increased by 1.57MMbbls and 1.23MMbbls, respectively. Stronger refinery activity and weaker implied demand (for gasoline) likely contributed to these stock builds. There are reports from a local consultant in China that the government has approved 15mt of refined product export quotas. There have been reports circulating for weeks that the government was looking to release further quotas in a bid to support economic growth. If these latest reports are confirmed, this will be a big deal for product markets, with it equating to around 1MMbbls/d of refined product supply for the remainder of the year. This should offer some relief to middle distillate markets, which have been extremely tight this year.   Metals: LME copper stocks jump by most since June Base metals drifted lower yesterday ahead of the US rate hike decision, while a stronger USD put only further pressure on metal prices. Adding to the downbeat sentiment, Rio Tinto commented that copper’s short-term outlook “might look a little bit challenged” as decades-high inflation and snarled supply chains hit demand. Meanwhile, copper inventories held in London Metal Exchange warehouses rose 10%, the biggest increase since 27 June. Large increases in metal immediately available to withdraw were seen in Europe, Asia and the US. Total stockpiles rose to 118,000 tonnes – the highest since August. On-warrant copper inventories increased 12% to 106,125 tonnes. The increase has put some pressure on spreads, with the cash/3M backwardation narrowing from US$68/t to US$59/t. Agriculture: wheat rallies on the back of Putin's comments CBOT wheat rose yesterday as Putin announced a “partial mobilisation” and threats to use “all means available” to defend Russian territory, escalating the ongoing tensions between the nations. The statement also raised further uncertainty over the extension of the ongoing Black Sea grain supply agreement. Looking at shipments, the latest data shows that Ukraine’s wheat exports stood at 2.3mt as of yesterday for the 2022/23 marketing year, down from 7.2mt at this point in the season last year. However, corn shipments reached 3.95mt during the same period, compared to 1.39mt for the same period last year. Meanwhile, reports suggest that China booked as much as 3mt of soybean in the last two weeks from Argentina, which is not far off the total volume that China imported from Argentina last year. A devaluation in the Argentine peso appears to have prompted this stronger buying interest for Argentine beans. Read this article on THINK TagsRussia-Ukraine Refined product Grains EIA Copper Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

The complex held up relatively well yesterday, despite a number of central banks hiking rates and the stronger USD. However, commodities are likely to face headwinds in the months ahead with expectations of only a further tightening in monetary policy Energy - Russian oil price cap talks Despite a raft of central banks hiking rates yesterday in a bid to rein in inflation, the oil market held up well. ICE Brent managed to settle 0.7% higher on the day. However, with expectations of only further monetary tightening in the months ahead, commodity markets are likely to face some strong headwinds. The dominance of the USD at the moment will only add to these headwinds. According to reports the EU is trying to push ahead with the G-7 price cap on Russian oil, after Putin’s latest escalation in the war. Member states will apparently be meeting over the weekend to discuss the cap, along with a number of other new potential sanctions. There are suggestions that the aim is to come to a preliminary agreement by early October, ahead of an EU leaders’ meeting. Getting all members to agree on a price cap could prove difficult, just like we saw with the EU ban on Russian oil, which was watered down to include only seaborne trade, given objections from Hungary. EU members will want to come to a final decision by 5 December, which is when the ban on Russian seaborne crude into the EU comes into force. Latest data from International Enterprise Singapore shows that oil product stocks in Singapore increased by 3.64MMbbls over the week to 47.15MMbbls. The increase was driven fully by residues, with them increasing by 3.98MMbbls over the week to 23.4MMbbls. Light and middle distillates both saw small declines over the course of the week. As for Europe, refined product stocks in the ARA region increased by 15kt to 5.34mt. Fuel oil and gasoline stocks fell by 40kt and 20kt respectively, whilst gasoil inventories increased by 30kt over the week. However, like most regions, gasoil stocks are still very tight for this stage of the year and are at their lowest levels since at least 2007 for this time of year. US natural gas prices came under pressure yesterday, falling almost 9%. This weakness came after the EIA reported that US natural gas storage increased by more than expected over the week. The latest data shows that storage increased by 103bcf last week, whilst the market was expecting a number closer to around 95bcf. The build was also significantly larger than the 5-year average of 81 bcf. Metals – LME zinc stocks drop Zinc inventories held in London Metal Exchange warehouses fell by 3,650 tonnes to the lowest since February 2020, while prices rebounded from their lowest in almost two months. The decline was driven by port Klang, Malaysia warehouses, aggravating supply tightness in the zinc market. LME on-warrant copper stockpiles rose to the highest level since 11 July. Earlier this week, data from China showed domestic output sliding more than 5% on the year. In precious metals, the latest data from World Gold Council shows gold prices in Shanghai trading at a premium of more than US$43/oz (highest since 2019) over their London equivalent due to strong demand for the metal in the Chinese market. China’s gold imports jumped to a four-year high in August. Jewellery demand is expected to pick up ahead of the Golden Week at the start of next month. Chinese banks will also receive new import quotas post the October holidays, which are currently only allowed to import quantities set by the People’s Bank of China. Agriculture – wheat production estimates revised upwards The latest update from the International Grains Council was moderately constructive for corn, whilst relatively soft for wheat and soybeans. The council revised down its estimates for 2022/23 global corn production by 11mt to 1,168mt. This was mainly driven by a cut in US production forecasts, which were lowered from 364.7mt  to 354.2mt. Corn ending stocks for 2022/23 were cut to 262m, down from a previous estimate of 265mt. For soybeans, production in 2022/23 is expected to rise by 10% YoY to a record of 387mt, led by South American and Black Sea production. For wheat, the council increased its ending stock estimates for 2022/23 from 275mt to 286mt due to expectations of higher production. Global wheat output is seen  increasing to 792mt in 2022/23 compared to an earlier estimate of 778mt. This increase is party driven by Russia, where output is expected to reach 93.4mt , up from an earlier estimate of 87.6mt. The latest weekly data from the USDA shows that US grain sales remained quite weak for the period ending 15 September. Weekly export sales of wheat dropped to 185kt, well below market expectations of 406kt and week ago levels of 217kt. For soybeans, US export sales declined to 446kt, down from 873kt in the previous week and below expectations of more than 890kt. Similarly, US corn export sales fell to 182kt down from 583kt in the previous week. Read this article on THINK TagsZinc Wheat Russian oil price cap Refined product Henry Hub Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

European Union's Crude Oil Price Cap Is On The Table The threat of a global recession continues to weigh on oil prices, with widespread monetary tightening over the last couple of days fueling fears of a significant hit to growth. Central banks now appear to accept that a recession is the price to pay for getting a grip on inflation, which could weigh on demand next year. At the same time, the market still remains tight and OPEC+ is perfectly willing to restrict supply further even as it fails to deliver on quotas it has set itself so far. What’s more, a nuclear deal between the US and Iran looks no closer and Russia’s mobilization could pose a risk to its supply. As for the price cap that the EU is working hard towards, that’s a big unknown as it may not even get the unanimous support it needs from member states. If it does, there’s no guarantee it will work without the cooperation of those that Russia has been able to lean on since sanctions came in and if it is effective, Russia could reduce supplies and cause a price spike. With that in mind, very little is probably priced in at this point. Is gold eyeing a correction? It’s been a choppy week for gold amid all of the central bank tightening and yet it hasn’t really progressed in that time. The break below $1,680 was a big deal but it hasn’t really been the catalyst for anything since. While it hasn’t accelerated lower so far, it does continue to see resistance at $1,680. How long for depends on whether all of this tightening becomes a trigger for a correction in the dollar and maybe yields. If we do see a corrective move then the next big test may come around $1,730 which was previously a major level of support and then resistance. A break of this would suggest a much deeper correction may be underway. A break below $1,650 on the other hand could be viewed as a secondary confirmation of the initial breakout and a very bearish signal. 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. Oil drifting, gold in choppy waters - MarketPulseMarketPulse

A difficult start to the week beckons as Asian markets eye Friday's G-10 carnage Source: shutterstock Macro outlook Global Markets:  US stocks had a bad end to the week. Both S&P500 and NASDAQ dropped sharply, and despite some slight recovery towards the end of the session, equity futures remain negative today, likely setting the scene for Asia’s markets. EURUSD also continued its losing streak, dropping below 0.97, though Cable was the star underperformer in G-10 FX space, dropping to 1.0824. New all-time lows beckon. This is not exactly a ringing endorsement by markets of the new Truss government and budget proposals. The AUD fared better, but not much, falling to 0.6525 and the JPY is making tentative moves higher again after the BoJ intervened at the end of last week. It probably won’t remain below 1.45 for long. The US yield curve continues to invert more forcefully.  2Y US Treasury yields are now 4.20%, a rise of nearly 8bp on Friday, while the yield on the 10Y Treasury bond dipped by just under 3bp to 3.685%. UK 10Y Gilt yields were up 33.3bp on Friday, a worse performance than the weakest Eurozone member bond.  Asian FX has been outperforming its G-10 peers. Most Asian currencies fell less than one-percent against the USD on Friday, though there could be some more catch-up today. Crude oil joined the general slump on Friday, no doubt helped by the USD’s strength, and front-month Brent crude futures are back below USD90/bbl. Gold is also soft, at $1643/oz, with inflation fears being swamped by interest rate rises. G-7 macro: It’s a very quiet day in the G-10 for macro news after the slew of weak PMI data on Friday. Germany’s Ifo survey may be the main highlight for the day – further falls are expected.  Regional US Fed activity indices provide additional insight into the US economic condition. Otherwise, the OECD’s Economic Outlook will probably garner a few downbeat headlines, though there is a good chance any forecasts will already have been overtaken by events. Singapore: Industrial production data for August is due at 13:00 today. Weakness in the electronics segment is likely behind the consensus -0.6%YoY forecast. The earlier NODX numbers for August were, if anything, a bit weaker than this consensus view, so there may be some downside risk to these estimates. Korea: The foreign exchange authorities (the Bank of Korea, the Ministry of Strategy and Finance) and the National Pension Service have agreed to conduct FX swap transactions within a limit of $10 billion. This is the second FX swap agreement after the 2008 agreement. The maturity of each case is 6 months or 12 months with no rollover and either party has the right to early liquidation. Despite the authorities’ efforts to stabilize the FX market, the KRW depreciation will likely continue for a while given that the market impact of these transactions will be limited. The Bank of Korea will likely take a big step at its October meeting, concerned that the weak KRW will add more pressure on inflation. What to look out for : China PMI Japan Jibun PMI composite (26 September) Singapore industrial production (26 September) Hong Kong trade (26 September) US Dallas Fed manufacturing activity (26 September) South Korea consumer confidence (27 September) China industrial profits (27 September) US durable goods orders (27 September) US Conference Board consumer confidence and new home sales (27 September) Australia retail sales (28 September) Japan leading index (28 September) Bank of Thailand meeting (28 September) US mortgage applications and wholesale inventories (28 September)       South Korea business survey manufacturing (29 September) US initial jobless claims, 2Q GDP and core PCE (29 September) South Korea industrial production (30 September) Japan labour market data (30 September) China official and Caixin PMI manufacturing (30 September) India RBI meeting (30 September) Hong Kong retail sales (30 September) US personal income, personal spending and core PCE (30 September) US University of Michigan sentiment (30 September) Read this article on THINK TagsEmerging Markets Asia Pacific Asia Markets Asia Economics Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

It was a negative end to the week for commodities. USD strength and a week of numerous central banks hiking rates have weighed heavily on the complex. Macro drivers are clearly in the driving seat when it comes to commodities Energy- Macro pressure ICE Brent came under significant pressure on Friday, trading down to US$85.50/bbl - the lowest level since January and settling almost 4.8% lower on the day. The surge higher in the USD has not been helpful to the oil market, while a raft of central banks tightening monetary policy dims the demand outlook.  Despite the weakness in the flat price, the prompt time spread has held up fairly well in the last couple of days and strengthened to a backwardation of US$1.13/bbl. If the flat price weakness persists, we will need to keep a lookout for possible OPEC+ intervention. The group has made it clear in recent months about the possibility of further action given the apparent disconnect between the physical and the paper market. If it is not there already, the market is trading towards levels where OPEC+ will be getting uneasy. The group are scheduled to meet next week. This could be an interesting meeting. The latest positioning data shows that speculators increased their net long in ICE Brent by 5,635 lots to 162,334 lots as of last Tuesday. This move was exclusively driven by short covering, rather than fresh longs coming into the market. Given the weakness in the market since Tuesday, speculators are likely to have trimmed this position. Similarly, the speculative net long in NYMEX WTI increased by 7,941 lots over the last reporting week to 192,740 lots. As for ICE gasoil, speculators trimmed their net long, selling 20,321 lots over the reporting week, to leave them with a net long of 47,176 lots. Given the recent speculation of China releasing a large amount of refined product export quotas, it shouldn’t be too surprising to see speculators taking risk off the table.   In Iraq, the oil ministry has announced that trial operations at the 140Mbbls/d Karbala refinery have started. Given the tightness in the refined products market (particularly the middle distillate market), the ramping up of new capacity will be welcomed by the market. Supply from the Karbala refinery will help to meet domestic demand. Metals – metals slump on economic concerns The LME metals index slumped more than 3% on Friday as concern over an industrial slowdown, recession fears and a very strong USD, all weighed on sentiment. LME nickel was the worst performer with around a 5% loss for the day, whilst copper also fell more than 3%. Soft economic data out of Europe did not help with the manufacturing PMI falling to 48.5 for September, the lowest level since 2020 and the third consecutive month below 50. LME zinc inventories dropped by another 2,375 tonnes on Friday, taking total weekly inventory withdrawals to around 14,225 tonnes or around 20% of the total available inventory at the end of last week. Most of the withdrawals were seen in Malaysia, where stocks dropped to 8,850 tonnes as of 23 September compared to 22,975 tonnes a week ago. Meanwhile, zinc inventory at SHFE warehouses also dropped by another 2,618 tonnes last week, taking total deliverable zinc stocks to nearly a 1-year low of around 55,789 lots as of 23 September. Rising interest rates along with the surging USD are weighing heavily on the safe haven appeal of gold. The latest CFTC data shows that money managers increased their net short position in COMEX gold by 22,834 lots over the week with their net short position increasing to more than a 3-year high of 32,966 lots as of 20 September. Similarly, total known ETF holdings of gold have dropped by around 0.85m ounces over the past week and around 1.71m ounces so far this month. Agriculture – weak start to the planting season in Argentina The latest update from the Buenos Aires Grain Exchange showed that corn planting in Argentina has been progressing at a very slow pace due to drought concerns. Corn planting was reported to be around 3% complete, compared to around 8.5% at the same stage last season with farmers waiting for the weather to improve before committing to corn planting. Meanwhile, the exchange also reported that 42% of the current wheat crop is in poor-to-very poor condition compared to 34% a week ago, reflecting the impact of dry weather on the crop. Earlier, the Rosario Board of Trade downgraded wheat production forecasts from 17.7mt to 16.8mt due to the ongoing drought. Speculative buying returned in CBOT corn and wheat over the last week as some concerns over the continuity of Ukrainian grain shipments combined with poor weather in South America helped sentiment. CFTC data shows that managed money net longs in CBOT corn increased by 7,266 lots over the week to push net longs to 247,909 lots as of 20 September. Read this article on THINK TagsZinc USD strength Oil Monetary Policy Gold Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

Oil slips further amid economic concerns Economic woes continue to weigh on oil prices, with Brent and WTI off around 1% again today and trading at pre-invasion levels. With more and more central banks being forced to take extraordinary measures no matter the cost to the economy, demand is going to take a hit which could help rebalance the oil market. Of course, OPEC+ has made its position on this perfectly clear and should it wait until the next scheduled meeting on 5 October, I expect there’ll be a big discussion about further cuts. Rising yields hit gold prices again Gold hit new two-and-a-half-year lows this morning as the dollar got off to a strong start to the week. Rising yields around the world continue to weigh heavily on the yellow metal, despite the risk-aversion we continue to see. Once we see yields stabilise, we may see more appetite for gold but in the meantime, it just isn’t there. It saw some support this morning around $1,625 but if yields keep rising, I can’t imagine that will hold for long. Showing resilience once more Bitcoin is once again showing some resilience despite the mood in the broader markets being quite pessimistic. It’s flat on the day after making decent gains earlier in the session. The backdrop remains very challenging for risk assets though and despite the resilience we’ve repeatedly seen, it could still come under further pressure putting substantial support around $17,500-18,500 at risk. 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. Oil and gold slide, bitcoin resilient - MarketPulseMarketPulse

The move higher in the USD has been unrelenting and this continues to weigh heavily on the commodities complex. Macro drivers remain firmly in the driving seat, while supply risks continue to be largely ignored across markets Source: Shutterstock Energy- Russian oil price cap hits a stumbling block The oil market came under further pressure yesterday as the USD continued to march higher. ICE Brent settled more than 2.4% lower on the day, leaving it to close below US$85/bbl. OPEC+ members have been oddly quiet in this latest sell-off. However, we are likely to hear a growing amount of noise in the lead-up to the OPEC+ meeting on 5 October. The group will likely be getting uneasy with the degree of weakness that we have seen in the market and so there is the very real possibility that we see OPEC+ announce supply cuts in order to support the market. Clearly though, if we are to see cuts, they will need to be quite a bit larger than the 100Mbbls/d agreed at the last meeting in order to have a meaningful impact on the market. It appears that the EU will delay the planned Russian oil price cap due to disagreements between EU members. According to reports, both Cyprus and Hungary oppose the idea of a price cap, and in order to be adopted, all members need to agree. The European Commission had been wanting the price cap to be enforced at the same time as the EU ban on Russian seaborne crude oil, which comes into effect on 5 December. Clearly, given the latest delay, this may not happen now. In the US, Hurricane Ian has led to the shut-in of some oil production in the US Gulf of Mexico. Both Chevron and BP have evacuated and shut a couple of platforms each. European natural gas has also been unable to avoid the weakness across the commodities complex. TTF fell by more than 6% yesterday and recorded its fourth consecutive day of settling lower. Meanwhile, the European Commission is still looking into the possibility of a price cap for natural gas. If the EU was to go down this route, it would not help solve the tightness in the gas market, as this move will likely only support gas demand. Spain introduced a price cap on gas used for power generation earlier this year, which unsurprisingly led to higher demand for gas.   Metals – gold enters bear market A rallying USD and surging treasury yields continue to put pressure on gold prices. Spot gold came off more than 1.3% yesterday, which saw it trading to its lowest levels in more than 2 years. Yesterday’s weakness also meant that the gold market entered a bear market, as it is now down more than 20% from its recent peak in March. Given the expectation that the Fed will continue to aggressively hike through this year, it is difficult to hold a constructive view on gold in the short term. We would need to see inflation coming off significantly before becoming more constructive towards the market. A meaningful fall in inflation could start to signal that the Fed will take a less aggressive approach in terms of hiking. Anglo American has announced the start of commercial operations at its Quellaveco copper mine in Peru with a copper production target of around 80-100kt this year at a c1 cash cost of around US$3,300/t. Previously the company was targeting output of around 100-150kt at a cash cost of around US$3,000/t. However operational constraints appear to have delayed the mine start and ramp-up. However, the miner continues to target around 320-370kt of copper production by 2023 and 2024 as the mine ramps up gradually. Meanwhile, the company has also reduced its copper production target in Chile to around 560-580kt for the current year compared to earlier estimates of around 560-600kt Read this article on THINK TagsUSD strength Russian oil price cap OPEC+ Natural gas Gold Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

USOIL on the 1H time-frame shows the marking of the final primary wave ⑤, which takes the form of an intermediate ending diagonal. We see the second half An intermediate correction (4) in the form of a minor double zigzag may have been completed recently. Thus, now we see that the price could start to rise in the intermediate wave (5). It is assumed that the intermediate wave (5) will take the form of a standard 3-wave zigzag A-B-C The end of the specified construction is possible near 124.78. At that level, wave (5) will be at the 76.4% Fibonacci extension of impulse (3). Alternatively, the construction of an intermediate correction (4) can be continued. It may have the form of a triple zigzag W-X-Y-X-Z. The minor sub-waves W-X-Y-X can be completed. Thus, in the near future, the downward movement is expected to continue in the final actionary sub-wave Z, which can be completed in the form of a minute triple zigzag ⓦ-ⓧ-ⓨ-ⓧ-â“©. The oil price may fall to 69.35. At that level, minute waves ⓨ and â“© will be equal. After reaching this level, the market is expected to grow above the maximum – 123.72.

Next week all attention will be on OPEC+ as the group decides on output policy amid recent price weakness and the uncertain demand outlook. Meanwhile, the German government has announced a EUR200bn package due to surging energy prices, which includes a price cap for gas Source: Shutterstock Energy - Germany gas price cap There is increasing noise that OPEC+ will be looking to agree on an oil production cut at their meeting next week, given the broader pressure that we have seen on oil prices. However, since reports that Russia had proposed a 1MMbbls/d supply cut, there have been no suggestions from other members on the potential size of any cut. In August, OPEC+ production was estimated at around 3.37MMbbls/d below target production levels. So in reality, any cut in supply will likely be smaller than whatever figure the group announces. The latest refined product inventory data for the ARA region shows that total refined product stocks fell by 139kt over the week to 5.2mt according to Insights Global. All products saw declines with the exception of gasoil. Naphtha saw the largest fall with stocks decreasing by 144kt (or 33%) to 288kt. Although the reported decline seemed to have little impact on the naphtha crack. Meanwhile, for middle distillates, there was some relief with gasoil stocks increasing by 125kt over the week to 1.81mt. The German government yesterday announced a EUR200bn package to address surging energy prices. Part of the package will include a price cap on natural gas with further details expected to be released next month. It is planned that these measures would run through until the spring of 2024. A price cap on gas is a questionable approach, as it will do little to ensure that we see the necessary demand destruction, particularly if Russian gas flows come to a complete halt. Interestingly, Germany’s network regulator yesterday also warned that natural gas consumption was above average last week - coming in 14.5% above the 2018-2021 average. Metals – LME discussing a ban on Russian metals LME nickel and aluminium both spiked higher yesterday after it emerged that the LME is discussing potential plans to ban Russian metals for delivery into exchange warehouses. The LME is looking to launch a discussion paper on the acceptance of Russian metals in exchange warehouses which could potentially lead to tighter restrictions on the delivery of Russian metals. This is purely a discussion for now and no decision has been made yet. Providing further support to LME metals yesterday was the softer USD. However, sentiment across broader financial markets remains negative given concerns over the macro outlook. Glencore is reportedly reviewing the sustainability of operations at its Portovesme lead production plant in Italy as high-power prices affect profitability. The company suspended primary zinc production at the plant last year due to high power prices, although zinc recycling and lead production continued. Glencore produced around 159kt of lead in 2021 from its three facilities in Europe including Portovesme, although exact details of lead production from the plant are not known. Read this article on THINK TagsRussian metals OPEC+ LME Gas price cap Aluminium Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

Oil edges higher into the weekend Oil prices are rising again as we head into the weekend, with the focus now on the OPEC+ meeting next week. There’s been plenty of rumours about how the alliance will respond to the deteriorating economic outlook and lower prices. A sizeable cut now looks on the cards; the question is whether it will be large enough to offset the demand destruction caused by the impending economic downturn. Not to mention how any cut would work considering the shortfall in output targets throughout this year. Brent continues to trade around the March to August lows having traded below here over the last week amid recession fear in the markets. We’re now seeing some resistance around $88, perhaps a sign that traders don’t believe OPEC+ will deliver a large enough cut to make a significant difference. Encouraging but maybe not sustainable Gold is making gains for a fourth consecutive day after a difficult start to the week. While the recovery has been encouraging, it’s hard to imagine it building on it in any significant way as that would probably require rate expectations to have peaked and inflation perhaps to have as well. While that may be the case, it’s hard to imagine pressure easing from here which may maintain pressure on the yellow metal for a little longer yet. Key resistance to the upside lies around $1,680 and $1,700, with $1,620 and $1,600 below being of interest. For a look at all of today’s economic events, check out our economic calendar: www.marketpulse.com/economic-events/ 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. Oil edges higher, gold rally continues - MarketPulseMarketPulse

Summary:  There are some big macro worries as we enter the final quarter of the year. We are looking at not just how the UK crisis could develop further, but also which other country/market could succumb to the US yields or dollar strength as market disruptions are likely to widen. Geopolitics also remains a key focus amid Putin’s military losses, as this could mean he could further try to choke Europe and the world of key supplies. A significant production cut from OPEC+ is already making headlines, but China markets are away for the Golden Week. Reserve Bank of Australia may need to delay slowing down its pace of rate hikes, and brace for more profit warnings as well ahead of the Q3 earnings season which goes into full swing in two weeks.   US ISM indices and payrolls data to continue the economic optimism, spurring risk off in the markets As the US economy continues to stay strong despite the aggressive Fed tightening, markets continue to be beaten out. Some respite was seen in the US yields and the US dollar last week, but data due this week could bring further risk-off with markets starting to price out some rate hike expectations for next year with the risks emerging from crisis in UK and possibly more crisis coming due to the run higher in US yields and USD. Data will likely show continued strength in the US economy and labor markets, especially ahead of the midterm elections. ISM manufacturing for September is due in the US session today, and Bloomberg consensus estimates signal some signs of a slowdown to 52.1 in September from 52.8 in August – that should likely be underpinned by improving supply chains, while new orders should remain upbeat and keep the sentiment positive. ISM services follows on Wednesday, and may also moderate as the services sector cools down from a peak, but will stay robust. Finally, the payrolls data on Friday is set for another positive surprise after sub-200k weekly jobless claims last week. Bloomberg consensus estimate as of now stand at gains of 250k for September from 315k last month, with unemployment rate and average hourly earnings steady at 3.7% and 0.3% respectively. Russia’s counter-attack risks Less than a day after Russia’s annexation of four Ukrainian cities and claims for these to be Russian territory, parts of these cities have been recaptured by Ukraine over the weekend. That is another military setback for Russia, and would possibly mean that Putin would be keen to press Europe’s energy nerves further as winter demand for energy starts to flow in. There are two key risks to highlight here: 1) Russia could cut supplies from Ukraine as well further to choke Europe and the world of energy and food supplies; and 2) there is an imminent threat of use of some low-yield nuclear weapons given how desperate Russia is now. Any of these moves could spur further risk off in the markets this week, and potentially, the effect will spill over to energy and agriculture markets, so think oil, gas, wheat, soybeans and the likes. OPEC+ meeting on October 5 may bring production cuts Oil prices were supported at the end of last week amid hopes of a production cut by OPEC+ members at their meeting this week. There were some reports that OPEC members have started talking about cuts with Russia proposing a 1 mln barrels per day cut, a reduction towards which they are unlikely to contribute much as they are already producing below their quota. At its last meeting on September 5, the group agreed a token reduction of 100,000 barrels a day for October, despite calls from consuming nations to help tame rampant inflation by keeping the taps open. With gasoline prices retreating in the US, some of that external pressure may now be easing, and that further raises the prospects of some price-supportive action. Reserve Bank of Australia may step away from moving to a slower rate hike pace The Reserve Bank of Australia is scheduled to announce its next rate decision on Tuesday, October 4. Governor Lowe had previously signalled that the pace of rate hikes is likely to slow from here after four consecutive rate hikes of the magnitude of 50bps. However, money markets and Bloomberg consensus forecast is still calling for another 50bps rate hike at the October meeting suggesting that RBA may delay taking the foot off the pedal just yet. The recent slide in the Australian dollar and worries over a turmoil in global financial markets may prompt the policymakers to front-load more of the rate hikes while the economy is still holding up. Retail sales data last week was upbeat while the first monthly inflation data reading at 6.8% is only slightly off the 7% levels seen in the preceding month. So, even as a monthly meeting can ensure a steady pace of rate hikes even with a smaller 25bps rate move, policymakers would possibly prefer to make a larger move this week to provide some support to the AUD. Likewise, the Reserve Bank of New Zealand is also expected to hike rates by another 50bps at their October 6 meeting. Japan’s Tokyo CPI to see impact of reopening Japan’s inflationary pressures are likely to continue to reign amid higher global prices of food, electricity as well as a weak yen propping up import prices. Bloomberg consensus estimates point to a slightly softer headline print of 2.7% YoY from 2.9% YoY previously, but the core is pinned higher at 2.8% YoY from 2.6% YoY previously. Further, the reopening of the economic from the pandemic curbs likely means demand side pressures are also broadening, and services inflation will potentially pick up as well. Slow earnings week but watch for further profit warnings ahead of the Q3 reporting season Last week, Biogen and its Japanese partner Eisai announced positive results in a phase-3 study on a treatment that slows Alzheimer’s disease. Analysts are eager to learn more about the treatment from the company’s presentation of more data at the Clinical Trails on Alzheimer’s Disease conference on Nov 29. For Q3 results, analysts expect Biogen’s revenue and adj. EPS to fall by around 11% to 12% Y/Y. Analysts are expecting beverage company, Constellation Brands’ (STZ:xnys) revenues to grow at 5.6% Y/Y in the quarter ending Aug 31, led by its core bear portfolio of Modelo Especial and Corona Extra which recent channel surveys from Beverage Bytes and Nielsen suggested outperformance. The consensus estimate is optimistic and anticipates over 18% Y/Y growth on Adj. EPS with margin expansion. Tesco’s (TSCO:xlon) FY23 1H results (ending Aug 31), scheduled to release this week, are worth watching it can let us have a glimpse of the state of U.K. consumers and some insights into the latest development in the inflation in the U.K. Analysts are expecting the U.K. grocer to report margin compression as a result of high energy costs and wage increases.    Key economic releases & central bank meetings this week Monday, Oct 3 Japan Tankan survey (Q3)ISM US manufacturing survey (Sep)Indonesia inflation (Sep) Tuesday, Oct 4 Australia home loans, building permits (Aug)Australia RBA policy decisionEurozone PPI (Aug)US factory orders, JOLTS (Aug) Wednesday, Oct 5 ISM US non-manufacturing survey (Sep)S Korea inflation (Sep)New Zealand RBNZ policy decisionPhilippines inflation (Sep)Thailand inflation (Sep)Australia retail sales (Aug)Germany trade balance (Aug)ECB non-monetary policy meetingUS MBA mortgage applications/30-year mortgage rateUS trade balance (Aug), ADP employment (Sep)Canada trade balance, building permits (Aug) Thursday, Oct 6 Australia trade balance (Aug)Taiwan inflation (Sep)Germany factory orders (Aug)UK & eurozone construction PMIs (Sep)Eurozone retail sales (Aug)US jobless claims Friday, Oct 7 Japan household spending (Aug)Germany industrial production (Aug)UK Halifax house prices (Sep)Canada labour market statistics (Sep)US employment report (Sep)US consumer credit, wholesale inventories (Aug)   Key earnings releases this week   Tuesday: Biogen Wednesday: Keurig Dr Pepper, Aeon, Lamb Weston, Tesco, RPM International Thursday: Seven & I, Conagra Brands, Constellation Brands, McCormick & Co   Source: https://www.home.saxo/content/articles/macro/saxo-spotlight-3-oct-2022-03102022

Following the $1.50 bullish opening gap, WTI has entered a phase of upside consolidation just above the $81 mark, as investors digest the reports of sharp output cuts by OPEC and its allies when they meet on October 5. Various media reported cited that the OPEC+ is considering slashing production by more than 1 million barrels a day but the alliance delegates said a final decision on the size of the cuts won’t be made until Wednesday. Further, Reuters reported that Saudi Arabia is considering raising prices for most crude grades it sells to Asia in November, as the world’s top oil exporter expects demand to recover and Chinese refineries to increase output. According to the median of the responses of five refining sources surveyed by Reuters, “the November official selling prices (OSP) for flagship Arab Light crude may rise by 25 cents a barrel.” At the time of writing, the US oil is adding 2.20% on the day to trade at $81.18, having eased from the intraday highs of $81.71. The black gold has kicked off a fresh quarter on the right footing after losing 25% of its value last quarter. On an hourly timeframe, WTI is defending gains above the flattish 50-Hourly Moving Average (HMA) located at $80.97. A sustained break below the latter will call for a retest of the next support levels around $80.50. However, the Relative Strength Index (RSI) holds above the midline, suggesting that the further upside appears more compelling. WTI: Hourly chart

Oil prices have started the week on a strong footing, with expectations that OPEC+ will announce a large supply cut when they meet on Wednesday. In addition, the European gas market is facing fresh supply disruptions due to Russia making further cuts in gas flows Energy- OPEC+ looking to cut output OPEC+ will meet in person on Wednesday to discuss output policy for November. And growing noise around what the group will do is pushing oil prices higher at the moment. There are growing expectations that the group will announce a large cut, with suggestions OPEC+ could agree on a reduction of more than 1MMbbls/d. This would be the biggest output cut seen from the group since the peak of Covid. However, if the group were to announce a reduction of around 1MMbbls/d, it is important to remember that the group is already producing well below their production targets and so the actual cut would likely be much smaller. There are only a handful of producers who are hitting their production targets and so it is likely that only these producers would have to make a cut. According to IEA numbers, OPEC+ output in August was 3.37MMbbls/d below target output. According to reports, Chinese consultant JLC has said that 15mt of refined product export quotas have been released to refiners. 13.25mt of quotas can apparently be used for clean product exports, whilst the remaining 1.75mt is for low sulfur fuel oil. In addition, it seems as though unused quotas will be able to be rolled over into the first quarter of next year. There has been plenty of market talk about Chinese refined export quotas but still no official confirmation from the government. There have been further European gas supply disruptions over the weekend. Gazprom has halted gas flows to Italy which come via Austria. Gazprom has blamed the stoppage on regulatory changes from Austria and stated that the grid operator did not confirm transport nominations. The Austrian government has said that Gazprom has not signed necessary contracts. Involved parties are apparently looking to fix the issue. In addition, Gazprom is also cutting gas flows to Moldova by 30%, blaming the reduction on Ukraine’s force majeure for gas transit through the Sokhranivka entry point. Furthermore, Gazprom has said that it has the right to terminate the current supply contract for Moldova at any time given that an agreement on the settlement of historic debts has not been reached.   Metals – zinc inventory withdrawals continue Both LME and SHFE zinc have continued to see large inventory withdrawals over the past few weeks. SHFE zinc stocks dropped by nearly 18.1kt over the last week to 37.7kt, whilst stocks over the third quarter have declined by nearly 100kt, reflecting some tightness in the physical market. Meanwhile, LME zinc stocks also fell by around 7.9kt over the last week to 53.6kt- the lowest levels in more than two years. These LME inventory declines have proved supportive for time spreads with the cash/3M spread spiking to a backwardation of US$46.25/t on Friday. Speculators increased their net bearish position in COMEX gold by another 8,334 lots over the last week, pushing their net short position to a fresh 3-year high of 41,300 lots as of 27 September. Meanwhile, investors also continued to liquidate their gold holdings with the total known ETF holdings falling by another 1.1m oz over the last week. ETF gold holdings have dropped by around 2.8m oz over September and around 7.3m oz over the third quarter. Investor demand for gold has dropped significantly over the last few months due to rising interest rates; however physical demand from both central banks and retail consumers continues to be healthy. Agriculture – USDA reports tighter corn stocks In its quarterly grains stocks report, the USDA reported US corn inventory stood at around 1.38b bushels as of 1 September; while this is higher than year ago levels of 1.24b bushels, the market was expecting an even higher number of around 1.5b bushels. The agency also reported that soybean inventories stood at around 274m bushels, which was above market expectation of around 243m bushels. As for wheat, the USDA estimated stocks at around 1.78b bushels, marginally lower than the 1.79b bushels that the market was expecting. Speculative net longs in both CBOT soybean and corn dropped over the last week due to the pessimistic economic environment. CFTC data shows that managed money net longs in CBOT soybean declined by 9,860 lots over the last week to 94,831 lots as of 27 September. Similarly, money managers trimmed their net long position in CBOT corn by 10,055 lots over the last week, leaving then to hold a net long of 237,854 lots. Read this article on THINK TagsZinc Russia-Ukraine OPEC+ Natural gas Grains Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

All attention remains focused on Wednesday’s OPEC+ meeting, where expectations are for the group to announce a large cut. Failure to deliver this could put some immediate downward pressure on oil prices. Meanwhile, the EU continues to work towards agreeing a price-cap for Russian oil Source: Shutterstock Energy- expectations grow for large OPEC+ cut Oil prices saw significant strength yesterday. ICE Brent managed to settle almost 4.4% higher on the day to close at US$88.86/bbl. Growing noise and expectations of a large supply cut from OPEC+ has pushed the market higher. However, as we have mentioned on a number of occasions, whilst OPEC+ might announce a large cut (in excess of 1MMbbls/d), in reality, the cut could be much smaller. This is due to most OPEC+ members producing well below their target production levels. And so there are only a handful of members who will actually need to reduce output if the group announces a large cut. Wednesday’s meeting will see oil ministers meeting in Vienna and this includes Russia’s deputy prime minister (who is also the former energy minister), Alexander Novak. Whilst the US has sanctioned Novak, as of yet the EU has not done so. According to preliminary numbers from Bloomberg, OPEC supply increased by 230Mbbls/d over September to average 29.89MMbbls/d. This increase was driven largely by Libya, whose output grew by 120Mbbls/d. However, looking at OPEC-10 (OPEC members who are part of the OPEC+ supply deal), their output averaged 25.53MMbbls/d over the month, well below their target production of 26.75MMbbls/d. The EU is still working towards an agreement on a G-7 price cap. The idea is to have a preliminary agreement in place before EU leaders meet on 7 October. But it appears that there are difficulties in reaching a consensus, with Greece, Cyprus and Malta concerned about the impact such a cap will have on shipping oil, given that they have large shipping industries. Hungary has also proved to be an obstacle when it comes to the price cap. The G-7 wants the cap on Russian oil prices to come into effect prior to the EU’s ban on Russian crude oil, which is due on the 5 December.   Metals – aluminium premiums soften in Japan Major aluminium buyers in Japan will likely pay the lowest premiums on imported metal in nearly two years, reflecting weakening consumption, especially from the auto sector. At least two buyers have agreed to pay $99 a tonne for supplies this quarter, 33% lower than the prior three months as demand for the light metal continues to soften amid macroeconomic concerns. Japan's manufacturing PMI has dropped from its recent peak of around 56 in March 2022 to around 50.7 in September, reflecting a slowdown in the manufacturing sector. The trend is largely similar to Western markets, where the European duty-paid aluminium premium has softened to US$390/t compared to US$490/t at the start of September and nearly US$518/t at the end of 2Q22. Iron ore prices came under pressure as China’s latest stimulus measures failed to lift sentiment in the market. China’s financial regulators told the biggest state-owned banks to extend at least 600 billion yuan ($85 billion) of net financing to the real-estate sector as steel demand has been hit by the property slowdown and Covid-19 lockdowns. Agriculture – uncertainty over Black Sea supplies supports wheat CBOT wheat has been trading firm over the past few days and made a fresh 3-month high of more than US$9.3/bu yesterday as Russia’s illegal annexation of some Ukrainian regions has pushed up supply risks for Ukrainian wheat shipments from the Black Sea under the UN’s Black Sea Grain Initiative. Under the deal, Ukraine has shipped around 5.5mt of agri products (mostly grains) through its three ports since the start of August and plans are to increase shipments to 5mt per month. Earlier, Ukraine’s Agriculture Ministry reported that the local grain harvest has dropped by around 44% YoY to 26.1mt in the season so far. The wheat harvest is nearly complete at 19.2mt (down 40% YoY), whilst the corn harvest has just started with 0.9% of harvesting completed so far compared to around 13% at this stage last year. Read this article on THINK TagsRussian oil price cap OPEC+ Iron ore Grains Aluminium Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

At first glance, the fall in oil prices below the levels that took place before the armed conflict in Ukraine looks paradoxical. The main grades of black gold lost a quarter of their value in the third quarter, despite the fact that world reserves are at a low level, American companies are not increasing production, there are fewer buyers for Russian oil, and OPEC+ is going to announce production cuts at its first face-to-face summit since the start of the pandemic. The expectation of the last event allowed the Brent bulls to launch a counterattack. The decline in exports and falling prices clearly do not suit Russia, whose oil revenues are melting before our eyes. Saudi Arabia is not averse to reducing production, as it fears that by the end of the year it will drop significantly in Russia due to Western sanctions. And in such conditions, it is necessary to save production facilities in order to turn them on later. Moscow and Riyadh are the key figures of OPEC+, so rumors about the Alliance reducing production by 1 million bpd, which is equivalent to 1% of global supply, are likely to turn into facts. The cartel and its allies are taking the fall of Brent as a challenge. They are clearly not thrilled by the prospect of North Sea grade falling to $80 per barrel. It is likely that OPEC+ would like to protect the $90 per barrel level. However, the Alliance is not fulfilling its plans anyway. In August, it received less than 3.6 million bpd. However, its intention to act aggressively is a bullish signal for the market. Also, Russian oil exports are constantly declining. Maritime deliveries to the EU and Britain have fallen by 60% from levels that took place before the armed conflict in Ukraine. At the same time, the process of redirecting black gold from Europe to Asia begins to falter. Three key buyers: India, China, and Turkey imported 2.2 million bpd in June, but by the end of September, this figure fell by 350,000 bpd. Dynamics of Russian oil flows Supply problems are reflected in JP Morgan's forecasts, which sees Brent at $101 a barrel in the fourth quarter. The main arguments cited are a recovery in demand, insufficient investment in field development and other targets by energy companies, the absence of an agreement on supplies from Iran, and OPEC+ production cuts. Alas, the main driver of the fall in oil prices is currently fears of a reduction in global demand against the backdrop of an approaching recession. It is likely to become a reality due to the aggressive tightening of monetary policy by central banks. Technically, there is a steady bearish trend on the Brent daily chart. Nevertheless, the formation of the 1-2-3 pattern increases the risks of a pullback. We build up the longs formed from the level of 87.6 per barrel on the break of the fair value at 90.7. The target is the mark 93.9, located near the upper border of the downward trading channel.   Relevance up to 09:00 2022-10-09 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323336

All eyes on OPEC+ Oil prices are continuing to creep higher ahead of the OPEC+ meeting on Wednesday. Markets are now expecting a large output cut in excess of one million barrels per day, for which there is seemingly plenty of support. But with the economic outlook becoming gloomier by the day, will the alliance go far enough to achieve the $90-100 oil they so clearly desire? I suspect any cut will be accompanied by strong language over the prospect of further action which may make up for any shortfall, should they take a more conservative approach. A hot jobs report may spoil the party All this talk of peak rates has excited the gold bulls, with the yellow metal leaping above $1,700 and gaining momentum. The sustainability of any rebound will ultimately depend on how long traders can convince themselves peak rates are priced in. Looking back at past periods of optimism, we may be on borrowed time. Of course, rates can only go so far and the RBA has already taken the decision to take its foot off the brake. But I’m not convinced the Fed is there yet and a hot jobs report may spoil the party once more. 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. OPEC+ meeting looms, gold has momentum - MarketPulseMarketPulse

Today there will be a lot of data from all over the world. The most important decisions and reports may affect the situation of the currency or commodities market. Retail Sales (MoM) Australia has published a retail sales report MoM. The reading has reached the expected level of 0.6%. The previous reading was at 1.3%, which means that it fell this time, but it was an expected drop. RBNZ Interest Rate Decision Today at 3:00 CET another decision on interest rates was made. Reserve Bank of New Zealand (RBNZ) raised rates from 3.0% to 3.5%. In 2022. The market expected such a decision. The RBNZ raised rates by 50bp each time. Source: investing.com UK Purchasing Managers' Index reports At 10:30 CET, the UK will publish its Purchasing Managers' Index (PMI) reports. The first one will concern the activity level of purchasing managers in the both sectors. It is expected to drop from 49.6 to 48.4 in September. This year it will be the second time that U.K. Composite Purchasing Managers' Index is below 50. This will mean another contraction in this sector. Another report will be on the activity level of purchasing managers in the services sector. It is expected to drop below 50 for the first time this year and reach 49.2. This means that the compression of this sector will begin as well. OPEC meeting The monthly OPEC meeting will take place at 12:00 CET. Meetings are attended by representatives from 13 oil-rich nations. They discuss a range of topics regarding energy markets and agree on how much oil they will produce. What kind of decisions can we expect? OPEC aims to change the price of oil by adjusting the volume of supply. If its members want to raise the price of oil, they can lower their production quotas to limit supply. In early September, OPEC surprised the markets and announced a slight reduction in oil production. We can expect that also this time the decision will be made to reduce production by OPEC+. The group may announce that it is expanding a general cooperation agreement between OPEC, Russia and other producing countries, which expires in December. Crude Oil Inventories At 16:30 U.S. will published report about the weekly change in the number of barrels of commercial crude oil held by US firms. This number is expected to increase from -0.215M to 2.052M which means it implies weaker demand and is bearish for crude prices. Source: investing.com ADP Nonfarm Employment Change At 14:15 CET, the U.S. report will appear. ADP Nonfarm Employment Change. It is a measure of the monthly change in non-farm, private employment, based on the payroll data of approximately 400,000 U.S. business clients. And this time it is expected to reach 200K. This would be a significant increase from 132K. Such a reading would be positive for the US currency (USD). ISM Non-Manufacturing PMI The Institute of Supply Management (ISM) will publish a report on Business, a composite index is calculated as an indicator of the overall economic condition for the non-manufacturing sector. The reading is expected to be at 56.0. It will be lower than its previous reading of 56.9. Despite expectations of a decline, the situation in this sector is positive, as it is above 50 for the entire period this year. Summary 2:30 CET Retail Sales (MoM) 3:30 CET RBNZ Interest Rate Decision 10:30 CET UK Composite PMI (Sep) 10:30 CET UK Services PMI (Sep) 11:00 CET German Buba Beermann Speaks 12:00 CET OPEC Meeting 14:15 CET ADP Nonfarm Employment Change (Sep) 16:00 CET ISM Non-Manufacturing PMI (Sep) 16:30 CET Crude Oil Inventories Source: https://www.investing.com/economic-calendar/

Summary:  Today we look at the short squeeze in equity markets finding surprising further strength yesterday and note that key resistance in US markets has already come into view as the "central bank pivot" narrative may struggle to find further sustenance when most of what we have seen may have just been a temporary improvement after a scary episode driven by UK gilt market contagion that eased. We also look at the status of FX markets, the crude oil reversal on the threats of an actual large production cut from OPEC+ today, Tesla and Twitter after Musk u-turned on his intent to challenge the deal, Tesco and semiconductor stocks and much more. Today's pod features Peter Garnry on equities, with John J. Hardy hosting and on FX. Listen to today’s podcast - slides are found via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: https://www.home.saxo/content/articles/podcast/podcast-oct-5-2022-05102022

OPEC+ meet in Vienna today and a supply cut seems to be a guaranteed outcome. However, what is less clear is the scale of the cut we could see from the group Source: Shutterstock Energy - OPEC+ cut expectations getting larger OPEC+ meet later today to discuss their output policy for November. It is pretty clear that the group will need to cut at their meeting and expectations about the scale of the supply reduction are growing. Initially, it was suggested that the group could reduce production in the region of 1MMbbls/d, however, there are now suggestions that OPEC+ could cut by as much as 2MMbbls/d. It is important to remember that these are paper cuts and that actual cuts would be much smaller. However, if OPEC+ were to announce a paper cut of as much as 2MMbbls/d, it would work out to an actual output decline in the region of 1MMbbls/d, which would mean that the surplus we expect for the rest of this year would likely disappear. This would provide a solid floor to the market. The group will need to manage expectations, if for some reason they announce a paper cut of less than 1MMbbls/d we could see an immediate downward correction in prices. The US Treasury is expecting that the price cap on Russian oil will be formally announced in the coming weeks. EU members are currently working towards an agreement on the cap, however, concern from certain EU members has meant that talks have dragged on. The European Commission still wants to reach a preliminary agreement before EU leaders meet on 7 October. Metals – dollar weakness supports base metals complex Weakness in the US dollar supported the base metals complex as negative economic data from the US eased concern that the Federal Reserve will tighten monetary policy too rapidly. The Institute for Supply Management’s gauge of US factory activity dropped to its lowest level in more than two years in September. US jobs data, which is due later this week, might provide more clues on the Fed’s rate hike trajectory. Iron ore prices also rose on speculation China might ease Covid-19 curbs and take more steps to revive the country’s ailing property market after reports that regulators told the biggest state-owned banks to provide financing worth at least $85 billion to the sector. Nyrstar will close its Port Pirie lead smelter facility in Australia for 55 days for upgrades aimed at reducing emissions and improving operational performance, the Belgian-based company said. Trafigura, the majority owner of Nyrstar, didn’t comment on how much lead Port Pirie produces. The plant produced 160kt of lead in 2018. Read this article on THINK TagsRussian oil price cap OPEC+ Lead Iron ore Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

OANDA Senior Market Analyst Craig Erlam reviews the latest market news with Jonny Hart. They discuss the UK fiscal situation, Japanese intervention, OPEC+ and the week ahead. http://www.subscribeonandroid.com/audioboom.com/channels/4947364.rss 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. Market Insights Podcast (Episode 382) - MarketPulseMarketPulse

OPEC+ agrees to cut production OPEC+ agreed to cut their production target by 2 million barrels a day. OPEC+ is keeping the oil market tight with the biggest output cut since 2020. ​ The production cut was driven by uncertainty that surrounds the global economic and oil market outlooks. The OPEC+ target is now 10.5 million bpd, which according to the Saudis is a real cut between 1 to 1.1 million bpd. ​ The next ministerial meeting will be on December 4th. ​ The plan is now for them to have ministerial meetings every six months and the monthly JMMC meetings will now happen every two months. The EIA crude oil inventory showed crude, gasoline, and distillate inventories continue to fall. ​ This report was mostly bullish given a headline draw, rebound in gasoline demand, steady production, and steady exports above 4 million barrels a day. Oil should remain supported here following the OPEC+ decision and the EIA report, but the upside will be capped well in advance of the $100 a barrel level. ​ After the OPEC+ meeting, Russia’s Novak said it could cut output if an oil price cap is put in place. Novak is signaling that Russia is not desperate for revenues and if this cap moves forward, we could see oil prices extend gains. ​ ​ Gold Gold prices edged lower after the bond market said not so fast with the collapse of global bond rates. ​ A strong private payrolls report reminded investors that there is still strength in the labor market that could allow the Fed to remain aggressive beyond the next two FOMC meetings. Gold needs to see a sharper slowdown in the US and cooler prices for a bullish breakout to form. Gold seems poised to consolidate between $1680 and $1740 until we get both the NFP report and the latest inflation readings. 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. OPEC+ delivers, gold pares this week’s gains - MarketPulseMarketPulse

There was no doubt that OPEC+ was going to cut supply when the group met in Vienna. However, the agreed 2MMbbls/d supply cut was at the top end of expectations. While the actual cut will be quite a bit smaller, it is still enough to dramatically change the oil balance over 2023 What did OPEC+ agree? Given the amount of noise leading up to the OPEC+ meeting and the fact that the group met in person in Vienna for the first time in over two years, it was clear that the group was going to take some meaningful action. Members of the agreement have for the last couple of months voiced their concerns about the disconnect between the physical and paper market, and that the group would possibly need to take action. We recently saw OPEC+ make a symbolic paper cut of 100Mbbls/d at their September meeting, which translated to an even smaller actual cut. Growing demand concerns have left OPEC+ uneasy and in the lead-up to this week’s meeting, expectations of a supply cut grew from around 1MMbbls/d initially to eventually 2MMbbls/d. Had the group announced a cut towards the lower end of this range, the market would have likely been disappointed. Therefore, OPEC+ announced that they would be cutting supply by 2MMbbls/d from November through until the end of 2023, although output policy could be reviewed before then, if needed. This is the biggest supply reduction seen from the group since the peak of Covid However, given that the bulk of OPEC+ members are producing well below their target production levels, the actual cut seen from the group will be smaller than the announced paper cut. Our numbers suggest that the announced cut will lead to an actual cut of around 1.1MMbbls/d from August production levels. It is likely that only Saudi, UAE, Kuwait, Iraq, Gabon, Algeria and Oman will need to cut output. All other members are already producing below their new target production. This action from OPEC+ will raise some eyebrows, given the uncertain macro outlook, an ongoing energy crisis and uncertainty over how Russian oil supply will evolve once the EU ban on Russian oil and refined products comes into force, along with G7 price cap. The move will also do little to help improve relations between the US and Saudi Arabia. A big winner from these supply cuts will be Russia. They do not need to cut output, given they are already producing below their targeted levels, yet they will benefit from the higher prices we are likely to see as a result of the cuts. OPEC+ agreed paper cuts vs. actual cuts by country (Mbbls/d) Note: Actual cuts use August 2022 production levels Source: OPEC, IEA, ING Research What does this mean for oil prices? The announced cut from OPEC+ dramatically changes the oil balance for the remainder of 2022 and the whole of 2023, assuming we see full compliance. We had previously expected that the global market would see a sizeable surplus for the remainder of this year and then a more marginal surplus over the first half of 2023, before returning to deficit over the second half. However, removing around 1.1MMbbls/d of supply means the market is more balanced over the fourth quarter 2022, and in large deficit over the whole of 2023. We had been expecting ICE Brent to trade in the US$90 area for the remainder of this year and through the first half of next year, before trading back above US$100/bbl in the fourth quarter of 2023. However, this latest action from OPEC+ suggests that there is upside to our current full year 2023 forecast of US$97/bbl. What can counter these cuts? The US administration will not be thrilled with the action taken by OPEC+, particularly given that US mid-term elections are just around the corner. Therefore, in the near term, we could see the US tap its Strategic Petroleum Reserves (SPR). However, with the US having already aggressively drawn down the SPR this year, which has left it at its lowest levels since 1984, there will be limits on much more will be released. Ultimately, OPEC+ can cut output for longer than the US can tap into its SPR. The US administration could also put more pressure on domestic producers to increase output more aggressively. However, we have already seen the US call on domestic producers to do so, yet the rig count has been largely flat since early July. The uncertain demand outlook along with rising costs may be holding some producers back. The OPEC+ supply cut could also put more pressure on the US to work towards an agreement for the Iranian nuclear deal. A positive outcome would mean that Iranian supply could increase by as much as 1.3MMbbls/d, which would more than offset the OPEC+ reduction, although admittedly, it would take some time for Iran to ramp up output if a deal were struck. In addition, there is always the risk that OPEC+ reduces production even further in the event of a nuclear deal. These are all supply-side solutions for the market. Clearly, demand destruction could also help to partly offset these supply cuts, although how much demand destruction we see will really depend on the severity of any upcoming recession. Read this article on THINK TagsSPR Russian oil price cap Russian oil ban OPEC+ Iran nuclear deal Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

It has been another volatile and undecided trading session yesterday. OPEC did cut its oil production target by 2 million barrels per day. It was the biggest cut since 2020, it was expected, it saw a morose reaction by Joe Biden - who said it was ‘shortsighted’, but a well better enthusiasm than what I expected by the oil bulls. Forecast for the global trade and US crude The barrel of US crude ended the session 1.90% higher, yet, the 50-DMA offers haven’t been cleared just yet. The World Trade Organization gave a scary forecast for the global trade next year. The WTO raised its trade growth estimate from 3 to 3.5% for this year, but they slashed their expectation for next year to 1%, from around 3-4%. Yesterday's market sentiment Yesterday, the investor sentiment was rather bearish. The major indices were under a decent selling pressure, following a strong two-day rally. The data from the US was not very Fed-friendly, but it was ok. The ISM services index showed a faster than expected expansion in the US services sector, and the ADP report printed a slightly higher number than the expectations. Now all eyes are on Friday’s NFP number, and wages growth data. In the FX, the dollar index rebounded, the EURUSD and Cable eased. Watch the full episode to find out more! 0:00 Intro 0:26 OPEC cuts, oil rallies… 2:46 …but WTO spoils rally 3:55 US deficit falls on higher exports despite strong oil 5:15 Market update: waiting for the next critical data 8:07 Morgan Stanley maintains overweight for Rivian Ipek Ozkardeskaya  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. #OPEC #Russia #output #cut #energy #crisis #crude #oil #natgas #stocks #XOM #Cheniere #Chesapeake #US #jobs #ADP #NFP #USD #EUR #GBP #Rivian #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary ___ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr ___ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 ___ Let's stay connected: LinkedIn: https://swq.ch/cH

The flow of information from the markets and the world today varies greatly. From successes to poor results. In this article: Compares the results Desire to buy Twitter First arrest in Terra LUNA investigation Another success of Deutsche Bank White House Commentary The statement Stephanie Cohen Communication Services has underperformed Bespoke in its tweet compares the results of Communication Services with the S&P. Pretty incredible how consistently Communication Services has underperformed the S&P over the last year. Almost a straight line from the upper left to the lower right.From our daily sector snapshot at https://t.co/H4p1RcpfIn. pic.twitter.com/q7wwuRYmsw — Bespoke (@bespokeinvest) October 5, 2022   Stock declines are visible in the market. We can judge the most important players by who and how copes with difficult market situations. It may come as a surprise when a better player achieves much worse results. This is what the author of the tweet mentions. Such a picture may turn out to be important for investors. Elon Musk tries to buy Twitter Cara Lombardo in her post describes situations where Elon Musk tries to buy Twitter. .@WSJ scoop w/⁦@AlexaCorse:⁩ - Musk & Twitter held unsuccessful price-cut discussions in recent weeks- Two sides now at odds over outlines of pact to close at original terms- For now, they agreed to delay Musk’s deposition tmrw $TWTR https://t.co/MjmvoEBYGi — Cara Lombardo (@CaraRLombardo) October 6, 2022   Once again, it grew loud around businessman Elon Musk. When he first announced his desire to buy Twitter, the market took it as a joke. Discussions are currently underway. Many wonder what the purpose of this purchase is and whether it will have a positive result for the giant's users. We can expect this topic to stay in the spotlight for a long time. Terra's head of general affairs has been arrested In his new tweet, CoinGecko announces the arrest of Terra's head of general affairs.   BREAKING: South Korea makes first arrest in #TerraLUNA investigation as they captured #Terra’s head of general affairs.The employee has been issued a bench warrant with charges of violating the capital markets act, fraud, and breach of duty.📰 https://t.co/iJVTndbnhJ — CoinGecko (@coingecko) October 6, 2022 A lot is happening in the cryptocurrency market. South Korea made the first arrest for violations of the Capital Markets Act, fraud and breach of obligations. Such information in the current cryptocurrency market can bring back memories of the beginning of this market where cryptocurrencies were used to hide profits in the world of criminals. Today, there are many supporters of cryptocurrencies, so we can expect that such a situation will have a negative impact on the terra luna market and not on the entire market. The successes of a large bank not only in the European region Deutsche Bank boasts of the successes of his Indonesian team.   Congratulations to our Indonesia team for winning Asiamoney's Best Corporate Bank in Indonesia award! Read more: https://t.co/BXfcD5dNmJ@DBCorporateBank — Deutsche Bank (@DeutscheBank) October 6, 2022 A few days ago, the Deutsche Bank announced that for the second consecutive year, it was awarded the title of the "Investment Bank of the Year of Western Europe" in The Banker's Investment Banking Awards 2022. The bank was successful not only in Europe but also in Asia. Deutsche Bank’s Indonesia team for winning Asiamoney's Best Corporate Bank in Indonesia award. Such a picture is very positive for the bank itself and its clients. Comment on the OPEC decision CNBC Now in its tweet cites a statement by the white house about the OPEC+ decision. JUST IN: White House says it is "disappointed by the shortsighted decision by OPEC+ to cut production quotas while the global economy is dealing with the continued negative impact of Putin’s invasion of Ukraine" (via @kaylatausche) https://t.co/KbCm80i2D3 pic.twitter.com/fKkP0mjKpI — CNBC Now (@CNBCnow) October 5, 2022   At yesterday's OPEC+ meeting, a decision was made to cut in production. There will be many reactions to this news, not only from the market. According to the White House, this is a bad decision in the face of the situation. The current economy is struggling with many problems, and cutting oil production may have different consequences. The company's commitment to workforce creation Goldman Sachs in his tweet recalls the statement Stephanie Cohen, Global Co-Head of Consumer and Wealth Management, on the company's commitment to workforce creation. Stephanie Cohen, Global Co-Head of Consumer and Wealth Management, discusses our commitment to building a diverse and inclusive workforce, our responsibility to the communities we serve and the strength of our business. Read more here: https://t.co/WzBCJL2o8R pic.twitter.com/UpwHXN4iu3 — Goldman Sachs (@GoldmanSachs) October 5, 2022   Readers can find out what is important to Goldman Sachs in building your workforce. Diversity in this environment is important for many, especially for young employees who count on personal development in such a company. Increasingly, it is becoming important to have a diverse environment that affects individuals as well as groups. Work in such an environment can be developmental for the employee and thus also for the company. The Goldman Sachs member emphasizes that this diversity is part of the responsibility for how they build relationships with customers and how they build their strength in the market. Getting to know this view of the company will positively influence its image.

In this article: USDCAD Gold Price US Crude Oil Price Check out our video comment on RBA decision:   USDCAD consolidates The Canadian dollar struggles over lacklustre August export data. A bearish RSI divergence showed a slowdown in the upward momentum while a double top at 1.3830 further suggested exhaustion in the current rally. The pair is prone to a correction after it fell below 1.3600. The uptrend remains intact but the recent parabolic rise could use some breathing room to let the bulls accumulate again. 1.3420 on the 20-day moving average is an area of interest. The support-turned-resistance at 1.3700 is the first hurdle. XAUUSD hits resistance Gold clawed back losses as the dollar index bounces higher. A sharp recovery has lifted bullion back to September’s high at 1730 which is an important level on the daily chart. As the RSI soared into the overbought area, fresh selling from trend followers in conjunction with profit-taking has kept the rally in check. A bullish breakout would force the short side to cover, stirring up volatility in the process. The psychological level of 1700 is a fresh support and its breach may extend losses to 1660. USOIL tests key resistance WTI crude bounced higher after OPEC+ agreed to cut output. The rebound has gained a foothold after it cleared the supply zone around 83.00. The price is testing the daily resistance and psychological level of 90.00 and stiff pressure could be expected from the sell side. However, sentiment may brighten up in the short-term if the bulls manage to push past this ceiling, clearing the path towards 97.00. As the RSI inches back into overbought territory, 86.00 has turned into a support in case of a pullback.

XOM stock rallied 4% on OPEC+ supply cut. OPEC+ agreed to cut production by 2 million barrels per day. There is confusion about how the oil barrel production cuts will be implemented. Exxon Mobil stock is nearing a multi-month high. Exxon Mobil (XOM) shares added 4% to close at $99.12 on Wednesday after OPEC+ agreed to cut production by 2 million barrels a day. XOM stock has given up 0.9% in Thursday's premarket though as critics wonder whether the cuts will really be carried out. Exxon Mobil stock news When the news was announced on Wednesday morning, Brent crude shot up from $90.44 to above $93. Bulls could not push the price to $94, however, and oil sold off below $93 later in the day. The US government was unhappy with the cuts and, according to The Wall Street Journal, is considering easing sanctions on Venezuela to allow for more oil exports. These exports would heavily favor Chevron (CVX) though, not Exxon. Additionally, the Biden administration may sell more oil from its strategic petroleum reserve or SPR. Check out our video comment on the latest RBA decision: The critics have begun all but ignoring the headline figure, however. They say that OPEC+ has already been underproducing its target for months and that the actual physical cut will not likely amount to much. An executive from Velandera Energy Partners was vocal about this way of thinking, specifying that his company thinks only 1 million barrels will even be cut. Goldman Sachs was even more defensive, saying the cuts would not top half a million. In August, the oil cartel missed its target by as much as 3 million barrels a day. However, Goldman has been bullish on commodities for months and said it expects Brent to rebound to $110 this quarter. JPMorgan has a price target of $100 on oil. Both prices would buoy the Exxon Mobile share price. The cuts are scheduled to go into effect in November, and both Saudi Arabia and Russia are expected to cut 526,000 barrels a day from their current target of just over 11 million barrels a day. Saudi only produced 10.9 million barrels in August, however, so some of these cuts are just accounting changes regardless. "Other OPEC producers, such as Angola, Congo, Equatorial Guinea, and Nigeria, are already producing below their reduced November quotas, and as such, will not be required to cut production further," according to a report from OilPrice.com. Exxon Mobil stock forecast Two things stick out from the 1-day chart below for XOM stock. First, traders will note the Moving Average Convergence Divergence has crossed over and turned bullish. The second thing to notice is that XOM is already at or near resistance. On Wednesday, Exxon stock gave up right at the $100 level. It would be easy to say that this was just a psychological boundary, but XOM also faced difficulty here back between August 25 and 29. On the last day of that streak, it made it up to $101.56 but was pushed down before the close. Wednesday's close was also right in line with the high from September 12. The high at $105.57 back on June 8 was a decade-long high. It beat out the high from the summer of 2014 at $104.76, but again XOM could not hold this level for long. A likely pattern would see XOM drop back to support at just above $86 from August or $84 from late September before making a run at the June high. XOM daily chart

Oil It is getting hard to bet against higher crude prices. ​ This week’s OPEC+ decision was a game changer for the oil market, as it signals tight conditions will remain throughout this winter. ​ Energy traders are not really believing that the Biden administration will be able to do anything quickly to stop the rally in oil prices. The NOPEC bill seems like it has a lot of barriers and won’t be an immediate course of action. The SPR has been tapped already and the US is dangerously depleting inventories which could make them more dependent on OPEC in the future. Sanction relief for Venezuela won’t come easy and does not seem like a viable option right now. ​ ​ A strong dollar is capping crude’s gains today and it looks like we could see crude continue to consolidate until tomorrow’s NFP report. ​ Gold dips on hawkish Fed Gold prices softened after another round of hawkish Fed speak. ​ Gold is entering consolidation mode as traders await nonfarm payrolls. ​ The lead up to NFP Friday saw a mixed round of employment readings that has many bullion investors on standby. A hot labor market and strong wages could keep the bond market selloff going and should decide what will be gold’s next major move. If nonfarm payrolls does not deliver any major surprises, gold may still be stuck in a trading range between $1700 and $1740 as traders will wait for next week’s inflation report. ​ 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. Oil keeps rising, Gold awaits NFP - MarketPulseMarketPulse

Supply cuts announced by OPEC+ earlier this week continue to push oil prices higher Source: Shutterstock Energy - supply cuts continue to offer support to oil Oil prices continue to strengthen following the 2MMbbls/d paper cut announced by OPEC+ on Wednesday. ICE Brent settled a little more than 1.1% higher yesterday, leading the market to trade above US$94/bbl. The crude oil market is now on course for its best week since mid-April. Read next: Terra's Worker Arrested! White House Comment On The OPEC Decision And Success of Deutsche Bank | FXMAG.COM  Following the OPEC+ meeting, the Saudis released their official selling prices (OSPs) for November loadings yesterday. Aramco left the OSP for its Arab Light into Asia unchanged at US$5.85/bbl over the benchmark. Meanwhile, Europe saw cuts of US$1.80/bbl for both extra light and light grades. There were smaller cuts of US$1.50/bbl for both medium and heavy grades. All grades to the US saw a marginal increase of US$0.20/bbl. The latest data from Insights Global shows that refined product inventories in the ARA region increased by 131kt over the last week to reach 5.33mt. Fuel oil stocks saw the largest increase, growing 83kt over the week to 1.13mt. Gasoil and jet fuel inventories increased by 27kt and 43kt respectively. Naphtha and gasoline inventories saw some moderate declines over the period. As for the European gas market, noise around a possible price cap continues to grow. According to Bloomberg, Belgium, Italy, Greece and Poland have proposed implementing a price cap on natural gas, which would include a corridor/range that would allow prices to trade within a certain range of the cap. The EU will need to be careful with how they go about trying to cap gas prices. This type of intervention will make it more difficult for the market to balance through needed demand destruction. In the US, natural gas prices continued to edge higher yesterday, despite the EIA reporting the largest weekly increase in inventories since 2015. US natural gas inventories increased by 129bcf, which was above market expectations of around 123bcf and also well above the 5-year average of 87bcf. Despite this large increase, total US natural gas inventories are still 7.8% below their 5-year average. Metals – LME restricts new Russian metal The London Metal Exchange said it will restrict new deliveries of metals from Russia’s Ural Mining & Metallurgical Co. and one of its subsidiaries after the UK placed sanctions on co-founder, Iskandar Makhmudov. Starting immediately, metal from UMMC or the Chelyabinsk Zinc unit can only be delivered to LME warehouses if the owner can prove to the exchange that it won’t constitute a breach of sanctions, including that it was sold before Makhmudov was sanctioned by the UK on 26 September, and that neither company has any economic interest in the metal. The LME said that UMMC copper, which is currently listed in the LME warehouse system, is not subject to the sanctions. There is no zinc produced by Chelyabinsk in LME warehouses. Last week the LME said it planned to launch a discussion paper considering a potential ban on new supplies of Russian material, including aluminium, copper, and nickel. Russia’s Rusal said that any move by the LME to restrict deliveries of its metal would damage the exchange’s standing in the global markets. The aluminium producer made the statement in a letter to customers, as it steps up a lobbying campaign against any possible move to block Russian metal. Rusal said that restricting deliveries of its metal would “create uncertainty around the role of the LME in the market” and make the exchange “less attractive to all participants.” Rusal is the world’s largest aluminium producer outside of China and accounts for about 6% of the world’s production. Although Russian metals, including aluminium, copper and nickel are not officially sanctioned, self-sanctioning could already be disrupting trade dynamics in the global metals markets. Agriculture- Brazilian crop prospects In its first estimates for 2022/23, Brazil’s National Supply Company, CONAB, forecasts domestic soybean production to increase by 21.3% YoY to 152.4mt largely on account of better yields. As Brazil recovers from drought in 2021/22, CONAB estimates soybean yields to increase 17.4% YoY to 3.6t/ha. Meanwhile, soybean acreage could also increase by around 3.4% YoY to 42.9m hectares. Comparatively, in the previous WASDE report, the USDA estimated that Brazil’s soybean production would increase by 18% YoY to 149mt. Considering the higher estimates from CONAB, the USDA could also increase Brazil’s soybean supply estimates in next week’s WASDE report. CONAB expects higher domestic production to support exports as well, with external shipments rising around 22.5% YoY to 95.9mt in 2022/23. Meanwhile, CONAB forecasts corn production to increase 12.5% YoY to 126.9mt, again largely due to better yields as the weather improves. Domestic corn yields are expected to increase 8.4% YoY to 5.7t/ha, whilst corn acreage could also increase 3.8% YoY to 22.4m ha. The Thai Sugar Millers Corp estimates domestic sugar cane production will increase to around 110mt in 2022/23 compared to around 92.1mt in 2021/22 due to better weather and supportive government policies. This would be the largest Thai sugar cane crop over the past three years and would help boost export supply from a key global exporter. Read this article on THINK TagsRussia-Ukraine OPEC+ Natural gas LME metals Grains Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

Commodity markets have come under pressure due to a strengthening US dollar and a raft of central banks hiking interest rates recently. This has clouded the macro outlook. However, the supply picture for a number of commodities remains fragile In this article The OPEC+ put Price caps and price forecasts Even tighter times ahead for European gas Source: Shutterstock The OPEC+ put Oil prices came under pressure in September, with ICE Brent falling by almost 9% over the month and trading to the lowest levels since January. US dollar strength and central bank tightening have weighed on prices and clouded the demand outlook. From a supply perspective, the oil market has been in a more comfortable position. Russian oil supply has held up better than most were expecting due to China and India stepping in to buy large volumes of discounted Russian crude oil. The demand picture has also been weaker than expected. However, we believe there is a good floor for the market not too far below current levels. Firstly, the EU ban on Russian oil comes into force on 5 December, followed by a refined products ban on 5 February. This should eventually lead to a decline in Russian supply, as it is unlikely that China and India would be able to absorb significantly more Russian oil. Secondly, US Strategic Petroleum Reserve releases are set to end later this year. If not extended, we could start to see large drawdowns in US commercial inventories, which are very visible to the market and could provide more support. Potential OPEC+ intervention should also provide a good floor to the market. Already this week, OPEC+ announced a 2MMbbls/d supply cut through until the end of 2023. However, it is important to remember that given OPEC+  is cutting output from target production levels, the actual cut will be smaller given that most OPEC+ members are already producing well below their target levels. Our numbers suggest that the group’s paper cut of 2MMbbls/d will work out to an actual cut of around 1.1MMbbls/d. Price caps and price forecasts As for the proposed G7 price cap on Russian oil, the EU now appears to have agreed on the mechanism. However, once implemented, there is still plenty of uncertainty over whether it will have the desired effect of keeping Russian oil flowing and limiting Russian oil revenues. Without the participation of big buyers, such as China and India, it is difficult to see the price cap being very successful. In addition, there is always the risk that Russia reduces output in response to the price cap. We currently expect Brent to trade largely within the US$90 area for the remainder of this year and into the first half of 2023, before strengthening over the second half of 2023. However, given the large supply cut recently announced by OPEC+, the global market will likely be in deficit through the whole of 2023, suggesting that there is upside to our current forecasts. Even tighter times ahead for European gas European natural gas prices have come off their highs in August, falling more than 40% from the recent peak. Comfortable inventory levels have helped, with storage 89% full already. The EU has also managed to build storage at a quicker pace than originally planned. In addition, intervention from the EU is likely to leave some market participants on the sidelines, given the uncertainty over how policy may evolve. It also appears that the EU is moving towards a price cap on natural gas in some shape or form. Whilst this will offer some relief to consumers, it does not solve the fundamental issue of a tight market for the upcoming winter. We need to see demand destruction in order to balance the market through the high demand months of the winter, but capping prices will do little to ensure this. It will be difficult to get through this period unless we see demand falling aggressively, and this becomes more of a challenge when we see seasonally higher demand. The latest numbers from Eurostat show that EU gas consumption was 11% below the five-year average over July, falling short of the 15% reduction the EU is targeting. In recent weeks, consumption has also come under further pressure as a result of industrial shutdowns. EU gas storage above target levels while demand comes under pressure Source: GIE, Eurostat, ING Research   It is looking increasingly likely that the trend for Russian gas flows is lower in the months ahead. At the moment, the EU is only receiving Russian pipeline natural gas via Ukraine and through TurkStream, and there is the risk that we will see these flows decline as well. Recently, Gazprom warned that Russia could sanction Ukraine’s Naftogaz due to ongoing arbitration. This would mean that Gazprom would be unable to pay transit fees to Naftogaz, which puts this supply at risk. At the moment, volumes transiting Ukraine are in the region of 40mcm/day. Meanwhile, total daily Russian flows via pipeline to the EU are down in the region of 75-80% year-on-year. The EU should be able to get through the upcoming winter if demand declines by 15% from the five-year average between now and the end of March. The bigger concern, however, will be for the following winter in 2023/24. Earlier this year, we saw some decent flows of Russian gas, which helped with rebuilding inventory. Next year, Russian flows are likely to be minimal, which means that the EU may build inventories at a slower pace. We therefore expect to go into winter in 2023/24 with very tight inventories, which suggests the risk of even higher prices over this period. TagsOil Natural gas Monthly Update Energy crisis Energy Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

The euro-dollar pair is phlegmatically declining, trading within the 97th figure, after a sharp 250-point decline last week. The downward dynamics slowed down ahead of important inflation reports. Note that on Wednesday, the US producer price index will be published, and on Thursday—the consumer price index. Despite the relatively passive position of the bears, buyers are also in no hurry to rush into battle: longs look too risky against the backdrop of fairly strong non-farm payrolls report, published Friday. The ISM Services Index, which came out in the "green zone" last week, also supported the greenback. Therefore, market participants found themselves in a stalemate at the start of the new week: both sellers and buyers of EUR/USD need an additional newsbreak to decide on the vector of further price movement. In my opinion, the situation will develop in favor of the US currency in the near term, as the flywheel of inflation will only spin up. According to some experts, the latest developments in the oil market will hit the pockets of many Americans quite noticeably. Last week, OPEC+ members decided to reduce the production of "black gold" by 2 million barrels per day. The resonant decision was made by the Cartel despite pressure from the United States. After all, the expected consequences of such a step are negative for the United States (and the consequences are not only economic, but also political). First, the decline in oil production will affect the cost of gasoline in the United States. According to preliminary calculations, it will rise in price by 30–50 cents per gallon. Secondly, the OPEC+ decision will hit those US residents who independently heat their homes in winter. Fuel oil, which is used for individual heating in the United States, will rise in price. For US President Joe Biden, and the Democratic Party as a whole, this is bad news, since the Cartel made its odious decision on the eve of the November congressional elections. According to CNN, it will be extremely difficult for Biden to solve this problem, "given the poor relations of the White House with representatives of the American oil industry." In turn, JP Morgan sources report that Washington may take countermeasures by freeing up additional oil reserves. However, how effective these responses will be is an open question. Rising fuel prices are also bad news for the Fed, which is trying in vain to curb inflation. The rise in fuel prices will pull along many other components, which will affect the dynamics of the consumer price index. We will most likely see the echoes of the OPEC+ decision in November–December (if the Biden administration does not stop this problem). But the dollar may receive additional support as early as this Thursday if September inflation exceeds forecast levels. Moreover, experts' forecasts are quite bold: according to most analysts, the general consumer price index will rise to 8.1% in annual terms, and will grow by 0.2% in monthly terms. The core CPI, excluding food and energy prices, could jump to 6.6%. If the core index comes out at least at the predicted level, it will update the 40-year high, thereby strengthening the positions of dollar bulls. But the euro is not able to reverse the situation in its favor. And although inflation in the Eurozone in September once again updated its historical record, reaching the target of 10.0%, this fact turned out to be essentially useless for EUR/USD buyers. The rhetoric of the ECB representatives tightened even before the publication of the latest inflation data. Back in September, many representatives of the European regulator announced that at the October meeting it was necessary to consider the option of a 75-point increase. Therefore, this fundamental factor is already largely taken into account in prices. For example, speeches by ECB representatives—Bundesbank President Joachim Nagel and ECB chief economist Philip Lane—are expected today. In the light of recent releases, they will certainly sound hawkish rhetoric. However, this fundamental factor is unlikely to affect the EUR/USD pair, even in the context of a corrective pullback. But the increase in geopolitical tensions will only increase the demand for a safe greenback. Anti-risk sentiment in the markets is growing again, supporting the dollar bulls. Thus, several fundamental factors play in favor of EUR/USD bears at once. The technical side of the issue also speaks about the priority of short positions: on the daily chart, the price is located between the middle and lower lines of the Bollinger Bands indicator, as well as under all the lines of the Ichimoku indicator, which shows a bearish "parade of line" signal. The first, and so far the main target of the downward movement at the moment is the 0.9570 mark (the lower line of the Bollinger Bands indicator, on the D1 timeframe). If this target is overcome, it will be possible to talk about a decline to the base of the 95th figure.     search   g_translate    

Oil had its best week since March following OPEC+ supply cuts, whilst gasoil time spreads have surged due to ongoing strike action at French refineries Energy- middle distillate market surges The oil market finished last week on a strong footing. ICE Brent managed to settle a little more than 11% higher over the course of the week - the biggest weekly increase since late March. And this leaves Brent trading near the US$98/bbl level. The market continues to digest the announced cuts from OPEC+ and what exactly this means for the oil market for the remainder of this year and more crucially for 2023. The cut is clearly bullish. However, there is obviously still plenty of other uncertainty in the market, including how Russian oil supply evolves due to the EU oil ban and G-7 price cap, as well as the demand outlook given the deteriorating macro picture. Read next: Great Britain Expects Positive Results For Its Economy | FXMAG.COM The latest positioning data shows that speculators increased their net long in ICE Brent ahead of last week’s OPEC+ meeting. The managed money net long position increased by 27,459 lots over the last reporting week, leaving speculators with a net long of 185,332 lots as of last Tuesday. This is the largest position held since June and given the move in the market since then, it’s likely that the current position is even larger. The bulk of the increase was driven by fresh longs with the gross long growing by 24,434 lots. The latest data from Baker Hughes shows that the US oil rig count declined by 2 over the last week to 602. The number of active rigs in the US has been largely stable since early July. This is not a great signal for the market in terms of US supply growth, particularly with the tighter supply outlook following OPEC+ supply cuts. The European gasoil market continues to strengthen. The prompt ICE gasoil timespread has surged above US$100/t, up from a little over US$50/t the week before. In addition, the gasoil crack has also seen significant strength. The middle distillates market has been tight for much of the year. However, the latest move in the market is due to ongoing strike action at refineries across France. Strike action along with some other outages means that over 60% of French refining capacity is offline at the moment. Labour negotiations to bring an end to the strike are ongoing, but in the meantime, the government has released fuel from strategic reserves and there is the potential for further releases. Metals- LME launches discussion paper on Russian metal The LME began a formal discussion on a potential ban on supplies from Russia. Any move by the LME will have a significant impact on aluminium, nickel and copper. Russian aluminium has accounted for as much as three-quarters of LME stockpiles over the past decade, while copper from Russia has made up as much as 95%, the exchange said. This year, Russian exports to key markets remained unaffected with most customers likely to have entered into long-term contract agreements – Q4 should give a better sense of the direction of Russian material flows as contracts for next year are negotiated. The launch of the discussion paper comes a day after the LME said it would ban new deliveries of metals from Russia’s Ural Mining & Metallurgical Co. and one of its subsidiaries after the UK placed sanctions on co-founder, Iskandar Makhmudov. The move is the biggest restriction on Russian metal flows by the LME since Russia’s invasion of Ukraine. Agriculture – pessimistic sentiment prevails in soybeans CBOT soybeans continued to witness a liquidation of speculative longs over the last week as better supply prospects from South America and logistical issues in the US weighed on sentiment. CFTC data shows that money managers reduced their net long in CBOT soybeans by another 17,343 lots over the last week, leaving them with a net long of 77,488 lots as of 4 October - the lowest net long position so far this year. The move lower was predominantly driven by longs liquidating with gross longs falling by 15,520 lots to 94,762 lots. The major catalyst for this move remains a buoyant outlook for the soybean crop in South America, where improved weather could help supply prospects significantly in 2022/23. Meanwhile, dry weather in the US Midwest has reduced water levels along the Mississippi river, creating logistical bottlenecks in transporting soybean cargoes to export terminals. The slowdown in exports could increase the availability of soybeans in the US domestic market. Read this article on THINK

Oil higher despite weak Chinese PMI Oil prices are continuing to edge higher at the start of the week, albeit at a much slower pace with Brent now not far from $100 a barrel. OPEC+ may be comfortable with that after slashing output targets by two million barrels per day but I’m not sure anyone else will be. The Chinese PMI data overnight highlighted the challenges facing the world’s largest crude importer as it tries to balance its zero-Covid policy with economic growth. That may have helped take some steam out of the rally today but it didn’t last. Gold tumbles below $1,700 Gold prices have slipped by more than 1%, far outweighing the modest rally in the dollar at the start of the week. The yellow metal is on course for the fourth day of losses amid a resurgent greenback and dwindling faith in slower monetary tightening. Yields are up around the world today and that’s going to be further pressuring gold. A move back below $1,700 on Friday is another worrying move which could wipe out any enthusiasm generated during the late-September, early-October rally. Back below $20,000 Bitcoin is also struggling at the start of the week after breaking back below $20,000 on Friday and failing to recapture those losses over the weekend. Ultimately, little has changed though. The cryptocurrency has been fluctuating around $20,000 for months and that remains the case now. 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.

Saudi Aramco will maintain oil deliveries to consumers in Asia despite the recently agreed OPEC+ production cuts, Reuters reported. According to Saudi Energy Minister Abdulaziz bin Salman, the OPEC+ alliance would cut oil production. The nominal size of the OPEC+ production cut was set at 2 million barrels per day but the actual cuts were agreed at between 1 million barrels and 1.1 million barrels daily. Most of the reduction will be made by Saudi Arabia, the UAE, and Kuwait. Following the news, Saudi Aramco might raise its export prices. For Asian customers, the price of the flagship Arab Light in November remained at the October level. Aramco also lowered the crude price for European buyers but raised for it its US customers. The Arab Medium and Arab Heavy prices grew by $0.25 per barrel from October. As oil-importing nations worry about oil prices, the Aramco chief warned of shrinking global production capacity.     Relevance up to 09:00 2022-10-13 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323959

Wheat prices rose yesterday as concern mounted for Ukrainian exports following Russia’s latest attack on a number of Ukrainian cities. The oil market appears to have shrugged off growing tensions and instead seems focused on the weaker macro outlook Energy- oil rally fades Oil prices corrected lower after last week’s significant move higher. The above-consensus US jobs report at the end of last week has reinforced expectations that the Fed will hike by 75bps at its next meeting, and this has put pressure on most risk assets, including oil. ICE Brent settled almost 1.8% lower yesterday. It appears that, after digesting the recent OPEC+ cuts, the market is once again focused on central bank policy and what it means for the demand outlook. The oil market even seemed to shrug off Russia’s latest attacks on a number of Ukrainian cities, including Kyiv. This lack of reaction is likely due to the limited potential actions the West could take to further hit Russian oil exports. Already, a number of countries have sanctioned Russian oil, whilst the EU ban comes into force later this year. While there is always the potential for secondary sanctions on Russian oil, this is something that the US and other countries are unlikely to pursue given the tighter oil outlook (particularly after the recent OPEC+ cuts) as well as the fact that the US has been pushing a price cap on Russian oil to keep Russian oil flowing, whilst simultaneously trying to limit oil revenues for Russia. Metals – copper spreads strengthen Whilst the bulk of the metals complex came under pressure yesterday due to a stronger US dollar, LME copper 3M prices managed to climb for the first time in four sessions and the cash/3M spread also strengthened by US$9/t to a backwardation of US$59.25/t. The flat price and spreads have been boosted by slower China inventory gains, a tightening global supply outlook and risks of a potential ban on Russian supplies by the LME. Last week, the exchange launched a formal three-week discussion process on the possibility of banning Russian metal. Russia accounts for about 4% of global copper production. Inventories of copper in China rose 16,500 tonnes to 82,700 tonnes during the Golden Week holiday ending October 9 from a week earlier, according to Shanghai Metals Market data. The increase was smaller than in the same period last year (20,900 tonnes). Meanwhile, the latest data from the Shanghai Futures Exchange (ShFE) showed copper inventories declined to their lowest level in more than eight months at 30,500 tonnes in the week ending 30 September. Agriculture – wheat jumps on Ukraine grains export risk Wheat prices rallied yesterday following the latest Russian attack on Kyiv and other cities in Ukraine. CBOT wheat settled more than 6.5% higher on the day and traded to an intraday high of almost US$9.50/bu, which is the highest level since June. Russia’s escalation calls into question the future of the Black Sea grain export deal, which is due to expire in the next month. In addition, there is a backlog of vessels awaiting inspection, with UN data showing 99 vessels awaiting clearance. Since the introduction of the Black Sea Grain Initiative in early August, almost 6.9mt of grains and foodstuff have been exported under the deal. Read this article on THINK TagsRussian oil price cap Russia-Ukraine Grains Copper Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

Oil prices came under pressure after OPEC revised down its forecasts for oil demand. Aluminium supply risks are growing after reports that the US is considering imposing a ban on Russian aluminium Energy- OPEC lowers demand forecasts Oil prices traded lower yesterday with ICE Brent settling down 1.95%. The market is now down almost 6% from its recent peak last Friday. The latest monthly report from OPEC did not help sentiment. OPEC have lowered their demand growth forecasts for both 2022 and 2023. For 2022, demand growth forecasts were reduced by around 460Mbbls/d, which would leave demand growing by 2.64MMbbls/d this year. For 2023, growth forecasts were lowered by around 360Mbbls/d to leave demand growth at 2.34MMbbls/d. These downward revisions were driven by a combination of Covid restrictions in China, inflationary pressure and growth concerns, particularly in Europe.  OPEC also sees demand for their crude oil at 29.4MMbbls/d, which is below September production levels of around 29.8MMbbls/d. It is, however, important to remember that if we see effective cuts from OPEC of a little over 1MMbbls/d through 2023, this should mean that global oil inventories continue to decline next year. There are more concerns around European energy infrastructure after an oil leak was detected along part of the Druzhba pipeline in Poland. The section, in which the leak was found, carries Russian oil to Poland and Germany. For now, Poland believes that the leak is due to an accident rather than sabotage. European countries are on high alert when it comes to energy infrastructure following the Nord Stream incident. The latest numbers from the API released overnight show that US crude oil inventories increased by 7.05MMbbls over the last week, whilst gasoline stocks increased by 2.01MMbbls. However, the concern going into winter is still around the middle distillate market. The API reported that distillate fuel oil inventories fell by 4.56MMbbls over the week. Metals – US considers Russian aluminium ban LME aluminium prices rallied yesterday, settling more than 3% up on the day. This came after reports that the US is considering a complete ban on Russian aluminium in response to Russia’s military escalation in Ukraine. According to a Bloomberg report, the Biden administration is considering three options: an outright ban, increasing tariffs to levels which would basically result in an effective ban or sanctioning Rusal. Russia is the world’s second-largest producer of aluminium after China and Russian supplies account for around 10% of total US aluminium imports. The latest data from the International Lead and Zinc Study Group (ILZSG) shows the global zinc market remained almost balanced with a marginal supply deficit of 4kt in the first eight months of 2022, compared to a deficit of 49kt during the same period a year earlier. Total refined production fell 2.6% YoY to 8.97mt, largely due to lower output in Europe, while total consumption declined 3.1% YoY to 8.98mt in Jan-Aug’22. For lead, total production fell 1.9% YoY to 8.1mt, while consumption fell marginally by 0.5% YoY to 8.1mt in the first eight months of the year. The lead market reported a supply deficit of 25kt in Jan-Aug’22, compared to a surplus of 92kt during the same time last year. Significant volumes of unwanted Russian-origin copper have been deposited in London Metal Exchange-approved warehouses in Germany, the Netherlands and Taiwan since the middle of September, according to a report from Reuters. LME data shows that since 15 September, copper stocks in LME warehouses in Rotterdam, Hamburg and Kaohsiung have climbed 225%, 153% and 26% respectively. LME copper stocks are up more than 40% since 15 September at 145,525 tonnes. But while inventories have increased from the lows earlier in the year (below 70kt over February/March), they remain at near historical lows, representing just two days’ worth of global supply. Russia produced 920,000 tonnes of refined copper last year, about 3.5% of the world's total, according to the U.S. Geological Survey, out of which Nornickel produced 406,841 tonnes. Asia and Europe are the main export markets for Russian copper. Although Russian copper is not officially sanctioned, self-sanctioning could already be disrupting trade dynamics in the European market. The LME launched a formal discussion paper on the possibility of banning new supplies of Russian materials, including aluminium, copper, and nickel. The LME also previously announced that it will restrict new deliveries of copper and zinc from Russia’s Ural Mining & Metallurgical Co. and one of its subsidiaries after the UK sanctioned its co-founder Iskandar Makhmudov. Agriculture- US supply cuts The latest WASDE report from the USDA was constructive for soybeans, as US yields and production estimates came in below market expectations. The agency lowered its US soybean production estimate by 69m bushels to 4.3b bushels, while yields were revised down from 50.5 bu/acre to 49.8 bu/acre. The market was expecting a production number of around 4.4b bushels and yields to be around 50.6 bu/acre. While ending stocks were left unchanged at 200m bushels (following demand revisions), the market was expecting an ending stock number of closer to 245m bushels. As for the global soybean balance, ending stocks for 2022/23 were increased from 98.9mt to 100.5mt, largely on account of Brazil. Global soybean production estimates were increased by around 1.2mt to 391mt with the majority of the supply addition coming from Brazil (+3mt). For corn, 2022/23 US ending stocks were lowered from 1.22b bushels to 1.17bn bushels due to lower yields and production. However, the latest numbers still come in above the roughly 1.13b bushels the market was expecting. Meanwhile, global corn production estimates were lowered by 3.8mt to 1,168.7mt due to lower supply from the US (-1.2mt) and the EU (-2.6mt), which saw global ending stocks fall by a little more than 3.3mt to 301.19mt. Finally, the USDA lowered its 2022/23 ending stock estimates for US wheat from 610m bushels to 576m bushels, although this was still above market expectations of 563m bushels. The USDA lowered production estimates from 1.78b bushels to 1.65b bushels due to lower acreage and yields. Read this article on THINK TagsWASDE Russian metals OPEC API Aluminium Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

In this article: Oil Gold Bitcoin Oil steadying Oil prices are steadying again after a three-day decline that’s coincided with further concerns around the economic outlook and gloomy forecasts. The output cut from OPEC+ last week triggered a surge in prices but that has partially been offset by the increasingly dire forecasts for the economy which will naturally weigh on demand. The alliance will no doubt be pleased with oil trading back in the $90-100 range, the question is whether the US will. Or if another coordinated SPR release could be on the cards. Gold on the rise Gold is also edging higher and could build strongly on that if we get a weaker inflation reading. The yellow metal is seeing plenty of resistance to recovery rallies in recent days after falling back to earth with a bang last week. One inflation number may not change things as far as the Fed is concerned but for markets, it could be a big start. Especially following the FOMC minutes which contained a sprinkling of dovishness. Bitcoin slipping again Bitcoin is sliding, hitting its lowest level since late September despite other risk assets rallying in the run-up to the inflation data. While there have been occasions when it hasn’t perfectly aligned with other high-risk assets recently, today’s price action is interesting as it’s doing the complete opposite. That may change after the inflation data but going forward, it will be interesting to see whether the relationship between cryptos and risk assets holds or if we enter a new phase where quality traditional risk assets are favoured in an era of recessions and higher interest rates. 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. Oil steadies, gold edges higher, bitcoin slides - MarketPulseMarketPulse

Following a drift lower from the post-OPEC+ production cut high, crude oil prices are once again ready to follow an upward trajectory. Strategists at TD Securities have upgraded their oil forecast. Oil unlikely to be in triple figure territory  “We are comfortable in saying that the most recent production targets from OPEC+ have very convincingly tilted price risks to the upside. For that reason, we have upgraded our Q4-22 WTI forecast to $94/b ($99/b Brent) and the 2023 average to $97/b ($101/b).” “Despite an expected tightening of supply-demand dynamics, a surge into triple digits in the coming months is not yet expected, as it looks increasingly likely that the decline in global demand growth will likely offset much of the OPEC+ cuts.”  “Given tight S-D and historically low inventories, a convincing move into $100+ territory is more probable when market is ready to call when the economy will stabilize and the Fed pivots.”

A stronger CPI print should have meant that markets came under pressure yesterday. However, oil prices rallied, while supply concerns continue to dominate the aluminium market Source: Shutterstock Energy - oil rallies despite bearish developments ICE Brent managed to settle almost 2.3% higher yesterday even after the higher-than-expected inflation reading from the US. Stickier inflation only reinforces the view of a more aggressive hiking cycle from the US Fed. And this latest data supports a 75bp hike at the Fed’s November meeting. The latest weekly numbers from the EIA were also not very constructive. US commercial crude oil inventories increased by 9.9MMbbls over the last week. Although when taking into consideration SPR releases, total US crude oil inventories increased by just 2.2MMbbls The large commercial build was predominantly driven by a large decline in crude oil exports. These fell by 1.68MMbbls/d WoW. We also saw slightly stronger crude imports and lower refinery activity over the course of the week. For refined products, whilst gasoline saw a build of a little over 2MMbbls, distillate fuel oil stocks declined by 4.85MMbbls. Read next: The Ad-Powered Netflix's Plan | Jim Cramer Comments On The Shares| FXMAG.COM The IEA released its latest monthly market report yesterday in which the agency questioned the recent decision from OPEC+ to cut output. The agency believes the decision will lead to increased volatility and energy security concerns. As a result of a deteriorating economy and higher prices, the IEA revised lower its demand growth forecasts for both 2022 and 2023 by 60Mbbls/d and 470Mbbls/d respectively. This leaves oil demand growth in 2022 and 2023 at 1.9MMbbls/d and 1.7MMbbls/d respectively. As for Russian supply, the IEA reports that exports fell by 230Mbbls/d in September to average 7.5MMbbls/d, which is down around 560Mbbls/d from pre-war levels. Obviously, with the EU ban on Russian oil coming into force in December, these flows are expected to decline further. Looking at broader OPEC+ supply, IEA numbers show that the group produced 3.44MMbbls/d below its target level for September. President Biden has suggested that some action will be taken by his administration next week to address high gasoline prices. The US is clearly not happy with the recent decision of OPEC+ to cut supply and the move has done very little to help the Saudi/US relationship. Potential action could include further releases from the SPR and potentially imposing export limits on fuel. Export limits on fuel would not be very effective, as they would likely push global fuel prices higher, and would then have a positive impact on fuel prices in US regions which import large volumes of refined products from overseas.   Metals – LME aluminium continues to surge on supply woes LME aluminium price continued to surge for a second straight session amid worries over a potential ban on Russian supplies, largely ignoring the jump reported in on-warrant stocks. The latest LME data showed that on-warrant inventories for aluminium rose by 20kt, their seventh consecutive rise, to reach 303.6kt (highest since May 9th) as of yesterday, with the majority of the increase from Malaysia’s Port Klang warehouses. Meanwhile, cancelled warrants also declined for a tenth straight session to 48.3kt as of yesterday, signalling potential further inflows. In China, the latest SMM survey showed China’s copper cathode production rising 13.2% YoY and 6% MoM to 909kt in September, as some smelters resumed normal operations. Meanwhile, a newly expanded smelter in the Zhejiang region reached its full production capacity, while a smelter in the Guangdong region resumed operations in mid-September.  Among other metals, SMM reported that Chinese primary aluminium production rose 7.3% YoY to 3.34mt in September. For the first nine months of the year, output rose 2.8% YoY to 29.9mt. Similarly, refined nickel output rose 7.7% YoY to 15.4kt in September. However, refined zinc output fell 3.1% YoY to 503.9kt last month, while YTD production also declined 3% YoY to 4.4mt. For lead, output rose 12.8% YoY and 10% MoM to 295kt in September. For copper premiums, the latest SMM data shows Yangshan copper premiums in China surged to US$137.5/t (highest since October 2021) due to the lower availability of domestic supplies resulting in higher import demand for the metal. The nearby Shanghai Futures Exchange (ShFE) copper spread moved to a backwardation of over CNY1,600/t as of yesterday, indicating tight domestic supply conditions. Agriculture - Black Sea grain deal uncertainty Wheat prices saw further strength yesterday on concern that the Black Sea grains deal may not be renewed when it expires in mid-November. According to reports, Russia has sent a letter to the United Nations regarding its concerns over the deal and potentially will not renew it if these concerns are not addressed. Read this article on THINK TagsOil IEA Grains EIA Aluminium Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

Energy prices traded lower last week with macro pressures proving too much for markets. However, supply concerns remain, not just in the energy complex, but across the broader commodity space Energy: gasoil tightness The oil market is seeing somewhat of a relief rally in early morning trading today. This follows a relatively large sell-off last week. ICE Brent settled more than 6.4% lower over the course of last week. And this is despite the announced OPEC+ cuts from the previous week. Clearly, the market is concerned over the demand outlook given a deteriorating macro outlook. Last week’s higher-than-expected US CPI only clouds the outlook further with expectations that the Federal Reserve will need to be more aggressive when it comes to hiking rates. Also not helping the demand outlook is China’s insistence on following a zero Covid policy. Markets have been keeping an eye on China’s 20th Party Congress to see whether this policy might be eased. However, there appears to be no change, so localised lockdowns could very well be a theme that runs through 2023.   The latest positioning data shows that speculators increased their net long in ICE Brent by 15,831 lots over the last reporting week to leave them with a net long of 201,163 lots as of last Tuesday. This increase was predominantly driven by fresh longs. The move likely reflects the market’s initial reaction to the OPEC+ meeting. However, given the more recent weakness in the market, the current net long is likely somewhat smaller. The latest data from Baker Hughes shows that the US oil rig count increased by eight over the week to 610. This is the highest number of active rigs seen since March 2020. The weakness we have seen in oil prices for much of the summer has meant that the rig count has been largely flat since early July. The EIA will also be releasing its latest drilling productivity report later today. The prompt ICE gasoil spread continues to trade in a deep backwardation of around US$70/t, reflecting the tightness in middle distillate markets as we move closer to winter. Strike action at French refineries has only further tightened the middle distillate market. Exxon Mobil will restart two of its refineries in France after workers came to an agreement with the refiner. However, operations at Total Energies refineries are still affected after the CGT union rejected the company’s latest offer, despite two other unions agreeing on a deal. The tightness in the gasoil market has attracted speculative money with the managed money net long increasing by 10,050 lots over the last week to 62,085 lots as of last Tuesday. Metals: major copper producers increase European copper premiums Two major copper producers, Coldelco and Aurubis, have increased their premiums to supply copper in Europe next year, anticipating tight supplies, stable demand, and lower availability of stocks in exchange warehouses, according to media reports. Coldeldo increased its premium to mid-US$230/t, compared to US$128/t in 2022. Aurubis raised the European copper premium to a record of US$228/t, a rise of almost 85% on an annual basis. Spot copper premiums in Europe, suppressed for years, are now getting a boost from recent supply concerns in Russia and surging freight costs. Spot copper premiums shipped to Rotterdam are now around US$75/t, compared to the levels of US$45/t before Russia’s invasion of Ukraine, according to Fastmarkets. The latest data from the LME showed on-warrant stocks for copper decreased by 11.3kt (the biggest daily decline in almost a year) to 98.9kt (the lowest since 20 September) as of Friday. The majority of the declines came from the US, Taiwan and South Korean warehouses. Agriculture: specs trim soybean position The latest CFTC data shows that money managers continued to reduce net longs in CBOT soybean for a fourth consecutive week by 11,750 lots, leaving them with a net long position of 65,738 lots as of 11 October- the lowest net long held this year. The move lower was predominantly driven by longs liquidating with the gross long falling by 7,963 lots to 86,799 lots. For wheat, speculators increased their net short position in CBOT wheat by 7,283 lots as of last Tuesday to 19,502 lots. Meanwhile, speculative net longs in CBOT corn grew for a second consecutive week by 23,649 lots to a net long of 267,377 lots as of 11 October. Read this article on THINK TagsSpeculators Oil rigs Middle distillates Gasoil Copper Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

Read next: The Double-Digit Inflation In The Eurozone Is Here! (European CPI)| FXMAG.COM Three weeks ago, oil started a 22% rally due to OPEC+ production cuts and bounced back after being technically oversold. However, the 8% drop in quotations last week showed that bears still dominate this market, which several technical factors can see. On the weekly charts, the WTI brand turned down neatly from its 50-week moving average, clearly indicating that a medium-term downtrend is prevailing here. On the daily charts, oil's rebound was well within traditional Fibonacci patterns, losing strength near the 61.8% retracement after declining from June through September. At the end of August, oil sold off spectacularly from the 200-day moving average, showing a fundamental breakdown in the market. OPEC+ production cuts and relatively strong U.S. jobs data worked to keep the price dynamic from becoming unidirectional, as it was in 2014-15. However, there is growing evidence that the economic slowdown suppresses energy demand, keeping long-term bearish pressure. Last week, oil sellers were also encouraged by some economic news. According to the latest EIA data, sales of oil from the strategic reserve have accelerated again in the past two weeks, helping to lift commercial inventories by nearly 10 million. According to Baker Hughes data released Friday night, America also increased the number of working oil rigs to 610. This is a new high from March 2020 and an attempt to get back on a rising trend. This could mean that America will again try to take over the initiative and strengthen its lead as the world's largest oil producer, taking advantage of a period of tight OPEC restrictions. The downtrend could intensify if we also see material moves by the U.S. administration to stimulate hydrocarbon production over the coming weeks. Without surprises from a surge in oil demand and new production cuts, WTI may return to the $75 area (September lows) before the end of October. Suppose that support fails, considering the global economic slowdown. In that case, the price could quickly retreat to $65 (the 200-week average) or even $50 (the psychologically important round level and the 161.8% Fibonacci area of the initial momentum from June).

Eyes on the Sterling Pound as new chancellor set to make announcement The pound remains in the spotlight this week as investors await today's speech from the new chancellor Jeremy Hunt where is expected to announce the new budget and tax plans after the recent plans caused a noticeable drop in confidence towards the currency. While there may be a possibility for some surprises in today's statement, expectations remain for a U-turn on several measures previously announced in an attempt to reassure markets about the financial stability of the economy. The pound started the day trading higher reaching 1,125 against the US dollar while the UK FTSE index pulled back slightly after an initial upward move which saw it briefly break above 6900 points and any unpredicted announcement could cause a significant reaction across asset classes. Read next: Netflix Stock Price May Tumble Tomorrow! What Can We Expect From NFLX Earnings? | FXMAG.COM Oil prices attempt to rebound at the start of the week Despite the announcement of a further cut to OPEC+ production in the most recent meeting, oil prices failed to gain momentum and after a brief attempted recovery remained stuck in the previous consolidation area. WTI prices are down around 1,50% after a short upward move this morning which was facilitated by a temporary weakening of the US dollar, which has been putting pressure on commodity prices in recent times. However, the situation appears to be changing as the dollar has once again started to garner some strength and is once again pressuring other currencies as well as commodities like oil. Prices could continue to be volatile in the near future as general economic uncertainty and investor sentiment continue to play a key role in price action while investors await macroeconomic reports and central banker speeches during the week, along with earnings reports from major Wall Street companies. Oil WTI prices are hovering in an interesting technical position as they test a short term support area around $84,50, which managed to limit the most recent downward movement. If this area is broken, it may lead to the start of a bigger move which may result in further speculation regarding the upcoming production targets set by OPEC+.

Settling down? It’s been another turbulent few weeks in oil markets from global growth concerns to super-sized OPEC+ output cuts and it seems they’re yet to fully settle down. Brent has seen lows of $82 and highs of $98 so perhaps what we’re now seeing is it finding its feet somewhere in the middle. Whether that will satisfy the oil alliance only time will tell but there will be some relief that it’s not back in triple figures already, even if that is a result of the ever-worsening economic outlook. An encouraging rebound Gold is seeing an encouraging rebound after another pretty terrible week. It’s trading more than 1% higher on Monday after slumping more than 3% last week. Lower global yields and a slightly softer dollar are probably behind the move, with traders no doubt hoping that peak inflation and rate pricing are nearly in sight. The recent economic data hasn’t offered cause for much optimism but that could change over the coming months, with central banks now surely not far from their terminal rates. That could favour gold, especially as the economy falters. Resistance ahead could be found around $1,680 and $1,700, although some traders may be encouraged by the failure to breach September’s lows. Read next: Netflix Stock Price May Tumble Tomorrow! What Can We Expect From NFLX Earnings? | FXMAG.COM A positive start to the week Bitcoin’s relationship with risk assets hasn’t been perfect recently but the last week has seen it look far more aligned. The US inflation disappointment almost sent it into a tailspin but then the wild turnaround happened and it quickly bounced back and powerfully. It came within a whisker of $20,000 once more before pulling back and now it’s trading on the front foot again with its sight set on that level. The gains today mirror those in equity markets, with risk assets more broadly getting the week off to a good start. 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. Oil edges lower, gold jumps, bitcoin on the rise - MarketPulseMarketPulse

Summary:  The Crimea bridge blast last weekend destroyed a key supply route for Moscow’s forces in southern Ukraine. Putin was quick to retaliate by raining missiles over Kyiv and other cities after condemning the act as terrorism done by Ukrainian special services. This places the UN brokered grain deal in jeopardy with negotiations taking place now to extend it by a year. Elsewhere, OPEC+ cut output by 2 million barrels per day despite Western nations protests. The Crimea bridge blast last weekend destroyed a key supply route for Moscow’s forces in southern Ukraine. Putin was quick to retaliate by raining missiles over Kyiv and other cities after condemning the act as terrorism done by Ukrainian special services. He did not spare the port of Odesa, which is considered one of the key grain export ports that Russia has agreed to allow normal export operations to continue via the Black Sea. The bombings has continued for over a week now with central Kyiv being hit by kamikaze drones early yesterday while heavy fighting is still happening at the war front in southeastern Ukraine.Escalating tensions between Russia and Ukraine might see potential risk on grain supply. Prices in wheat (ZWZ2) and corn (ZCZ2) have gained as much as 7.5% and 3.3% respectively after the Kyiv bombings even though these moves look small compared to the ones we saw in the earlier part of this year. To provide some numbers, Ukraine is currently one of the world’s leading exporter of grain. We have the breakdown below:Percentage of global exportsSunflower oil – 46%  Corn – 12%   Wheat – 9% Rapeseed – 20%Barley – 17%UN brokered Grain DealEven though there is an existing UN-brokered deal to allow Ukraine to export grain via the Black Sea, this would expire in November and with tensions escalating between the two nations, there is a risk that this will not be extended a further year. The last time grain exports ceased due to the Russian invasion saw grain prices skyrocket as much as 60%. The market consensus is that it currently expects that the deal would be extended after some changes to the terms – primarily allowing a Russian pipeline to reopen to transport its ammonia fertilizer to Ukraine’s Odessa port for shipment.  However, the move to boost Russia’s export revenues to fund the war indirectly might not sit well with US and Europe which has recently approved a Russian oil price cap to limit export revenue in Russia. U.N. aid chief Martin Griffiths and senior U.N. trade official Rebeca Grynspan has travelled to Moscow last week to discuss this issue.OPEC+ CutJust as we thought supply side constraints were subsiding, we are now facing a possibility that commodity inflation might persist due to political uncertainties. Last week, OPEC+ made a key decision to slash oil output by 2 million barrels per day despite Western nations protesting the move as short sighted, perhaps prioritizing their agenda that maintaining oil revenue is more important than the global inflation problem or crippling Putin’s war now. This sent WTI crude oil rallying as much as 9% with rapid short covering as market was positioned with recessionary risk in mind. Oil has since given back some of those gains. The diverging interest of US and Saudi, both key oil producers globally can create instability in energy supplies.The FedThe US inflation breakdown in the month of September has shown lower inflation from energy while key drivers now are mostly from the demand/services side ( rent, medical, services and food). Because of this, the Fed has been relentless in utilizing every opportunity to reinforce their hawkishness with terminal fed funds rate now at 4.9%. If energy and agriculture prices start rising rapidly once again, this will provide the Fed even more ammunition to stay on the course despite some initial data that shows jobs growth is starting to cool off with vacancies falling 1 million in August. If supply constraints do not resolve, the combination of both demand and supply side factors does not bode well for equities and risk assets.    What trades to consider?Watch for the negotiation outcomes between UN and Russia regarding the grain export agreement set to be out by November. Strained relations between Ukraine and Russia might make negotiations tougher and the terms of the deal less favourable. Grains tradable on Saxo include Wheat futures (ZWZ2) and Corn futures (ZCZ2).The output cut by OPEC+ could trigger the start of a possible supply tightening cycle to support oil prices given weak global demand. The US – Saudi relationship souring could also lead to further price instability with volatility set to rise and possible retaliation from US by increasing their supply. Another bright spark is China reopening even though the recent Chinese Communist Party Congress indicated that China is not doing away with its Covid Zero policy in the near term. To trade, we have both Light Sweet Crude Oil (CLZ2) and Brent Crude (LCOZ2) futures.Lastly, if supply side inflation returns, the Fed might have no choice but to accelerate their rate hike cycle. To express this, USDCNH might be a trade to look at given China’s easing cycle is still ongoing to prop up the property market while the risk reward ratio looks more favourable as compared to USDJPY which has moved substantially and BOJ now jawboning the pair’s appreciation.   Wheat December Futures Corn December Futures Oil December Futures USDCNH Source: https://www.home.saxo/content/articles/commodities/st-note-supply-side-inflation-risks--wheat-corn-oil-and-the-fed-18102022

OPEC+ defends cut as oil steadies around $90 Oil prices are continuing to stabilise around $90 a barrel as OPEC+ steps up its defence of its two million barrel per day cut amid a backlash from the US, in particular. Meanwhile, the world’s largest economy is reportedly considering another release of strategic reserves in order to offset the impact of the cuts and stop fuel prices jumping as midterms near. How effective the SPR release will be may well depend on whether others join as we saw earlier this year. Of course, at the time oil was trading at much higher levels, well above $100 a barrel, and the willingness to engage in joint action may well depend on whether countries perceive there to be a risk of similarly damaging prices when they’re already contending with a weaker economy, even recessions. Gold rebound struggling Gold has benefited from slightly lower yields and a weaker dollar over the last couple of days, both of which could resume their uptrend if rate fears persist. The yellow metal struggled to hold onto gains at the start of the week, perhaps a sign of the headwinds continuing to face it in this environment. Resistance remains above around $1,680 and $1,700, with support now around $1,640 and $1,620. For a look at all of today’s economic events, check out our economic calendar: www.marketpulse.com/economic-events/ 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.

The US administration is set to announce further releases from the Strategic Petroleum Reserve today, although this volume is part of the larger 180MMbbls announced earlier in the year. More interesting are suggestions that the US will look to start refilling the SPR at or below US$67-72/bbl Source: Shutterstock Energy: US SPR release and refill Oil prices came under pressure yesterday after reports that the US would announce a further release from its Strategic Petroleum Reserve. The latest release is expected to be announced today by President Biden and would be for 15MMbbls. However, it is important to point out that this release would be part of the initial 180MMbbls announced earlier this year and would be the final tranche of that volume. Therefore, given that this release is already factored in, the price impact should be minimal. However, there are reports that the US administration is not ruling out further releases through the winter months. The US administration will find it difficult to compensate for the OPEC+ supply cuts with just SPR releases. In the medium- to longer-term, SPR releases are supportive for the market, given the need for the US to refill. Bloomberg is reporting that the US administration is also planning to start refilling the SPR when WTI trades at or below US$67-72/bbl. This should provide another floor to the market, although the key question is whether OPEC+ would allow prices to trade down to these levels or intervene (if needed) to keep prices near current levels. The latest data from the API shows that US crude oil inventories fell by 1.27MMbbls over the last week, while the market was expecting crude stocks to increase by around 2.5MMbbls. In addition to the crude draw, the API also reported that gasoline and distillate inventories decreased by 2.17MMbbls and 1.09MMbbls, respectively. Overall, these numbers were moderately constructive and appear to be offering some support to the market in early morning trading today. The more widely followed EIA numbers will be released later today. European natural gas prices continue to come under pressure. The TTF Nov-22 contract fell by a further 11.5% yesterday, leaving the market to trade at a little over EUR113/MWh. The market has fallen by around 40% now since the start of the month. Warmer than usual weather for this time of year and the fact that EU storage continues to fill up (currently 92% full) is easing concerns over prompt tightness in the market. However, prices from Dec-22 through to Apr-23 are trading in excess of EUR140/MWh. The forward curve continues to reflect concerns over expected tightness through 2023. The European Commission has laid out its latest proposals for the EU energy markets, which for now does not include a gas price cap. Instead, the commission is proposing a dynamic price limit for TTF, which will be temporary and only used as a last resort. In addition, the proposal includes upper and lower daily price limits on energy derivatives to try to address volatility in markets. Furthermore, the commission wants to push the idea of joint gas purchases between member states, in the hope this would give Europe more leverage and prevent EU countries from competing against each other for supply. Finally, given the changing supply dynamics in the European gas market (the EU turning increasingly to LNG), the commission proposes a new LNG benchmark, rather than using TTF which reflects regional infrastructure bottlenecks. These proposals will be discussed by EU leaders who meet later this week. Metals: copper inventories in China surge Copper prices came under pressure yesterday after inventories in Shanghai jumped by a record amount, easing concerns about supply tightness. The Shanghai Futures Exchange’s on-warrant stocks of the red metal ready for delivery climbed by 47,024 tonnes on Monday – the biggest daily change in data going back to 2010. As a result, the prompt SHFE timespread eased from its multi-year highs. Japan’s largest smelter, Sumitomo Metals, estimates the global nickel market to be in a deficit of 108kt in 2022 and forecasts a deficit of 63kt for a third consecutive year in 2023 due to rising demand from the batteries sector. The smelter expects global nickel demand to surge by 7.1% YoY to 3.14mt, while supply is expected to rise by 9% year-on-year to 3.08mt next year. The company forecasts demand for nickel used in batteries to surpass 500kt in 2023, compared with 410kt in 2022 and 320kt in 2021. Agriculture: wheat declines on constructive grain-export deal talks CBOT wheat futures dropped to the lowest level in four weeks on the back of hopes of an extension to the Black Sea grain deal, which is currently set to expire next month. The latest comments from the United Nations suggest that ongoing negotiations to renew the existing grain deal were constructive. However, there still appears to be a rush to export as much as possible through the corridor before the existing deal expires. Meanwhile, a backlog of Ukrainian grain vessels awaiting inspection has eased slightly over the weekend. As per the latest data, the backlog of inbound and outbound vessels awaiting checks stood at 131 as of yesterday, compared to 156 on Friday. The latest data shows that, around 7.7mt of grain and other food products have been exported as of 16 October under the deal. Read this article on THINK TagsUS SPR Grains European natural gas Energy crisis Copper Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

Rates markets have taken reports of an accelerated European Central Bank tightening process in their stride. If such reports are confirmed next week, we expect another leg wider in sovereign spreads, and core rates. The money markets' reaction depends on how the ECB pushes banks to repay TLTRO loans; we may get more information in the coming days ECB sequencing on steroids Francois Villeroy has often been one of the ECB officials laying out his policy expectations most explicitly. Even if he’s only one member of the 25-strong governing council, his opinion can also reflect the tone of policy discussions that are happening behind closed doors. He has also been more often at the slightly more hawkish end of the council, which in the currently hawk-dominated debate makes him a relatively interesting barometer of where the discussion is. This makes his expectation that quantitative tightening could start from the end of this year a particularly notable one. Press reports so far have suggested a start in the course of 2023, most likely in the second quarter. This was to give the ECB time to reach neutral deposit rates (likely around 2%) and to mop up some of the excess liquidity created by targeted longer-term refinancing operation (TLTRO) loans to banks. That suggested timing would not only imply an earlier reduction of the ECB’s bond portfolio, but also a decision as early as next week on how to nudge banks into repaying their TLTRO loans. Money market spreads are prime candidates for widening when the ECB tightens policy Market reaction to QT or TLTRO-related headlines has been very muted. It is difficult to discern euro-specific drivers among the gilt-induced volatility but there has been no appreciable uptrend in sovereign spreads in recent weeks, and the spread of German 10Y yields relative to Treasuries remains well within its recent range. The same goes with money market spreads, which are prime candidates for widening when the ECB tightens policy (see below), and long-dated bases have tightened, if anything. The prospect of ECB QT hasn't pushed euro yields up relative to dollar Source: Refinitiv, ING Liquidity reduction and quantitative tightening around the corner Both are momentous decisions that should be considered carefully by market participants. In the case of pushing banks to repay TLTRO loans, the range of options on the table is so wide that it is difficult to have great certainty about the market impact. Ranging from the most to the least likely, we could see: A reduction of excess liquidity to the tune of €0.5tn in December and €0.5tn in March A greater sensitivity of Euribor fixings to widening in credit and sovereign spreads A rise in Estr fixings relative to the ECB deposit rate A rise in repo rates relative to Estr fixings An easing of collateral scarcity A differentiated tightening of liquidity conditions in various member states Except for the first two, these impacts will depend on the type of mechanism implemented by the ECB. We’ve done our best to keep up with various trial balloons released in the press in dedicated publications on TLTRO repayments, comparison with other central banks' options, and the broader choice of reserve tiering. Quantitative tightening is more straightforward in that there seems to be a broad agreement on the form it will take Quantitative tightening is more straightforward in that there seems to be a broad agreement on the form it will take: a progressive phasing out of reinvestment of its asset purchase programme (APP) portfolio starting sometime in 2023 (or very late in 2022), and then the same for pandemic emergency purchase programme (PEPP) reinvestments in 2025. Here too, we’ve covered the implications in more detail in a dedicated publication but we would expect another leg wider in sovereign spreads, an acceleration of money market spread widening when combined with TLTRO repayments (see above), and eventually higher core rates although we think the effect should be manageable next year. Money markets don't appear concerned about a widening of Euribor fixes Source: Refinitiv, ING Today's events and market view Eurozone inflation and construction output are the main data releases in Europe today. The US will see the release of housing starts and building permits, as well as MBA mortgage applications. There is a decent raft of central bank speakers on the schedule. From the European Central Bank: Fabio Centeno, from the Federal Reserve: Neel Kashkari, Charles Evans, and James Bullard, and from the Bank of England: Jon Cunliffe and Catherine Mann. Read next: The USA May Release 15MMbbls Of Crude Oil And Is Expected To Refill The Reserves When The WTI Reaches Ca. $67-72/bbl| FXMAG.COM Realised volatility has slowed down this week and markets could be left to their own devices on a day which is light on event risk. In that environment, we expect the uptrend in rates to reassert itself. Read this article on THINK TagsRates Daily Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

Jonny Hart discusses what is driving markets today with OANDA Senior Market Analyst Ed Moya in New York.  This week they talk about earnings results from Netflix and Procter & Gamble, what is driving oil markets, and crypto resilience. 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. Market Insights Podcast (Episode 389) - MarketPulseMarketPulse

As widely expected, the US administration yesterday announced a further release from the Strategic Petroleum Reserve (SPR). This will be the final tranche from the 180MMbbls announced earlier this year. Meanwhile, LME aluminium inventories continue to grow amid speculation is that it is Russian aluminium flowing into LME warehouses Energy- US SPR release confirmed President Biden confirmed that the US will release 15MMbbls of crude oil from its SPR, which would be the final tranche from the 180MMbbls announced earlier this year. The crude will be for delivery through December with bids due by 25 October and results by 1 November. 3MMbbls will be sour crude, while the remaining volume will be sweet crude. Given that this volume is part of the previously announced larger release, the impact on the market is minimal. This is reflected in price action with WTI settling 3.3% higher yesterday. This latest release will do little to offset the impact of OPEC+ supply cuts - the release is equivalent to less than 14 days of OPEC+ supply cuts, whilst the OPEC+ deal is set to run through until the end of 2023. However, as widely reported before Biden’s announcement, the US will make further releases over the coming months if necessary. Yesterday’s EIA report was constructive. US commercial crude oil inventories fell by 1.73MMbbls over the week, which was unexpected - the market was anticipating a build in the region of 2.5MMbbls. The drawdown in crude stocks was even larger when taking into consideration SPR releases. Total US crude oil inventories declined by 5.29MMbbls. The fall in crude stocks was largely driven by a recovery in exports which grew by 1.27MMbbls/d over the period. As for refined products, gasoline stocks fell by 114Mbbls, while distillate stocks increased by 124Mbbls. Despite this increase, there are still concerns going into winter over distillate inventories as they are at their lowest levels in at least 25 years for this time of year. Metals - LME aluminium inflows fuel concerns of Russian glut Readily available aluminium inventories in LME warehouses rose for an eleventh day, driven by deliveries into Malaysia’s Port Klang. They now stand at 527,675 tonnes, according to data from the bourse. On-warrant stockpiles have doubled since the start of October, fuelling speculation about Russian material inflows. Meanwhile, Reuters reported on Wednesday that trader, Glencore had delivered “significant” amounts of Russian-origin aluminium to LME-registered warehouses in Gwangyang, South Korea.           The International Copper Study Group (ICSG) forecasts the global copper market to be in a supply deficit of around 325kt in 2022, compared to a previous estimate of a supply surplus of 140kt in 2022 and a supply deficit of 458kt reported last year. For 2023, the group forecasts the copper market balance to switch to a supply surplus of 150kt; however, the group had previously forecast a surplus of 350kt back in May. Global mine supply is forecast to rise by 3.9% YoY this year and 5.3% YoY in 2023. Meanwhile, refined copper supply growth was revised down from 4.3% YoY to 2.8% YoY for the current year, mainly due to lower output from smelters and longer-than-expected smelter maintenance/shutdowns. For 2023, refined output is expected to increase by 3.3% YoY following the expansion of Chinese capacity and newly added smelting capacity elsewhere. On the consumption side, global refined copper usage is expected to rise by 2.2% YoY this year and 1.4% YoY in 2023. The International Nickel Study Group (INSG) forecasts the global nickel market to shift to a supply surplus this year and to continue to remain in surplus next year due to negative growth expectations in the stainless-steel sector. The global nickel market is expected to be in a supply surplus of 144kt in 2022 and a surplus of 171kt in 2023, compared to a supply deficit of 163kt in 2021. Global primary nickel production is forecast to rise by 424kt to 3.04mt this year and then expected to rise to 3.39mt in 2023. Global demand is estimated to rise by 117kt to 2.89mt this year and to 3.22mt in 2023. Read this article on THINK TagsUS SPR Nickel EIA Copper Aluminium Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

Energy US natural gas declined to the lowest levels since March as supply concerns have slightly improved. ​ Over the past week, energy traders have digested a few winter weather forecasts and it seems many are thinking the south will be drier and warmer than usual, while the northern tier, Midwest and Ohio valley could have a colder winter. Oil prices rallied on hopes that China is starting to pivot with their COVID quarantine guidelines and as energy traders start to price in a hard floor for WTI crude after yesterday’s White House announcement on how they will restock the SPR. ​ The Biden administration intends to buy WTI crude ahead of the $67-72 a barrel range, which means oil should remain supported if China doesn’t suffer a major COVID setback. ​ The latest round of US economic data suggests the economy is still in good shape and any immediate hits to the short-term crude demand outlook are premature. ​ WTI crude should start to form a range slightly above the $90 level, with the upside tentatively capped at the $100 level. ​ Gold bounces back Gold prices are rebounding as the dollar softens slightly after political turmoil in the UK drove the British pound higher and as BOJ was forced into action. ​ The BOJ had no other option but to do an additional unscheduled purchasing of JGBs. The dollar-yen testing the 150 level in New York is putting more pressure on Japan to intervene. ​ Gold is still battling steady outflows from gold-backed ETFs and that trend should limit any rebounds we see over the short term. ​ Another round of US economic data and earnings still supports the argument that the labor market is strong and that the economy is slowly weakening. ​ It looks like the Fed might be in a position to tighten aggressively beyond the winter and that could drive further weakness for gold. ​ It looks like a matter of when will gold break the September lows but for now it is stabilizing as it seems it will need a fresh catalyst to send prices below the psychological $1600 level. ​ 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. Oil higher on possible Chinese COVID pivot, gold rebounds - MarketPulseMarketPulse

Oil choppy as it establishes a new range Another choppy session in oil markets but one in which the price is once again broadly unchanged on the day. Yesterday we saw a decent rally before gains were erased and today we’ve seen the opposite. It continues to look like oil is establishing a new range after a host of factors caused massive swings in the price including the increasingly pessimistic global economic outlook and the huge two million cut to output from OPEC+. We could see Brent stabilise between $90 and $100 now barring another coordinated SPR release. Recovery rally short-lived Gold prices are slipping a little again after a recovery rally on Thursday was cut short. The bullish case for the yellow metal remains weak considering the uncertain outlook for inflation and interest rates. It’s testing support around $1,620 this morning with further support potentially coming around $1,600. For a look at all of today’s economic events, check out our economic calendar: www.marketpulse.com/economic-events/ 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. Oil choppy, gold rally fizzles - MarketPulseMarketPulse

Oil ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Crude prices rose after constant reminders that the oil market is still tight. ​ Saudi energy minister Abdulaziz noted that they need to retain spare oil capacity. On Halliburton’s earnings conference call they stated that oil and gas supply is tight for the foreseeable future. ​ Earlier Valero said that US fuel demand has surpassed 2019 levels. Risk appetite was somewhat healthy and that helped keep oil prices positive this morning. ​ The dollar rally hit a wall and that should provide a boost for all commodities. Gold higher as Treasury yields fall Gold prices got a boost as Treasuries kept the rally going on strong. US economic data is deteriorating and that is helping push down Treasury yields. ​ If the data keeps on getting uglier, the December FOMC meeting debate might not be between a half-point increase and 75 basis-point hike, but with a quarter-point rise and 50 basis-point boost. Gold’s rebound is gaining momentum as the 10-year Treasury yield continues to drop further away from last Friday’s high. ​ Gold’s bearish trend has firmly been in place after prices could not hold the $2000 level in the spring. ​ We’ve seen some bullion rallies stall around the 50-day SMA, which means this current rebound could target the $1700 level. 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. Oil and gold rise - MarketPulseMarketPulse

Oil Oil is mustering up a nice rally as energy traders try to price in a China recovery that will unfold over the next few months. ​ WTI crude has strong support in the mid-$80s as the oil market still remains tight and now that a short-term peak with the dollar is in place. ​ Crude prices extended gains after the EIA crude oil inventory report showed exports surged to a record high and gasoline demand bounced back. ​ Crude production is anchored and that probably will remain the case unless the oil giants signal major investments in CAPEX. ​ The next big move in oil might come from oil earnings later this week that will tell us if we are going to see any investments in new wells. ​ Gold Gold is ready to form its pre-Fed trading range. ​ A weaker dollar has been good news for bullion investors, but gains should be capped well ahead of the $1700 level. ​ Treasury yields have been steadily declining and that has helped make non-interest-bearing gold look more attractive. The Bank of Canada’s dovish surprise was good news for gold as it shows a major economy is already downshifting its tightening pace. ​ Expectations are growing for the Fed to shift to a half-point pace in December and if that seems more likely after next week, gold could have a nice breakout above the $1700 level. ​ 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. Oil rallies, gold loves falling yields - MarketPulseMarketPulse

USDCAD tests key support The Canadian dollar softened after the BoC surprised the market with a smaller-than-expected rate hike. On the daily chart, the rally came to a halt in the supply zone from May 2020 under 1.4000. The greenback is testing the recent low at 1.3500, a key level to keep short-term buyers interested. A lack of bids suggests that traders could be wary of chasing after an already high exchange rate. A breakout would force the bulls to bail out and trigger a deeper correction with 1.3360 as the next target. 1.3640 is the closest resistance. NZDUSD bounces higher The New Zealand dollar climbs as soft US data raises risk appetite. The daily resistance at 0.5810 has been capping the recent price action. But a ‘buy-the-dips’ behaviour off March 2020’s low (0.5500) has offered the kiwi effective support. A series of higher lows indicates growing buying pressure. A bullish breakout would prompt sellers to cover their bets, paving the way for an extended rally should momentum pick up. 0.5880 would be the next stop and 0.5730 at the base of the breakout the first support in case of a pullback. USOIL finds support WTI crude rallied after data showed a rise in US crude exports. The price has stabilised near a 3-week low (82.00). A bullish MA cross on the daily chart suggests a potential acceleration to the upside. Cautious traders may wait for a bullish breakout as a form of confirmation. After a break above 87.00, sentiment would only start to shift in the bulls’ favour if they succeed in pushing past the support-turned-resistance at 89.80. 85.00 is a fresh support and 82.00 an important floor to keep the current bounce valid.

USD weakness provided a boost to the commodities complex yesterday, with both energy and metals pushing higher. Record US crude oil exports over the last week appear to have provided further support to oil prices Energy- record US crude oil exports The latest data from the EIA shows that US commercial crude oil inventories increased by 2.59MMbbls over the last week, though when factoring in SPR releases, total US crude oil inventories declined by 829Mbbls. The build in commercial inventories comes despite the US exporting a record 5.13MMbbls/d of crude oil over the last week, an increase of 991Mbbls/d WoW. Refined product exports also grew, helping total petroleum exports (crude and refined products) to grow by 1.96MMbbls/d WoW to a record 11.43MMbbls/d. As for refined product inventories, gasoline stocks fell by 1.48MMbbls, while distillate stocks increased by a marginal 170Mbbls. However, the US distillate market is still in a tight situation as we head into winter, particularly on the US East Coast. According to a Bloomberg report, the US is rethinking the severity of the proposed G-7 price cap on Russian oil. Instead of a strict price cap, the cap may be more loosely imposed and also at higher levels than originally pushed for. In addition, the cap will likely be followed only by G-7 members, Australia and possibly South Korea. The effectiveness of a potential price cap has been called into question since it was first proposed. Firstly, it will be difficult to get key buyers, China and India to follow the cap. And there is always a risk that Russia reduces supply as a result. Obviously, that would have the opposite effect of what the US is trying to achieve. Metals – more calls for sanctions on Russian metal Norsk Hydro, the largest aluminium smelter in Europe, is calling for sanctions to be imposed on Russian metals. Russian aluminium is currently not sanctioned in the US or Europe, although some European buyers are shunning Russian material in next year’s contracts.  Norsk Hydro won’t agree to any new Russian metal, while Novelis Inc. has excluded Russian supply from a key tender for new contracts to supply its European factories next year. Last month, Alcoa Corp., the largest US aluminium producer, wrote in a letter to the London Metal Exchange, that Russian metal shouldn’t be traded on the bourse. European aluminium smelters continue to operate at lower rates or remain idle amid surging energy costs. It is estimated that over 1mt of aluminium capacity has been impacted due to surging energy costs in Europe. Refined copper output in China rose 5.8% YoY to 946kt in September, according to the latest data from the National Bureau of Statistics (NBS). Zinc output rose 3.7% YoY to 583kt while lead production increased 10.9% YoY to 672kt last month. Peru’s Espinar community will start protests against Glencore’s Antapaccay copper mine on 7 November, as the mine is not fulfilling its commitments to the community, according to media reports. The community leaders warned that they would block the southern mining corridor affecting Antapaccay, Hudbay and MMG’s Las Bambas copper mine. Agriculture- temporary halt to Black Sea corridor exports CBOT wheat futures edged higher yesterday, receiving a boost from the recent halt in exports from Ukraine’s Black Sea corridor along with concerns over the US winter wheat crop. According to reports, ship traffic was temporarily halted in the Ukraine corridor as a suspicious object had been identified. This has once again raised concerns over the growing backlog of vessels which were scheduled to export grains through the corridor before the deal expires on 19 November- although obviously, the idea is to extend the export deal. The International Sugar Organization (ISO) expects the global sugar market balance to remain in a supply surplus of 5.6mt in 2022/23. Total sugar output is expected to grow by 7.8mt (highest in five years) to reach 181.9mt in 2022/23, while consumption is forecast to remain almost flat at 176.3mt. The group expects sugar production in India, Thailand and Central America to remain healthy in 2022/23. However, sugar exports from Brazil could be affected by rains that have already delayed the harvesting process in Center-South. Read this article on THINK TagsSanctions Russian oil price cap Oil EIA Aluminium Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

Oil eases Oil prices are a little lower today although nothing has dramatically changed in recent weeks as far as the outlook is concerned. The global economy is facing major challenges, even recession, OPEC+ is prepared to make unpopular cuts alongside member Russia, whose war in Ukraine has been a dominant driver of market volatility. China’s economic stumble driven partly by its commitment to zero-Covid also continues to dampen the outlook for demand. Brent continues to settle in the $90-100 range which all parties may just about accept for now. Well, after the midterms for a little while perhaps. Make or break week for gold? Gold continues to be choppy but its outlook hasn’t improved at all, with rallies continuing to face significant resistance and $1,600-1,620 looking very vulnerable. Its resilience will certainly be put to the test this week though, given the Fed meeting on Wednesday and US jobs report on Friday. Not to mention the scattering of data around those events. Time will tell whether it proves to be the week that starts the resurgence or the straw that breaks the camel’s back. For a look at all of today’s economic events, check out our economic calendar: www.marketpulse.com/economic-events/ 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. Oil eases, gold choppy - MarketPulseMarketPulse

The commodities complex was provided with a boost following unverified reports that China could look to ease its zero-Covid policy. Meanwhile, markets today will be fully focused on the outcome of the FOMC meeting In this article Energy- OPEC output edges higher Metals – Aluminium smelters in Henan to reduce capacity on losses Energy- OPEC output edges higher The oil market had a strong day yesterday with ICE Brent settling almost 2% higher after unverified reports that China could look to ease its zero-Covid policy. However, for now, this is nothing more than a rumour. China’s covid policy has weighed heavily on oil demand this year with crude oil imports over the first nine months of 2022 averaging 9.95MMbbls/d, down 4.4% YoY. Numbers from the API overnight have provided some further support to the market in early morning trading in Asia. US crude oil inventories are reported to have fallen by 6.53MMbbls over the last week. This is significantly more than the roughly 200Mbbls draw the market was expecting. For refined products, distillate fuel oil stocks increased by 865Mbbls, while gasoline stocks fell by 2.64MMbbls, which would have boosted sentiment further. Overall, it was a bullish set of numbers. However, we will need to see what the more widely followed EIA numbers show later today. Preliminary numbers from Bloomberg show that OPEC oil production in October increased by 30Mbbls/d to average 29.98MMbbls/d. The largest increases came from the UAE, Nigeria and Iraq, whose output increased 70Mbbls/d, 50Mbbls/d and 50Mbbls/d respectively. While Angola, Congo and Libya saw the largest declines with output falling by 60Mbbls/d, 40Mbbls/d and 30Mbbls/d respectively. Production target levels for the broader OPEC+ group were lowered by 100Mbbls/d for October. However, given that most producers are still producing well below their target production levels, the group is still well ahead in terms of compliance levels. Metals – Aluminium smelters in Henan to reduce capacity on losses Base metals rallied yesterday on speculation that Beijing will prepare to wind down China’s Covid-19 rules. Chinese stocks and the yuan also rallied. An unverified social media post circulating online suggested that a committee is being formed to assess scenarios on how to exit its current Covid zero policy. Three aluminium smelters in China’s Henan province plan to halt 110kt of combined annual capacity on losses and to curb pollution during the winter heating season, according to a report from the Shanghai Metals Market. The plants plan to halt 10-15% of their total capacity by the middle of this month with the restart time unknown for now. In precious metals, gold prices rose as the dollar fell ahead of a Federal Reserve meeting. Gold has been struggling to find direction in recent weeks, trading around $1,650/oz, as investors wait for the Fed’s decision, with market expectations firmly behind a fourth consecutive 75bp interest rate hike. The latest data from the World Gold Council shows that central banks increased their buying of gold significantly over the third quarter. Central banks bought 399 tonnes in 3Q22, which is up 341% YoY and also a record quarterly amount. The data shows that Turkey, Uzbekistan, India and Qatar were the largest buyers of gold over the quarter. Those who report their numbers were net buyers of almost 90 tonnes, which leaves a significant amount of purchases from unknown buyers. TagsOPEC Oil Gold Covid-19 China Aluminium   Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read morein

The commodities complex was provided with a boost following unverified reports that China could look to ease its zero-Covid policy. Meanwhile, markets today will be fully focused on the outcome of the FOMC meeting Energy- OPEC output edges higher The oil market had a strong day yesterday with ICE Brent settling almost 2% higher after unverified reports that China could look to ease its zero-Covid policy. However, for now, this is nothing more than a rumour. China’s covid policy has weighed heavily on oil demand this year with crude oil imports over the first nine months of 2022 averaging 9.95MMbbls/d, down 4.4% YoY. Numbers from the API overnight have provided some further support to the market in early morning trading in Asia. US crude oil inventories are reported to have fallen by 6.53MMbbls over the last week. This is significantly more than the roughly 200Mbbls draw the market was expecting. For refined products, distillate fuel oil stocks increased by 865Mbbls, while gasoline stocks fell by 2.64MMbbls, which would have boosted sentiment further. Overall, it was a bullish set of numbers. However, we will need to see what the more widely followed EIA numbers show later today. Preliminary numbers from Bloomberg show that OPEC oil production in October increased by 30Mbbls/d to average 29.98MMbbls/d. The largest increases came from the UAE, Nigeria and Iraq, whose output increased 70Mbbls/d, 50Mbbls/d and 50Mbbls/d respectively. While Angola, Congo and Libya saw the largest declines with output falling by 60Mbbls/d, 40Mbbls/d and 30Mbbls/d respectively. Production target levels for the broader OPEC+ group were lowered by 100Mbbls/d for October. However, given that most producers are still producing well below their target production levels, the group is still well ahead in terms of compliance levels. Metals – Aluminium smelters in Henan to reduce capacity on losses Base metals rallied yesterday on speculation that Beijing will prepare to wind down China’s Covid-19 rules. Chinese stocks and the yuan also rallied. An unverified social media post circulating online suggested that a committee is being formed to assess scenarios on how to exit its current Covid zero policy. Three aluminium smelters in China’s Henan province plan to halt 110kt of combined annual capacity on losses and to curb pollution during the winter heating season, according to a report from the Shanghai Metals Market. The plants plan to halt 10-15% of their total capacity by the middle of this month with the restart time unknown for now. In precious metals, gold prices rose as the dollar fell ahead of a Federal Reserve meeting. Gold has been struggling to find direction in recent weeks, trading around $1,650/oz, as investors wait for the Fed’s decision, with market expectations firmly behind a fourth consecutive 75bp interest rate hike. The latest data from the World Gold Council shows that central banks increased their buying of gold significantly over the third quarter. Central banks bought 399 tonnes in 3Q22, which is up 341% YoY and also a record quarterly amount. The data shows that Turkey, Uzbekistan, India and Qatar were the largest buyers of gold over the quarter. Those who report their numbers were net buyers of almost 90 tonnes, which leaves a significant amount of purchases from unknown buyers. Read this article on THINK TagsOPEC Oil Gold Covid-19 China Aluminium Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

The US Fed hiked rates by 75bp as expected, but the press conference suggested that rates will go higher than previously expected. This is likely to provide headwinds to commodity markets in the near term despite constructive fundamentals Jerome Powell, chair of the Federal Reserve Energy - Bullish US inventory report The oil market managed to settle higher yesterday despite a 75bp hike from the US Fed and comments suggesting that rates will peak at a higher level than previously expected. That said, they also indicated that the pace of hiking could slow as soon as the next meeting in December. Weaker price action in early morning trading in Asia looks as if the market could be digesting the outcome of the FOMC meeting, with WTI down more than 1% at the time of writing. The EIA’s weekly report was fairly bullish and showed that US commercial crude oil inventories declined by 3.12MMbbls over the last week. Although if we look at total US crude oil inventories, which take into account stocks from the SPR, inventories fell by 5.04MMbbls. The drawdown in the SPR last week was the smallest since February. It would appear that we are starting to see larger draws in commercial crude oil inventories as the amount of crude released from the SPR is reduced. The refined product numbers were also bullish. US gasoline inventories declined by 1.26MMbbls, leaving total US gasoline inventories at 206.63MMbbls - the lowest level seen since 2014. Meanwhile, distillate fuel oil stocks grew by just 427Mbbls, and while we saw a more meaningful build on the US East Coast, inventories in the region are still at their lowest levels on record for this time of year. European day-ahead gas prices continue to trade in a volatile manner. TTF day ahead rallied more than 96% yesterday to EUR45/MWh. Although current prices are still well below the more than EUR200/MWh seen at the end of September. There have been few fresh fundamental developments in the European market. Storage continues to fill up given the milder weather. The latest data from Gas Infrastructure Europe shows that storage is 95% full now, compared to a 5-year average of 89%. Meanwhile, German storage is more than 99% full. The rally in prices yesterday could have been driven by the fact that it is looking increasingly likely that the Freeport LNG export facility in the US will see a further delay in its restart after a fire earlier in the summer. The plant was set to partially restart this month but is yet to submit its restart plan to regulators. Further delays in the restart mean a tighter-than-expected global LNG market through the northern hemisphere winter. Metals – China steel demand to remain suppressed The China Iron Ore and Steel Association (CISA) expects steel demand in China to remain suppressed due to extended stringent Covid-19 control measures and worries over a global economic slowdown. China’s steel consumption fell 4.2% YoY to 741mt in the first nine months of the year as overall downstream demand remained weak. The recent data from Mysteel shows that roughly 150kt of daily production capacity was impacted in October as 44 blast furnaces were shut down at mills in China's north and north-west. At the end of the month, 28 of those had not resumed production affecting 100kt of production capacity. Agriculture – Russia resumes Ukraine grain export deal CBOT wheat futures fell more than 6% yesterday after Russia agreed to resume the Black Sea grain export deal. This is after Russia said it had received “written guarantees” from Ukraine that the safe-passage corridor wouldn’t be used for military purposes. Ukraine is optimistic that the deal will be extended beyond its mid-November deadline due to strong global demand. The deal will automatically be extended for 120 days if the involved parties have no objections. Read this article on THINK TagsTTF Russia-Ukraine Oil LNG EIA Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

Oil prices have declined only slightly, and it's all the fault of Federal Reserve Chairman Jerome Powell's statement that interest rates will rise higher than previously forecast. West Texas Intermediate futures fell below $89 per barrel after rising 4% compared to the previous two sessions. Powell said it was "premature to think about suspending the rate hike cycle" after the Fed raised rates again by 75 basis points.     All major central banks are currently trying to curb rampant inflation, which puts pressure on demand and energy. The bearish sentiment caused by the increase in rates offset the rise in gasoline prices in the United States, but this was not enough to seriously affect the situation. Growing concerns about the slowdown in the global economy will inevitably affect the oil demand, which will limit the upward potential of the trading instrument. However, the battle between the bearish demand forecast and the bullish supply forecast continues to be waged in full. It is difficult to say how energy carriers will behave in winter since they are largely tied to geopolitical risks and factors.     Premarket: Qualcomm shares lost 6% after the company reported weak earnings. Forecasts and targets also fell short of analysts' expectations, as demand was lower than expected due to China. According to Refinitiv, the technology company reported adjusted earnings per share of $3.13. Revenue for the quarter was $11.39 billion, compared with an estimated $11.37 billion. Shares of the Roku streaming TV platform fell nearly 20% after the company said fourth-quarter revenue would be lower than Wall Street expects. The company reported third-quarter results that beat analysts' forecasts: a loss per share of 88 cents compared with a loss of $1.28. Revenue was $761 million, more than the estimated $694 million. However, forecasts for the future have ruined everything. Etsy securities jumped more than 10% after the company reported quarterly profit that exceeded expectations. The online store reported revenue of $594.47 million against the expected $564.48 million. The company also expects continued sales growth in the fourth quarter, leading to a share increase. Zillow shares rose 2.7% after reporting earnings that beat analysts' expectations. The company reported adjusted earnings per share of 38 cents, above the forecast of 11 cents. Revenue was $483 million, while Wall Street expected $456 million. As for the technical picture of the S&P500, after yesterday's decline, demand for the index remains rather sluggish. The main task for buyers now is to protect the support of $3,735. As long as trading is conducted above this level, we can expect a return in demand for risky assets - especially if the US data disappoints. This will create good prerequisites for strengthening the trading instrument and returning $3,773 under control, just above which the level of $3,808 is located. A breakthrough in this area will strengthen the hope for an upward correction with an exit to the resistance of $3,835. The farthest target will be the $3,861 area. In a downward movement, buyers must declare themselves in the $3,735. A breakdown of this range will quickly push the trading instrument to $3,699 and open up the possibility of updating the support of $3,661. Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326182

A rallying USD following this week’s hawkish FOMC meeting has kept the pressure on the commodities complex. In the short term, sentiment is likely to remain negative. However, in the medium to longer term, there are clear supply risks for a number of commodities which should prove constructive Energy- USD weighs on oil USD strength and a more hawkish FOMC meeting this week have proved too much for the oil market (and broader risk assets) with ICE Brent settling more than 1.5% lower on the day. The increasingly gloomy macro outlook is providing some strong headwinds to the oil market and without the supply cuts announced by OPEC+ back in October, we would likely have been trading at much lower levels. In fact, OPEC+ cuts have provided some stability to the market in the short term. However, this is likely to change once the EU ban on Russian oil comes into force next month for crude and in February for refined products. The UK government yesterday announced that it would impose a ban on the use of UK insurance, brokerage and shipping services for the purchase of Russian oil from 5 December. This aligns the UK with similar action taken by the EU. However, under the G-7 price cap, the ban will not be applied to Russian oil bought at or below the price cap. Although, for now, it is still not clear at what level the G-7 will set the price cap. The US natural gas market came under pressure yesterday. Henry Hub settled almost 4.7% lower over the day. The weakness in the market was driven by US inventory data which showed that US gas storage increased by 107bcf, which was above market expectations of closer to 100bcf and also well above a 5-year average build of 45bcf for this time of year. The increase means that total US natural gas storage is 3.5tcf, which leaves inventories 3.7% below the 5-year average. Metals – Las Bambas copper mine to progressively halt production MMG’s Las Bambas copper mine in Peru will be forced to progressively halt its production due to road blockades. Since 28 October, communities have blocked the roads used by Las Bambas in Chumbivilcas and an alternate road in Paruro. Protests against the mining sector have spread to Glencore’s Antapaccay, where civil organizations demand alleged unfulfilled commitments. Readily available zinc inventories in LME warehouses jumped by 13,600 tonnes to 36,625 tonnes yesterday – the biggest tonnage increase since 14 December. The increase was driven by a drop in orders to withdraw metal from Taiwan. The cash/3m spread for zinc eased to a backwardation of US$17.25/t yesterday compared to a backwardation of US$38.50/t  at the beginning of the week and year-to-date highs of US$218/t on 23 June. Ghana’s only aluminium smelter temporarily shut down after pay protests threatened the safety of its operations. Volta Aluminium halted production after cutting power to its smelter because of an invasion by protesting workers. Unions representing workers are asking for a 55% pay increase and for their pay to be linked to the US dollar. The company is producing 50kt currently, below its installed capacity of 200kt, as only two out of its five pot lines are running due to a lack of maintenance and repairs. Read this article on THINK TagsUSD strength Oil Natural gas FOMC Copper Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

Summary:  Commodities traded higher during a week where the focus altered between optimism over China reopening and an extended rate hike cycle in the US having a negative impact on global growth and demand. Overall China optimism won the day with strong gains being led by industrial metals, energy and cotton. Commodities traded mostly higher during a week where the focus altered between optimism over China reopening and an extended rate hike cycle in the US having a negative impact on global growth and demand. In addition, the energy market continues to focus on the price-supportive impact of OPEC+ production cuts and upcoming EU sanctions against Russian crude sales. Overall, the Bloomberg Commodity Index which tracks a basket of major commodity futures spread evenly between energy, metals and agriculture, traded higher by more than 4% near a three-week high. Following Wednesday’s expected 75 basis point rate hike, the fourth in this cycle, Fed Chair Powell went on to deliver what turned out to be a temporary hammer-blow to sentiment across markets after saying that any talk of a pause is “very premature”. However, it is also clear that the FOMC will be economic data driven, and any signs of weakness could alter this view after the Fed in its statement raised the prospect of pausing to assess the” cumulative tightening” impact. The time lag between rate hikes and the economic impact remains a worry that the bond market is trying to price through an increasingly inverted US yield curve. This week, the 2–10-year spread jumped to -61 basis points, the most inverted we have seen it since the 1980’s and it highlights the risk of a central bank policy mistake leading to weaker growth without successfully managing to get inflation under control. These developments helped support gold and silver, both bouncing strongly on short covering following an initial and failed attempt to drive them lower through key support. Gold recovering from another FOMC dump Gold traded higher on the week after managing to recover from the stronger dollar and rising yields driven sell-off that followed Fed Chair Powell’s press conference. The initial weakness saw gold challenge key support in the $1615 area for a third time with the subsequent bounce being supported by short covering and a softer dollar. Also supporting the price was the mentioned further inversion of the US yield curve signalling increased risks of an economic slowdown. Having returned to safer ground the market will be watching the incoming economic data, starting with US payrolls on Friday which despite being on the strong side did not arrest gold’s end of week rally. At Saxo, we maintain a long-held view that the medium term inflation outlook will likely surprise to the upside with a 4% to 5% range over the next decade not being that outrageous. Driven by a new geopolitical situation where the world is splitting into two parts with everything evolving around deglobalization driven by the need for self-reliance. Together with the energy transition, we are facing a decade that will be commodity and capital intensive and where scarcity of raw materials and labor will keep inflation elevated for longer, and higher than the 3% level currently being priced in through the swaps market.Such a scenario combined with the risk of an economic slowdown forcing a roll over in central bank rate hike expectations, sending yields and the dollar lower, may in our opinion create powerful tailwinds for gold and silver during 2023. Underlying support is already being provided by central banks who bought a record 400 tons in Q3, thereby more than offsetting a 227 tons reduction in total holdings across bullion-backed ETFs. With support firmly established at $1615, the first key upside challenge awaits in the $1675-80 area where we find a recent high, the 50-day moving and trendline from the March high. Crude oil bulls getting the upper hand Crude oil remains on track for a third week of gains with Brent and WTI crude oil both approaching the top of their established ranges with the focus on the supply impact of OPEC+ production cuts and upcoming EU sanctions against Russian oil as well as a tight product market while the demand side is torn between the prospect of a pickup in Chinese demand once Covid restrictions are lifted and worries that global economic activity will continue to weaken in the coming months. While crude oil has been mostly rangebound since July, the fuel product market has continued to tighten as supplies in Europe and the US have become increasingly scarce, thereby driving up refinery margins for gasoline and distillate products such as diesel, heating oil and jet fuel. The focus in terms of tightness remains the northern hemisphere product market where low stocks of diesel and heating oil continues to raise concerns. The market has been uprooted by the war in Ukraine and sanctions against Russia, a major supplier of refined products to Europe. In addition, the high cost for gas has supported increased switching activity from gas to other fuels, especially diesel and heating oil.This tight market situation is now being made worse by the OPEC+ ill-timed decision to cut production from this month. While the continued release of US (light sweet) crude from its strategic reserves will support the production of gasoline, the OPEC+ production cuts will primarily be provided by Saudi Arabia, Kuwait and the UAE – all producers of the medium/heavy crude which yields the highest amount of distillate.As long as the product market remains this tight, the risk of seeing lower crude oil prices -despite the current worry about recession - seems to be low so we maintain our forecast for a price range in Brent for this quarter between $85 and $100, with the tightening product market increasingly skewing the risk to the upside.   Strong week for industrial metals on reopening hopes The Bloomberg Industrial Metals Index was heading for its best week since July with gains being led by the three major metals of nickel, aluminum and copper on unverified talk that China could be moving closer to exit its strict Covid-zero policies as well as raised worries about tightening supply driven by increased activity from Chinese buyers. Copper in addition received a boost from a halt to operations at MMG’s giant Las Bambas mine in Peru, one of the world’s largest. Since October 31, operations have been challenged by blockades from locals. As per the chart below, HG copper, rangebound since July, traded sharply higher through a couple of resistance levels but in order to confirm a proper recovery it would need to break above the August high at $3.78 per pound. Only then can we potential see fresh momentum buying from speculators who for months have preferred to trade the metal with a short bias. Cotton jumps on short covering and signs of a demand rebound. Cotton, down by more than 50% since May on worries about the health of the global economy and with that demand for garments from consumers, has bounced 20% since last Friday. Despite renewed dollar strength weighing on other agriculture commodities, cotton has bounced on signs China’s yarn production seems to be picking up. A story supported by weekly US export sales to China showing a 98% jump from a year ago. Rollercoaster week for wheat Wheat traded in Chicago and Paris surged higher at the start of the week after Russia announced a suspension of the Ukraine grain-export deal, only to slump after an about-face from Russia allowed shipments to continue. Prices nevertheless maintained a bid on growing drought concerns in Argentina and the US Plains. Source: https://www.home.saxo/content/articles/commodities/metals-surge-on-china-covid-easing-speculation-04112022

Summary:  Speculation about China relaxing its stringent dynamic zero-Covid policy stirred up risk-on trades on global equities and commodities on Friday. Hong Kong’s Hang Seng Index surged 5.4% and China’s CSI 300 rose 3.3%. A mixed job report brought about a choppy session in the U.S. and stocks managed to finish the day higher as materials and industrials rallied in the afternoon when Investors turned their focus to the China reopening notion and strength in commodities. What’s happening in markets? The Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) rebounded on Friday but were still down for the week Following a mixed job report, the U.S. equity markets had a choppy session on Friday, fluctuating between gains and losses, and finished the day higher. S&P500 gained 1.4% and Nasdaq 100 climbed 1.6%. For the week, however, S&P 500 was down 3.4% and Nasdaq 100 was 5.7% lower. All 11 sectors of the S&P 500 gained on Friday, with materials having done the best and up 3.4%. Software names underperformed on earnings and revenue misses. US  treasury (TLT:xnas, IEF:xnas, SHY:xnas) yields were largely steady after the job report U.S. treasury yields surged initially on the stronger-than-expected non-farm payroll gain of 261K jobs in the establishment survey but pared the rise after the market focus shifted to the higher unemployment rate of 3.7% and a decline of 328K in employment in the household survey. The yield curve turned steeper notably, with the 2-year yield down 6bps to 4.66%, the 10-year yield up 1bp to 4.16%, and the 30-year yield jumping 7bps to 4.25%. The market is pricing in a 65% chance of a 50bp hike at the December FOMC and a terminal Fed Fund rate at around 5.1% next year. Hong Kong’s Hang Seng (HSIX2) China’s CSI300 (03188:xhkg) rallied dramatically on reopening hope Stocks in Hong Kong and the mainland surged on intensification of speculation on relaxation (not abandoning but relaxing) of the dynamic zero-Covid policy, newswire stories reporting that the U.S. Public Company Accounting Oversight Board (PCAOB) has completed the first round of inspection on Chinese ADR ahead of schedule, and an article from Vice-Premier Liu He on the People’s Daily pledging to boost domestic aggregate demand.  Hang Seng Index jumped 5.4% and CSI300 surged 3.3%. Hang Seng China Enterprise Index surged 6% and China Internet stocks climbed 10% to 17%, with Alibaba (09988:xhkg) up 11%, and Tencent (00700:hkxg) up 7.8%. FX: USD gains return as China asserts commitment to Zero Covid FX: USD gains return as China asserts commitment to Zero Covid With plenty of chatter last week about China’s reopening, commodity currencies had been supported with NZD leading the gains against the USD and being up over 2%. AUDUSD also surged above 0.6450 into the end of the week on hopes of a recovery in commodities demand. However, weekend reports from China’s Health Ministry confirmed that China will maintain its present zero-Covid regulations but improve the pandemic control measures, hinting that protracted lockdowns will be avoided. This has sent dollar back into gains this morning, with AUD and NZD leading the declines. GBPUSD also slid back to 1.1300 and EURUSD back at the 0.99 handle. Commodities rally Commodity screens all in the green on the back China reopening hopes. The Crude Oil (CLX2 & LCOZ2) price rose 5% to $92.61, its highest level since August after rising 5.4% last week. Iron Ore (SCOA, SCOZ2) is up 1.6% today $87.30 after gaining 8.3% last week. The Copper price (HGA, HGZ2) rose 7.8% today, after rising 7.5% last week.   What to consider Mixed US jobs report to keep the Fed on a tightening path US NFP headline gains of 261k were above expectations of 200k but slowed from last month’s 315k which was revised higher from 263k. Job gains were broad-based with strong gains in healthcare, professional and business services and manufacturing. Wage growth also held up strongly, coming in at 0.4% MoM in October from 0.3% MoM previously although a tad softer on a YoY basis at 4.7% from 5.0% YoY previously. However, the unemployment rate ticked up to 3.7% from 3.5% (exp. 3.6%), although it was met with a 0.1% decline in the participation rate to 62.2%. However, with layoffs rising recently, especially in tech, it will be interesting to see how that impacts the headline NFP and the Fed tightening path in the months to come. Heightened anticipation of relaxation of the implementation of pandemic control in China Speaking at a meeting hosted by a U.S. investment bank last Friday, the former Chief Expert of Epidemiology of the Chinese Centre for Disease Control and Prevention said the relaxation of pandemic control had already started and more would come, citing the resumption of state visits, sports events (e.g. the Beijing Marathon this Sunday), and relaxing PCR test requirements and starting to charge for the tests. At a press conference last Saturday, China’s National Administration of Disease Control and Prevention reiterated adherence to the dynamic zero-Covid policy. This may dampen somewhat investors’ optimism about reopening. Nonetheless, the Chinese health officials pledged at the same press conference to improve the implementation of the pandemic control measures so as to avoid massive and protracted lockdowns. China’s approval of BioNTech vaccine for foreigners living in mainland China also stirred up some anticipation of the possibility of allowing the more effective BioNTech vaccine to be available eventually beyond foreign residents. Stocks of interest to watch First up this week, Champion Iron (CIA) goes ex-dividend today, along with Macquarie (MGQ). National Australia Bank (NAB) is due to report results on Wednesday 9th. Mosaic (MOS) a fertilizer giant reports on Monday in the US. Walt Disney (DIS) reports 9th November. On with Occidental Petroleum (OXY) and Constellation Energy (CEG) report as well. Note Oxy and CEG are some of the US' best performers this year). Ralph Lauren (RL) reports on Thursday.    For a global look at markets – tune into our Podcast.     Source: https://www.home.saxo/content/articles/equities/market-insights-today-7-nov-07112022

Summary:  The October US CPI release this week will be key to watch after Fed’s hawkish shift last week. Market pricing for December’s Fed rate hike is closer to 50bps for now, but a stronger than expected core print could move that towards another 75bps expectation. Midterm elections could also cause some volatility given the risk of policy paralysis if Democrats lose control of the Congress. More economic data is due, from UK’s Q3 GDP to China’s credit update and inflation, but a key driver of volatility will likely be further developments on China’s reopening story. In the commodities space, this means industrial metals, iron ore, copper, gold, energy and cotton are key to watch. The earnings calendar cools down, but keep Walt Disney and Adidas on your radar. components Bloomberg consensus expects US October CPI to drop below the 8% mark and come in at 7.9% YoY from 8.2% previously, but still higher at 0.6% MoM from 0.4% in September. The core measure is also expected to ease slightly to 6.5% YoY, 0.5% MoM (prev. 6.6% YoY, 0.6% MoM) but still remain elevated compared to historical levels. Key to watch also will be the drivers of inflation, particularly the stickier shelter and services costs, which if stuck higher could move the December Fed funds future pricing more towards another 75bps rate hike, resulting in another round of selloff in equities and dollar gains. However, with another CPI report due before the next Fed meeting in December, market impact of this week’s report will likely remain restrained unless a major deviation from expectations is seen. For this week’s CPI data, we will be watching the USD, and bond yields, which may be expected to rally up if the data is hotter than expected. What next for the China reopening chatter, and what does that mean for commodity markets? Last Saturday, China’s National Administration of Disease Control and Prevention reiterated China’s adherence to the dynamic zero-Covid policy but at the same time pledged to improve the implementation of the policy so as to avoid massive and protracted lockdowns. Investors will focus on if subtle relaxation of implementation will gather momentum in the coming weeks. This will be key not just for mainland/HK markets, but also for commodity markets. The biggest impact will be seen on industrial metals (watch Copper, Iron ore) and energy prices, as China is the biggest consumer of such commodities. HG Copper broke through several resistances last week, but is seen lower back at $3.60 on Monday morning after Chinese officials hinted at adherence to the zero covid policy. Crude oil prices also remain on watch especially with OPEC+ production cuts set to take effect this month and upcoming EU sanctions against Russian oil, all leading to a tight market. Gold (XAUUSD) reversed its post-FOMC slump on China reopening optimism at the end of last week, and remains supported above $1670 for now. Will it break the short-term downtrend? Also worth watching Cotton, which bounced more than 20% from their low on signs of China’s improving yarn production, but still remains down on a YTD basis. US mid-term elections this Tuesday Pundits suggest that the Republicans have very strong odds of flipping the House of Representatives in their favour, while the odds look finely balanced for whether the Senate ends retaining the slimmest of Democratic majorities. Republicans taking both houses has few immediate ramifications, as US President Biden has the presidential veto, but a stronger than expected Democratic showing that somehow sees them retaining the House and strengthening their Senate majority would be a game changer – opening for more policy dynamism from the US over the next two years rather than the expected lame-duck presidency. Uncertainty is high as pollsters have had a hard time gathering accurate indications for the election results since Trump’s victory in 2016. China is scheduled to release credit data, CPI, PPI, and trade data Among the data scheduled to release this week, investors are likely to focus on the new RMB loans and aggregate financing numbers. After a very strong September in which banks were urged to lend, new RMB loans were expected to decelerate to RMB800 billion in October from RMB2,470 billion in September. New Aggregate Financing was forecasted to fall to RMB 1,600 billion in October from RMB 3,530 billion in September. On the inflation front, China’s PPI is expected to fall 1.6% Y/Y in October, due to the high base last year resulting from increases in material and energy prices. Unlike other major economies, CPI in China is expected to slow to 2.4% in October. On trade, while export growth in RMB terms is forecasted to rise to +12.7% YoY in October from +10.7% in September, exports in US dollar terms are expected to decelerate. China’s Singles’ Day this Friday, Nov 11 Investors will watch closely Alibaba, JD.com, and other online retailers’ sales on Singles’ Day this Friday to gauge the strength of China’s private consumption. Analysts are expecting slower sales growth as recent data indicated slower user growth across online shopping platforms. UK GDP to confirm the onset of a recession On Friday, UK’s Q3 GDP is released and the first negative print of the current cycle is expected to be seen. Consensus forecast is seen at 2.1% YoY, -0.5% QoQ, significantly lower than the second quarter print of 4.4% YoY, 0.2% QoQ. August GDP data had already begun to show a negative print with -0.3% MoM and the trend will only likely get worse in September, exacerbated by a one-off factor relating to Queen Elizabeth II’s funeral in the month, which was a national holiday. The economy is already facing a cost of living crisis, and both fiscal and monetary policy have to remain tight in this very tough operating environment. Technically, a recession may still be avoided as activity levels picked up in October, but still it will remain hard for the UK to dodge a recession going into 2023. This suggests more downside for the sterling may be in store, especially as the market refuses to cater to the Bank of England’s warning that the current expectations of terminal rate may be too steep. Key Earnings to watch Saxo’s Head of Equity Strategy, Peter Garnry, wrote the following, for key focus areas for corporate earnings this week. On Monday our focus is Activision Blizzard which is struggling with negative top-line growth like the rest of the gaming industry as the pandemic boom is over. Analysts are expecting revenue growth of -17% y/y and EPS of $0.50 down 39% y/y. Walt Disney is next week’s biggest earnings release scheduled on Tuesday with analysts expecting Q4 (ending 30 September) revenue growth of 15% y/y but EBITDA at $3bn down from $3.86bn in Q3 highlighting the ongoing margin pressure. Adidas, reporting on Wednesday, is also key due to its size in consumer goods but also because of its costly partnership breakup with Ye; analysts estimate revenue growth up 13% y/y but EPS at €1.24 down 47% y/y due to one-off items. On Thursday, we will focus on ArcelorMittal, because Europe’s largest steelmaker is an important macro driver, and analysts are getting increasingly negative on the steel industry expecting ArcelorMittal to announce a 14% drop in Q3 revenue and a 66% drop in EPS. The week ends with Richemont expected to see revenue growth coming down fast to just 7% y/y in Q3.   Key company earnings releases Monday: Westpac Banking, Coloplast, Ryanair, Activision Blizzard, BioNTech, Palantir Technologies, SolarEdge Technologies Tuesday: Bayer, Deutsche Post, KE Holdings, Nintendo, Walt Disney, Occidental Petroleum, Lucid Group, DuPont Wednesday: National Australia Bank, KBC Group, Genmab, Siemens Healthineers, E.ON, Adidas, Honda Motor, Coupang, Rivian Automotive, Roblox, DR Horton, Trade Desk Thursday: Brookfield Asset Management, Fortum, Engie, Credit Agricole, Allianz, Merck, Hapag-Lloyd, RWE, SMIC, Nexi, AstraZeneca, ArcelorMittal, Siemens Gamesa Renewable Energy, Becton Dickinson, NIO Friday: Richemont Key economic releases & central bank meetings Monday 7 NovemberChina (Mainland) Trade (Oct)Germany Industrial Production and Output (Sep)Eurozone S&P Global Construction PMI (Oct)Indonesia GDP (Q3) Tuesday 8 NovemberJapan BOJ Summary of Opinions (Oct)Japan All Household Spending (Sep)Eurozone Retail Sales (Sep) Wednesday 9 NovemberJapan Current Account (Sep)China (Mainland) CPI and PPI (Oct)United States Wholesale Inventories (Sep) Thursday 10 NovemberUnited States CPI (Oct)United States Initial Jobless ClaimsChina (Mainland) M2, New Yuan Loans, Loan Growth (Oct) Friday 11 NovemberNew Zealand Manufacturing PMI (Oct)Germany CPI (Oct, final)United Kingdom monthly GDP, incl. Manufacturing, Services and Construction Output (Sep)United Kingdom Goods Trade Balance (Sep)United Kingdom GDP (Q3, prelim)United Kingdom Business Investments (Q3)United States UoM Sentiment (Nov, prelim)     Source: https://www.home.saxo/content/articles/macro/saxo-spotlight-7-nov-2022-07112022

Summary:  Traders witnessed a wild session on Friday as the market decided that the US data would not add any further risk of a hawkish Fed for now, helping risk sentiment to rebound sharply as US treasury yields eased a bit lower. The US dollar was pummeled for sharp losses, particularly against commodity currencies that rebounded on chatter of China moving to ease Covid restrictions, only to see those hopes dashed over the weekend. Focus this week on US October CPI release this Thursday.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) US equities are holding up pretty well given the remarks on Wednesday from Fed Chair Powell and assessment by Larry Summers that the terminal rates probably should be closer to 6% than 5%. S&P 500 futures are trading around the 3,767 level with the index futures likely trying to attempt again to move to the 3,800 level, but our view is that tighter central bank policy will begin to impact US equities negatively again and the 3,600 level is our shorter-term target for S&P 500 futures. Euro STOXX 50 (EU50.I) European equities are up 13% from late September as European earnings have been better than expected and the energy situation has eased. But this optimistic view might be premature as the economic activity in the euro area is slowing down fast and the winter has not even started, so we do not know the true strength of the European energy market. Also, the idea that ECB will begin pausing is not credible as the inflationary pressures are very high and will force ECB to continue being more aggressive on policy rates. STOXX 50 futures are trading just above the 200-day moving average this morning at the 3,680 level, with some potential to move higher if the index futures can close above Friday’s close. But overall, we maintain that it is more likely that equities will begin to roll over here as central bank hawkishness on terminal rates will sink in. Hong Kong’s Hang Seng (HSIX2) and China’s CSI300 (03188:xhkg) While China’s National Administration of Disease Control and Prevention reiterated its adherence to the dynamic zero-Covid policy at a press conference last Saturday, the health officials added that local governments should not unreasonably double down on the implementation and must ensure people’s livelihood and economic activities remain normal.  Investors took note of the above and recent signs of incremental flexibility in the implementation of pandemic control measures in China and saw the Hang Seng Index more than 3% higher as of writing. The resumption of large-scale sports events including the Beijing Marathon last Sunday, multinational sports events scheduled for 2023 such as Shanghai F1 and Hangzhou Asian Games, relaxation of PCR test requirements, increases in international flights, cancellation of circuit breaker for international flights, and approval of BioNTech vaccine for foreigners living in mainland China are among the factors cited by investors who anticipate gradual reopening in the coming months. Mainland A-shares’ reactions were more modest, with CSI300 climbing only 0.2%. FX: USD bounces back as China reasserts Zero Covid commitment after Friday’s huge sell-off The market absorbed Friday’s US data without further punishing US treasuries, as yields were capped and eased back. This saw the former USD strength reversing sharply to pronounced weakness Friday as risk sentiment also rebounded. Chatter late last week about China’s reopening added to brightening of sentiment. Commodity currencies had been supported with NZD leading the gains against the USD and being up over 2%. AUDUSD also surged above 0.6450 into the end of the week on hopes of a recovery in commodities demand. However, weekend reports from China’s Health Ministry confirmed that China will maintain its present zero-Covid regulations but improve the pandemic control measures, hinting that protracted lockdowns will be avoided. This has sent dollar back higher overnight, with AUD and NZD leading the declines, but this still appears merely a small consolidation of Friday’s weakening move. Focus this week on US CPI release on Thursday (more below). Gold (XAUUSD), silver (XAGUSD) and copper (HGZ2) … all raced higher on Friday, before giving back some of those gains overnight. The China reopening story gained its own momentum last week and while the official line has not changed, the tone has softened (see HK and China update above).  The extended rally despite a stronger-than-expected US report was driven by copper which recorded its best day since 2009, rallying close to 8% and in the process breaking through several key levels of resistance, thereby triggering some extra buying momentum from traders, not positioned for a bounce. The strong surge fed through to silver, up 7% on day, which found its own momentum above $20 and finally also Gold which had its biggest jump since March 2020. It may still be too early to call for a reversal given continued worries about the global economic outlook and Fed action, but Friday’s action will force a rethink of whether the sell-into-strength strategy is still valid. China developments, the dollar and incoming US data will provide most of the answers to this question.  Crude oil (CLZ2 & LCOF3) Crude oil trade lower following Friday’s strong gains with the market responding negatively to weekend headlines about zero-Covid policies being maintained in China. However, looking a bit deeper there is no doubt a softening approach is happening. The People’s Daily in an article on November 3 told people not to worry too much about “long Covid” ie the aftermath health problems from Covid while the health officials told local government not to make measures over stringent. With demand in China potentially starting to recover, the ill-timed OPEC+ production cut and EU sanctions against Russian crude is likely to keep the price risk focused to the upside, but with Brent failing to break above $98.75, and WTI above $93.65, the October highs, the market may spend the start of the week consolidating last week’s strong gains. US treasuries (TLT, IEF) US Treasury yields dropped back slightly on Friday as the US data was not seen stoking additional fears of the Fed intensifying its hawkish stance further for now, with this Thursday’s CPI weighing more in the balance than the mixed jobs report Friday. Focus is on the 4.32% top in the US 10-year treasury benchmark yield and the 3.90% low-water mark of the recent consolidation lower. What is going on? Mixed US jobs report US NFP headline gains of 261k were above expectations of 200k but slowed from last month’s 315k which was revised higher from 263k. Job gains were broad-based with strong gains in healthcare, professional and business services and manufacturing. Wage growth also held up strongly, coming in at 0.4% MoM in October from 0.3% MoM previously although a tad softer on a YoY basis at 4.7% from 5.0% YoY previously. However, the unemployment rate ticked up to 3.7% from 3.5% (exp. 3.6%) on a rather weak Household Survey although it was met with a 0.1% decline in the participation rate to 62.2%. However, with layoffs rising recently, especially in tech, it will be interesting to see how that impacts the headline NFP and the Fed tightening path in the months to come. Apple lowers iPhone output by 3mn units The demand for iPhones is coming down and Apple is now announcing a cut of 3mn units as consumers are under pressure from inflation and might be extending the life of their old phones. Apple has recently hiked prices on some of its services aiming to offset the weakness in its hardware business. Meta to start layoffs according to WSJ Investors have been frustrated with Meta following the Q3 earnings release as Mark Zuckerberg has reinforced the image that he does not listen to the concerns of investors that Meta is spending too much capital on its metaverse bets. According to Wall Street Journal, Meta might have listened after all as the technology company is expected to begin laying off thousands of employees. Ryanair lifts passenger target If there is an airliner that can do well during a recession in Europe it is Ryanair and the first half result this morning is a bit better than expected and the airliner expects net income of €1-1.2bn in the FY23 (ending 31 March). The Danish shipping giant Maersk sees the world entering a recession Maersk cut its forecasts for container demand this year. The drop is expected to reach minus 2 to 4 %. This matters because the company is often seen as a barometer for global trade. This is explained by well-known factors we have mentioned several times here: high inflation across the board, structural energy crisis in Europe, the geopolitical tensions and higher cost of capital. All of this weighs on consumer purchasing power and can potentially cause a global recession. Maersk expects the eurozone to be already or to enter into a recession, and potentially the United States as well. At Saxo Bank, we share this view, especially regarding the recession risk in the eurozone. Last week, ECB governor Martins Kazaks (which is seen as a hawk) acknowledged that the eurozone recession is now the baseline. This was the first time that an ECB governing council member said that officially.  The number of penny stocks is increasing on Euronext Paris With the significant equity drop that started earlier this year, many stocks are now close to zero. In Euronext Paris, the number of listed companies with stock value below 0.01 euro has jumped in recent months. For instance: Pharnext (biopharmaceutical company), NFTY (NFT and blockchain marketing services), Safe (specialized in the design and manufacture of medical devices) etc. Retail investors need to be very careful regarding small caps investment (especially when the valuation of the company is below 100 million euros). There are a lot of stocks that are not liquid enough and can represent a high risk of losses. What are we watching next? US inflation to test the 8% level, watch core and stickier components Bloomberg consensus expects US October CPI to drop below the 8% mark and come in at 7.9% YoY from 8.2% previously, but still higher at 0.6% MoM from 0.4% in September. The core measure is also expected to ease slightly to 6.5% YoY, 0.5% MoM (prev. 6.6% YoY, 0.6% MoM) but still remain elevated compared to historical levels. Key to watch also will be the drivers of inflation, particularly the stickier shelter and services costs, which if stuck higher could move the December Fed funds future pricing more towards another 75bps rate hike, resulting in another round of selloff in equities and dollar gains. However, with another CPI report due before the next Fed meeting in December, market impact of this week’s report will likely remain restrained unless a major deviation from expectations is seen. For this week’s CPI data, we will be watching the USD, and bond yields, which may be expected to rally up if the data is hotter than expected. US mid-term elections tomorrow Pundits suggest that the Republicans have very strong odds of flipping the House of Representatives in their favour, while the odds look finely balanced for whether the Senate ends retaining the slim Democratic majorities. Republicans taking both houses has few immediate ramifications, as US President Biden has the presidential veto, but a stronger than expected Democratic showing that somehow sees them retaining the House and strengthening their Senate majority would be a game changer – opening for more policy dynamism (and inflation from fiscal stimulus) from the US over the next two years rather than the expected lame-duck presidency. Uncertainty is high as pollsters have had a hard time gathering accurate indications for the election results since Trump’s victory in 2016. Earnings to watch The Q3 earnings season is slowing down this week but there are still important earnings releases to watch in certain industries or equity themes. Today our earnings focus is Ryanair, Palantir, and SolarEdge. Palantir is part of the technology segment that has been hit hard on valuations and with revenue growth slowing down and a negative EBITDA in Q2 the pressure is on Palantir to deliver a credible path to profitability; analysts expect 21% y/y revenue growth. Solar panel growth is still high and SolarEdge is enjoying this tailwind with revenue expected to grow 57% y/y and EPS up 57% y/y to $1.46. Monday: Westpac Banking, Coloplast, Ryanair (see earnings review above), Activision Blizzard, BioNTech, Palantir Technologies, SolarEdge Technologies Tuesday: Bayer, Deutsche Post, KE Holdings, Nintendo, Walt Disney, Occidental Petroleum, Lucid Group, DuPont Wednesday: National Australia Bank, KBC Group, Genmab, Siemens Healthineers, E.ON, Adidas, Honda Motor, Coupang, Rivian Automotive, Roblox, DR Horton, Trade Desk Thursday: Brookfield Asset Management, Fortum, Engie, Credit Agricole, Allianz, Merck, Hapag-Lloyd, RWE, SMIC, Nexi, AstraZeneca, ArcelorMittal, Siemens Gamesa Renewable Energy, Becton Dickinson, NIO Friday: Richemont Economic calendar highlights for today (times GMT) 0700 – Germany September Industrial Production Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app:   Source: https://www.home.saxo/content/articles/macro/market-quick-take-nov-7-2022-07112022

CME Group’s flash data for crude oil futures markets noted open interest resumed the uptrend on Friday, this time rising by around 17.7K contracts. Volume followed suit and increased sharply by around 310.5K contracts, offsetting the previous drop. WTI stays focused on $93.62 Prices of the WTI rose markedly at the end of last week on the back of rising open interest and volume, leaving the door open to the continuation of the rebound in the very near term. On the upside, the next hurdle remains at the October top at $93.62 per barrel (October 10).  

Summary:  Today we step back and look at last week's price action and especially after the FOMC rate decision. China is in focus over supposedly easing its Covid restrictions lifting copper and other industrial metals including emerging market equities. The USD also seems to be rolling over in the short-term easing financial conditions a bit and lifting risk sentiment. On the macro side, we discuss US consumer credit growth and what it means for the cycle and we highlighting the plunge in European economic activity over the past three months. On equities, we discuss rumoured Meta layoffs and Apple cutting its iPhone production target. Today's podcast features Peter Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting an on FX. Listen to today’s podcast - slides are available via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: https://www.home.saxo/content/articles/podcast/podcast-nov-7-2022-07112022

Summary:  Our weekly Commitment of Traders update highlights future positions and changes made by hedge funds and other speculators across commodities and forex during the week to Tuesday, November 1, the day before Fed Chair Powell sent shivers across markets. Ahead of the meeting speculators cut bullish dollar bets to a 15-month low, in commodities buying was concentrated in crude oil, natural gas, copper and soybeans with gold, sugar and coffee seeing continued selling Saxo Bank publishes weekly Commitment of Traders reports (COT) covering leveraged fund positions in commodities, bonds and stock index futures. For IMM currency futures and the VIX, we use the broader measure called non-commercial. Link to latest report What is the Commitments of Traders report? The COT reports are issued by the U.S. Commodity Futures Trading Commission (CFTC) and the ICE Exchange Europe for Brent crude oil and gas oil. They are released every Friday after the U.S. close with data from the week ending the previous Tuesday. They break down the open interest in futures markets into different groups of users depending on the asset class. Commodities: Producer/Merchant/Processor/User, Swap dealers, Managed Money and otherFinancials: Dealer/Intermediary; Asset Manager/Institutional; Leveraged Funds and otherForex: A broad breakdown between commercial and non-commercial (speculators) The reasons why we focus primarily on the behavior of the highlighted groups are: They are likely to have tight stops and no underlying exposure that is being hedged This makes them most reactive to changes in fundamental or technical price developments It provides views about major trends but also helps to decipher when a reversal is looming   Financial Markets Daily Quick TakeSaxo Market Call Daily Podcast This summary highlights futures positions and changes made by hedge funds across commodities and forex during the week to Tuesday, November 1. The day before the FOMC delivered its fourth consecutive 75 basis rate hike in this cycle while pouring cold water on the markets hope for a slowdown after Fed Chair Powell said there is still some way to go and that incoming data means will help determine the “ultimate level” that the Fed funds reaches. In the reporting week prior to the meeting technology stocks had sold of on disappointing earnings while the dollar and US Treasury yields traded softer. The commodity sector was mixed with gains in industrial metals and grains being partly offset by softness elsewhere.  Commodities The Bloomberg Commodity traded higher on the week with a small 0.6% gain reflecting a mixed market where gains in industrial metals and especially the grains sector was being offset by losses in softs and livestock. The energy sector traded lower with losses in natural gas and gas oil disguising an otherwise strong week for crude oil.Speculators where net buyers of commodities with length being added to 13 out of the 24 commodity futures tracked in this, led by and concentrated in crude oil, natural gas , copper and soybeans. Selling was concentrated across the softs sector where all four contracts continued to be sold. Energy Speculators raised bullish crude oil bets by a combined 38k lots to 426k lots, an 18 week high. In the week both WTI and Brent rallied by more than 3% in response to OPEC+ production cuts and renewed optimism about demand in China, developments that helped attract fresh longs, primarily into Brent. Small profit taking reduced the net length in gas oil and gasoline. In natural gas a 7% price drop triggered profit taking among short sellers resulting in the net short falling by 21% to -68k lots.    Metals Money managers were net sellers of gold for a third week ahead of last week's FOMC meeting. The 17% increase to -39k lots took the net short back to near a four-year high, just ahead of a volatile few trading days where anotherr downside rejection at $1615 support helped trigger a strong short covering rally ahead of the weekend. Short covering reduced the silver net short by 43% to 3.4k lots, platinum length was added for a fifth week taking the net long to 13.3k lots and highest since March. Copper buyers sensing support from developments in China helped flip the net back to a long position of 5.3k lots and highest since June.  Agriculture  The grains sector saw net buying for a second week lifting the combined long across six grains and soy contracts to a 19-week high at 553k lots. The bulk of the buying was led by the soybeans, soy meal and oil contracts with corn seeing a small increase in the net long. The 8% jump in wheat on Ukraine export worries did not alter the overall bearish view held by funds. Selling into strength they lifted the net short in Chicago wheat to -37k lots, the biggest short bet since the depth of the pandemic panic in June 2020. The four major softs commodities continued to see heavy net selling, this week being led by 48% reduction in the sugar long to 44k lots. The cocoa net short extended to -43.7k lots and not far from a five-year high, a development that increasingly could trigger a sharp rebound should the technical and/or fundamental outlook turn more friendly. Weeks of coffee selling continued resulting in the net flipping back to a net short of -10.4k lots for the first time in 25 months. A similar situation in cotton where nine weeks of continued selling has taken the net close to neutral at just 5.4k lots.    Forex In forex, flows turned decisively against the dollar, a day before Fed Chair Powell delivered his hawkish comments which only managed to trigger some temporary dollar strength. Before this reporting week, the Greenback had increasingly been losing steam against several of the nine IMM forex futures tracked in this report. The bulk of the net dollar selling had up until recently been mostly against the euro which since late August has seen €19 billion of net buying, reversing the net position from a 48k lots short to a 106k long. This past week buying accelerated with the net long jumping 41% to a 17 month high. Combined with an aggressive 24% reduction in the JPY net short and a 250% jump in the MXN net long, the combined dollar long ended up being reduced by 59% to just $5 billion, the weakest belief in a stronger dollar since August last year.     Source: https://www.home.saxo/content/articles/commodities/cot-crude-oil-and-copper-bought-gold-sold-ahead-of-fomc-07112022

Natural gas prices came under significant pressure in October due to milder weather and growing European storage. Oil prices have been relatively stable following the recently announced OPEC+ supply cuts. Despite the recent weakness, the 2023 outlook remains bullish In this article European natural gas prices collapse 2023 will be tight for European gas OPEC+ cuts change 2023 oil outlook European natural gas prices collapse The scale and pace of the collapse in European natural gas prices have been extraordinary; day-ahead TTF prices fell by 79% over October, trading to their lowest levels since June 2021. Meanwhile, TTF next-hour prices briefly traded in negative territory towards the end of the month. This may be an odd move during an ongoing energy crisis, which is being felt most acutely in Europe. However, milder-than-usual weather across large parts of Europe has meant that heating demand has been lower than usual while EU gas storage continues to grow. The latest numbers from Gas Infrastructure Europe show that European inventories are almost 95% full right now, well above the European Commission’s initial target of having storage 80% full by 1 November. It's also above the 5-year average of around 89%.  Essentially, EU storage is full Clearly, through much of 2022 strong LNG shipments and demand destruction helped the European Union build inventories at a good pace despite the significant fall in Russian pipeline gas flows - YTD Russian flows to the EU have fallen by around 50% Year-on-Year. While weakness in prices provides some relief to consumers, the concern is whether those lower prices will stimulate demand once again. European fertiliser producers have already started to bring back curtailed capacity following the recent weakness in prices. If we see this happening on a larger scale, Europe’s efforts to refill storage next year will be more difficult. There are still concerns for Europe over the longer term, particularly through 2023 and into 2024. The front end of the TTF forward curve is in significant contango with Feb-23 TTF futures trading in excess of EUR130/MWh (vs. day-ahead at around EUR34/MWh). The forward curve through 2023 until early 2024 remains fairly flat at these elevated levels. EU gas storage Chart shows total capacity as a percentage    Source: GIE, ING Research Europe's temperature anomaly The darker red colours show the higher-than-normal temperatures in the week beginning 23 October Source: NOAA 2023 will be tight for European gas The pace of inventory builds during the 2023 injection season will be much more modest compared to what we have seen this year, given the reductions in Russian supply. If Russian gas flows remain as they are currently, annual flows next year will still be down 60% YoY. And clearly, there is the risk that these remaining flows still come to a complete stop. The ability of the EU to completely turn to other sources is just not possible. There are constraints to how much more LNG Europe can import. There are reports that LNG carriers are queuing for spots at regasification units. This highlights the lack of regas capacity in Europe at the moment. It could also be partly due to market players wanting to take advantage of the significant contango in the front end of the TTF curve. The EU is seeing the start of a fair amount of regasification capacity in the form of Floating Storage Regasification Units (FSRUs) over the second half of this year and into early 2023. This will help with some of the infrastructure constraints Europe is facing, but the issue is also around global LNG supply and the limited capacity which is expected to start next year. Also, a key upside risk for Europe is if we see a recovery in Chinese LNG imports next year. The world’s largest importer has seen weaker demand so far this year due to the impact of Covid-related lockdowns and higher prices. Chinese LNG imports over the first nine months of 2022 were down 21% YoY. Tight storage capacity will leave Europe vulnerable this time next year  As a result, Europe is likely to go into the winter with tight storage which will leave the region vulnerable this time next year.  In order to get through this winter comfortably, we will have to see continued demand destruction. This will have to be either a result of market forces (prices needing to trade higher to reduce demand) or EU-mandated demand cuts. While Europe should be able to scrape through this winter if current Russian gas flows continue, it is much more challenging if the remaining Russian gas flows come to a full stop. Therefore, we believe there to be upside to current 2023 forward values, particularly those towards the end of the year. Although much will depend on how much storage the EU drawdowns this winter, which obviously will depend on heating demand through the peak of winter. OPEC+ cuts change 2023 oil outlook The outlook for the oil market has changed significantly since last month and this is a result of the OPEC+ supply cuts announced in early October. OPEC+ agreed to reduce their output targets by 2MMbbls/d from August production levels. These cuts will start in November and run through until the end of 2023. However, given that the bulk of OPEC+ members are producing well below their target levels, the actual cuts we see from the group will be much smaller. We estimate that output will fall by around 1.1MMbbls/d. These OPEC+ cuts come at a time of plenty of uncertainty around Russian supply. The EU ban on Russian seaborne crude oil comes into effect on 5 December, followed by the ban on Russian refined products on 5 February. Up to now, Russian supply has held up well thanks largely to India, China and a handful of small buyers increasing their share of Russian oil purchases, but it is difficult to see them having room to increase these purchases significantly. Therefore, when these bans come into force, we would expect to see more significant declines in Russian supply. For now, we are assuming Russian supply to fall by a little more than 2MMbbls/d in the first quarter of next year.  Prior to the latest OPEC+ supply cut announcement; we were forecasting that the oil market would be in surplus through to mid-2023. However, with the market set to lose in the region of 1.1MMbbls/d of supply, it's now expected to be in deficit throughout the whole year. This is even after considering slower demand growth next year, given the macro headwinds (the IEA estimates demand growth of 1.7MMbbls/d for 2023 vs. a previous forecast of 2.1MMbbls/d). As a result, we see oil prices trading higher over 2023. We currently forecast ICE Brent to average US$104/bbl next year. There are several risks to this view. These include a worse-than-expected macro environment, OPEC+ ending supply cuts early or members not adhering to their cuts, and obviously a de-escalation in the Russia-Ukraine war. For now, we believe it is unlikely that US sanctions against Iran will be lifted, so we see no change in Iranian supply through 2023. Global quarterly oil balance (MMbbls/d)   Source: IEA, EIA, OPEC, ING Research TagsRussia-Ukraine OPEC+ Oil Natural gas Energy crisis   Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

Continuing to creep higher Oil prices are continuing to creep closer to $100 amid ongoing speculation over China’s Covid-zero commitment and a little more positive sentiment in broader markets. Brent and WTI are treading water but it’s been choppy at times, with the former coming within a dollar of triple figures. That won’t make good headlines at a time when the Democrats in the US need all the good headlines they can get as people head to the polls. But with OPEC+ cutting output aggressively in anticipation of a demand shock, there’s little they can do. As we’ve seen following President Biden’s wasted trip to Saudi Arabia months ago. Gold choppy after jobs report Gold is choppy at the start of the week but largely holding onto Friday’s gains. I struggle to see how the jobs report was good for gold – especially to the tune of 3% – but that is the markets right now and perhaps there was some delay from what was an overreaction to the Fed a couple of days earlier. Still, the yellow metal is trading around $1,680 where it has now stalled. This has been a notable area of support and resistance in recent months and so it is proving again. If it can overcome this, $1,700 will be the next test, followed by $1,720 above that. For a look at all of today’s economic events, check out our economic calendar: www.marketpulse.com/economic-events/ 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. Oil ticks higher, gold choppy - MarketPulseMarketPulse

Summary:  Equities extended their rebound from post-Powell lows on Monday with China reopening reports not taking any clear direction. US treasury yields jumped higher, but more so on a heavy corporate calendar rather than macro-driven, and dollar continued to slip for a second consecutive day. Asian economic data sending some warnings signs with China export/import growth turning red and Australian confidence dropping to fresh lows. US midterms ahead, and a clean Republican sweep can be further dollar negative. Earnings focus on Walt Disney in the day ahead. What’s happening in markets? The Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) rose with tech and energy leading gains Ahead of the U.S. midterm election, equity market sentiments maintained a risk-on tone. Both S&P 500 and NASDAQ rose about 1%.  Community services, energy, and information technology led gains while utilities were the largest loser in S&P 500. On corporate news, Meta (META:xnas) gained 6.5% after the company announced plans to cut staff. Viatris (VTRS:xnas) surged 13% after the pharma company agreed to acquire Oyster Point (OYST:xnas). Lyft (LYFT:xnas) plunged 15% in extended-hour trading after reporting weaker-than expected ridership growth. Tesla (TSLA:xnas), losing 5%, dragged the benchmarks indices most. US  treasury (TLT:xnas, IEF:xnas, SHY:xnas) edged higher on incoming supply Yields across the treasury curve rose around 6bps ahead of refunding auctions of the 3-year notes, 10-year notes, and 30-year bonds for a total of USD96 billion from Tuesday to Thursday. A rise of 16bps across the pond in the 2-year UK Gilt yield also added to the pressure on treasuries. Investors will be watching closely the U.S. mid-term election on Tuesday and CPI on Wednesday. Hong Kong’s Hang Seng (HSIX2) China’s CSI300 (03188:xhkg) continued to rally on China reopening hopes Stocks in Hong Kong shrugged off the headlines about China’s National Administration of Disease Control and Prevention reiterating adherence to the dynamic zero-Covid policy over the weekend. Investors took note that the health officials added that local governments should not unreasonably double down on the implementation and must ensure people’s livelihood and economic activities remain normal.  In addition, the resumption of large-scale sports events, relaxation of PCR test requirements, increases in international flights, cancellation of circuit breaker for international flights, and approval of BioNTech vaccine for foreigners living in mainland China were among the factors cited by street analysts in their reports anticipating gradual reopening in the coming months. The Hang Seng Index rose for the second day in a row, finishing 2.7% higher. Financials outperformed, with HKEX (00388:xhkg) up 5.4%, HSBC (00005:xhkg) up 3.7%, and AIA (01299:xhkg) up 3.3%,  China property names surged on better-than-expected home sales data from some tier-1 cities. Country Garden (02007:xhkg), up 11%, was the top gainer in the Hang Seng Index. Despite Apple (AAPL:xnas) cutting iPhone production, Sunny Optical (02382:xhkg) jumped 11%. MMG (01208:xhkg) surged 16%, following the removal of blockage by locals to the company’s copper mine in Peru. Zinjin Mining (02899:xhkg), up 10.3%, announced to buy a 20% stake in Zhaojin Mining (01818:xhkg), up 9.7%.  China’s October trade data came in weaker than expected but it did not have much impact on the market on Monday. FX: Dollar’s decline extends despite rise in 10-year yields The US 10-year yields rose to last week’s post-Powell highs at 4.20%+, but the dollar tumbled for a second day in a row to drop to over one-week lows. Dollar decline was broad-based, against all G10 currencies barring the loonie. Gains were led by sterling, with GBPUSD above 1.1500 and EURGBP also sliding lower to 0.8700. EUR benefitted from the weaker dollar which helped EURUSD rise above parity from lows of 0.9900 even as President Lagarde reiterated her usual tone noting inflation must be brought back down to 2%. Midterms bring further volatility risks to FX, with a clean Republican sweep likely being dollar negative as yields will likely plunge amid speculation of a hamstrung administration limiting scope for fiscal support.    Crude oil (CLX2 & LCOZ2) lower despite dollar weakness Oil prices ended lower as hopes of China easing its zero covid policy faded, even as near-term supply constraints continued to limit the slide. OPEC has begun reducing output in line with the agreement to reduce quotas by 2mb/d at its last meeting. The market is also facing the deadline for European imports of Russian oil before sanctions kick in on 5 December. This has left fuel inventories tight, with Brent crude oil futures still below $100 per barrel and WTI futures staying above $91. Meanwhile, US natural gas futures soared on cold weather fears in the West and the Northeast. December natural gas futures contracts climbed as much as 12.8% to $7.22 per MMBtu before trimming the advance later. Copper (HGZ2) trimmed last week’s gains Copper reversed back to $3.60 after racing to $3.70+ levels on Friday on China reopening optimism. However, reports that China would stick with its adherence to strict virus controls, made the metal reverse some gains. Weak economic data also weighed on sentiment with China’s imports of Copper ore down and overall imports also unexpectedly falling for the first time in more than two years. Gold (XAUUSD) held steady despite the lower USD, and it may still be quite early to call a reversal in the short-term downtrend.   What to consider US mid-term elections to spook market volatility Pundits suggest that the Republicans have very strong odds of flipping the House of Representatives in their favour, while the odds look finely balanced for whether the Senate ends retaining the slimmest of Democratic majorities. Republicans taking both houses has few immediate ramifications, as US President Biden has the presidential veto, but a stronger than expected Democratic showing that somehow sees them retaining the House and strengthening their Senate majority would be a game changer – opening for more policy dynamism from the US over the next two years rather than the expected lame-duck presidency. Uncertainty is high as pollsters have had a hard time gathering accurate indications for the election results since Trump’s victory in 2016. China’s October trade data disappointed China’s exports in USD terms declined 0.3% Y/Y in October, much worse than the growth of 4.5% expected in the Bloomberg survey and the 5.7% in September. It was the first decline in export growth since May 2020 and might point to a turning point of deceleration in exports as the global economy slowed. If adjusting for inflation in export prices, the decline of China’s exports would be even larger in the real term. Imports in USD terms declined 0.7% Y/Y (vs consensus 0.0%, Sept: +0.3%). Bank of Japan affirms easy policy, but not without some mention of a future exit The Bank of Japan released summary of opinions of the October policy meeting today, broadly reaffirming the easy monetary policy stance. Still some members stuck a slightly different tone, noting that Japan's inflation likely to remain fairly high as there are signs service prices starting to rise, and “cannot rule out chance prices will sharply overshoot forecasts.” Still, sustained wage gains remained the base case for Japan to achieve its price target and members agreed that there was no immediate need to tweak monetary policy. Importantly, one member noted that the Bank of Japan must continue examining how a future exit from ultra-low interest rates could affect financial markets, in a rare mention of an exit. Big slump in Australian business and consumer confidence Australia’s consumer sentiment tumbled to its lowest level in 2.5 years and business confidence also weakened as higher interest rates and surging inflation stoke caution over the economic outlook. NAB business confidence plunged to 0 from 5 in September, while the Westpac consumer confidence index was down to 78 for November from 83.7 previously. This bodes ill for spending ahead, suggesting RBA’s caution on rate hikes may continue to prevail despite the continued hot CPI reports. Walt Disney earnings ahead Walt Disney is scheduled to report on Tuesday with analysts expecting Q4 (ending 30 September) revenue growth of 15% y/y but EBITDA at $3bn down from $3.86bn in Q3 highlighting the ongoing margin pressure. Layoffs are coming to Meta and Apple cuts iPhone production The demand for iPhones is coming down and Apple is now announcing a cut of 3mn units as consumers are under pressure from inflation and might be extending the life of their old phones. Apple has recently hiked prices on some of its services aiming to offset the weakness in its hardware business. Meanwhile, investors have been frustrated with Meta following the Q3 earnings release as Mark Zuckerberg has reinforced the image that he does not listen to the concerns of investors that Meta is spending too much capital on its metaverse bets. According to Wall Street Journal, Meta might have listened after all as the technology company is expected to begin laying off thousands of employees. Read our equity strategist Peter Garnry’s note here.   For our look ahead at markets this week - Listen/watch our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: https://www.home.saxo/content/articles/equities/market-insights-today-8-nov-08112022

Open interest in crude oil futures markets shrank by around 12.4K contracts at the beginning of the week, reversing the previous daily build, according to preliminary readings from CME Group. In the same line, volume remained choppy and dropped markedly by around 105.7K contracts. WTI: Next on the upside comes the 200-day SMA Prices of the barrel of the WTI started the week on the back foot amidst shrinking open interest and volume, which suggests the possibility that further decline is not favoured in the very near term. Further bullish attempts, in the meantime, are expected to target the 200-day SMA, today at $98.44 per barrel.  

The OPEC cartel's recent decision to cut oil production was met with a response from U.S. President Joe Biden, who called an emergency conference call on October 31 following the cartel's decision. To this, he announced significant steps to beat the price, describing the oil companies with the following words: "Their profits are a windfall of war – the windfall from the brutal conflict that’s ravaging Ukraine and hurting tens of millions of people around the globe" Situation in the US oil market Since President Biden's statement, the price of WTI crude oil (XTIUSD) on the markets has risen more than 16% to $92 per barrel. Recall, however, that the United States is currently the number one producer in the oil market. According to the latest data from the EIA (Energy Information Administration), production stands at 11.975 million barrels per day (11.9% of global output). These are levels from November 2019, when the price per barrel was in the neighbourhood of $55. Will Biden succeed in forcing companies to increase production? On Wednesday, we will learn the results of the change in oil inventories in the United States. Last week, they decreased by 3.115 million barrels (0.45 million barrels per day). If this trend continues, it  could  be assumed that the US government's actions have yielded the first results. However, the amount of inventories seems to be presented negatively. According to the EIA's data, they currently stand at 836.62 million barrels, down 29% from their July 2020 peak. If the current trend of inventory consumption continues, the stockpile would run out in 5 years; if it doubles, we could see shortages after just 2.5 years. Will OPEC lead to a global recession? According to data provided by OPEC, in Q3 2022 global supply was 100.63 million barrels per day, and the cartel itself, which consists of 13 countries mainly in the Middle East, amounted to 29.45 million barrels per day (28% of global output). Demand at the time was 99.33 million barrels per day. It is expected that demand may remain at a similar level. The cartel's announcement may indicate a desire to reduce production by more than 2 million barrels per day. This could create a shortage in the world market of about 2%, in which case it seems that we could expect price increases in this market. To cover the described shortfall, the Biden government would have to increase production by 16%, or increase supply to levels of about 14 million barrels per week. Both scenarios and their mixes may prove unlikely. Oil prices, and fuel prices at that, appear to have a significant impact on inflation. As a result, the U.S. presidential government may do all it can to limit the risk of further price increases. Information that could lead to a reduction in demand in the global market in recent days is a declaration by the Chinese government, which has reaffirmed its commitment to pursuing a zero-Covid policy. This could lead to a reduction in demand from one of the world's largest importers of the commodity. What does Wall Street think about the oil market? The EIA Institute gives a target price for 2023 in the vicinity of $95/bbl. However, a consensus of analysts reported by Trading Economics indicates a price of $108.71/bbl in 12 months. An additional perspective was indicated by UBS bank analyst Giovanni Staunovo on OPEC's production cuts: "The cut suggests that there is a desire to defend oil prices to stay above the level of $90 per barrel". Source: MT5, XTIUSD, Daily How to find CFDs on oil? At Conotoxia, you can choose from CFDs for commodities and precious metals. Wanting to find an XTIUSD CFD, for example, you just need to follow 4 simple steps: To access Trading Universe - a state-of-the-art center of financial, information, investment and social products and services with a single Smart account, register here. Click "Platforms" in the "Invest&Forex" section. Choose one of the accounts: demo or real. On the MT5 platform, search for the CFD of your choice and drag it to the chart window. Use the one-click trading option or open a new order with the right mouse button. Grzegorz Dróżdż, Junior Market Analyst of Conotoxia Ltd. (Conotoxia investment service) Read more reviews and open a demo account at invest.conotoxia.com Materials, analysis and opinions contained, referenced, or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75,21% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Summary:  Today we look at markets as we await US elections today and the US CPI data print on Thursday, all while everyone has very twitchy trading fingers on hopes that China is set to ease up on its Covid restrictions. We also discuss the simultaneous decline in bond market and equity market volatility and ask which asset class might be more attractive. Equity sentiment has improved sharply and is near six-month highs. In commodities, we zero in on nat-gas, gold, cocoa and coffee. Stocks to watch, including Tesla, upcoming earnings from Disney and more also on today's pod, which features Peter Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting an on FX. Listen to today’s podcast - slides are available via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.     Source: https://www.home.saxo/content/articles/podcast/podcast-nov-8-2022-08112022

Oil edges lower  Crude prices edged lower after as China continues to struggle with COVID. Bets that China will reopen soon are losing momentum as cases jumped in Guangzhou and other key Chinese cities. ​ Brent crude is still close to the $100 a barrel level for now and it seems short-term risks to supplies have traders looking for a bullish move higher. ​ Gold powers higher Gold had a great day as the dollar tumbled ahead of the midterm elections and a pivotal inflation report. ​ The weakness in the dollar was more of a short-covering move and potentially on hopes that later this week we will have confirmation that inflation is headed lower. ​ Gold looks like it could be breaking out now and it will just need the macro backdrop to support the move higher. ​ Gold’s rally above the $1700 was impressive as it comes before any exit polling data and well ahead of Thursday’s inflation report. ​ Gold should find major resistance ahead of the $1750 level and that might prove to be difficult to reach before this week’s CPI data. ​ 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. Oil lower on China concerns, gold pops - MarketPulseMarketPulse

Summary:  Risk sentiment remained upbeat despite the fallout in the crypto world as equities focused on the results of the midterm elections. Bitcoin made fresh YTD lows in the wake of Binance's acquisition of FTX. But US yields and the dollar tumbled, helping Gold and Silver to run higher breaking some key resistances. Another surge in China’s Covid cases still kept a check on gains in oil prices, and focus today will be on inflation data from China. Disney’s disappointing results further add to this quarter’s earnings misery, and Rivian and Roblox report today. What’s happening in markets? The Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) closed higher in a choppy session A political gridlock with a divided Congress after mid-term elections was historically positive for the equity market. S&P 500 gained nearly 1.4% and Nasdaq 100 rose as much as 2% at one point before paring all the gains and more in the early afternoon, dragged by a selloff in the crypto space. Stocks managed to bounce in the late afternoon and recover some of the early gains, with S&P 500 and Nasdaq 100 finishing a volatile session 0.6% and 0.8% higher respectively. Lyft (LYFT:xnas) tumbled 23% after weak rider growth was reported the day before. Walt Disney (DIS:xnys) plunged 6.4% in extended-hours trading on earnings miss which was dragged by weak streaming results. US  treasury (TLT:xnas, IEF:xnas, SHY:xnas) yields fell on hopes for political gridlock and strong demand in the 3-year auction US treasury yields fell 4bps to 9bps across the curve with the best performance in the 5-year to 10-year segment, with the 10-year yield down 9bps to to 4.12%. Anticipations of political gridlock in Washington that historically restrained fiscal policies saw buying in treasuries. Demand in the 3-year auction was solid with awarded yields stopped at more than 1bp richer from the time right before the auction. Hong Kong’s Hang Seng (HSIX2) China’s CSI300 (03188:xhkg) took a pause as Covid cases surged The China reopening trade took a pause in Hong Kong and the mainland bourses as domestically transmitted new cases in the mainland doubled to 7,455. Guangzhou, the capital city of the Southern Guangdong province reported 2,377 new cases and launched mandatory testing in 9 of the 11 districts of the city, and extended the lockdown of Haizhu district to Friday. Hang Sang Index fell 0.2% and CSI300 lost 0.7%. China’s passenger vehicle sales growth slowed in October to +7.3% Y/Y but new energy vehicles sales, rising 75% Y/Y, remained solid. However, EV stocks declined, with NIO (09866:xhkg) falling the most, down 9% following analysts cutting price targets on the stock. Among China internet names, Alibaba (09988:xhkg) underperformed, losing 3.7%. Macau casino stocks were the top performers, rising 2% to 4%, following Macau’s decision to relax entrance rules for some visa holders starting Sunday. FX: Weaker dollar and lower yields amid an expected Republican sweep Expectations of a split Congress saw lower US yields and further USD selling on Tuesday, and eyes are now on US CPI due later this week. Meanwhile, the crypto fallout in the wake of FTX being acquired by Binance sparked a wave of volatility. Yen gained with USDJPY falling below 146. EUR gained a firmer footing above parity amid the latest ECB rhetoric including from de Guindos who noted they will continue raising rates to levels that ensure price stability, while ECB's Nagel said he will do his utmost to make sure the ECB does not let up in the inflation fight and said that large rate hikes are necessary. GBPUSD also reclaimed 1.15 handle. Crude oil (CLZ2 & LCOF3) slid with API inventory build WTI futures slid below the key $90 mark on Tuesday and Brent slid to $95 despite a weaker dollar as a fresh surge in China’s Covid cases further sparked concerns on whether China will part ways with its Zero Covid policy. Xinjian reported its fourth highest number of new cases nationally on Monday. Inner Mongolia, which was sealed off in early October, saw cases jump to almost 1800. New infections in the province of Henan almost doubled. Meanwhile, supply concerns eased with API inventory build coming in larger than expected with crude oil inventory up 5.6mm barrels last week and gasoline inventory also coming in higher. Still, US EIA also cut its 2023 oil production estimate to 12.31mm barrels/day, suggesting structural supply concerns are here to stay. Copper (HGZ2), Gold (XAUUSD) and Silver (XAGUSD) The weakness in the dollar drove metals higher. Copper led the base metals sector higher on dwindling inventories amid positive signs for demand, challenging the September high of $3.6925 once again, ahead of $3.78. Bold move higher in gold and silver as well last night with renewed USD weakness, with the most notable being gold up at one-month highs breaking through $1680/85. A break above $1735 would likely confirm a low in the market. Silver finding some technical resistance here at $21.50 but the break above $21.15 has opened up for a move to $22.25.   What to consider Republicans likely in a strong position in the US mid-term elections Looking at the latest odds on Predictit, the chance of Republicans taking the House is up to 95% from 90% earlier. The chance of them winning the Senate is up to 83% from 74% earlier. All the closest races have tilted towards the Republicans as well. It can take several days to confirm which party will prevail, especially in the Senate. More so if we go to recounts, where the votes cast in a close race are retabulated to verify the initial results. A split Congress, as we wrote yesterday, lowers the expectation of fiscal support measures thereby leading to investors expecting a sooner Fed pivot again. This can spark a further tactically rally in equities and will likely be USD negative. Risk of a contagion in the crypto market After a weeklong dispute between crypto exchanges Binance and FTX, the former is set to acquire FTX, stating a significant liquidity crunch for FTX. This may fuel further contagion throughout the crypto market, as not only FTX but also Alameda Research - the highly linked trading firm to FTX - may be insolvent. Our crypto analyst expects increased volatility in the next couple of days and weeks. Further, this may lead to contagion across the crypto market as experienced in May and June this year, so in our view, traders and investors in the crypto market should act cautiously in the foreseeable future. Likewise, Bitcoin's correlation with NASDAQ has been record-high throughout this year - and relatively high today. Please be aware that the development of crypto may impact particularly NASDAQ. Read more here. China’s PPI and CPI are expected to slow in October China’s PPI is expected to fall -1.5% Y/Y in October vs +0.9% Y/Y in September, due to the high base last year resulting from increases in material and energy prices. Unlike other major economies, CPI in China is expected to slow to +2.4% Y/Y in October from +2.8% in September. Walt Disney reported disappointing FYQ4 results Walt Disney reported FYQ4 revenue at USD20.2 billion, about USD1 billion below street consensus estimates. Adjusted EPS declined to 30 cents, missing substantially the Bloomberg consensus of 51 cents. Subscriptions rose to 164.2 million in FYQ4, up 12 million from 152 million in FYQ3, beating expectations. The operating loss in the direct-to-consumer segment, driven by the Disney+ streaming service, however, jumped to USD1.47 billion in FYQ4 from USD1.05 billion in FYQ3. The management told analysts that they expect the direct-to-consumer segment losses “to narrow going forward and that Disney+ will still achieve profitability in fiscal 2024, assuming [they] do not see a meaningful shift in the economic climate.” France’s housing market is cooling down The combination between high inflation across the board (CPI hovering close to 6% on a year-on-year basis), lower purchasing power and higher interest rates is pushing housing prices down in France. According to the real estate promoter Century21 (one of the leading player in this market), real estate prices went down under the threshold of 10.000 Є per square meter in Paris. The deceleration in prices is however limited so far. Contrary to Tel Aviv, Amsterdam and Hong Kong, the parisian housing market is not in a situation of a speculative bubble. Prices are overvalued however. Expect prices to go down a bit more due to a drop in solvent demand. But we won't see a large decrease in prices as it is currently happening in several major cities in the United States, for instance. The French housing market is more resilient for mostly two main reasons: fixed interest rates and a comparatively low household debt (it represents about 124% of net disposable household income versus a peak at 249% in Denmark). For our look ahead at markets this week - Listen/watch our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: https://www.home.saxo/content/articles/equities/market-insights-today-9-nov-09112022

Open interest in crude oil futures markets shrank for the second straight session on Tuesday, now by nearly 7K contracts according to preliminary readings from CME Group. On the other hand, volume remained choppy and went up by around 77.4K contracts. WTI: Upside remains capped by $93.00 and above Tuesday’s moderate downtick in prices of the WTI was amidst declining open interest, which removes strength from a potential deeper decline. Against that, there are chances of a rebound in the very near term and with the immediate up barrier at recent peaks past the $93.00 mark per barrel.  

Summary:  Market sentiment improved further yesterday before dipping slightly overnight, as China Covid cases are on the rise, pushing back against hopes for a lifting of Covid restrictions. In the US mid-term elections, Democrats are slightly outperforming expectations, possibly set to retain control of the Senate even if Republicans look likely set to take narrow control of the House of Representatives.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) US equities exhausted themselves yesterday pulling back from intraday highs to close around the 3,835 level. Sentiment has weakened overnight amid the ongoing impact from the US midterm elections, bad Disney and the fallout from the implosion of FTX in the crypto industry with S&P 500 futures trading down to the 3,829 level. Tesla shares continued lower yesterday, and Elon Musk announced overnight in a filing that he had sold 19.5mn shares in Tesla, and the negative momentum could broaden as many retail investors have sizeable exposure to the stock. The next big event for the US equity market is tomorrow’s October inflation figures which are expected to show core inflation is easing a bit. Hong Kong’s Hang Seng (HSIX2) and China’s CSI300 (03188:xhkg) The China reopening continued to fade as new Covid cases surged further to 8,176 yesterday. Hang Seng Index retreated 1.6% and CSI 300 slid 0.8%. China’s PPI declined 1.3% Y/Y in October due to falls in energy and materials prices and weaknesses in metal processing. CPI inflation was also weaker than expected and fell to +2.1% in October from 2.8% in September on weak consumer demand and property prices. Share prices of Chinese developers however surged, following the Chinese authorities pledged to provide credit support, including credit insurance and bond buying, to private enterprise developers. FX: USD remains on back foot after testing important support. Thursday CPI key focus The US dollar fell sharply yesterday, with EURUSD testing the pivot high of 1.0094 before pulling back slightly into this morning and USDJPY had a look toward the pivotal 145.00 level without breaking through. Elsewhere, AUDUSD tested above the 0.6522 pivot late yesterday before pulling back again, likely on concerns that rising China Covid cases are frustrating hopes that a shift away from lockdowns will provide a further boost to the commodity market. Lower US treasury yields yesterday helped drive the US dollar lower and are a key focus over the Thursday October US CPI release, as CPI releases have sparked considerable volatility in recent months. Crude oil (CLZ2 & LCOF3) slid on API inventory build and China’s Covid Challenges WTI futures trade back below $90 and Brent near $95 after a fresh surge in China’s Covid cases sparked concerns over whether China will part ways with its Zero Covid policy. Also weighing on prices was the API reporting a 5.6m build in crude and 2.6m build in gasoline stocks. On the supply the EIA made another downgrade to its forecast for US 2023 production, down 0.7m b/d since March to 12.3m b/d driven by labor shortages, high equipment costs, supply-chain constraints and not least commitment to profits over production. Precious and industrial metals pause following another upside push After pausing on Monday, gold, silver and copper all resumed their upside push yesterday with the moves being triggered by renewed dollar weakness and softer bond yields ahead of tomorrow’s US October CPI release. A selloff in cryptocurrencies potentially helped get the ball rolling, especially gold which found fresh momentum buying on the break above $1680/85 area. Technical resistance levels in silver at $21.50 and copper at $3.69 together with the EURUSD hitting resistance at the pivot high of 1.0094 paused the rally. Gold, up 83 dollars in three sessions, will be watching $1735 closely as a break above could be signalling an end to the month-long correction. Crypto market getting nervous After a weeklong dispute between crypto exchanges Binance and FTX, a letter of intent was signed yesterday for Binance to acquire FTX, stating a significant liquidity crunch for FTX. The announcement was initially a brief relief for the crypto market, but it was followed by a steep crypto sell-off, likely dragging major equity indices such as S&P 500 down as well. Nervousness is spreading throughout the crypto markets in fear of further contagion as we saw earlier this year, and a higher degree of volatility should be expected in the crypto markets. Read more here. US treasuries (TLT, IEF) US Treasury yields fell yesterday all along the curve ahead of the macro data point of the week – tomorrow's US October CPI release. Focus on the 3.90% yield on the 10-year treasury yield to the downside and 4.3% area cycle high to the upside in the wake of that release. What is going on? Disney sees margin compression in Q4 Disney+ delivered Q4 subscribers of 164.2mn vs est. 162.5mn but EPS came in at $0.30 vs est. $0.51 as energy costs and wage pressures are pressuring the operating margin. Disney+ is still on track to be profitable in the FY24 (two years from now). Disney’s Q4 revenue was $20.2bn vs est. $21.3bn. Shares were 7% lower in extended trading. Tesla shares fall another 5% and Elon Musk sells $4bn of shares The rumours about the big losses at Twitter and that Elon Musk would be forced to fund its operations were true as he filed overnight that he had sold $4bn of Tesla shares pushing the price down by another 2% in extended trading. Negative momentum could easily extend here with Tesla shares sitting a crucial support area back from March and June 2021. US Mid-term elections avoid the “red wave” of Republican gains, although Dems likely to lose House The final results are too early to call, but the Democrats may possibly retain control of the US Senate, with one race in Georgia possibly requiring a run-off as was the case in the 2020 election before any final outcome is known. Final tallies are not available for the House of Representative results, but the lean in the results makes it likely that the Republicans will take control of the House by a fairly comfortable margin (NYT estimates 225-210 this morning). Democrats losing the House means that the last two years of the Biden presidency will be “lame-duck”, with no real ability to shape new policy. At the same time, given the situation coming into this election, with soaring inflation and poor popularity for the sitting president, the Republican performance looks quite weak. As well, if the Democrats do retain control of the Senate, Republican-driven legislation will be unlikely to reach Biden’s desk, meaning he won’t have to formally veto their bills. France’s housing market is cooling down The combination between high inflation across the board (CPI hovering close to 6 % on a year-on-year basis), lower purchasing power and higher interest rates is pushing housing prices down in France. According to the real estate promoter Century21 (one of the leading players in this market), real estate prices went down under the threshold of 10.000 Є per square meter in Paris. The deceleration in prices is, however, limited so far. Contrary to Tel Aviv, Amsterdam and Hong Kong, the Parisian housing market is not in a situation of a speculative bubble. Prices are overvalued, however. Expect prices to go down a bit more due to a drop in solvent demand. But we won't see a large decrease in prices as it is currently happening in several major cities in the United States, for instance. The French housing market is more resilient for mostly two main reasons: fixed interest rates and a comparatively low household debt (it represents about 124 % of net disposable household income versus a peak at 249 % in Denmark). What are we watching next? US October CPI release tomorrow is macro event of the week Many recent US CPI releases have sparked considerable market volatility, not least the September release last month which strongly surprised by showing core inflation reaching a new cycle high of 6.6% year-on-year. Tomorrow’s October CPI release, ex Fresh Food and Energy is expected to come in at +0.5% month-on-month and +6.5% year-on-year, with the headline expected at +0.6%/7.9%, which would be the first sub-8.0% year-on-year print since February. Earnings to watch Today’s US earnings focus Rivian Automotive and DR Horton. The electric vehicle industry is in high growth phase and Rivian is also expected to report revenue of $561mn up from $1mn a year ago as the company ramps up production of its delivery vans. DR Horton is expected to deliver FY22 Q4 (ending 30 September) revenue growth up 25% as the tailwind from the backlog is still feeding through, but revenue growth y/y is expected to collapse to –6% y/y in the current quarter so the outlook is the key watch in this earnings release. Wednesday: National Australia Bank, KBC Group, Genmab, Siemens Healthineers, E.ON, Adidas, Honda Motor, Coupang, Rivian Automotive, Roblox, DR Horton, Trade Desk Thursday: Brookfield Asset Management, Fortum, Engie, Credit Agricole, Allianz, Merck, Hapag-Lloyd, RWE, SMIC, Nexi, AstraZeneca, ArcelorMittal, Siemens Gamesa Renewable Energy, Becton Dickinson, NIO Friday: Richemont Economic calendar highlights for today (times GMT) 0800 – Hungary October CPI 0800 – US Fed’s Williams (Voter) to speak 0905 – Australia RBA’s Bullock to speak Poland Announces Interest Rate 1200 – Mexico Oct. CPI 1300 – UK Bank of England’s Haskel to speak 1530 – EIA's Weekly Crude and Fuel Stock Report 1630 – UK Bank of England’s Cunliffe to speak 1700 – World Agriculture Supply and Demand Estimates (WASDE) 0001 – UK Oct. RICS House Price Balance 0100 – US Fed’s Kashkari (Voter 2023) to speak Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher Source: https://www.home.saxo/content/articles/macro/market-quick-take-nov-9-2022-09112022

Oil eases amid a surge in inventories Oil prices are a little lower again on Wednesday after falling around 3% a day earlier. This came following a strong move in recent weeks in which crude prices rallied around 20% on the back of the OPEC+ output cut and the prospect of less restrictive Covid measures in China, which have not been confirmed. The API inventory data came late in the day on Tuesday after the bulk of the losses had already occurred. If the large inventory build is confirmed by EIA today, it will be interesting to see if it generates a bigger reaction in the markets, with Brent now trading back in the middle of the $90-100 range. Gold surges ahead of CPI A surge in gold on Tuesday saw the yellow metal smash through $1,680 and then $1,700 resistance and settle above here, as risk appetite improved and the dollar retreated. While it’s hard to attribute the rally to any particular event, the technical loss of both of those resistance levels won’t have done it any harm. The question now is whether it can hold onto those gains once the latest inflation report drops. It may well be that gold’s revival, and the dollar’s retreat, are driven by an expectation that the CPI data will be favourable but we’ve seen what the dangers of that are before. Especially when it comes to inflation data. The next test to the upside for gold falls around $1,730, while prior resistance of $1,700 and $1,680 could now become support. For a look at all of today’s economic events, check out our economic calendar: www.marketpulse.com/economic-events/ 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.

Summary:  Today we look at the US mid-term election results, where the House looks set to flip Republican and the Senate may go down to a December 6th run-off in Georgia (as in 2020 and providing fodder for election denier conspiracy theories, etc...) but either way cementing the lame duck second half of Biden's presidency. Elsewhere, we look at the massive gold rally yesterday, in part on huge liquidity pressures in the crypto space that have prices tumbling there. Also, Tesla, Disney, stocks to watch, the USD on edge ahead of critical CPI release tomorrow and more on today's pod, which features Peter Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting an on FX. Listen to today’s podcast - slides are available via the link. Follow Saxo Market Call on your favorite podcast app:           If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.     Source: https://www.home.saxo/content/articles/podcast/podcast-nov-9-2022-09112022

Demand concerns have weighed on oil prices so far this week. The medium to long term outlook for the market is still constructive, with expectations of a tighter balance. Latest US oil supply estimates for next year only reinforce the view of a tighter oil market in 2023 Source: Shutterstock Energy - lower US oil supply growth Oil prices came under further pressure yesterday, with ICE Brent settling  more than 2.6% lower as Covid cases in China rise, while the government recently made it clear that it will stick to its zero-Covid policy. Meanwhile, API numbers released overnight show that US crude oil inventories increased by 5.61MMbbls over the last week, whilst gasoline stocks grew by 2.55MMbbls. Distillate inventories fell by 1.77MMbbls, which will do little to help ease concerns over supply tightness in middle distillates as we head into the heating season. In the short term, sentiment remains negative as a result of the demand outlook. However, the supply picture for 2023 is looking increasingly tighter. The EIA yesterday released its latest Short Term Energy Outlook, in which further cuts were made to US supply growth expectations for next year. The EIA now forecasts that US crude oil output will grow by 490Mbbls/d YoY to 12.31MMbbls/d in 2023. While this is slightly lower than last month’s numbers, output forecasts have been consistently lowered through the year. If we go back to March, the EIA was expecting that 2023 output would grow by close to 1MMbbls/d to around 13MMbbls/d. The US industry appears focused on capital discipline rather than pumping as much as they can. Not helping matters is that oil producers have reported labour and equipment shortages, along with rising costs. Lower than expected supply growth from the US leaves the market more vulnerable over 2023. In addition to ongoing OPEC+ supply cuts, Russian oil supply should fall as the EU ban on Russian crude and refined products comes into effect. Lower US supply growth gives us even more confidence in our view that Brent will average US$110/bbl in 4Q23.   Metals – Codelco proposes price hike for Chinese copper buyers for 2023 Codelco, the world’s biggest copper miner, has proposed a premium of $140/t for 2023 supplies to at least two Chinese customers, a 33.3% increase from this year, and its highest since 2008, according to a report from Reuters. The premium, paid on top of LME copper prices for physical delivery of copper cathodes into China is a widely watched industry benchmark. The move continues a trend of higher premiums - last month Codelco and Aurubis increased 2023 refined copper premiums for European buyers on the back of expectations of firm copper demand and low inventories. Meanwhile, China’s copper cathode production rose 14.2% YoY, according to data from SMM, although fell 0.9% MoM to 901kt in October amid power cuts, Covid-related restrictions and tight supply for blister copper and copper scrap. Cumulative copper output increased 2.8% YoY to 8.51mt over the first ten months of the year. Chinese refined zinc production rose 3% YoY and 2% MoM to 514mt in October. Cumulative output still fell 2.5% YoY to 4.93mt in the first ten months of the year. Agriculture – France revises corn output lower The Agriculture Ministry of France revised lower its estimate for domestic corn output from a previous forecast of 11.4mt  to 11mt following drought conditions. French corn output is now expected to come in 29% lower than last year and 21% below the 5-year average. The latest data from Ukraine’s Agriculture Ministry shows that winter grain plantings are now 90% complete with 4.3m hectares planted. The bulk of this is winter wheat- 3.6m hectares, whilst 568k hectares and 79k hectares of barley and rye have been planted respectively. Weekly data from the European Commission shows that soft wheat shipments from the EU reached 12.5mt as of 6 November, up from 11.9mt for the same period last year. Meanwhile, given lower domestic output, EU corn imports stand at 10.2mt, compared to 4.64mt last year. Read this article on THINK TagsUS oil production Corn Copper China Covid Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

Oil is getting cheaper for the third consecutive session. The trigger is unexpected reports that the Chinese authorities have finally begun to discuss the issue of the country's exit from severe restrictions. This is big news, as the world's largest oil importer and consumer has signaled that restrictions on its territory will be eased and public life is likely to resume: people will start traveling and spending oil savings inside their country. The Cost Of Brent The cost of January futures for Brent on the London ICE Futures exchange by 12:49 London time fell in price by 1.54% and amounted to $93.86 per barrel. By 6:39 p.m. Brent had dropped to $92.95. The Price Of WTI The price of futures for WTI oil for December in electronic trading on the New York Mercantile Exchange was $87.52 per barrel during the daytime, falling by 1.53%. At 21:40, quotes fell to $86.17. China Situation All this time, China has been desperately fighting the constantly emerging new outbreaks of coronavirus, imposing too strict restrictions on its population, reducing both public and business activity. All this led to the fact that the flourishing and actively developing economy of the country suddenly began to slow down, and the population's need for petroleum products significantly decreased. And although recently the news background has been filled with hints about the lifting of restrictions in China, there have still been no concrete facts and actions on the part of the authorities on this matter. It is clear that softening the "zero tolerance for coronavirus" approach can accelerate economic growth in China and, accordingly, increase global demand for fuel, but the Beijing authorities are clearly in no hurry to make loud statements and change something drastically. In contrast, Chinese health officials said over the weekend that they would remain committed to strict restrictions for the time being. Crude Oil Market Situation All of this uncertainty has left oil markets on edge, especially as the number of new coronavirus infections has skyrocketed in Guangzhou and other Chinese cities, according to official figures. It is noted that the global manufacturing center is struggling with the worst outbreak in history. Another factor weighing on quotes is the data from the American Petroleum Institute (API), which on Wednesday night told the world that the growth of US commercial stocks over the past week amounted to 5.6 million barrels. Official data showed that US commercial oil inventories rose by 3,925,000 barrels last week to 440.755 million barrels. Commodity stocks of gasoline decreased by 900,000 barrels (up to 205.733 million), stocks of distillates - by 521,000 barrels (up to 106.263 million). In the context of a surplus in oil supply on the market, despite all the efforts of OPEC +, all these factors play against the active growth in oil prices.   Relevance up to 19:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/326697

Summary:  Risk sentiment took a beating again as the midterms fever faded with a lack of a Republican wave, and focus shifted back to the crypto turmoil and continued surge in Covid cases in China. Tech layoffs also took another step up with Meta slashing 13% of its workforce. USD gained despite lower US yields as it is likely turning more risk-sensitive than yield-sensitive, but focus on US CPI will add to some caution ahead of the release. A hotter-than-expected core print will likely bring the focus back on Fed’s hawkishness. What’s happening in markets? The Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) dropped on crypto selloff, earnings disappointment, lower oil prices, and midterm elections S&P 500 plunged 2.1% and Nasdaq fell 2.4%. The sell0ff was board based with all 11 sectors of the S&P 500 in the red. The energy sector was the worst performer, falling 4.9% as crude oil prices down nearly 4% on rising US inventory levels. The collapse in crypto prices deepened, following Binance’s decision to walk away from its short-lived takeover bid for the ailing FTX. Robinhood Markets (HOOD:xnas) fell 13.8% as investors were concerned if FTX’s Sam Bankman-Fried might liquidate his 7.5% stake in Robinhood. Disney (DIS:xnys) plunged 13.2% on disappointing earnings. Meta Platforms (META:xnas) gained 5.2% after the company announced to layoff 13% of its employees to cut costs. US treasury (TLT:xnas, IEF:xnas, SHY:xnas) yields fell in a mixed session U.S. treasuries, in particular, the frontend of the curve were supported by selloff in equities and crypto, dovish comments from Fed Evans, and strong rallies in the European bond markets, seeing 2-year yields down 7bps to 4.58%, and 10-year yields falling 3bps to 4.09%. European bond yields dropped on the news that Russia was withdrawing its troops from Kherson, a Ukrainian regional capital city annexed by Russia less than two months ago. Chicago Fed president Charles Evans, who is retiring, said in an interview that there are “benefits to adjusting the pace as soon as” the Fed can and the Fed should not keep raising rates by a large amount every time on disappointing economic data. The 10-year auction did poorly with weak demand from investors but the market managed to shrug it off and had a strong close. Hong Kong’s Hang Seng (HSIX2) China’s CSI300 (03188:xhkg) The China reopening trade continued to fade on Wednesday as new domestically transmitted cases surged further to 8,176 the day before. Hang Seng Index retreated 1.2% and CSI 300 slid 0.9%. China’s CPI fell to 2.1% Y/Y and PPI declined 1.3% Y/Y in October, signaling weak domestic demand. Share prices of Chinese developers however surged, following Chinese authorities saying that they were expanding an existing credit support programme by RMB250 billion to help private enterprises, including developers, in raising debts, by providing debt insurance or bond buying. Country Garden (02007:xhkg), up 13.9%, Longfor (00960:xhkg), up 4%, were top performers in the Hang Seng Index. After trading 1% to 4% lower during the Hong Kong session, China Internet names continued to face selling pressure overnight in New York, with ADRs of Alibaba (09988), Tencent  (00700:xhkg) ,and Meituan (03690:xhkug)  each falling around 3% from their Hong Kong closing levels. FX: USD gains return as risk sentiment deteriorates The USD was back on the front foot on Wednesday ahead of the critical US CPI data due today. US midterms still ended in a political gridlock, even though a Republican wave was avoided. However, limited implication on policy means market focus can return to other key events, such as the crypto turmoil and further rise in China’s Covid cases. US 10-year yields dropped below 4.1% but it appears that the USD is not more risk-sensitive rather than being yield-sensitive. Geopolitics turned calmer with Russia retreating from the only Ukrainian regional capital captured, Kherson, but that brings some risk of new escalations as Putin gets desperate. Focus on US CPI however brought some weakness back in the DXY in early Asian hours with USDJPY back below 146.20. GBPUSD bounced back after a brief slide below 1.1350 and the EUR bounced back higher from parity. Crude oil (CLZ2 & LCOF3) WTI futures dipped further below $90/barrel mark, now touching the $85 handle, while Brent moved lower to sub-$93. Oil prices declined as the EIA reported US crude stocks rose by 3.9 million barrels to the highest since July 2021. This was offset by tightness in the fuel product markets. Gasoline inventories fell by 900kbbl, and distillate fuel stockpiles fell by 521kbbl. Meanwhile, sustained rise in Covid cases in China continued to take a hit on the demand outlook. New cases in Beijing jumped to the highest level in more than five months. Of particular concern was the number of infections found outside quarantine, suggesting the virus is still circulating through the community and would likely delay the easing of Zero Covid policies. Wheat (ZWZ2) prices lower, along with Corn, after USDA report The USDA released it’s November World Agricultural Supply and Demand Estimates report, which led to mixed but mostly lower grain prices. While the overall wheat consumption outlook was raised, USDA said demand may drop in some places, including Indonesia and Sri Lanka, due to high prices. Wheat prices plunged 2.5%. The agency also lifted its soybean output and stockpiles outlook, but robust export demand lifted prices. Meanwhile, USDA expects to see the seventh-largest corn crop on record this year, with a new estimate of 13.93 billion bushels.   What to consider? US midterms avoided a Republican wave Even with votes still being counted and runoffs yet to come to determine the US Senate majority, the midterm election didn't bring the red wave that was expected. Republicans are inching towards control of the House, but with a far narrower margin than what was predicted. Meanwhile, Democrats are likely to keep their majority in the Senate but the outcome won’t likely be confirmed for a while as Georgia heads to a runoff on December 6. The end result is still a political gridlock, much as expected, but with far smaller market implications given lack of a firm policy direction. US inflation to test the 8% level, watch core and stickier components Bloomberg consensus expects US October CPI to drop below the 8% mark and come in at 7.9% YoY from 8.2% previously, but still higher at 0.6% MoM from 0.4% in September. The core measure is also expected to ease slightly to 6.5% YoY, 0.5% MoM (prev. 6.6% YoY, 0.6% MoM) but still remain elevated compared to historical levels. Key to watch also will be the drivers of inflation, particularly the stickier shelter and services costs, which if stuck higher could move the December Fed funds future pricing more towards another 75bps rate hike, resulting in another round of selloff in equities and dollar gains. However, there is another CPI report due before the next Fed meeting in December, and we are going into today’s release with a weak risk sentiment following the crypto meltdown seen this week. This suggests that even a print that matches expectations, or is above it, will likely bring another selloff in equities and further support for the dollar. Binance walked away from FTX acquisition, another plunge in Bitcoin The contagion in the crypto and equities we mentioned yesterday is already here, and getting worse as latest developments suggest that Binance backed away from its earlier pledge, tweeting Wednesday afternoon that it would not pursue the acquisition of FTX. It cited due diligence and a reported US investigation into the exchange. Bitcoin plunged below $16,000, , while Ether followed and dipped to its lowest price since July, barely hanging on to the $1,100 level. China is in disinflation China’s PPI declined 1.3% Y/Y in October due to falls in energy and materials prices and weaknesses in metal processing. CPI inflation was also weaker than expected and fell to +2.1% in October from 2.8% in September on weak consumer demand, falling residential costs, and declines in vegetable prices. Meta to layoff 13% of its workforce Meta’s Mark Zuckerberg announced the social platform’s plan to layoff over 11,000 employees, about 13% of its workforce. Zuckerberg also said Meta is cutting discretionary spendings and extending its freeze on hiring through Q1 2023. The company reaffirmed its Q4 revenue guidance of USD30-32.5 billion, in line with expectations. Capex for 2023, according to the Company, will be in the range of USD34-37 billion, at the low end of prior guidance of USD34-39 billion.   For our look ahead at markets this week - Listen/watch our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: https://www.home.saxo/content/articles/equities/market-insights-today-10-nov-2022-10112022

Energy markets came under further pressure yesterday as part of a broader risk-off move across markets. Meanwhile, the price action in a number of commodity markets could also be a reaction to Russian orders for a withdrawal of its troops from Kherson in Ukraine Source: Flickr Energy - US East Coast product inventories fall Sentiment in the oil market remains negative, with ICE Brent settling more than 2.8% lower yesterday which saw the market trading down to levels last seen at the start of the month. Demand remains a key concern, particularly related to China’s zero-Covid policy. Although a large part of yesterday’s price action appears to be part of a broader risk-off move across markets with the S&P 500 down a little more than 2%. The EIA released weekly US inventory numbers yesterday which showed that US commercial crude oil inventories increased by 3.93MMbbls over the last week. Although, when factoring in the drawdown of the SPR, total US crude oil inventories increased by just 352Mbbls. As SPR releases near an end, we are likely to see more meaningful draws in commercial crude oil inventories in the coming months.  On the refined products side, gasoline and distillate fuel oil saw inventory draws of 900Mbbls and 521Mbbls respectively. These draws come despite refiners increasing run rates by 1.5pp over the week to 92.1% as they return from seasonal maintenance. Product inventories on the US East Coast remain extremely tight with gasoline inventories standing at 49.14MMbbls- the lowest levels since 2012, while distillate stocks remain at their lowest levels on record for this stage of the year. The IEA has criticised the decision OPEC+ made in early October to reduce production targets by 2MMbbls/d from November through until the end of 2023. The IEA has said that the move will hurt importers in Asia and Africa the most and also suggested that the group may have to rethink these cuts. In the short term it is clear that the OPEC+ decision has provided some stability to the market. However, in the medium to longer term we are of the view it will push the market into deficit through 2023, which suggests higher oil prices over the course of next year. Metals – Chinese copper smelters call for capacity controls China’s major copper smelters, including Jiangxi Copper Corp., China Copper, Tongling Nonferrous Metals Group Holdings Co., and Zijin Mining Group Co., have called on Beijing to issue policies to “reasonably control” domestic smelting capacity in order to ensure supply-chain security and improve quality. The request comes after a surge in smelter construction in recent years has led to a fight for market share and raw material supplies. The smelters also pledged to boost the proportion of copper scrap used to make refined output to about 25% of total production by 2025. Daye Nonferrous Metals Group and Holdings Co. is expected to start its new copper smelter in China this month, with 400kt/year operating capacity. Zijin Mining Group in China is planning to build a 500kt/year copper smelter in Sichuan province in the southwest region. It is expected that Julong copper mine in Tibet would produce 160kt of copper annually once the first phase reaches full capacity. The mine has a long-term production target of 600kt. Zijin is aiming to boost the smelter capacity to 1.8mt by 2027-28 due to rising production in the Julong mine. LME on-warrant copper stocks fell by 6.4kt, taking the total to 39.13kt (lowest since November 2021) as of yesterday. Cancelled warrants for copper rose by 4.3kt (after declining for eight consecutive sessions) to 41.9kt as of yesterday, signaling potential further outflows. Meanwhile, exchange inventories declined for the thirteenth straight session, by 2.1kt to 81kt. Agriculture – USDA raises domestic supply estimates for corn and soybeans The latest WASDE report from the USDA was really a non-event, with small changes made in Domestic US and global balances for wheat, corn and soybeans. For corn, the USDA increased its 2022/23 ending stocks estimates for the US from 1.17b bushels to 1.18b bushels. This was largely due to a revision higher in domestic production on the back of expectations for better yields. As for the global corn balance, 2022/23 ending stock estimates were revised down from 301.2mt to 300.8mt- broadly in line with market expectations for a number of around 300.7mt. For soybeans, the USDA increased its yield estimate for 2022/23 from 49.8bu/acre to 50.2bu/acre, leading to expectations of higher output. As a result ending stocks for the current marketing year were increased by 20m bushels to 220 bushels. The global soybean balance saw 2022/23 ending stocks increased from 100.5mt to 102.2mt, largely on account of revisions higher to beginning stocks. for wheat, US ending stocks for 2022/23 were lowered from 576m bushels to 571m bushels- the lowest since 2007/08. This decrease was driven by expectations of marginally higher domestic demand. As for the global balance, the USDA increased production estimates for 2022/23 from 781.7mt to 782.7mt, whilst global demand estimates were also revised higher. As a result, 2022/23 ending stock estimates were increased marginally from 267.5mt to 267.8mt. Read this article on THINK TagsWASDE USDA Oil EIA Copper Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

Summary:  Markets are increasingly spooked by the liquidity pressure in the crypto space, as the major crypto exchange FTX.com and its associated trading house Alameda Research may be set to go bust without a multi-billion dollar rescue, and as total market cap in crypto currencies has plunged over $100 billion over the last month. Elsewhere, the focus was meant to be on today’s US October CPI release. What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) US equities saw a hit to sentiment yesterday as Binance walked away from the deal to save the crypto exchange FTX setting in motion a plunge in cryptocurrencies. One of the largest shareholders in FTX, Sequoai Capital, is marking down its investment to zero suggesting little faith in the company and its ability to function. The risk-off moves spilled over into equity market with Tesla leading the declines among the mega caps down 7% with US President saying that Elon Musk relationships with foreign powers could be a national security issue. S&P 500 futures took out gains over the previous two sessions closing at 3,755 but the index futures are attempting to rebound this morning. Note the critical support level at 3,727 which could come into play later today if we get a negative surprise on the US inflation figures suggesting more sticky inflation. Hong Kong’s Hang Seng (HSIX2) and China’s CSI300 (03188:xhkg) Following the risk-off sentiments spilling over from the crypto space and then global equities, Hong Kong and mainland China stocks declined, with Hang Seng down 2% and CSI 300 0.6% lower. China EV and Internet stocks are the top losers.  Among Hang Seng Index constituents, LINK REIT (00823:xhkg) was the performer, gaining more than 2%. AAC (02018), Apple’s acoustic product supplier, surged 5.7% on earnings beat and analysts expecting the company gaining market shares from its arch-rival after the latter losing orders from a key foreign client (most likely Apple).  FX: USD finds bids on weak risk sentiment. US October CPI release key focus later today The US dollar clawed back some of its losses as cratering crypto prices are seeing widening contagion, and rising Covid cases in China continue to drive concerns that further lockdowns are on the way. The weakest currencies were those normally associated with risk sentiment, like the smaller G10 currencies, as AUDUSD trades this morning not far above 0.6400 after a spike to 0.6550 at the beginning of the week. Overall USD direction remains in play as the USD is somewhat down, but by no means out and today’s US October CPI to theoretically set the tone, although a liquidity crisis in crypto that continues to drive contagion elsewhere could yet steal the spotlight in the near term, with poor liquidity generally associated with USD strength. A weak US treasury auction yesterday is also a concern on that front (more below). Crude oil (CLZ2 & LCOF3) Trades lower for a third day as hopes for a Covid zero exit in China fades after the country increased restrictions in a key manufacturing hub and new cases in Beijing jumped to the highest level in more than five months. WTI has returned to the $85 handle, down 9% from Monday’s peak, while Brent trades sub-$93. In addition, the market has also been hurt by the loss of risk appetite filtering through from the carnage in cryptos and after the EIA reported US crude stocks rose by 3.9 million barrels to the highest since July 2021. This was somewhat offset by tightness in the fuel product markets with gasoline inventories dropped to an eight-year low. Focus on China, the general level of risk appetite signaled through the dollar and today’s US CPI print for October.  Precious metals hold gains ahead of today’s US CPI print Gold trades above $1700 for a second day with shallow correction attempts since Tuesday's surge so far pointing to underlying support. However, with most of that currently being provided by a drop in Treasury yields and a softer dollar, today’s US CPI print for October will be watched closely. Another upside surprise may cause a temporary drop before potentially supporting prices as the market will start wondering whether the FOMC will be successful in getting inflation control. Some support also emerging from the chaos across the crypto market where the risk of contagion to other coins from the FTX fallout remains elevated. Gold support at $1682 and silver at $21 followed by $20.27. Crypto market: another plunge in crypto as Binance walks away from FTX acquisition  The contagion in the crypto and equities we mentioned yesterday is already here, and getting worse as latest developments suggest that Binance backed away from its earlier pledge, tweeting Wednesday afternoon that it would not pursue the acquisition of FTX. It cited due diligence and a reported US investigation into the exchange. Bitcoin plunged below $16,000, while Ether followed and dipped to its lowest price since July, barely hanging on to the $1,100 level. According to a research note from JPMorgan the crypto market is right now facing a cascade of margin calls and liquidity disappearing in the system. US treasuries (TLT, IEF) US Treasury yields are sharply lower this morning, with the 2-year treasury yield closing below 4.60% yesterday, the lowest since the hawkish Fed Chair Powell press conference last Wednesday. Weak risk sentiment and contagion from the melt-down in crypto markets may finally be driving safe haven flows into what is traditionally the world’s most liquid asset: UYS treasuries. The 10-year treasury benchmark yield edged below 4.10% after a very weak 10-year auction, with bidding metrics the worst in years. The US Treasury is set to auction 30-year T-bonds today. What is going on? Wheat (ZWZ2) prices lower, along with Corn (ZCZ2), after USDA report The USDA released its November World Agricultural Supply and Demand Estimates report, which led to mixed but mostly lower grain prices. While the overall wheat consumption outlook was raised, USDA said demand may drop in some EM countries due to high prices. Wheat prices plunged 2.5% with additional selling from the announcement Russia is moving its troops out of Kherson, a development that may clear the way for more crop shipiments out of Ukraine. The agency also lifted its soybean output and stockpiles outlook, but robust export demand lifted prices. Meanwhile, USDA expects to see the seventh-largest corn crop on record this year, with a new estimate of 13.93 billion bushels. Foxconn still sees high demand for high-end electronics  The electronics maker, and the biggest supplier to Apple, reported Q3 results today with operating profits and revenue beating estimates. The company still sees strong demand for consumer electronics at the high-end of the market, but sees overall consumer electronics falling in Q4 y/y. US earnings recap: Beyond Meat and Rivian The EV delivery van maker Rivian missed estimates on Q3 revenue yesterday due to supply constraints, but the EPS loss of $1.57 was less than estimated at $1.86. The EV maker still sees 2022 production target at 25,000 vs est. 26,166. Rivian shares gained 8% in extended trading hours. Beyond Meat missed big on both revenue and EBITDA, but tries to calm investors by putting out a positive cash flow level around the second half of 2023. Russia said to be set to pull troops from embattled Kherson  In the hardest fought area of the war after the Russian invasion of Ukraine, the Russian side has announced the intention to withdraw its troops to the Eastern side of the river after an intense battle to maintain control of the strategic city, which is the closest major city to the Crimean Peninsula and would bring many Russian targets, including key supply routes from Crimea, within range of Ukrainian artillery if Ukraine takes control of Kherson. UK October Home Price Survey shows massive deceleration in UK housing  The RICS House Price Balance has been tumbling in recent months as mortgage rates have spiked on the overall rate rise, but also as spreads have widened due to by poor liquidity in the market. The positive 30% reading in September was already a sharp drop from the very strong levels above 50% just two months prior, and the October survey was expected to show +19% (still shownig prices generally rising). Instead, it plunged all the way to –2%, suggesting that UK housing market pricing is decelerating at a record clip, with deeper negative readings ahead that will impact overall UK confidence. What are we watching next? US October CPI release today suddenly looking less pivotal? The crypto panic has quickly stolen focus from the US CPI data release here, possibly to a sufficient degree that even an inflation print that is solidly below the expectations could fail to spark notable relief across markets, as weak liquidity concerns possibly keep the US dollar firm and equity markets weak even if yields ease lower. The ex-Fresh Food and Energy number is expected to come in at +0.5% month-on-month and +6.5% year-on-year, after the multi-decade high of 6.6% YoY in September, with the headline expected at +0.6%/7.9%, which would be the first sub-8.0% year-on-year print since February.) Earnings to watch Today’s US earnings focus is NIO which will be latest test for the EV market as maybe providing information on the factory situation in China amid rising Covid cases. The Chinese market is the most important market for Tesla so a dire outlook from NIO could translate into negative sentiment on Tesla shares. Thursday: Brookfield Asset Management, Fortum, Engie, Credit Agricole, Allianz, Merck, Hapag-Lloyd, RWE, SMIC, Nexi, AstraZeneca, ArcelorMittal, Siemens Gamesa Renewable Energy, Becton Dickinson, NIO Friday: Richemont Economic calendar highlights for today (times GMT) 1330 – US Oct. CPI 1330 – US Weekly Initial Jobless Claims 1400 – US Fed’s Harker (voter 2023) 1400 – Poland Central Bank Governor Glapinski news conference 1530 – EIA’s Weekly Natural Gas Storage Change 1730 – US Fed’s Mester (Voter 2022) to speak 1800 – US Treasury auctions 30-year T-bonds 1830 – US Fed’s George (voter 2022) to speak 1900 – Mexico Central Bank Rate Announcement     Source: https://www.home.saxo/content/articles/macro/market-quick-take-nov-10-2022-10112022

Asian stocks have been prey to sheer volatility ahead of the US inflation data. Massive sell-off at Facebook's helm brought a sell-off in S&P500. Long-term US yields have tumbled in anticipation of a 50 bps rate hike in the December policy meeting. Markets in the Asian domain have witnessed an intense sell-off after fetching negative cues from S&P500. A significant recovery in the risk-off market mood has forced investors to stay away from equities till the release of the US Consumer Price Index (CPI) and the outcome of mid-elections outcome. At the press time, Japan’s Nikkei225 tumbled 1.05%, ChinaA50 dropped 0.43%, Hang Seng plummeted 1.87%, and Nifty50 surrendered 0.70%. Massive lay-off announced at Facebook dented sentiment of market participants. This has triggered the risk of a slowdown in overall demand. Well, US equities are facing the consequences of accelerating interest rates by the Federal Reserve (Fed). Also, a majority win of Republicans would snap some command from Democratic in passing bills and laws. The US dollar index (DXY) is hovering around the day’s low at 110.20 as investors are restricting themselves ahead of the US CPI for making informed decisions. The 10-year US Treasury yields have tumbled to 4.07% as odds are not favoring a rate hike of 50 basis points (bps) in December monetary policy by the Federal Reserve (Fed). Going forward, the extent of deviation in inflationary pressure will provide meaningful cues about the likely monetary policy action by the Fed. Meanwhile, Nikkei225 has witnessed selling pressure despite the announcement of economic stimulus packages this week. To spurt the aggregate demand, the Japanese administration has decided to provide stimulus budgets and hike taxes for big pockets. On the oil front, oil prices have nosedived by more than 3% after the head of the International Energy Agency (IEA) Fatih Birol slammed OPEC+’s decision to cut oil production as it might worsen the outlook for developing countries that are sliding towards recession, reported Bloomberg. He further added that the move is fueling inflation, especially in developing countries, and may require a “rethink,”

Considering advanced prints from CME Group for crude oil futures markets, traders added around 4.3K contracts to their open interest positions after two daily builds in a row on Wednesday. Volume followed suit and advanced for the second straight session, this time by nearly 144K contracts. WTI could slip back to $82.10 Prices of the barrel of WTI extended the weekly leg lower on Wednesday amidst increasing open interest and volume. That said, a deeper pullback remains well on the cards in the very near term and with the next target of note at the weekly low at $82.10 (October 18).  

Oil slides amid Chinese Covid restrictions Oil prices fell again on Wednesday, taking losses over the last couple of days to more than 5%. Brent and WTI are basically flat on the day at the time of writing, settling towards the lower end of their recent trading ranges. While the narrative in recent weeks has focused on the potential for Chinese Covid restrictions to be relaxed, which has driven Chinese equities higher and lifted oil prices, the reality has seen case numbers soaring, restrictions reimposed and mass testing undertaken. This doesn’t exactly add substance to the rumours and we may be seeing some unwinding of those positions. Gold steadies ahead of CPI data Gold has steadied over the last 24 hours or so after surging late last week and early this in the hope that inflation data delivers what the Fed, and investors, crave so much. It’s a very hopeful-looking move and one that could end badly if the CPI data continues this year’s trend of disappointing to the upside. I just wonder at this point what investors need to see because the recovery of the last week has been strong – more than 5% – which suggests expectations are quite high. Time will tell if hopeful traders will be burned once more. For a look at all of today’s economic events, check out our economic calendar: www.marketpulse.com/economic-events/ 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.

Oil has lost 7.5% since Tuesday, bouncing back to $84 for WTI. Pressure intensified on Wednesday after the weekly inventory report. Having failed to break above $93 for the second time in just over a month, oil appears to have completed its correction from its June-September decline, heading towards $75. Weekly data showed a 3.9M barrel increase in commercial inventories, reversing the decline a week earlier. At the start of November, inventories were 2.5% below the five-year average for the same week. From this point of view, the situation is quite normal-ish. The strategic reserve continues to melt away, masking the lag between production levels and demand. Notably, weekly production levels remain close to 12M BPD, at 12.1M last week versus 11.9M the week before. However, these numbers may well be considered sufficient given the slowdown in China, which is increasingly evident from the data released this week. Also on the side of the market bears was Oman, whose oil minister warned of a possible drop in the price to "$70 after this winter". Adjusting to the shift of the OPEC cartel member, market participants began to consider an even deeper decline. On the chart, oil has formed a ‘double top’, failing to raise above $93 at the start of the week. And now, the $83 level, where the previous support area is located, is worth paying more attention to. A fall below that would confirm the pattern, suggesting a possible target in the $73 area. A resistance area in oil has formed in the last month at 61.8% of the decline, a classic Fibonacci retracement. This pattern will finally get confirmation if the price falls under $75. It is considered that in this case, the bears' target will be the area of 161.8% of the initial movement, i.e., the mark near $50. A drop here looks excessively pessimistic now, but volatile oil has repeatedly lost more than 70% of its peak value during economic downturns. And given the increasing risks of a recession early next year in the USA, the Eurozone, and the UK, plus a sharp slowdown in China at the same time, a fall to $50 looks like a pessimistic working scenario.  

Oil Crude prices were heavy early as concerns grew over China’s COVID situation. ​ Energy traders were quick to jump back on the oil trade after a cool inflation report brought hopes back to life that the US economy could still have a soft landing. ​ The inflation report showed fuel oil prices surged 19.8% before the cold weather arrives. ​ The oil market is going to remain very tight this winter and that should keep oil prices heading higher. ​ Gold surges as US inflation dips Gold prices are surging after a cool inflation report has made markets confident that the Fed can downshift to a  half-point-rate-hiking pace and possibly be done with tightening after the March FOMC meeting. ​ It looks like the dollar died today and chaos in crypto has made good ol’ gold very attractive again. ​ Gold is breaking out here and it could have a steady path towards the $1800 level if dollar weakness remains. 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. Oil higher, gold skyrockets - MarketPulseMarketPulse

Summary:  A softer US CPI print sent the equity markets skyrocketing in an extreme reaction, but there was some pushback against dovish expectations from Fed speakers and WSJ’s Timiraos, highlighting that a 50bps rate hike at the December Fed meeting is still in play. Dollar weakness fueled gains across the metals space, but oil market remained volatile on concerns around China’s covid cases even as the authorities urged targeted measures will remain in place. UK GDP due in the day ahead before focus turns to G20 meetings next week. What’s happening in markets? The S&P 500 (ESZ2) jumped 5.5% and Nasdaq 100 (NQZ2) soared 7.5%, staging the biggest rally in two years US equities surged the most since 2020 on a softer-than-expected CPI report. S&P 500 gained 5.5% and Nasdaq 100 soared 7.5%. The gains were board-based. All 11 sectors of the S&P 500 rose, with the information technology, real estate, and consumer discretionary sectors leading the charge higher. Semiconductor names surge, Marvel Technology (MRVL) up 16.1%, Nvidia (NVDA:xnas) up 14.3%, and Advanced Micro Devices (AMD:xnas) up 14.3%.  Amazon (AMZN:xnas) surged 12%, Meta (META:xnas) gained 10.3% and Apple (AAPL:xnas) climbed 8.9%. The shift of sentiment from risk-off to risk-on saw the crypto stabilize and Bitcoin rally 13%. US treasury (TLT:xnas, IEF:xnas, SHY:xnas) soared, yields tumbling 22 to 30bps across the curve Treasuries jumped in price and yields plunged on slower-than-expected CPI data. Large buying first concentrated on the 2-year and the 5-year notes. The yield curve bull-steepening in initially, with the 2-10 spread narrowed 8bps to minus-41bps at one point. However, the long ends rallied strongly in the afternoon following a strong 30-year bond auction. The curve reversed and became more inverted with 2-10-year finishing the session at minus-52 bps. At the close, 2-year yields fell 25bps to 4.33% and 10-year yields tumbled 28bps to 3.81%. On Fedspeak, Cleveland Fed President Mester said “services inflation, which tends to be sticky, has not yet shown signs of slowing” and she views “the larger risks as coming from tightening too little”. San Francisco Fed President Mary Daly remarked “it was indeed good news that inflation moderated its grip a bit” but “one month of data does not a victory make”. Hong Kong’s Hang Seng (HSIX2) China’s CSI300 (03188:xhkg) retreated on Covid outbreaks Hong Kong and China stocks retreated on Thursday as China’s daily new domestic Covid cases came in above 8,000 second day in a row and Guangzhou extended lockdown in one of its districts. Hang Seng Index dropped 1.7% and CSI 300 lost 0.8%. China Internet and EV stocks underperformed. NIO (0988:xhkg) fell 13.2% on a bigger-than-expected loss in Q3 and a Q4 guidance below analysts’ expectations. Overnight in U.S. hours, Hang Seng Index futures jumped 4.6% after U.S. stocks soared on softer CPI data. ADRs of Alibaba (09988:xhkg), Meituan (03690:xhkg), and Tencent (00700) surged around 7% to 9% in New York hours. FX: Massive dollar selloff in the aftermath of the US CPI release The Dollar Index saw its greatest losses in a single day since 2009, falling to lows of 107.7 after the release of that softer-than-expected US CPI. The biggest gainer on the G10 board was JPY, no surprises there, given its yield-sensitive nature and the plunge in US yields. USDJPY broke below 141 although it has rebounded to 141.68 in the Asian morning. If we do see hawkish Fed comments in the coming days/weeks, some of this rally in the JPY is likely to be unwound but overall the trend in USDJPY remains biased to the downside now with most of the interest rate expectations already in the market. GBPUSD was also a big gainer as it surged to the 1.17 handle, but a test lies ahead with UK GDP release today likely to confirm the onset of a recession (read preview below). Crude oil (CLZ2 & LCOF3) volatile amid dollar weakness and China's Covid concerns Crude oil ended higher in a volatile session as earlier concerns of weak demand were overtaken by the broader market rally in response to lower inflation and the weakness in the US dollar. Concerns however remain on China’s Covid cases with Beijing reporting its highest number of cases in a year, which kept the gains restrained. WTI futures rose above $86/barrel while Brent went above $94 before retreating later. Cooler US inflation prompts gains across metals The weaker USD eased pressure on the base metals complex, with copper rising more than 2%. This was boosted by reports coming out of a Politburo Standing Committee meeting that suggest Beijing would take more targeted measures to avoid damage to the economy. If China’s Zero covid measures remain targeted, this could shift focus back to supply issues and dollar weakness. Copper (HGZ2) broke the September high of $3.6925, and is now testing resistance at $3.78. Gold (XAUUSD) also broke above the double top at 1730, likely suggesting that the bottom is in place. Silver (XAGUSD) rose to $21.83 but has since returned to the resistance turned support at $21.50.   What to consider? Softer US inflation, but what does it mean for the Fed? US CPI was softer than expected across the board, as headline M/M and Y/Y printed 0.4% (exp. 0.6%, unchanged) and 7.7% (exp. 8.0%, prev. 8.2%), respectively, while the core metrics came in at 0.3% M/M (exp. 0.5%, prev. 0.6%) and 6.3% Y/Y (exp. 6.5%, prev. 6.6%) on a Y/Y basis. Shelter prices still remained hot while the used vehicle prices declined by 2.4% M/M. While the inflation still remains high and far from Fed’s 2% target, it can be expected that the trend is lower. Markets cheered the release, expecting a downshift in Fed’s rate hike trajectory which has already been communicated at the last FOMC meeting. December Fed rate hike pricing is still close to 50bps, while the terminal rate projections have slid lower to 4.9% for May 2023. However, it is worth noting that there is one more labor market report and another CPI report due before the FOMC’s Dec 13-14 meeting. Fed speakers pushed back on the market rally The kind of market reaction we have seen to the soft CPI print in the US yesterday confirms that investors still remain on edge expecting a Fed pivot. This can prove to be counterproductive, as easing of financial conditions can derail this downtrend in inflation and reverse the less hawkish path that Fed is expected to take in the coming months. The Cleveland Fed’s Loretta Mester said that, while she was encouraged by October’s data, she sees bigger risks from tightening too little than too much. Kansas City Fed President Esther George said monetary policy “clearly has more work to do”, while the Dallas Fed’s Lorie Logan said earlier that inflation has a long way to go before it reaches the central bank’s target. They also noted it may be time to slow down the pace of hikes, however, but that it shouldn’t be interpreted as easing policy. Equally importantly, WSJ's Timiraos tweeted, "The October inflation report is likely to keep the Fed on track to approve a [50bps rate hike] next month. Officials had already signaled they wanted to slow the pace of rises and were somewhat insensitive to near-term inflation data". Easing financial conditions will likely drive the Fed speakers to a further hawkish tilt in the coming days. US jobless claims still underscore a tight labor market Initial jobless claims rose marginally to 225k from 218k, and above the expected 220k. Meanwhile, continued claims also exceeded consensus to print 1.493mln (exp. 1.475mln) from, the revised higher, 1.487mln. While this still continues to show a tight labor market in the US, it may be worth watching how it moves in the coming months especially after the wave of tech sector layoffs that we have seen in the past few weeks. The latest in the Crypto space Bloomberg reports a balance sheet hole of $8bn for FTX. Likewise, the Wall Street Journal reports that Alameda Research owes FTX about $10bn. Reuters says that the loan to Alameda Research was equal to at least $4bn. Sam Bankman-Fried (SBF), however, went to Twitter to give an explanation. He goes on to talk about two major mistakes that he has made, one being that he underestimated the demand for sudden liquidity by clients withdrawing funds. In terms of liquidity, SBF further says that: “FTX International currently has a total market value of assets/collateral higher than client deposits (moves with prices!). But that's different from liquidity for delivery--as you can tell from the state of withdrawals. The liquidity varies widely, from very to very little.” Remember, that this is contrary to the story by Bloomberg and likely the Wall Street Journal and Reuters story. It now seems plausible that FTX has a serious hole in its balance sheet”, though, hard to judge anything at this stage given the amount of rumors and unconfirmed information floating around. What remains clear is that any liquidity event will unlikely remain isolated as cascading margin calls and contagion effects are likely to be felt beyond the crypto space. UK GDP to confirm the onset of a recession UK’s Q3 GDP is scheduled for release today and the first quarterly negative print of the current cycle is expected to be seen. Consensus forecast is seen at 2.1% YoY, -0.5% QoQ, significantly lower than the second quarter print of 4.4% YoY, 0.2% QoQ. August GDP data had already begun to show a negative print with -0.3% MoM and the trend will only likely get worse in September, exacerbated by a one-off factor relating to Queen Elizabeth II’s funeral in the month, which was a national holiday. The economy is already facing a cost of living crisis, and both fiscal and monetary policy have to remain tight in this very tough operating environment. Technically, a recession may still be avoided as activity levels picked up in October, but still it will remain hard for the UK to dodge a recession going into 2023. This suggests there maybe some downside for the sterling, especially as the market refuses to cater to the Bank of England’s warning that the current expectations of terminal rate may be too steep. Credit growth in China slowed in October China’s new aggregate financing fell to RMB908 billion in October, much lower that the RMB1,600 billion expected in the Bloomberg survey and the RMG3,527 billion in September. The growth of outstanding aggregate financing slowed to 10.3% in October from 10.6% in September. New RMB loans declined to RMB615 billion in October, below the 800 billion consensus estimate and much smaller than the RMB2,470 billion in September. New RMB Medium to long-term loans to corporate fell to RMB462 billion as loan demand was weak. China’s Politburo Standing Committee met to discuss pandemic control policies  On Thursday, President Xi and the rest of the Politburo Standing Committee had a meeting to discuss its policies on pandemic control. While the statement from the meeting reiterated adherence to the dynamic zero-Covid policy, it also highlighted the push for vaccination and treatments and called on government officials to implementation of control measures more scientifically targeted and precise and to avoid doubling down on each layer of execution.   China’s Singles’ Day this Friday, Nov 11 Investors will watch closely Alibaba, JD.com, and other online retailers’ sales on Singles’ Day this Friday to gauge the strength of China’s private consumption. Analysts are expecting slower sales growth as recent data indicated slower user growth across online shopping platforms.   For our look ahead at markets this week - Listen/watch our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: https://www.home.saxo/content/articles/equities/market-insights-today-11-nov-2022-11112022

CME Group’s flash data for crude oil futures markets noted traders increased their open interest positions for the second straight session on Thursday, this time by just 924 contracts. Volume, instead, reversed two daily builds in a row and shrank by around 191.2K contracts. WTI retargets the November high at $93.73 Crude oil prices charted humble gains on Thursday amidst a small uptick in open interest, which is supportive of the continuation of the rebound in the very near term. Moving forward, the WTI now targets the so far November peak at $93.73 (November 7).  

Summary:  China released a set of 20-item guidelines on Friday to fine-tune the country’s pandemic control measures aiming at minimizing disruption to people’s livelihood and the economy. The move added fuel to the post-US CPI risk-on sentiments and saw Hong Kong and China stock soaring with Hang Seng Index up 7.7% and commodities prices higher. S&P 500 rallied another 0.9% on Friday and finished the week nearly 6% higher. Over the weekend, China’s financial regulators rolled out a 16-point plan to boost the property sector. What’s happening in markets? The S&P 500 (ESZ2) and Nasdaq 100 (NQZ2) extended post-CPI gains US stocks rallied for the second day, adding to the dramatic surge after the softer CPI prints on Thursday. S&P 500 gained 0.9% and Nasdaq 100 climbed 1.9%. The energy sector, up 3.1%, was the top performer in the S&P 500 as WTI crude oil price bounced 2.8% on China’s easing of pandemic control measures despite a rise in the number of new Covid cases. Gaming and casino stocks and consumer discretionary names also gained from optimism about China’s fine-tuning of Covid policies. FTX filed for Chapter 11 bankruptcy protection on Friday and its CEO and founder resigned. Coinbase (COIN:xnas), the largest US crypto exchange, bounced 12.8% on Friday after being dragged down by the FTX fiasco earlier in the week. Robinhood (HOOD:xnas), in which FTX’s Sam Bankman-Fried has a 7.5% stake, surged 12.9% after steep declines on Tuesday and Wednesday. Over the week, S&P 500 gained 5.9% higher and NASDAQ 100 surged 8.8%. US  treasury (TLT:xnas, IEF:xnas, SHY:xnas) markets were closed for holiday The US treasury cash markets, after the massive 25bp-30bp  post-CPI drops in yields on Thursday, took a break to observe the Veterans’ Day holiday on Friday. Treasury note and bond futures were little-changed. Hong Kong’s Hang Seng (HSIX2) China’s CSI300 (03188:xhkg) soared on China’s fine-tuning of pandemic control measures Hang Seng Index soared 7.7% on the post-CPI rally in the U.S. stock market and the easing of pandemic control measures in China. Following a meeting of the Chinese Communist Party’s new Politburo Standing Committee on Thursday, China’s health authorities issued 20 new measures on Friday to fine-tune pandemic control policies including relaxing quarantine and PCR testing requirements and prohibiting excessive lockdowns. China Internet stocks soared, with Alibaba (09988:xhkg) up 12.4%, Tencent (00700:xhkg) up 11.7%, Meituan (03690:xhkg) up 12.5%, JD.Com (09618:xhkg) up 16.1%, and Kuaishou (01024:xhkg) up 17.5%. EV maker NIO (09866:xhkg) jumped 20.4% despite missing Q3 earnings. XPeng (09868:xhkg) surged 16%. Macao casino stocks gained 8% to 9%. China consumption names also climbed on China’s easing of pandemic control. Share prices of China property developers were squeezed massively higher, with Country Garden (02007) soaring 35% and Longfor (00960 ) jumping 29%. The debt-laden CIFI (00884:xhkg) soared 72.2%. Subsequently, Bloomberg ran a couple of news reports saying China is rolling out a 16-point rescue plan to boost the ailing property markets and struggling developers. CSI300 gained 2.8%/ Australia’s ASX200 (ASXSP200.1) rises ~4% last week. Stock poised to extend rally on China’s property measures All eyes will be on Australia tech stocks following the stellar run in the US, however Aussie tech stock gains may not shoot the lights be muted today after Australia’s 10-year bond yield rose seven basis points to 3.72%.  However, Commodity stocks will be a focus; on Covid hopes, with the Copper price up 4.1%, while precious metals are higher and aluminum had its best day since 2009. In New York BHP rose 3.6%, gapping up and rising above its 200-day moving average which could be seen as bullish sign, and also means local listed counterpart will likely follow. Lithium stocks will also be in the spotlight, with Australia’s biggest Allkem (AKE) and Pilbara (PLS) a focus with sentiment picking up and the stocks already trading in record-high territory ahead of China reopening. FX: the US Dollar continued to plunge in the aftermath of a softer CPI The US dollar index plunged 1.7% on Friday, bringing the weekly loss to 4%. After falling the post-CPI decline of 3.8% on Thursday, USDJPY fell another 1.5% to 138.81 on Friday. Over the week, USDJPY fell from 1.4662 to 138.81, a 5.3% decline. EURUSD surged 1.4% on Friday, bringing its weekly gain to nearly 4%. The Chinese renminbi strengthened further against the US dollar, benefiting from China’s easing of pandemic control in addition to the impact in the aftermath of the US CPI. USDCNH declined from 7.15 to 7.09 on Friday.The Aussie dollar is gaining on the back of China's property sector rescue package. China introduced 16 property measures to address the developer liquidity crisis; from blanket debt extensions, to loosening down-payment requirements for homebuyers. On top of that that, China’s eased covid restrictions; shortening to five-day quarantines, which is aimed at reducing the economic impact of Covid Zero, rather than relaxing restrictionsThe Australian dollar jumped 1.4% on Friday and 3.7% over the week. While the market still awaits further easing developments, the market is buoyed on forward looking hopes that the AUD will continue to be bid on commodity demand picking up. The iron ore (SCOA) price is back above US$90 after rising 6% last week, the copper price lifted about 5% last week, and the lithium price is also higher, with carbonate prices up 118% year to date.  Crude oil (CLZ2 & LCOF3) WTI crude oil gained 2.8% to finish the week at USD88.96 on China’s easing of pandemic control and a sharply lower dollar but it remained stuck inside its established trading range. In addition, as the fuel product market has been tightening in Europe and the US due to low inventories of diesel and heating oil, the crude oil price is likely to find support here and the tendency is more to the upside. OPEC issues its monthly market report on Monday so all eyes will be on that. Copper (HGZ2) rose nearly 5% on Friday on China easing Covid policies Benefiting from China fine-tuning Covid policies and a sharply lower US dollar, copper rose 4.7% on Friday and nearly 7% for the week to USD3.91. It is poised to challenge a key resistance zone near $4 in the near term. As noted by Ole Hansen, Saxo’s Head of Commodity Strategy, while the prospect of copper mines in Central America, South America, and Africa temporarily increasing production is significant, the outlook for copper prices remains positive since global electrification will continue to drive the demand for copper higher. Globally, especially in Europe, the need to reduce reliance on Russian-produced natural gas, oil, and the use of coal as energy sources will continue to build momentum for accelerated electrification. But enabling the grid to handle the additional baseload will require significant new copper-intensive investment in the coming years. In addition, producers such as Chile, the world's largest copper supplier, are not optimistic about their ability to increase production of copper mines in the medium and long term amid declining ore grades and water shortages. The slowdown of the Chinese economy is temporary, and the Chinese government's economic stimulus measures are focused on infrastructure and electrification, which require a lot of industrial metals, especially copper. Gold (XAUUSD) Gold climbed 0.9% to USD1771 on Friday, with the biggest weekly gain since March. In addition to a softer US CPI on Thursday, according to Ole Hansen, supporting the underlying improvement in sentiment was the recently published Gold Demand Trends Q3 2022 update from the World Gold Council. The update outlines how central bank demand reached a quarterly record of nearly 400 tons, thereby offsetting a 227 tons outflow from bullion-backed ETFs. What to consider? China issued 20 guidelines to fine-tune its dynamic zero-Covid policy measures China’s health authorities released 20 guidelines on Friday to fine-tune the country’s pandemic control measures, a day after the Politburo Standing Committee, led by President Xi, held a meeting to discuss how to best contain the pandemic. The key measures in the guidelines include reducing the number of quarantine days for close contacts from 10 days to 8 days, relaxing some centralized quarantine to home quarantine, limiting PCR testing, prohibiting excessively extending lockdowns, promoting vaccination and treatments, and prohibiting local authorities from shutting down production, schools, and transportation without proper approval. At a press conference on Saturday, the National Health Commission emphasized the fine-tuning was optimization measures based on scientific findings but not representing a shift in the principles of dynamic zero-Covid policy. China’s financial regulators rolled out a 16-point plan to boost the property sector The People’s Bank of China and the Banking and Insurance Regulatory Commission jointly issued a notice to financial institutions with 16 measures to address the liquidity squeeze faced by property developers through measures including the relaxation of previously imposed redlines restricting banks from lending over certain ceilings and calling for financial institutions to treat private enterprise developers equally with state-owned enterprises. A busy week of Fedspeak kicked off by Fed Governor Waller After the sharp easing of financial conditions after the massive asset price movements after the release of the CPI, helped by lower bond yields, higher stock prices, and lower US dollar, the market is eagerly monitoring if Fed officials will push back on pivot speculations in order to bring financial conditions back to tighter levels. Governor Waller previously proposed that the Fed should not pause until the monthly core PCE substantially falls below 3% on an annualized basis. Biden and Xi are set to meet on the sidelines of the G20 summit U.S. President Biden and China’s President Xi will hold a bilateral meeting on the sidelines of the G20 summit in Indonesia on Monday. It will be the first time they meet in person since Biden took the presidential office in January 2021. The White House said the meeting could last a couple of hours. For our look ahead at markets this week - Listen/watch our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: https://www.home.saxo/content/articles/equities/market-insights-today-14-nov-2022-14112022

Open interest in crude oil futures markets reversed the previous drop and increased by around 16.3K contracts on Friday according to preliminary readings from CME Group, the largest single day build since September 23. Volume, in the meantime, dropped fir the second day in a row, now by nearly 52K contracts. WTI faces the next hurdle at $93.73 Friday’s second improvement in a row in prices of the WTI was accompanied by increasing open interest, which suggests that extra gains appear on the cards in the near term. That said, the next resistance turns up at the November high at $93.73 per barrel (November 7).  

The commodities complex pushed higher on Friday after China eased some of its quarantine restrictions related to Covid. This more positive sentiment should continue today with reports that the Chinese government is also rolling out a number of measures to help out the weak property sector Source: Shutterstock Energy - oil rallies on China Covid policy change The oil market continued its move higher on Friday. ICE Brent settled almost 2.5% higher on the day. This followed China's relaxation of its covid-related quarantine measures. These measures reduce the quarantine period for inbound travellers and close contacts of those who have tested positive. In addition, secondary contacts will no longer need to be traced. However, while we are seeing these changes in policy, China is also experiencing its highest numbers of daily Covid cases since April and Guangzhou has tightened restrictions. The latest easing in quarantine requirements is certainly a step in the right direction, but the market will likely need to see further easing if this recent enthusiasm is to be sustained. European natural gas prices continued to come under pressure on Friday. TTF December futures fell by almost 14%, leaving the market below EUR100/MWh. EU storage is now close to being 96% full compared to a 5-year average of 89%. Mild weather means that storage is still filling up at a time when we usually see drawdowns. Forecasts show that temperatures in Western Europe are likely to be warmer than usual over the next week. Meanwhile, the European Union’s Copernicus Institute, said that Europe could see a milder than usual winter, which if the case, will continue to provide some relief to the market. As for the calendar this week. OPEC will release its latest monthly market report later today, which will include the group’s latest views on the market outlook for the remainder of this year and 2023. This will be followed by the IEA monthly oil market report on Tuesday.   Metals – LME decides against Russian metals ban Metals prices surged on Friday after China eased some Covid restrictions, fuelling speculation of a broader relaxation in measures. The easing, including a shortening of the quarantine period, comes at a time when Covid cases nationwide have surged, with outbreaks in Guangzhou and Beijing. A weakening US dollar, following a lower-than-expected US CPI reading for October, has also been supportive. This optimism is likely to continue this morning after reports that China will implement 16 property measures to help out the weak property sector. Some of these measures include debt extensions to the industry and relaxing deposit requirements for homebuyers. The metal markets also have a bit more clarity now, following the LME’s decision to take no action on the delivery of Russian metals into LME warehouses, after receiving a number of responses to its discussion paper. The LME was looking at potentially banning the delivery of Russian metal into its warehouses, limiting Russian flows or taking no action. In the lead-up to the decision, there were a number of producers who were quite vocal in calling for Russian metal to be banned, whilst consumers were keener for there to be no changes. If we continue to see an increasing amount of self-sanctioning of Russian metals, the risk is that we see more Russian metal being delivered into LME warehouses, which could potentially mean that LME prices trade at discounted levels to actual traded prices.   Nyrstar’s Budel plant in the Netherlands will partially restart production in November. The operations at the plant will depend on market conditions, the company said, which remain extremely challenging. The Budel smelter was shut on 1 September, however, the plant had been operating at lower capacity since 4Q21 due to high energy prices. Budel is one of Europe’s largest zinc smelters, with a nameplate capacity of 315ktpa. Agriculture – Indian wheat area increase The latest data from the Indian Ministry of Agriculture & Farmers Welfare shows that farmers have planted wheat on 4.5m hectares during the current sowing season that began on 1st October, up 9.7% when compared to last year. Meanwhile, there is speculation that the Indian government might take price-cooling measures to try to rein in soaring domestic prices, which could include the release of state reserves in the open market and possibly reducing the 40% import duty. Wheat stocks in state warehouses totalled 22.7mt at the start of October, quite a bit lower than the 46.9mt from a year earlier. The market is expecting wheat production to total around 95mt this year, much lower than the government forecast of 106.8mt. Read this article on THINK TagsRussian metals Property Oil LME China Covid Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

Summary:  Market sentiment closed last week on a strong note after the wild rally on Thursday in the wake of the softer-than-expected October US CPI data. Sentiment was checked in the Asian session today by rising Covid cases in China, although the Zero Covid policy approach there may be softening. US yields jumped a bit to start this week after a bank holiday on Friday and after Fed Governor Waller was the first significant Fed profile to push back against the market’s lower of forward Fed tightening expectations in the wake of a single data release.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) Last was a spectacular week for equities with the MSCI World Index up 6.7% with our theme baskets e-commerce, cyber security, and semiconductors rallying 19.4%, 13.6%, and 12.8% respectively. High duration equity themes responded the most to broad-based easing of financial conditions last week and the key question is now if the market will extend its momentum. S&P 500 futures closed on Friday at the 4,000 level and have opened a bit lower this morning but are already attempting to climb back to the 4,000 level. If we look at financial conditions and where they mostly went last week there are theoretically room for a rally up 4,100 and even beyond that to the 4,200 level. Hong Kong’s Hang Seng (HSIX2) and China’s CSI300 (03188:xhkg) Hang Seng Index climbed 2.7% and CSI 300 edged up 0.9% on the news that the People’s Bank of China and the Banking and Insurance Regulatory Commission jointly issued a notice to financial institutions with 16 measures to address the liquidity squeeze faced by property developers through measures including the temporary relaxation of previously imposed redlines restricting banks from lending over certain ceilings to developers and calling for financial institutions to treat private enterprise developers equally with state-owned enterprises. Leading China private enterprise property developers listed in Hong Kong soared by 20% to 40% at one point. FX: USD picking up the pieces after massive downdraft on lower October CPI The US dollar lurched into an historic two-day plunge late last week after the release of the softer than expected US October CPI data on Thursday ahead of a three-day weekend for US rates (on Friday’s bank holiday). The move was so sharp that it can’t hope to maintain course, so for the nearest term, the market will try to feel out consolidation levels. EURUSD, for example, finally found resistance just above the key 1.0350 area, which was the major low back in May and June and prior to that, back in early 2017. The first support is the 1.0200 area, the 38.2% retracement of the rally sprint, with the reversal level at 1.0100, the 61.8% retracement and near the prior important resistance. For USDJPY, the market managed to take out the 139.40, the prior major high in July, around where it trades this morning. Amazingly, having fallen from 151.95 to the local low of 138.46, the 200-day moving average is still quite far away, near 133.00. Crude oil (CLZ2 & LCOF3) remains rangebound ... trading softer into the European session in response to a recovering dollar after Fed’s Waller said the FOMC has some way to go before it stops raising interest rates. Earlier in the session commodity prices in general, including oil, were supported by demand optimism after China on top easing Covid restrictions issued a rescue package for its struggling property market. A pickup in Chinese demand, despite the current headwinds from rising virus cases, when EU is preparing sanctions against Russian oil and OPEC+ is cutting production, will likely lead to further tightening of the market. Focus on US economic data given its impact on risk appetite as well as Monthly Oil Market Reports from OPEC today and the IEA tomorrow. Gold trades softer following a two-week jump of almost 8% … after Fed’s Waller cautioned that the FOMC isn’t close to pausing interest rate hikes. The dollar strengthened while Treasury yields moved higher after having been closed on Friday for Veterans Day. Overall, however, the sentiment in the market seems to be changing with a period of consolidation, potentially the next phase. Focus on resistance-turned-support at $1735 and whether we have seen a shift in the trading behaviour among speculators from a sell-into-strength to a buy-on-weakness. ETF investors – net sellers for months - and speculators in the futures market now hold the key that could unlock further gains. Expect some consolidation and potentially a recheck of support at $1735 with resistance at $1789 and $1804. Industrial metals remain focussed on China … and overnight iron ore, the key feedstock for steel production, jumped +3% after the Chinese government released a package of policies to rescue its property sector. The news came on top of last week's easing of some virus restrictions which drove a near 14% rally in the Bloomberg Industrial metals index to a five-month high. Copper, now up 25% from the July low was one of the main beneficiaries of the news, coming at a time when supplies are already showing signs of tightening. Overnight, the property news drove HG copper to a fresh five-month high at $3.96 per pound before some profit taking emerged just ahead of critical and potential sentiment as well as momentum changing resistance in the $4 to $4.05 area.  US treasuries (TLT, IEF) US Treasury yields (10Y) closed Thursday on a weak note after the plunge on the October CPI data ahead of a three day weekend for banks (treasuries not trading, even as equity markets were open). Yields have jumped a bit here at the start of this week after Fed Board of Governors member Waller pushed back against the market’s repricing of Fed tightening intentions since that CPI release (more below) in comments overnight. The low water mark for the 10-year treasury benchmark was just above 3.80%, with a jump back above 4.00% needed to suggest that this drop in yields is temporary. The next level of note to the downside is the 3.50% area, which was the high-water mark back in June that held for about three months before new highs were posted in September. What is going on? AUDUSD is up 9% from its low, gaining some extra ground on China’ property rescue package The Aussie dollar has gained ground on the back of China's introduction of a property sector rescue package. AUDUSD now trades at a two-month high, hitting 0.666 in anticipation that Australia’s trade surplus will be further supported by exports into resurgent Chinese demand after China introduced 16 property measures to address its developer liquidity crisis. On top of that that, China’s eased some covid restrictions; shortening to five-day quarantines, which is aimed at reducing the economic impact of Covid Zero. US Fed’s Waller pushes back against market’s lowering of Fed expectations Federal Reserve Governor (and therefore voter) Christopher Waller has been the first high profile Fed official to emerge and push back against the market’s repricing lower of the Fed’s rate tightening trajectory in comments overnight. Speaking at a Sydney, Australia conference, Waller said that “These rates are going to...stay high for a while until we see this inflation get down closer to our target”. “We’ve still got a ways to go. This isn’t ending in the next meeting or two.” The market is now pricing the Fed to reach a peak policy rate below 5.00%, either at the March or May FOMC meeting next year, with a 50-basis point hike priced for December to take the Fed Funds rate to 4.25-4.50% and slightly more than 50 basis points of further tightening priced beyond that. This is some 25 basis points below the prior peak in expectations. Crypto market fear is spreading On Friday, the CEO of the cryptocurrency exchange FTX stepped down, and FTX and more than 100 affiliates filed for bankruptcy, with the filing revealing that FTX and Alameda Research (related trading firm) have liabilities in the range $10-$50 bn. Contagious effects have already appeared with examples of as Genesis has $175 mn stuck in FTX and the crypto lender BlockFi stating that they would be limiting activities in wake of the FTX collapse. As the confidence in centralized exchanges is shrinking, a record-high amount of Bitcoin was moved out of exchanges and into self-custody wallets due to increased fears of exploitation and mismanaging of user funds. What are we watching next? Fed Vice Chair Lael Brainard to speak today Brainard is thought to be one of the most dovish of prominent Fed figures and possibly behind what was seen as slightly dovish insertion in the November FOMC monetary policy statement before Fed Chair Powell’s press conference. What will Brainard say now that the market seems ready to pounce on a single month’s data to significantly alter its projections of Fed policy? NY Fed President and voter Williams will also speak today, with a rather busy schedule of Fed speakers in the week ahead. Incoming US data Traders will remain nervous around incoming US data after the wild reaction to last week’s Thursday October US CPI release. The US macro calendar highlights this week include Tuesday’s October PPI releases, the Oct. Retail Sales data on Wednesday and November NAHB Housing Market Index release the same day. Finally, the US reports October Housing Starts/Building Permits data on Thursday. Major China Internet companies are scheduled to report this week Meituan (03690:xhkg) kicks off the busy earnings calendar of  China Internet companies on Monday, followed by Tencent (00700:xhkg) on Wednesday, Alibaba (09988:xhkg) on Thursday, and JD.COM (09618:xhkg) on Friday. Analysts’ estimates for top-line growth in Q3 are subdued due to weak consumption recovery and the macro environment. Slow merchandise value (GMV) growth during the Singles’ Day festival may point to a sluggish Q4 outlook. Alibaba's GMV growth during the Singles' Day festival was flat. JD.COM has not yet announced its numbers except saying GMV had positive growth Y/Y during the period (from Oct 31 evening to Nov 11 end of the day). According to estimates, eCommerce platform GMV grew about 14% Y/Y but the large traditional eCommerce platforms were estimated to see GMV growth at just around 3% Y/Y. UK Autumn Statement on 17 November Expect a contractionary 2023 UK Budget. The new Prime minister Rishi Sunak needs to find savings worth about £30-40bn/year to convince the independent Office for Budget Responsibility that debt won’t rise across the medium-term as a percentage of GDP. This is not an easy task. But this is certainly the only way for the United Kingdom to win back investor confidence after the disastrous mini-budget presented in September. All of this will likely increase the depth of the UK recession and poverty across the country. The outlook is really grim. The Bank of England expects the UK to be in recession from mid this year all the way through to mid 20024. Then growth will pick up only very modestly (annualized rate of 0.75 %). Poverty is also increasing. The country’s largest foodbank charity says 11.5 million meals were handed out over six months – more than 63.000 a day on average. This is a record. The 2023 budget will likely make things worse. The UK is facing an emerging market economy dynamic. Earnings to watch The Q3 earnings season is still slowing down but with important earnings releases still coming out this week. Today’s focus is Chinese e-commerce giant Meituan, Brazil-based fintech bank Nu Holdings, and finally DiDi Global which is the Uber equivalent in China. For foreign investors the earnings from Nu Holdings will get the most attention as the bank is purely technology-driven, fast growing (expected to grow net revenue 188% y/y in Q3 to $1.09bn), and has Berkshire Hathaway as one of its biggest shareholders. Monday: Meituan, Sonova, Tyson Foods, Nu Holdings, Trip.com, DiDi Global Tuesday: Infineon Technologies, Vodafone, Alcon, Walmart, Home Depot, Sea Ltd Wednesday: Siemens Energy, Tencent, Experian, SSE, Nibe Industrier, Nvidia, Cisco, Lowe’s, TJX, Target Thursday: Siemens, Alibaba, Applied Materials, Palo Alto Networks, NetEase Friday: JD.com Economic calendar highlights for today (times GMT) 1000 – Eurozone Sep. Industrial Production 1630 – Switzerland SNB President Jordan to speak 1630 – US Fed Vice Chair Brainard to Speak 2030 – Weekly Commitment of Traders Report (delayed from Friday) During the day: OPEC’s Monthly Oil Market Report 0030 – Australia RBA Minutes 0120 – China Rate Decision 0200 – China Oct. Industrial Production / Retail Sales  Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher Source: https://www.home.saxo/content/articles/macro/market-quick-take-nov-14-2022-14112022

Oil is steady but upside risks remain The prospect of looser restrictions has boosted the price of oil recently and yet Brent still finds itself trading around the middle of its $90-$100 range. The US inflation data last week gave crude another boost as traders were left to dream again about a possible soft landing if the data continues that way and the Fed raises rates less. There’s still a long way to go though and much of the world won’t be so lucky, assuming it isn’t already too late for the US. But further signs of inflation peaking will no doubt be welcome; you just wonder whether it will also be the catalyst for oil to break $100 again, further complicating the growth outlook once more. Gold’s spectacular rebound It’s been a fantastic 10 days for gold, with the yellow metal going from at risk of breaking below $1,620 support to rallying almost 10% to its highest level in almost three months. It’s been quite the ride, fueled by signals from the central bank that the next hike could be less aggressive and then that inflation report. Can gold hold onto this momentum and break $1,800, taking it into territory that it hasn’t traded within since late-Spring, early-summer? It’s a big ask but if the data is generous and the dollar continues to give back some of its enormous gains from the past year, there’s every chance gold could build momentum from here. For a look at all of today’s economic events, check out our economic calendar: www.marketpulse.com/economic-events/ 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.

The LME's decision to continue to allow Russian metal to be delivered into its warehouses put some downward pressure on metals on Monday morning, easing fears of supply shortages In this article LME aluminium prices retreat LME says many consumers still accept Russian supplies LME aluminium prices retreat The LME aluminium price fell from a two-month high to as low as $2,416/t on Monday morning following the decision. How much further pressure we will see on metals prices going forward will depend on whether we see a significant inflow of Russian metals into LME warehouses in the weeks and months ahead. LME says many consumers still accept Russian supplies After the LME launched a discussion paper on 6 October related to the delivery of Russian metal into LME warehouses, the exchange has been receiving feedback from market players on the potential action, if any, that should be taken. The period for feedback closed on 28 October. The LME set out three options; to take no action on Russian metal, to ban the delivery of Russian metal into LME warehouses, or to introduce thresholds which would restrict the amount of Russian metal that could be delivered into LME warehouses. In the lead-up to the decision, there were a number of producers, who were quite vocal in calling for Russian metal to be banned, whilst consumers were keener for there to be no changes. After going through all the feedback and carrying out its own analysis, the LME has decided to take no action on Russian metal, allowing it to continue to be delivered into LME warehouses. The LME said it believes, after receiving feedback, that a material amount of the market is still accepting and will continue to rely on Russian metals. This was evident in the response from consumers during the discussion period. The LME received 42 written responses - 22 of the responses favoured taking no action, 17 supported a ban on Russian metal and just two supported limiting Russian metal stocks. While a number of respondents said that allowing the delivery of Russian metal into LME warehouses, at a time when we are seeing an increasing amount of self-sanctioning, would see LME prices reflecting the price of Russian metal more than actual traded prices, others said excluding Russian metal would mean that LME prices are not truly reflecting the supply and demand picture. There were also suggestions that the LME's action needs to reflect the global picture, where there are still a number of markets accepting/buying Russian material, rather than just taking a purely Western view, which is where we are seeing most of the self-sanctioning. While there were opposing views on what impact banning or not banning Russian metal would have on liquidity, there was a strong view that nickel should be excluded from any ban, given that it would face the largest liquidity disruption in such an event. The LME acknowledged that its decision to take no action would mean that we likely see increased volumes of Russian metal into LME warehouses. However, the LME believes we would have seen higher inflows of metals into warehouses regardless, given the depressed global outlook. Having said that, the LME has reported that the proportion of Russian metal in LME warehouses has not changed significantly over the discussion paper period. While the LME accepts that LME prices may start to increasingly reflect the price of Russian metal if we see large inflows into LME warehouses, they believe that premia will play an important role, with this likely reflecting a large proportion of the all-in cost, so that non-Russian metal producers continue to receive fair value for their metal. According to feedback, market players do want more transparency on the origin of metal stocks in LME warehouses. Starting in January 2023, the LME will publish a monthly report which will provide the percentage of live tonnage of Russian metal on warrant. If we continue to see an increasing amount of self-sanctioning of Russian metals, the risk is that we see more Russian metal being delivered into LME warehouses, which could potentially mean that LME prices trade at discounted levels to actual traded prices.   Percentage of live tonnage of Russian brands Source: LME Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

Oil Crude prices softened but didn’t break as energy traders await how supplies will be disrupted when the Russian crude price cap begins early next month. ​ Today’s oil price weakness was mainly attributed to a weakening short-term demand outlook by OPEC and nervousness that the Fed could still remain aggressive with raising rates. Warmer weather across Europe has been good news for natural gas prices and that has removed some of the extra demand that was expected to come crude oil’s way. ​ The warm weather however is about to go away and that could keep energy prices rising going forward. ​ ​ ​ Gold Gold’s rally appears to be running out of steam. ​ The Fed remains the key driver for gold prices and this week could see a strong round of hawkish pushback from the policymakers. The Fed’s Waller kicked off the week with some hawkish talk that reminded traders we need to see a couple of more strong drops with inflation to say policymakers can pause. ​ Gold appears to have strong resistance at the $1800 level, with decent support at the $1750 region. ​ 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. Oil weakens, gold rally losing steam - MarketPulseMarketPulse

November 14, 2022  $USD, Brazil, China, Currency Movement, Federal Reserve, France, inflation expectations, Japan, UK Overview: China’s new initiatives to support the property sector helped lift the Hang Seng. And while the China’s CSI 300 edged higher both the Shanghai and Shenzhen composites fell. Most Asia Pacific markets fell, while Europe’s Stoxx 600 is posting a small gain. US futures are sporting modest losses. European benchmark 10-year yields are 3-5 bp lower, including UK Gilts ahead of Thursday’s budget that is expected to confirm new borrowing (Office for Budget Responsibility projects to be GBP70 bln more than previously anticipated). The 10-year US Treasury yield is about seven basis points higher near 3.88%. The dollar is mostly firmer after last week’s sharp losses. The yen is leading to the downside with about a 1.3% loss, while the Canadian dollar is holding up the best, off around 0.2%. A small handful of Asian currencies, including the Chinese yuan, are posting small gains against the greenback. Higher yields and a stronger dollar are paring last week’s sharp gold gains. It is off a little less than 1%. December WTI rallied nearly 2.9% before the weekend and is also off nearly 1% today. The cold spell in the US is helping natgas recoup its pre-weekend loss of more than 5%. Similarly, though more volatile, Europe’s natgas benchmark is recovering fully the 10.5% drop seen at the end of last week. Iron ore continues to rebound. Today’s 3.1% advance comes on top of the more than 14% rally over the past two weeks. December copper’s four-day rally is stalling, and it is off 2.3%. It rallied about 13.5% over the past two weeks. December wheat snapped a four-day before the weekend with a nearly 1.3% bounce. It is come back offered and is trading about 1% lower.    Asia Pacific China has launched two multi-point programs to revive the property market and allow a more focused implementation of its zero-Covid policy. So much depends on the implementation that it is hard to discern the real impact. Moreover, given the excess capacity in the housing market, even with the 16-points to be implemented and lending renewed, many Western observers are skeptical that the underlying challenges will be addressed. Reducing mass testing, resisting overzealous lockdowns, reducing the number of days in quarantine for inbound travelers, dropping the punishments against airlines for bringing into too many sick passengers sound well and good, but they may not herald the kind of pivot some in the financial press are claiming. Chinese officials themselves claim that policy is not being relaxed, and the number of cases is surging to 7–8-month highs. Japan reports its first estimate of Q3 GDP first thing tomorrow. It is expected to slow from 0.6% quarter-over-quarter to 0.2% largely on the back of slower consumption. Consumption rose 1.2% in Q2 and is seen having grown about a quarter as much. Business spending may have increased a little and inventories may not have been a drag (-0.3% in Q2). Despite the yen's weakness, net exports were likely a drag after contributing slightly in Q2. The GDP deflator, which is often seen as among the best metrics of overall price pressures, may show the most deflationary pressure this year. After falling 0.3% in Q1 and 0.5% in Q2, the median forecast in Bloomberg's survey projects a -0.6% reading.  The dollar slid to its lowest level against the yen since late August ahead of the weekend, slightly below JPY138.50, but has rebounded back above JPY140 in the European morning. It had stalled in front of there in Asia, but stops, perhaps related to the roughly $510 mln option (at JPY140) that expires today, saw it quickly trade up to JPY140.40. The rebound in US yields was also supportive. Nearby resistance is around JPY141.00. The Australian dollar initially rose through the pre-weekend high marginally on some optimism arising from China's measures but has succumbed to mild profit-taking pressures. It was knocked back from nearly $0.6725 to slightly below $0.6665. A break of $0.6650 could spur a retreat toward $0.6600. The greenback may have completed a three-day 3.4% decline against the Chinese yuan that took it to its lowest level since September 20 (~CNY7.0255). Optimism about the Covid and property measures helped the yuan recover. China may boost the lending at the one-year Medium-Term lending facility tomorrow and it reports October economic activity. The PBOC set the dollar's reference rate at CNY7.0899, nearly matching the median projection in Bloomberg's survey for CNY7.0903. Europe While tighter US monetary policy, via rate and the balance sheets, are well known, we have argued that many observers do not seem to be aware of the magnitude of the fiscal tightening that is taking place. The budget deficit is set to be more than halved from last year. After the Great Financial Crisis, it took several years to deliver the magnitude that is being experienced this year. The UK is engaging in its own double-barrel effort. The Bank of England is one of the few central banks that have begun to actively sell bonds it bought during QE rather than the more passive approach of limiting the re-investment of maturing proceeds. The BOE also signaled that it will begin selling the GBP19 bln (~$22 bln) Gilts purchased to help stabilize the markets (Sept 28-Oct 14). These sales of long-term bonds and inflation-linked instruments will begin at the end of the month. The operations will be demand-led, in a reverse enquire window, rather than at a preannounced pace so as to be responsive to market conditions and interest. It will publish additional operational details next month. Meanwhile, the highlight this week is Chancellor Hunt's budget statement on Thursday. Spending will be cut, and taxes will rise, even if the precise details are not fully known. The windfall tax on oil and gas firms appears earmarked to increase. Also, more revenue is to be had on bracket-creep, while lowering the threshold for paying the top rate. Still, the Office for Budget Responsibility warns borrowing will be around GBP70 bln more than previously anticipated. The UK's Telegraph reported over the weekend that the US has given the UK and EU until April to reach an agreement on the Northern Ireland Protocol. It is when President Biden is expected to visit Northern Ireland and commemorate the 1998 Good Friday Agreement, for which the US is a guarantor. However, the article's only detail was a far cry from the US setting the deadline as the headline claimed: "...and White House officials have privately indicated that he [Biden] would be happier if the situation was resolved before then." The Democratic Unionist Party has boycotted the Northern Ireland Assembly since the May election over the Protocol. New elections were delayed last week potentially until April 13, three days after the anniversary in hope of the deal by then. The UK is demanding that the role for the European Court of Justice in adjudicating disputes over the Protocol is eliminated. This has become the latest sticking point. More promising was the Telegraph's story that UK and France have reached an agreement to limit migration. The UK apparently has agreed to pay GBP60 mln to France to share intelligence on the people being smuggling through the English Channel and boost the number of officers on the beaches to limit the proportion of migrants leaving France for the UK. The UK had demanded that British "officials" would be allowed to join the patrol of the French beaches, but Paris could not abide. Instead, some British immigration officials would be part of a joint control center. The stronger than expected eurozone September industrial output figures (0.9% vs. 0.5% median forecast and August revised to 2.0% from 1.5%) failed to deter the market from paring the euro's advance. It did rise a few hundredths of a cent above the pre-weekend high but continued to work its way lower through the European morning and slipped below $1.03. The low in the North American session before the weekend was near $1.0265 and that may offer the nearby target. Sterling's pre-weekend high was near $1.1855, and initially it was bid slightly through $1.1870 in early Asia Pacific trading, but when it stalled, momentum traders appear to take profits. Sterling fell to about $1.1745 and another attempt on the upside stalled near $1.1830. It came under new selling pressure in the European morning and the market may have its sights set on the roughly GBP560 mln options that expire at $1.1715 today. America The busy week of US economic reports begins slowly. Many economic calendars do not include it, but the results of the Federal Reserve's October survey of consumer inflation expectations will be reported today. In September, the one-year expectation had fallen to 5.4% from 5.7%, the lowest since September 2021. By comparison, the University of Michigan's survey found expectation in September slipped from 4.8% to 4.7%, and then rose to 5.0% in October. Last week's preliminary results showed a tick up to 5.1%. The Fed's survey saw three-year expectations edge up to 2.9% from 2.8% and the five-year outlook rise to 2.2% from 2.0%. The University of Michigan's survey showed the 5–10-year inflation forecast outlook rose to 2.9% in October from 2.7% in September, and then, the preliminary estimate for October rose to 3.0%. It has been between 2.7%-3.1% since the start of last year. The Fed's Waller pushed hard against the market exuberant response to the softer than expected inflation print. He argued that it was only one print, and that the Fed has more work to do. But he was preaching to the converted. The market is well aware of those facts and continues to price in not only a 50 bp hike next month but more hikes next year. Governor Cook also reiterated what is widely recognized the more and longer the Fed hikes the more it risks overdoing it. Governor Brainard and NY Fed President Williams speak today, and they too are unlikely to break fresh ground. No official that has spoken before or after the CPI report to give any reason to expect a dissent at the December meeting, which slows the pace of tightening from 75 bp to 50 bp, which had been tipped in the September dot plot. Brazil has been a market darling this year, but concerns about the new government's fiscal plans has pushed it from second place behind the Russian rouble to third place, below the Mexican's peso as well. With a new team in place, including naming a finance minister, Lula appears to be pushing for a constitutional amendment that would allow welfare expenditures to be permanently outside of the budget cap. The cap limits spending increases to inflation. Constitutional amendments require 3/5 of both houses to support it in two votes. The Brazilian real was the weakest currency in the world last week, falling 3% against the weakening greenback. The Bovespa fell 5%, bucking the global equity rally.    The US dollar fell to almost CAD1.3235 ahead of the weekend, culminating a 1.5% weekly drop. It was the fourth consecutive weekly decline for the greenback, the longest losing streak since October 2021. The modest unwinding of risk-sentiment and the firmer tone for the US dollar, has seen the greenback recover to CAD1.33. The next upside target may be near CAD1.3350. Many find the Mexican peso's weakness ahead of the weekend difficult to comprehend, but we suspect it was the result of unwinding short yen carry trades that were used to finance long peso positions. As the yen strengthened dramatically, positions were unwound. The dollar shot up from new two-and-a-half year lows (~MXN19.2655) to a little above MXN19.59. A move now through MXN19.63 may signal a move toward MXN19.70-75.      Disclaimer

Summary:  Perhaps reality set in that markets could perhaps have been a bit too euphoric after just one inflation print showed CPI had dropped. Investors took profits from the Nasdaq 100 and S&P 500 seeing the indices fall 1% & 0.9% ahead of US PPI and following Fed officials’ remarks about ‘additional work to do’ and “a ways to go” to bring down inflation. Inflation expectations in a New York Fed consumer survey increased. Crude oil took a haircut, falling 4.2% after OPEC cut its oil demand outlook. Despite the US dollar rising against almost all major G-10 peers, The Aussie dollar nudged up to 0.67 ahead of the RBA meeting minutes. What’s happening in markets? Investors took profits from the Nasdaq 100 (NAS100.I) and S&P 500 (US500.I) seeing the indices fall 1% and 0.9% as there’s ‘additional work to do’ to bring down inflation  Perhaps reality set in, that markets could perhaps have been a bit too euphoric after just one inflation print showed CPI had dropped. The major US indices snapped their two-day rally because US Federal Reserve speakers raised the alarm that the Fed had extra work to do to bring down inflation. Fed Governor Christopher Waller warned that “the market seems to have gotten way out in front over this one CPI report” and the Fed has “got a ways to go”.  Adding to that, Fed’s Vice Chair Lael Brainard said there is “additional work to do”. Putting it into perspective, the S&P500 has still managed to hold onto a gain of 10% from October 10. Given the rhetoric of ‘more work to do’ has been reinforced, it’s important to remember bear markets produce wild swings in markets, and volatility might be expected to pick up given the uncertainty. Ten of the 11 sectors of the S&P 500 declined with Real Estate, Consumer Discretionary, and Financials falling the most and Health Care being flat. Amazon (AMXN:xnas) dropped 2.3% as the company announced plans to layoff about 10,000 employees. Tesla (TSLA:xnas) declined 2.6% as Elon Musk said he had too much work to juggle and was running Tesla “with great difficulty”. Toll and board games maker, Hasbro (HAS:xnas) tumbled nearly 10% on analyst downgrades. Hong Kong’s Hang Seng (HISX2) and China’s CSI300 (03188:xhkg) as China rolling out financial support to the property sector Hang Seng Index climbed 1.7% and CSI 300 edged up 0.1% on the news that the People’s Bank of China and the Banking and Insurance Regulatory Commission jointly issued a notice to financial institutions with 16 measures to address the liquidity squeeze faced by property developers through measures including the temporary relaxation of previously imposed redlines restricting banks from lending over certain ceilings to developers and calling for financial institutions to treat private enterprise developers equally with state-owned enterprises. Leading China private enterprise property developers listed in Hong Kong soared, with Country Garden (02007:xhkg) jumping 45.5% and Longfor (00960) surging 16.5%. US  treasury (TLT:xnas, IEF:xnas, SHY:xnas) pared some post-CPI gains on hawkish Fedspeak and higher surveyed inflation expectations. US treasury yields rose about 6bps across the curve, paring some of the post-CPI gains, after returning from a long weekend, with the 10-year yield rising to 3.86% and the 2-year yield back to 4.39%. Hawkish comments from Fed Governor Waller that the market has gotten too much ahead of itself on one CPI report and there is still a long way to go triggered selling in treasuries during Asian hours. To add to that, the usually dovish Fed Vice Chair Lael Brainard said there is additional work to do in fighting inflation. Higher inflation expectations from the New York Fed’s Survey of Consumer Expectations weighed on the bond markets. Median one- and three-year-ahead inflation expectations increased to 5.9% and 3.1% from 5.4% and 2.9%, respectively. The median five-year-ahead inflation expectations rose to 2.4% from 2.2%. Also weighing on the markets during the session as about 12 billion corporate bond issuance. Australia’s ASX200 (ASXSP200.1) trades at its highest level since June; focus on CBA today   The biggest bank in Australia and the second biggest company on the ASX, Commonwealth Bank (CBA) reported its financial results today, with the bank reporting its net profit after tax (NPAT) from continuing operations grew just 2% compared to the prior quarter to A$2.5 billion. Its common equity Tier 1 ratio fell slightly to 11.1% vs. 11.5% q/q (showing its holding slightly less cash), and it also declared a loan impairment expense of A$222 million from bad debts, (showing Australians are feeling the pinch of the rate hikes). All in all, CBA’s income rose 9%, driven by higher margins and volume growth, which partly offset the reduced non-interest income. Meanwhile, CBA’s expenses rose, 4.5% (excluding remediation) with higher staff costs adding to the bill. CBA’s shares have risen 21% from their June low. And the technical indicators on the monthly chart suggest its slow grind up could perhaps continue, but the monthly and daily charts look somewhat mixed/choppy- it guess you could say, showing volatility may pick up. A lot can be taken by the RBA’s commentary, which has alluded to insolvencies rising up. Which we can see has been reflected in CBA’s results. Also remember the RBA said that the rate hikes from May have not fully been felt by Australians yet. That means, CBA’s margins could remain thin given inflationary pressures and rising rates. If you are looking for alpha, we still believe commodities offer the most potential over banks. Crude oil (CLZ2 & LCOF3) took a haircut, falling 4.2% after OPEC cut its oil demand outlook WTI crude price fell 4.2% as OPEC cut its global oil demand outlook down 0.1million bpd to 99.6 million bdp for 2022 and down 0.1 million bdp to 101.8 million bdp for 2023.  In the natural gas market, Freeport LNG will likely extend an outage that began in June, curbing the much-needed supply to customers in Europe and Asia. AUDUSD holds steady at around 0.67 after balanced RBA meeting minutes Despite the US dollar rising against almost all major G-10 peers, the Aussie dollar has held its ground, thanks to fresh China stimulus (with China announcing a property sector rescue package, as well as relaxing some Covid restrictions). This has added to the AUDUSD rally, with the pair now gaining 6.2% this month, in anticipation that Australia’s trade surplus will bolster, with hopes that commodity demand will improve. In its minutes released this morning, it shows that the RBA considered the case for a 50bp rate hike but settled at raising 25bps as the RBA was mindful of the full impacts of prior hikes were yet to be fully felt.  What to consider? US PPI today to watch In the October CPI released last week, a decline in health insurance costs due to technical factors contributed to the deceleration in the service component of the core CPI. In the calculation of core PCE, which the Fed watches most closely, the healthcare services prices are estimated from the PPI dataset than the CPI database. As a result, investors are likely to pay more attention to the October PPI numbers scheduled to release on Tuesday than usual as they are trying to gauge the trend of the service component of the core CPI. Bloomberg consensus estimates for headline PPI are +04% M/M and +8.4% Y/Y and for core PPI are +0.3% M/M and +7.2% Y/Y. Biden and Xi stroke a conciliatory tone but key issues unresolved  The 3-hour long meeting between President Biden and President Xi on the sidelines of the G20 Summit in Bali showed some goodwill gestures from both sides. Nonetheless, key issues remain unresolved.  In a relatively conciliatory tone, the two leaders agreed to resume talks on climate change and economic issues between officials of the two countries. U.S. Secretary of State Blinken plans to visit China early next year. Japan’s Q3 GDP unexpectedly declined Japan reported Q3 GDP that unexpectedly declined by 1.2% on a seasonally adjusted annualized basis, contrary to the consensus expecting a 1.2% growth. Falling net exports and a decline in housing investment drove the weakness. China’s October activity data are expected to be weak October retail sales in China are expected to decelerate to +0.7% Y/Y according to the Bloomberg survey from +2.5% Y/Y in September as the surge in COVID cases and pandemic control restrictions took their toll on consumption. Industrial production is estimated to slow to +5.3% Y/Y in October from +6.3% Y/Y in September, amid Covid-related restrictions, slower auto production, and weak exports. Retail bellwether companies report Q3 results today Home Depot (HD:xnys) and Walmart (WMT) are scheduled to report Q3 results today. Investors will be monitoring the top-line growth figures and assessment of business outlooks to gauge the state of US consumers. For our look ahead at markets this week - Listen/watch our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: https://www.home.saxo/content/articles/equities/market-insights-today-15-nov-2022-15112022

CME Group’s flash data for crude oil futures markets saw traders add around 20.3K contracts to their open interest positions at the beginning of the week, clinching the 4th consecutive daily build at the same time. In the same line, volume went up by around 130.3K contracts after two daily drops in a row. WTI: Next on the downside comes $82.10 Monday’s strong decline in prices of the WTI was on the back of increasing open interest and volume, opening the door to the continuation of the leg lower in the very near term. Against that, the next target of note for the commodity is seen at the weekly low at $82.10 per barrel (October 18).  

USDCAD comes under some renewed selling pressure on Tuesday amid modest USD weakness. Bearish crude oil prices might undermine the Loonie and help limit the downside for the major. Investors now look to the US macro data and speeches by FOMC members for a fresh impetus. The USDCAD pair struggles to capitalize on the previous day's bounce from the 100-day SMA support and meets with a fresh supply near the 1.3325 area on Tuesday. The pair maintains its offered tone through the early European session and is currently placed near the daily low, around the 1.3285-1.3280 region. The US Dollar comes under some renewed selling pressure amid rising bets for a less aggressive policy tightening by the Fed. In fact, Fed fund futures are now pricing in a 91% chance of a 50 bps rate hike at the next FOMC meeting in December. This, along with a generally positive tone around the equity markets, is seen as another factor weighing on the safe-haven buck and exerting some downward pressure on the USDCAD pair. The downside, however, seems cushioned in the wake of a mildly negative sentiment surrounding crude oil prices. Rising COVID-19 cases in China raise concerns about lower fuel consumption in the world's top crude oil importer. This comes after OPEC lowered its 2022 global demand forecast and continues to act as a headwind for the black liquid, which might undermine the commodity-linked Loonie and lend support to the USDCAD pair. The mixed fundamental backdrop warrants some caution for aggressive traders and positioning for a firm near-term direction. Traders now look to the US macro data - the Empire State Manufacturing Index and Producer Price Index (PPI). This, along with speeches by influential FOMC members and the US bond yields, will drive the USD demand. Apart from this, oil price dynamics should provide a fresh impetus to the USDCAD pair.  

Expect the best, but prepare for the worst. As much as investors would like the glass to be half full, the pessimistic forecasts of authoritative organizations are forcing oil markets to ignore supply concerns and focus on slowing global demand. How else, if OPEC cut the estimate of the increase in the indicator by 100,000 b/d to +2.5 million b/d in 2022 and to +2.2 million b/d in 2023, coupled with weak statistics from China, this forced Brent collapse to $92.5 per barrel. The whole world knows firsthand how COVID-19 affects the economy. What the global recession 2020 is worth. Now China is following this thorny road, the deterioration of the situation, which is pushing global GDP to a new recession. In October, retail sales in China decreased by 0.5%, industrial production growth slowed, and real estate investment continued to fall. Dynamics of Chinese indicators China is the largest consumer of oil, so it is not surprising that the outbreak of COVID-19, an increase in the number of infections, lockdowns and a reduction in economic activity are dragging Brent down. China is far from the only dark spot on the map of the global economy. According to Bloomberg forecasts, the eurozone's GDP will shrink by 0.1% in 2023. And that is subject to a mild winter and large-scale fiscal incentives to combat the energy crisis. If the governments of the countries of the currency bloc fail and frosts come to the eurozone, the economy may sink by 3.3%. As for the US, the basic scenario here is a 0.7% GDP growth with a recession in the second half of 2023. The housing market crisis and the Fed's overly aggressive monetary restrictions will lead to a deeper and longer recession. Thus, the situation in the key economies of the world leaves much to be desired, while the IMF warns that it may worsen due to inflation and the armed conflict in Ukraine. As a result, global oil demand will suffer, expectations of which rightly lead to a peak in Brent. As for supply issues, investors are ignoring them due to the increase in maritime transport of oil from Russia to the highest levels since 2017. Buyers seek to increase imports ahead of the EU embargo. Dynamics of sea transportation of oil from Russia In my opinion, a significant part of the negative is already embedded in Brent quotes. For a long time, investors have been talking about a recession, the most aggressive federal funds rate hike in decades. If the Fed succeeds in giving the US economy a soft landing, warm weather in Europe keeps the recession short and shallow, and China can weather the COVID-19 pressure as other countries have, demand for oil will be higher than expected. And with it the prices. Technically, on the daily chart, Brent falling below $92.5 per barrel will activate the 1-2-3 pattern and become the basis for short-term sales. Subsequently, we use the rebound from $91 and $89.2 to fix profits and medium-term purchases.       Relevance up to 08:00 2022-11-20 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327134

Summary:  Equity markets traded largely sideways, as did the US dollar after the wild sell-off late last week in the wake of the soft US CPI data. Markets in Asia traded on a strong note overnight after friendly headlines from the long Biden-Xi talk yesterday. The focus on incoming data in the days ahead will be on US PPI today and Retail Sales tomorrow, with the UK set to announce a much anticipated autumn budget statement on Thursday, likely to include new windfall taxes on power and fossil fuel companies.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) Despite a strong session in China there is little spillover effect into developed market equities with S&P 500 futures still hovering just below the 4,000 level. Today’s key events are earnings from Walmart and Home Depot, or news coming out of the G20 meeting. US equities are tilted short-term in favour of an upside move with the 200-day moving average in the S&P 500 futures at 4,080 being the natural gravitational point for the market. Hong Kong’s Hang Seng (HSIX2) and China’s CSI300 (03188:xhkg) Hong Kong and China’s equity markets surged for the third day in a row, with Hang Seng Index soaring 3.4% and CSI 300 climbing 1.7%, as optimism returned to the markets due to favourable policy shifts in China regarding pandemic control and property developers’ access to funding and goodwill gestures shown by China’s President Xi and the US’ President Biden at their first face-to-face meeting after President Biden took office. China Internet companies were among the top gainers, with Alibaba (09988:xhkg) up 11%, Tencent (00700:xhkg) up 10%, and Meituan (03690:xhkg) up 6%. Investors brushed off the rise of new Covid cases to 17,772 in mainland China as well as weaker-than-expected retail sales (shrinking 0.5%) and industrial production (+5%) in October. FX: USD still on the mat after massive downdraft on lower October CPI After the massive two-day plunge last week on the release of the softer than expected US October CPI data on Thursday, the US dollar largely tread water in yesterday’s session, with traders unwilling to take it lower still after a huge, one-off adjustment to Fed expectations that will require more weak incoming data from the US if investors want to solidy their case for a coming Fed pivot. EURUSD continues to trade near the key 1.0350 area, which was the major low back in May and June and prior to that, back in early 2017. The first support is the 1.0200 area, the 38.2% retracement of the rally sprint, with the reversal level at 1.0100, the 61.8% retracement and near the prior important resistance. For USDJPY, while the market managed to briefly take out the 139.40, the prior major high in July, it has bounced back above 140.00 at times since yesterday. Crude oil (CLZ2 & LCOF3) returned to the lower end of their current ranges ... after OPEC cut its forecasts for global oil demand in the fourth quarter, virus infections continue to climb in China. In addition, a monthly Drilling Productivity Report from the EIA cast doubt on US shale growth and as oil production per drilled well has fallen to the lowest since July 2020. Weaker than expected China data also highlighted the risk to oil demand during the final quarter before an expected tightening driven by OPEC+ production cuts and EU sanctions against Russian oil. Focus on US economic data given its impact on risk appetite as well as IEA’s Oil Market Report for November due later today. Gold (XAUUSD) Gold has so far seen three shallow corrections during the run up from the post-FOMC low at $1620 on November 3, highlighting an emerging “buy-the-dip" mentality as short positions are being reduced while others trade the current positive momentum. An attempt to reverse some of last week's drop in the dollar and yields initially supported a correction but gold did not get close to test key support at $1735 before receiving a bid after Fed Vice Chair Lael Brainard said it would be appropriate for the Fed to slow its monetary-tightening pace soon. Demand from ETF investors – net sellers for months – have yet to show any appetite while speculators cut their net short by 80% to –8k lots in the week to November 8.  Expect some consolidation and potentially a recheck of support at $1735 with resistance at $1789 and $1804. US treasuries (TLT, IEF) US treasuries failed to consolidate much of last Thursday’s enormous slide in yields, with the 4.00-4.10% area the somewhat far away upside swing zone, while the next major focus lower will be on the major pivot high near 3.50% from June. What is going on? Xi-Biden summit sees positive headlines After a three-hour talk between the US and Chinese heads of state, both sides issued statement suggesting a friendly reset of the tone between the two countries. The two sides are set to resume cooperation on climate change and food security and both leaders criticized Russia for its threatening the use of nuclear weapons. The Chinese Foreign Minister Wang Yi said the talks represent a “new starting point” with both sides hoping “to stop the tumbling of bilateral ties and to stabilize the relationship.” Weak incoming data from China overnight Industrial Production rose 5% YoY in October, a slowing of the pace from the month before and below estimates of 5.3%. Retail Sales for the month were down –0.5%, far below expectations of a rise of +0.7%. Infineon Technologies blasts earnings estimates The German semiconductor manufacturer reports strong Q4 results (ending 30 September) with revenue at €4.14bn vs est. €3.93bn and segment profit of €1.06bn vs est. €970mn. For the current fiscal year, the company guides segment profit margin of 24% vs est. 22.2% and revenue of €15.5bn vs est. €15bn. Fed Vice Chair Brainard mentions slowing the pace of Fed rate hikes In an interview yesterday, Lael Brainard, widely considered the chief dove on this FOMC, confirmed forward market expectations for lowering the size of future rate hikes. After last Thursday’s softer US October CPI print, the market had already lowered expectations to a 50-bp move, so there was little market impact despite a flurry of headlines. Brainard said “It will probably be appropriate soon to move to a slower pace of increases...but I think what’s really important to emphasize, we’ve done a lot, but we have additional work to do.” Higher US inflation expectations ... from the New York Fed’s Survey of Consumer Expectations weighed slightly on bond markets. Median one- and three-year-ahead inflation expectations increased to 5.9% and 3.1% from 5.4% and 2.9%, respectively. The median five-year-ahead inflation expectations rose to 2.4% from 2.2%. Also weighing on the markets during the session was about $12 billion corporate bond issuance. What are we watching next? ECB’s TLTRO repayments on Friday This is usually a non-event for traders, only ECB watchers care about that. But this is before the European Central Bank (ECB) decided on 27 October to change the rules retroactively and increase the targeted longer-term refinancing operation (TLTRO) rates from 23 November onwards. The interest rate will be directly indexed on the ECB’s deposit rate (which could peak at 2.50 % next year) instead of being calculated over the entire life of the operation. This creates strong incentives for commercial banks to repay in advance (the bulk of the TLTRO was going to be repaid in June 2023). This is aimed to reduce the eurozone balance sheet and with that to contribute to the overall monetary policy normalisation. At this stage, it is still unclear what will be the exact consequences on the flow of credit in the eurozone. This is something to monitor, however. Incoming US data Traders will remain nervous around incoming US data after the wild reaction to last week’s Thursday October US CPI release. The US macro calendar highlights this week include today’s October PPI releases, the Oct. Retail Sales data on Wednesday and November NAHB Housing Market Index release the same day. Finally, the US reports October Housing Starts/Building Permits data on Thursday. Hints of new taxes for the coming UK Autumn Budget Statement on 17 November The new Prime minister Rishi Sunak needs to find savings worth about £30-40bn/year to convince the independent Office for Budget Responsibility that debt won’t rise across the medium-term as a percentage of GDP.  At the same time, Sunak was out yesterday promising the return of the “triple lock” he suspended for 2022-23 as Chancellor, under which pensions are adjusted higher by the highest of inflation, average earnings, or 2.5%. Current Chancellor Jeremy Hunt is considering a new 40% windfall tax on electricity producers. He may also extend the current windfall tax on oil and gas producers to 2028 and raise it to 35% from 25% in Thursday’s budget statement. Earnings to watch Today’s US earnings focus is Walmart and Home Depot which are both giants in the US consumer sector. Walmart is expected to deliver 5.2% y/y revenue growth and lower EBITDA margin at 5.5% down from 6.3% a year ago. Home Depot is expected to deliver revenue growth of 3% y/y and unchanged EBITDA margin at 17.5% compared to a year ago. Sea Ltd is also reporting today and was at one point the darling of the market delivering high growth rates and strong returns but the last year has been brutal. Analysts expect revenue growth of 12% y/y down from a revenue growth rate of 122% y/y a year ago as e-commerce, gaming and financial services have slowed down in Southeast Asia. Today: Infineon Technologies, Vodafone, Alcon, Walmart, Home Depot, Sea Ltd Wednesday: Siemens Energy, Tencent, Experian, SSE, Nibe Industrier, Nvidia, Cisco, Lowe’s, TJX, Target Thursday: Siemens, Alibaba, Applied Materials, Palo Alto Networks, NetEase Friday: JD.com Economic calendar highlights for today (times GMT) 0900 – IEA’s Oil Market Report for November 1000 – Germany Nov. ZEW Survey 1000 – Eurozone Sep. Trade BAlance 1000 – Eurozone Q3 GDP estimate 1330 – US Oct. PPI 1330 – Canada Sep. Manufacturing Sales 1400 – US Fed’s Harker (voter 2023) to speak 1500 – US Fed’s Barr (Voter) to speak before Senate panel 2130 – API's Weekly Crude and Fuel Stock report 0030 – Australia Q3 Wage Price Index  Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher Source: https://www.home.saxo/content/articles/macro/market-quick-take-nov-15-2022-15112022

Equities saw some profit taking in last week’s post-US inflation rally, as some Federal Reserve (Fed) officials reminded investors that the 7.7% inflation is still high and that the Fed would continue fighting to bring it lower. G20 In geopolitics, yesterday’s meeting between Jow Biden and Xi Jinping went well. US-listed Chinese stocks extended gains. Crude Oil In energy, American crude dived on the news that OPEC cut its oil demand outlook and warned of uncertainties around global growth. Earnings In earnings, big US retailers Walmart and Home Depot are due to release earnings today Donald Trump And in fun news, Donald Trump will make an important announcement! Whoo! Watch the full episode to find out more! 0:00 Intro 0:41 Fed members warn of premature optimism 2:54 US inflation expectations go up 4:31 China could be the next hit to global inflation 5:05 Crude oil down on OPEC demand outlook cut 6:20 Biden, Xi meeting went well! 7.49 Crypto selloff cools 8:53 What to watch today? Ipek Ozkardeskaya 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. #Fed #US #inflation #expectations #G20 #Biden #Xi #meeting #US #China #crude #oil #FTX #bankruptcy #Bitcoin #Ethereum #selloff #Binance #recovery #funds #Walmart #HomeDepot #earnings #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary ___ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr ___ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 ___ Let's stay connected: LinkedIn: https://swq.ch/cH

Most of the commodities complex came under pressure yesterday. Although nickel was one of the exceptions, hitting its daily limit of 15% after reports of a blast at a nickel pig iron plant in Indonesia In this article Energy- OPEC cuts demand outlook Metals – LME nickel briefly hits limit amid reports of blast in Indonesia Agriculture – slight improvement in US winter wheat condition Energy- OPEC cuts demand outlook The oil market came under pressure yesterday. ICE Brent settled almost 3% lower on the day. A partial recovery in the USD put pressure on oil and the broader commodities complex, but a poorer demand outlook appears to have been the key catalyst for the move. OPEC released its latest monthly market report yesterday, in which they revised their demand growth forecasts for both 2022 and 2023 down by 100Mbbls/d. This means that the group now expects 2023 demand to be 200Mbbls/d below their previous forecast. OPEC forecasts demand for their crude oil to be 29.3MMbbls/d in 2023, compared to output in October of 29.49MMbbls/d. Given the sizeable supply cuts from November through until the end of next year, OPEC supply will still be lower than demand for OPEC oil over 2023. The IEA’s monthly market report will be released later today. The latest drilling productivity report from the EIA shows that the number of drilled but uncompleted wells (DUCs) increased by eight in October, which is the first monthly increase in DUCs since June 2020. The US industry since Covid has relied heavily on DUCs to help drive a recovery in production, which has left the amount of DUCs at their lowest levels since at least 2014. Meanwhile, in the same report, the EIA estimates that US shale production will grow by 91Mbbls/d to 9.191MMbbls/d in December. Metals – LME nickel briefly hits limit amid reports of blast in Indonesia Nickel briefly jumped by its 15% daily limit after unconfirmed reports about a blast at a small nickel pig iron plant in Indonesia. The operator of the plant has, however, said that the reports are false. The LME price surged by more than $4,000/t before paring gains. Volatility in the nickel market has become more common in recent months with reduced liquidity ever since the short squeeze seen back in March. Copper inventories immediately available to withdraw from LME warehouses climbed by 23,175 tonnes, the highest daily inflow since June 2021, according to the latest data from the exchange. The increase was driven by gains from warehouses in Germany and the Netherlands. Meanwhile, LME exchange inventories rose by 8.9kt after declining for fifteen consecutive sessions. Agriculture – slight improvement in US winter wheat condition The latest data from Ukraine’s Agriculture Ministry shows that Ukraine exported around 15.1mt of grains so far in the 2022/23 season, a decline of almost 31% YoY. Total corn shipments stood at 8.1mt (+124% YoY), while wheat exports fell 56.5% YoY to 5.7mt as of 14 November. The latest crop progress report from the USDA shows that the condition of the US winter wheat crop has improved over the week. 32% of the winter wheat crop is rated good to excellent. This compares to 30% last week and 46% at the same stage last year. The poor condition of US winter wheat will raise concerns for US 2023/24 wheat supply. TagsWheat OPEC Oil Nickel IEA   Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

Oil treading water Oil prices are basically flat on Tuesday, sitting a little below the middle of their recent trading ranges as traders continue to weigh up the global economic outlook, OPEC+ production risks, and China’s Covid approach. Prices remain choppy and that’s likely to remain the case given the ongoing uncertainty around these key areas. Everyone became much more optimistic around the US after last week’s inflation report but that appears to have quickly faded. Enormous downside risks remain around the global economy next year even if the Fed does pause its tightening a little sooner and perhaps that reality is kicking in again. Gold rally stalls at key resistance level The great gold recovery has stalled, with the yellow metal only slightly higher on the day after dipping a little earlier in the session. That follows a similar pattern to Monday and could be viewed as a positive sign given the reluctance to allow the recent rally to retrace in any considerable way. It has been a very impressive recovery though, up around 10% from the lows earlier this month, so a corrective move wouldn’t come as a surprise. It’s seeing resistance around $1,780 at the moment, a level that was a major area of support earlier in the year and again in May before finally crumbling in early July. A move above here would be a significant technical breakout. For a look at all of today’s economic events, check out our economic calendar: www.marketpulse.com/economic-events/ 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.  

Summary:  Today we note an indifferent session yesterday yielding to a strong session for sentiment overnight in Asia, perhaps in part from the friendly tone in the wake of the Biden-Xi summit yesterday, but also on stimulus hopes after weak Chinese data overnight. Elsewhere, we note the shift in attitude in the gold market as the USD remains very weak, with the latter trading at pivotal support areas in places. Wheat, crude oil, key semiconductor stocks to watch and upcoming earnings and more also on today's pod, which features Peter Garnry on equities and John J. Hardy hosting an on FX. Listen to today’s podcast - slides are available via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com. Source: https://www.home.saxo/content/articles/podcast/podcast-nov-15-2022-15112022

Summary:  Nasdaq 100 and S&P 500 ended higher, being lifted by softer-than-expected producer inflation. Walmart and Home Depot beat in earnings and topline. Chinese stocks surged on additional financial support to the property sector and a conciliatory tone from the Biden-Xi meeting. Hang Seng Index rose 4% to 18,343, more than 25% higher from its October low. What’s happening in markets? The Nasdaq 100 (NAS100.I) and S&P 500 (US500.I) gained on softer-than-expected US PPI Investors got a lift from the softer-than-expected PPI data which added to the post-CPI optimism that the US inflation may have peaked. S&P 500 gained 0.9% and NASDAQ 100 rose 1.5%. Stocks pared gains in the afternoon when the news of Russian missiles landing in Poland, a NATO member, hit the wires. Stocks nonetheless managed to recover from the missile news and finished the session higher.  Nine out of 11 S&P 500 sectors gained, with communication services, consumer discretionary, information technology and real estate led. On earnings, retail bellwether Walmart (WMT:xnys) surged 6.7% after reporting earnings and revenue beats and raising full-year outlook guidance. Home Depot (HD:xnys) gained 1.7% on earnings beating estimates and reaffirming full-year guidance. US  treasuries (TLT:xnas, IEF:xnas, SHY:xnas) rallied on PPI prints, with the 10-year yield falling 8bps to 3.77% US treasuries rallied, with yields falling 5-9 basis points across the curve. The 10-year yield fell 8bps to 3.77%. The market surged in price after the growth in PPI, both in headlines and core measures, slowed more than expected. A stronger Empire State manufacturing index, returning to the expansionary territory and Fedspeak from Bostic, Barr, and Harker reiterating the slower pace but still additional work to do message, did not tame market sentiment. Adding to the fuel was some safe-haven buying of treasuries after Russian missiles hit Poland and killed two people. Hong Kong’s Hang Seng (HISX2) and China’s CSI300 (03188:xhkg) on fire as risk-on sentiment returned Hong Kong and China’s equity markets surged for the third day in a row, with Hang Seng Index soaring 4.1 % and CSI 300 climbing 1.9%, as optimism returned to the markets due to favourable policy shifts in China regarding pandemic control and property developers’ access to funding and goodwill gestures shown by China’s President Xi and the US’ President Biden at their first face-to-face meeting after President Biden took office. In addition, the Chinese authorities announced that they will allow developers, after meeting some requirements in their financials and supports from their banks, to tap into some of the presale deposits now placed in escrow accounts. China Internet stocks and semi-conductor names were among the top gainers. Commodities lift; Crude oil (CLZ2 & LCOF3) rose more than 1% after Russian rockets hit, iron ore (SCOA,SCOZ2) extended its gain and wheat whipped up 1% Crude oil (CLZ2 & LCOF3) rose more than 1% after the EIA published a report saying inventories in developed nations sunk to an 18-year low of less than 4 billion barrels. The EIA says a potential EU ban on Russian supply will add further pressure, and its output may drop below 10 million b/d next year, from about 10.7 million so far this year. For the next technical indicators and levels to watch in oil, click here. Moving to metals, the Iron ore (SCOA) price rose 1.7%, continuing its rebound and has now risen 25% this month on the back of fresh China stimulus, however the iron ore price is still down 13% from its high. The question is, if China continues to ease restrictions, will the iron ore price continue its rebound, and support affiliated iron ore equities. Meanwhile in crop markets, wheat trades higher on concerns there could be a potential escalation of the war. What to consider Fed collects more evidence inflation is easing; US producer prices cool more than expected, clocking smallest gain in a year Investors got another piece of evidence the inflationary pressures are easing, with US producer price growth rising 8% Y/Y in October (below the 8.3% Bloomberg consensus expected and down from the 8.5% Y/Y in September), with prices rising 0.2% M/M (which was less than the 0.4% expected). Excluding volatile food, energy, and trade services, the core PPI grew 6.7% Y/Y in October- while the market expected the growth remains unchanged from the September level of 7.2%. After peaking in March at 11.7%, producer price growth has moderated from improving supply chains, softer demand, and weakening commodities prices. This means, following the softer-than-expected CPI print last week, the Fed has garnered more catalysts to slow its pace of hikes, which also provides further support to the equity market and bond market rallies. However, the next important data sets the Fed will be watching are due early next month; US jobs, and November CPI, which are ahead of the Fed’s next meeting (in the third week of December). RBA meeting minutes signal food and energy prices to rise, and property prices to fall Australia’s central bank sees food price inflation rising, along with energy prices, while the Unemployment rate is expected to rise as well off its lows. The RBA downgraded its outlook for the property market, expecting property prices to continue to fall, as they have in history when the RBA is in a rising cycle. It also sees housing loan commitments further falling. Yet the RBA affirmed it will keep rising rates till inflation is within its targets as the central bank wants underlying inflation to be within 2-3%. The RBA also hinted it may be close to its target, "in underlying terms, inflation was a little over 6% with most components of the CPI rising at annualized rates of more than 3%”. What are the investor takeaways from the RBA minutes? It could be worth looking for potential opportunities in investing in Food stocks, food ETFs, and the as well as wheat and corn. Secondly, it could be worth looking for potential opportunities in energy, like crude oil, or oil stocks such as Woodside Energy and Occidental Petroleum to name a few. And with property prices falling, along with lending, keep an eye on bank shares. Consider looking at CommBank (CBA) as a proxy. Will CBA continue to rally off its low on the back of the RBA's dovish stance, or will CBA and big banks take a haircut as banks’ profits are shrinking? Walmart and Home Depot earnings beat estimates Peter Garnry, Head of Equity Strategy wrote in his notes that Walmart showed a positive surprise on its operating margin and an upward revision to the FY results and Home Depot is delivering a decent Q3 result,= as well.  Walmart, the largest US retailer reported FY23 Q3 (ending 31 October) revenue of $152.8bn up 9% y/y beating estimates and adj. EPS of $1.50 vs est. $1.32 while announcing a $20bn buyback programme. The third quarter result is so strong that Walmart is increasing its FY outlook on adj. EPS to -6% to -7% y/y from previously -9% to -11%. The 12-month trailing revenue figure eclipsed $600bn for the first time in its history. As we have seen throughout this Q3 earnings season, retailers and consumer industries have been able to either preserve or expand operating margins. Walmart is valued at a 12-month forward EV/EBITDA of 11.6x compared to 12x for the S&P 500 Index.  The largest US home improvement retailer Home Depot reports FY23 Q3 (ending 31 October) revenue of $38.9bn vs est. $37.9bn up 6% y/y and EPS of $4.24 vs est. $4.13 as the US consumer remains in good shape despite inflation and higher cost of living. Home Depot is confirming its fiscal year guidance. Tencent (00700) is scheduled to report earnings on Wednesday Tencent is scheduled to report Q3 results today. Bloomberg survey shows the street is expecting revenues to edge down around 1% Y/Y with both advertisements and gaming down Y/Y. On adjusted EPS, the consensus is calling for an 8% year-on-year decline. For our look ahead at markets this week - Listen/watch our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: https://www.home.saxo/content/articles/equities/market-insights-today-16-nov-2022-16112022

Summary:  Equity markets were in for a wild ride yesterday as the melt-up continued in early trading, only to violently reverse on an apparently errant missile killing two in a Polish town bordering Ukraine. The price action has since stabilized, with risk sentiment still strong in Asia on hopes for incoming stimulus from China. Important incoming US data up today includes the October Retail Sales data.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) Big rejection in S&P 500 futures yesterday with the index futures coming off 1.3% from the intraday highs to close below the 4,000 level. Yesterday’s upside driver was a lower than estimated US PPI print and then later the downside move was triggered by news that a rumoured Russian missile had hit Polish territory killing two persons. This morning S&P 500 futures are attempting to push above the 4,000 level again, but we want to emphasize cautiousness here as geopolitical risks remain high and markets that seem fragile and trading on thin liquidity across many markets. Today’s key earnings event in the US is Nvidia reporting after the market close. Hong Kong’s Hang Seng (HSIX2) and China’s CSI300 (03188:xhkg) Hong Kong and China stocks consolidated and took a pause on the strong rally since last Friday, with Hang Seng Index losing 1% and CSI 300 Index sliding 0.7%. Chinese property names retraced. Leading private enterprise developer Country Garden (02007:xhkg) plunged 14% following the placement of new shares. Chinese EV makers underperformed, with leading names dropping by 2% to 6%. New Covid cases in mainland China went above 20,000 for the first time since April. FX: USD volatile on risk sentiment swings yesterday The US dollar was pummelled yesterday as the risk sentiment melt-up initially continued yesterday in early trading in the US before a missile hitting a Polish town (more below) sharply reversed sentiment. The situation has since stabilized, but the reversal of the spike put a considerable dent in tactical USD downside momentum. GBPUSD traded the most wildly ahead of today’s CPI and tomorrow’s Autumn Budget Statement, squeezing from 1.1750 early yesterday to all the way north of 1.2000 briefly before trading back to 1.1800 and closing the day south of 1.1900. The USD volatility was less pronounced elsewhere, particularly against Asian currencies. The incoming US data and risk sentiment swings around that data (or as we saw yesterday from other sources) will likely drive the next USD move. Crude oil (CLZ2 & LCOF3) Crude oil ended lower on Tuesday following a volatile trading session that briefly saw prices spike on news a Polish border town had been hit by a Russian-made but probably Ukrainian fired missile (see below). Overall, the crude oil market remains rangebound with demand worries currently weighing a touch harder than supply concerns driven by OPEC+ production cuts and from next month, EU sanctions against Russian oil, a development that according to the IEA may drive a 15% reduction in Russian output early next year. In China the number of virus cases have surged to near 20,000 thereby testing local authorities' appetite for maintaining the covid-zero restrictions. Focus on EIA’s weekly stock report after the API reported a 5.8m barrel drop in crude and smaller increases in fuel stocks. Gold (XAUUSD) Gold touched resistance at $1788 on Tuesday as the dollar hit a fresh cycle low after US PPI showed the smallest increase since mid-2021. Later in the day, a brief safe haven bid quickly fizzled out after Biden said the rocket that hit Poland was unlikely to have been fired from Russia. Demand from ETF investors – net sellers for months – remain elusive with total holdings falling to a fresh 31-month low and with that in mind expect continued consolidation and potentially a recheck of support at $1735. Resistance at $1788, the 38.2% retracement of the 2022 correction and $1804, the 200-day moving average. US treasuries (TLT, IEF) US treasuries punched to new local lows yesterday, with the 10-year treasury benchmark dipping below 3.80% after a likely errant missile hit a Polish town bordering Ukraine and on slightly softer than expected PPI data. But yields have rebounded today and are back to slightly below the close from last Thursday after that day’s surprisingly soft October US CPI release. Key levels are 3.50% to the downside, the pivot high around the June FOMC meeting when the Fed hiked 75 basis points for the first time for this cycle, while 4.00-4.10% is perhaps the upside swing area. What is going on? UK October CPI was out at 11.1% YoY, a new cycle high This was vs. 10.7% expected and 10.1% in September. Core CPI matched the cycle high from September at 6.5% YoY, versus 6.4% expected. Sterling trades a bit weaker after the initial reaction to the data point, as higher inflation will likely require more fiscal and monetary tightening that will make the coming UK recession deeper, a sterling negative. Missile comes down in Poland town bordering Ukraine, killing two The source of the missiles is a mystery, with US President Biden saying after an emergency meeting with other leaders that the missile was “unlikely” to have been launched in Russia, while Poland claimed that the missile was “Russian made” and convened an emergency security meeting yesterday afternoon. Markets reacted strongly to the development initially, as Poland is a member of NATO. Russian officials said that claims of an intentional missile firing are a “deliberate provocation with the goal of escalating the situation.” Donald Trump declares third bid for the White House in 2024 Trump was widely seen as the chief liability in a very poor Republican showing in the mid-term elections last week, with candidates strongly denying the results of the 2020 election losing badly in almost every case. The Democrats are set to gain a slightly larger majority in the Senate and the Republicans will only eke out the narrowest of majorities in the House of Representatives. As Trump still enjoys an unmatched “base” of personal popularity, it will be difficult for any Republican profile to rise up to challenge Trump, just as it is likely impossible that Trump can win independent voters and those that are not his base. It’s ideal ground for the formation of a new party. Apple set to shift to US-based chip production Apple shares rose over 2.1%, moving to their highest level since early November after the Apple CEO unveiled the company will be using US-made Chips from Arizona in 2024, as part of reducing its reliance on Asian chip manufacturers and shifting to producing its own. CEO Tim Cook also told staff Apple plans to expand its chip supply into European markets. The moves underscore the necessity for technology companies to reshoring semiconductors from Asia to reduce supply chain risks. These types of moves will add to inflationary pressures in the future. US earnings recap: Walmart, Home Depot, and Sea Ltd Yesterday’s earnings releases from these three consumer retailing companies were all better than expected with Walmart lifting guidance and beating on revenue growth. Home Depot had the most downbeat reaction from investors as the home improvement retailer’s revenue growth beat was only due to inflation and not higher volume. The biggest positive reaction was in Sea Ltd shares as the Southeast Asia gaming and e-commerce company posted a narrower operating loss and beat on revenue growth; however, the company took down guidance in its gaming division. Read more details in our earnings review note from yesterday. US producer prices cool more than expected, clocking smallest gain in a year Investors got another piece of evidence inflationary pressures are easing, with US producer price growth rising 8% Y/Y in October (below the 8.3% Bloomberg consensus expected and down from the 8.5% Y/Y in September). Excluding volatile food, energy, core PPI rose 6.7% Y/Y in October- when the market prices to rise 7.2%. After peaking in March at 11.7%, producer price growth has moderated from improving supply chains, softer demand, and weakening commodities prices. The Fed has therefore garnered more catalysts to slow its pace of hikes, which also provides further support to the equity market and bond markets. However, the next important data sets the Fed will be watching are due early next month; US jobs, and November CPI, which are ahead of the Fed’s next meeting (in the third week of December). Arabica coffee (KCc1) dropped 4.4% on Tuesday … thereby extending a rout that has seen the price retrace almost 61.8% of the 2019 to 2022 surge to a multi-year high above $2.50 per pound. Fast forward nine months and the global economic slowdown has led to a reduction in away-from-home consumption at a time where the production outlook from South America has improved. Stocks at ICE monitored warehouses have risen for the past seven days from a 20-year low and could more than double soon with more than half a million bags awaiting assessment. A new LNG exporter is born Mozambique is now officially a new LNG exporter after the first shipment on Monday left the Coral South floating liquefaction unit, which has a 4.4 bcm annual export capacity. This is positive news for Europe who is desperately looking for new energy suppliers since the Ukraine war has started. It was a long-decade process for Mozambique to get its first LNG supply out of the country. Based on official estimates, this is one of the largest LNG offshore fields in Africa. What are we watching next? Fed hawk Christopher Waller to speak on Economic Outlook tonight Waller is an FOMC voter as he sits on the Board of Governors and is widely considered one of the most hawkish Fed members and may unleash a blast of hawkish rhetoric, although it seems the market is more likely to listen only to Fed Chair Powell himself and more importantly, at incoming data. US October Retail Sales data today An interesting data release is up today, the US Retail Sales for October. This data series suggests rather sluggish US growth and is reported in nominal month-on-month terms, not real- or inflation-adjusted terms. The last three months of the headline data have averaged almost exactly 0.0%, while the “ex Food and Energy” series has averaged +0.36%. Today’s headline number is expected at +1.0% MoM and +0.2% for core sales. Earnings to watch Today’s US earnings focus is Nvidia which is expected to deliver a 18% decline in revenue y/y to $5.8bn and EPS of $0.70 down 31% y/y as the market for GPUs is cooling down as crypto mining is becoming less profitable from lower prices on cryptocurrencies. Tencent is expected to report earnings today following a new round of layoffs announced yesterday as revenue growth is expected to be down 1% y/y in Q3. Today: Siemens Energy, Tencent, Experian, SSE, Nibe Industrier, Nvidia, Cisco, Lowe’s, TJX, Target Thursday: Siemens, Alibaba, Applied Materials, Palo Alto Networks, NetEase Friday: JD.com Economic calendar highlights for today (times GMT) 0900 – ECB Financial Stability Review 1300 – Poland Oct. CPI 1315 – Canada Oct. Housing Starts 1330 – US Oct. Retail Sales 1330 – Canada Oct. CPI 1330 – US Oct. Import & Export Prices 1415 – US Oct. Industrial Production 1450 – US Fed’s Williams (Voter) to speak 1500 – US Nov. NAHB Housing Market Index 1500 – US Fed’s Barr (Voter) to testify before House Panel 1530 – EIA's Weekly Crude and Fuel Stock Report 1935 – US Fed’s Waller (Voter) to speak 0030 – Australia Oct. Employment Change / Unemployment Rate Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher Source:https://www.home.saxo/content/articles/macro/market-quick-take-nov-16-2022-16112022

In light of advanced prints from CME Group for crude oil futures markets, traders scaled back their open interest positions by around 14.2K contracts following four consecutive daily builds on Tuesday. Volume, on the other hand, rose for the second straight session, this time by nearly 114K contracts. WTI: Next support comes at $82.10 Tuesday’s uptick in prices of the WTI was on the back of declining open interest, which removes strength from the continuation of the rebound in the very near term. WTI prices could then challenge the weekly low at $82.10 (October 18).  

Summary:  Today we discuss US markets exploding higher yesterday after a soft PPI release, only to have an apparently Russian missile hitting Poland on the Ukrainian border roiling sentiment. The USD behavior yesterday was inverse to the swings in equities, pointing to more correlation with risk sentiment swings than US yields as we look ahead at today's US Retail Sales data. Crude oil, tightness in the commodity markets, the huge announcement from Apple on plans to purchase US-made chips and much more on today's pod, which features Peter Garnry on equities and John J. Hardy hosting an on FX. Listen to today’s podcast - slides are available via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com. Source: https://www.home.saxo/content/articles/podcast/podcast-nov-16-2022-16112022

Summary:  The hotter-than-expected US retail sales data and hawkish-leaning comments from Fed officials weighed on equities but boosted buying of long-dated bonds as investors focused on the likelihood of Fed overdoing in monetary tightening and triggering a recession. Target disappointed with Q3 miss and weak Q4 sales guidance, highlighting the pain of the US retailers and consumers. Nvidia's results beat expectations, moving its shares up after hours. What’s happening in markets? The Nasdaq 100 (NAS100.I) and S&P 500 (US500.I) retreated on strong retail sales and hawkish Fedspeak The Good news is bad news phenomenon persists. The hotter-than-expected 1.3% rise in October retail sales, followed by several hawkish-leaning comments from Fed officials triggered concerns that the Fed would overdo monetary tightening and bring about a recession. The fall in yields at the long end of the US treasury curve did not lend support to the equity market as in recent months as stock investors took it as a sign of bond market pricing in a higher recession risk. Nasdaq 100 fell 1.5% and S&P500 declined 0.8%, with 68% of S&P 500 companies and 9 out of 11 sectors closing lower. Energy, consumer discretionary, and information technology led the benchmark index lower while the defensive utilities sector and consumer staples sector managed to finish the session with modest gains. Target (TGT:xnys) fell 13% following the retailer reported a large miss on earnings and cut its outlook for the current quarter far below analyst estimates. Lowe’s (LOW:xnys) gained 3% after reporting better-than-expected comparable sales and raising full-year earnings guidance. Micron (MU:xnas) dropped 6.7% as the chipmaker said it was cutting DRAM and NAND wafer production. After the market closed, Nvdia (NVDA:xnas) and Cisco (CSCO:xnas) reported earnings beating analyst estimates. Nvida rose 1.3% and Cisco gained 3.9% in the extended hours trading. US  treasuries (TLT:xnas, IEF:xnas, SHY:xnas) rallied with yields in the long end of the curve falling most on recession concerns The US treasury yield curve bull flattened, with the 2-year yield edging up 2bps to 4.35% while the 10-year yield fell 8bps to 3.69%. The much-watched yield curve inversion between the 2-year and the 10-year widened to 67bps, the most invested since February 1982, and heightened the growth scare among investors. The market has largely priced in a 50bps hike in December but is unwinding some of the post-CPI optimism that the Fed may do less next year, after Fed’s George, Daly, Waller, and Williams pushed back on the notion of pausing. The strong results from the 20-year bond auction on Wednesday helped supported the outperformance of the long ends.  Hong Kong’s Hang Seng (HISX2) and China’s CSI300 (03188:xhkg) on fire as risk-on sentiment returned Hong Kong and China stocks consolidated and took a pause on the strong rally since last Friday, with Hang Seng Index losing 0.5% and CSI 300 Index sliding 0.8%. Chinese property names retreated, following new home prices in the 70 major cities of China falling 1.6% Y/Y in October, the largest decline in seven years, and Agile (03383) announced that the developer will sell new shares at an 18% discount. Agile tumbled 23%. Country Garden (02007:xhkg), which also announced share placement earlier, plunged 15%. Investors also became increasing concerned about the rising trend in new Covid cases in mainland China, which having gone above 20,000 for the first time since April. In New York hours, the ADRs of Tencent (00700:xhks) rose 3.4% versus their Hong Kong closing level after reporting earnings beating estimates while Meituan (03690:xhkg) dropped 6.7% from Hong Kong closing as Tencent said it would disburse its stake on Meituan to shareholders. What to consider U.S. Retails hotter-than expected U.S. headline retail sales grew by 1.3% M/M in October (consensus:  +1%, Sep: 0%). The control-group retail sales increased by 0.7% M/M (consensus: +0.3%, Sep: +0.4%). U.K. headline CPI jumped to 11.1% in October, the highest in 41 years U.K’s October headline CPI came in at 11.1% Y/Y (vs consensus 10.7%), the highest in 41 years. Core CPI remained at 6.5%. Australia’s unemployment falls, employment rises more than expected in October, following Australian wage growth growing more than expected; AUDUSD trades flat Australia’s jobless rate fell to 3.4%, from 3.5% last month, which supports the RBA continuing to rise rates, and not pause on rate hikes at their next meeting in December. Australian employment rose by 32,200 month-on-month in October, almost double the 15,000 jobs expected to be added to the economy. Job growth is also up markedly from the tiny 900 jobs that were added the month prior. The AUDUSD is staying range bound for now. Target reported Q3 earnings miss and full-year guidance reduction Target’s Q3 adjusted EPS fell to USD1.54, nearly 30% below the median of analyst estimates. The retailer is predicting a drop in comparable sales for the first time in five years and estimating operating margins will shrink to about 3%, which is half of its previous forecast. Target is looking to axe $3 billion in costs, but says there will be no mass layoffs. This highlights the pain of the US retailers and also the consumer – who is reluctant to spend on non-essential items in the face of rising interest rates and inflation. Nvidia earnings beat Software graphics giant Nvidia (NVDA) reported revenue for the third quarter that beat analyst estimates. Revenue fell 17% y/y to $5.93 billion, beating the expected drop of 18% y/y to $5.84 billion. NVIDIA’s outlook for the fourth quarter was a bit vague though, but more or less points to improvements in revenue, citing revenue is expected to hit $6.00 billion, plus or minus 2%. Nvidia said Microsoft will use its graphics chips, networking products, and software in Microsoft’s new AI products. Nickel Miners could be under fire Profit taking in oil equites is likely with the after the oil price fell on reports the Druzhba pipeline carrying Russian oil to Europe had restarted, WTI Crude Oil fell 1.9%. Elsewhere, Nickel miners shares could be under fire today move after Nickel futures fell 9% on Wednesday. LME is said to be stepping up surveillance of sharp swings earlier in the week on supply fears. Keep an eye on Australia’s Nickel Mines (NIC) and IGO, Japan’s Pacific Metals, Sumitomo Metal Mining, and Indonesia’s Vale Indonesia, Aneka Tambang. For our look ahead at markets this week - Listen/watch our Saxo Spotlight. For a global look at markets – tune into our Podcast. Source: https://www.home.saxo/content/articles/equities/market-insights-today-17-nov-2022-17112022

Summary:  The strong equity market rally eased yesterday as a very strong US Retail Sales report for October pushes back against the notion that the US economy is rapidly weakening. Today features a pivotal Autumn Budget Statement that will allow the market to make a vote of confidence on sterling on whether the new spending cuts and tax rises will inspire further confidence in sterling after its recent comeback.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) S&P 500 futures fell yesterday to close at 3,968 as investors are not following through on the momentum around the ‘peak rates’ narrative. This morning the index futures are trading higher with the 3,964 level being the key level to watch on the downside and 4,000 on the upside. Today’s macro events that can impact the equity market are US housing starts and permits, Philly Fed Business Outlook and initial jobless claims with the latter in focus given the latest mass layoffs in the technology sector. Hong Kong’s Hang Seng (HSIX2) and China’s CSI300 (03188:xhkg) Hong Kong and China stocks retreated for the second day in a row, with Hang Seng Index falling around 2% and CSI 300 declining 1%. Tencent (00700:xhkg) fluctuated between small gains and losses after reporting Q3 EPS beating analyst estimates but a 2% Y/Y decline in revenues, being dragged down by online gaming and advertisement. Meituan (03690:xhkg) however fell nearly 8%, following Tencent’s announcement to disburse its 17% stake in Meituan to shareholders. NetEase (0999:xhkg) tumbled 12% after US gaming company Blizzard Entertainment (ATVI:xnas) would not renew its expiring licensing agreement with NetEase. Also weighing on sentiment was the People’s Bank of China’s emphasizes on financial stability and warns against potential inflation risks in the central bank’s Q3 monetary report, as well as news reports about the temporary suspension of redemption in some investment products suffering losses from the recent rise in Chinese bond yields. In addition, new Covid cases surged to 23,132, a new high since April. FX: GBP focus today as USD stabilizes on very strong October US Retail Sales report Strong US data is at odds with the recent drumbeat of softer inflation numbers that have helped inspired the recent steep sell-off in the US dollar, and kept the 2-year yields and Fed rate expectations from falling any further yesterday, even if longer US yields dipped to new local lows yesterday. The USD edged higher, with the recent lows the key support for the greenback and with the currency trading more in line with risk sentiment now. The top-tier incoming data won’t arrive until the early-mid December time frame, save perhaps for the PCE data on November 30. The bigger focus today is on GBP as Chancellor Jeremy Hunt is set to deliver the Autumn Budget Statement and a chance for thje market to judge whether the UK is an attractive place to invest in addition to whether the moves ill stabilize the country’s finances as it also risks worsening the depth of the coming recession. 1.2000 appears a key in GBPUSD, while EURGBP is choppy in the 0.8700-0.8800+ range. Crude oil (CLZ2 & LCOF3) Crude oil remains on the defensive trading near the lowest levels this month on continued concerns about the demand outlook in the world’s two largest consumers. The US yield curve has inverted the most since the early 1980’s underscoring concerns about the risk of recession next year while China continues to battle with rising covid cases, now nearing the all-time high seen earlier this year. Both developments leading to demand growth for next year being downgraded, thereby offsetting some of the tightness the EU embargo on Russian oil will help create into early 2023. WTI will be looking for support ahead of the recent low at $82 with Brent focusing on the $90-area. Gold (XAUUSD) Gold trades lower as the market pauses for breath following a 170-dollar run up in prices from the November 3 low. The metal is currently dealing with mixed signals as elevated recession worries, highlighted by the most inverted yield curve in almost four decades, are being offset by the biggest increase in US retail sales in eight months, indicating Fed tightening has further to run to bring inflation under control. Demand from ETF investors – net sellers for months – picked up a bit on Wednesday, but not enough to signal a change in their behaviour, and with that in mind expect continued consolidation and potentially a recheck of support at $1735. Resistance at $1788, the 38.2% retracement of the 2022 correction and $1804, the 200-day moving average. Copper (HGH3) and silver (XAGUSD) Copper and silver both extended their declines following a recent strong run up in prices. Copper ran out of steam ahead of major resistance in the $4/lb area and after breaking back below $3.78 the next line of support now comes in at $3.68. Industrial metal traders are keeping a watchful eye on covid developments in China, the US yield curve signalling an increased risk of a recession next year, extreme volatility in nickel market and in copper specifically, an emerging contango indicating a market with ample supply.  currently. Silver meanwhile trades back below its 200-day moving average with the first level of support in the $20.95 area. US treasuries (TLT, IEF) US treasuries punched to new local lows again yesterday, supported by a strong 20-year auction result, and despite the strong US Retail Sales news, with the 10-year treasury benchmark dipping below 3.70% and within 20 basis points of the next psychologically important level and pivot high from mid-June near 3.50%, a level that was quickly reached in the context of the market realizing that the FOMC was set for its first 75 basis point rate hike since 1994. The much-watched yield curve inversion between the 2-year and the 10-year widened to 67bps, the most invested since February 1982, and heightened the growth scare among investors. The market has largely priced in a 50bps hike in December and is unwinding some of the post-CPI optimism that the Fed might do less next year, after Fed’s George, Daly, Waller, and Williams pushed back on the notion of pausing. What is going on? Strong October US Retail Sales, weak November housing Market survey After a string of weak reports, the US October Retail Sales report came in far stronger than expected, with a strong +1.3 % MoM rise (vs. +1.0% expected) for the headline and an even more impressive +0.9% MoM rise in the “ex Food and Energy” print, on top of a +0.3% revision to the September data point. Elsewhere, we can see the massive shift higher in US mortgage rates continue to weigh on housing activity, as the November US NAHB Housing Market Index plunged 5 more points to 33, the lowest reading since the very worst month of the pandemic outbreak shock in 2020 and before that since 2012. Siemens Q4 results beat estimates The German industrial giant reports FY22 Q4 (ending 30 September) revenue of €20.6bn vs est. €19.3bn and orders of €21.8bn vs est. €20.4bn. In addition, the company says that it sees higher operating margins in three divisions and that downside risks from Russia are minimal now. Target reports earnings miss and downgrades sales guidance Target’s Q3 adjusted EPS fell to $1.54, nearly 30% below the median of analyst estimates. The retailer is predicting a drop in comparable sales for the first time in five years and estimating operating margins will shrink to about 3%, which is half of its previous forecast. This indicates that the substitution effect is increasing as the consumer is increasingly under more pressure. Target is looking to reduce $3bn in costs but says there will be no mass layoffs. Nvidia earnings beat Software graphics giant Nvidia (NVDA) reported revenue for the third quarter that beat analyst estimates. Revenue fell 17% y/y to $5.9bn, beating the expected drop of 18% y/y to $5.8bn. NVIDIA’s outlook for the fourth quarter was vague citing revenue is expected to hit $6.0bn, plus or minus 2%, which will translate into a 20% drop in revenue in the important holiday quarter. Nvidia also said Microsoft will use its graphics chips, networking products, and software in Microsoft’s new AI products. The slowdown in demand for GPUs is driven by less profitable crypto mining and as a result GPU pricing is plummeting and inventories on the balance sheet rising to $4.45bn up from $2.23bn a year ago. EPS was $0.28 down 73% y/y. Australia’s unemployment falls, employment rises more than expected in October Australia’s jobless rate unexpectedly fell to 3.4%, from 3.5% last month, which now supports the RBA continuing to raise rates, and not pause on hikes at their next meeting in December (market priced at 50-50 odds of a 25-bp hike). Australian employment rose by 32,200 month-on-month in October, almost double the 15,000 jobs expected to be added to the economy. The AUDUSD is staying range bound for now after its recent sharp rally, consolidating a bit on weak risk sentiment in Asia overnight. The RBA has said it expects the jobless rate to rise. US Fed’s Waller, noted Fed hawk, says he is “more comfortable” with smaller hike It appears that Fed consensus is settling on lowering the pace of rate increases at the December FOMC meeting after one of the more hawkish FOMC voters, Governor Christopher Waller said he is “more comfortable” with a smaller hike in December after the Fed’s four 75-basis points moves since the June FOMC meeting, although he still declared the move is data-dependent. What are we watching next? UK Autumn Budget Statement to be announced today Ahead of the speech, the UK’s Office for Budget Responsibility told the treasury that by 2026-27, the budget deficit could grow to £100 billion from earlier projections of £32 billion. Several moves by Chancellor Jeremy Hunt have already been made to reverse the original budget laid out by former Chancellor Kwarteng under PM Truss’ leadership, including a shortening of the energy bill cap scheme to just six months. Corporate taxes are also set to be raised to 25 percent from 19 percent, and windfall taxes on electricity and oil and gas firms, together with more income earners set to pay tax at the top 45% rate and taxes on capitali gains and dividends set to rise. Still, the pension benefit will be set to rise at September’s 10.1% CPI rate in April of next year. Critics might suggest that much of the tax implementation will be “back-loaded” to beyond the 2024 election to avoid a further hit to Tory popularity. This statement will be critical for the direction of sterling from here. Earnings to watch In today’s US earnings focus we expect Applied Materials to report revenue growth of 4% y/y and lower operating margin from a year ago following the signs we observe in the semiconductors industry. In the cyber security industry, Palo Alto Networks is also reporting today with revenue growth expected to 24% y/y and EBITDA of $349mn up from $-8.8mn a year ago. The Chinese technology and consumer sectors have faced a lot of headwinds over the past year and Tencent’s result yesterday was not rosy either, so there might be a downside risk to Alibaba’s result today. Analysts expect Alibaba to report revenue growth of 4% y/y and EPS of CNY 11.21 up 65% y/y. Today: Siemens, Alibaba, Applied Materials, Palo Alto Networks, NetEase Friday: JD.com Economic calendar highlights for today (times GMT) 0955 – UK Chancellor Jeremy Hunt presents Autumn Budget Statement 1000 – Eurozone Oct. Final CPI 1230 – UK Bank of England Chief Economist Pill to speak 1300 – US Fed’s Bullard (voter 2022) to speak 1330 – US Oct. Housing Starts and Building Permits 1330 – US Oct. Philadelphia Fed 1330 – US Weekly Initial Jobless Claims 1440 – US Fed’s Mester (Voter 2022) to speak 1530 – EIA's Weekly Natural Gas Storage Change  1540 – US Fed’s Jefferson and Kashkari (voter 2023) to speak 1600 – US Nov. Kansas City Fed Manufacturing Activity 1845 – US Fed’s Kashkari (voter 2023) to speak 2330 – Japan Oct. National CPI 0001 – UK Nov. GfK Consumer Confidence Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher Source: https://www.home.saxo/content/articles/macro/market-quick-take-nov-17-2022-17112022

Summary:  Today we look at risk sentiment taking a breather after a particularly strong US October US Retail Sales report, although long US treasury yields fell on the day and took the yield curve inversion to its most negative in over forty years as markets continue to price a recession ahead. The key incoming data doesn't start rolling in for another couple of weeks, so we wonder if a possible shift in weather into proper winter mode could change the complacent stance in energy markets. Elsewhere, we wonder if the Budget Statement from UK Chancellor Hunt can continue to support sterling, look at the plunge in coffee prices, Nvidia and Siemens earnings, and more. Today's pod features Peter Garnry on equities and John J. Hardy hosting an on FX. Listen to today’s podcast - slides are available via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: https://www.home.saxo/content/articles/podcast/podcast-nov-17-2022-17112022

GBPUSD keeps high ground Sterling rallies as red hot inflation in the UK calls for more interest rate hikes by the BoE. A break above September’s high of 1.1740 has prompted some bears to cover their positions, easing the downward pressure from the daily chart’s perspective. A brief pause above this resistance-turned-support suggests that there is still juice in the recovery. August’s double top at 1.2250 would be next should the rebound pick up speed past 1.2000. 1.1500 near the origin of a bullish breakout is a key demand zone. USDCAD attempts to rebound The Canadian dollar slid as October’s inflation fell short of expectations. A dip below 1.3240 indicates a lack of demand for the US counterpart. The greenback may continue to lose ground as traders stay on the sidelines for fear of catching a falling knife. 1.3150 is the immediate level to see whether it could trigger a buy-the-dips behaviour. Failing that, the psychological level of 1.3000 would be on the line. For those looking to buy, 1.3440 is the first hurdle to clear and the pair may only regain a foothold once above 1.3640. USOIL falls lower WTI crude remains feeble amid rising COVID-19 cases in China. The price is in a horizontal consolidation between 82.00 and 93.50, but the downward pressure is still omnipresent following a double top at the upper band. Two consecutive falls below 88.00 and 85.00 have put the bulls on the defensive. As the latest rebound stalled at the psychological level of 90.00, the commodity could be vulnerable to a new round of sell-off. A drop below 82.00 might attract momentum sellers and push the price towards 77.00.

Silver we do have a sell signal after a new high & significantly lower close yesterday. I am watching for a small head & shoulders pattern to form on the short term charts for confirmation. WTI Crude December remains in a volatile sideways trend. Impossible to read day to day as we are up one day, down the next day. Update daily by 05:00 GMT. Today's Analysis. Gold could be on the turn after a very fast $170 rally in just 2 weeks as we test important Fibonacci & 2 year trend line resistance at 1785/90. No sell signal yet but I feel we are due for a correction to the downside. A break below 1768 today should be confirmation of a move towards 1755 & support at 1750/45 for profit taking on shorts. Strong Fibonacci resistance at 1785/90 then further important 500 & 200 day moving average resistance at 1800/05. I think Gold will reverse from one of these 2 areas. A sustained break above 1810 is a buy signal. Silver holding above the 200 day moving average at 2155/35 was a buy signal targeting 2220/30 which was hit yesterday with a high for the day exactly here. However prices collapsed back to the 200 day moving average at 2150/40. We can trade this 80 tick range while we wait for the next signal. Yesterday I warned that a bounce today which holds 2200/2210 (a high for the day exactly here yesterday) & then breaks below the neck line at 2140/30 is a sell signal. So sell a break below 2130 today targeting 2115/10 & 2085/80, perhaps as far as strong support at 2050/40.

The key theme for COP27 has been to follow through on commitments made at COP26. The climate conference so far has shown some but not enough progress in implementation. While talks are slowly advancing on loss and damage funding and carbon offset markets, we expect more to be done in the remaining days of COP27 In this article Slow progress in addressing loss and damage Complications of developing a more mature carbon market Few new targets and climate plans revealed Will there be an agreement to phase down all fossil fuels? Corporate sustainability commitments grabbing more attention Conclusion and what to expect from the final days of COP27 Climate change forecasts have been more alarming than ever. Just days before COP27, the United Nations annual climate conference, a report released by the UN Environmental Programme projected that current nationally determined contributions (NDCs, or country pledges that cover agreed policies) will likely result in a 2.4 to 2.6-degree Celsius increase in global temperature by 2100, well above the Paris Agreement’s 1.5-degree Celsius goal. This gloomy outlook emphasises the urgency for governments to act and collaborate. Deemed an 'implementation COP', COP27 has largely been focusing on how governments are going to honour their commitments, and how they can work together to address climate challenges at the global level. While COP27 is still a few days away from its conclusion, here’s what the conference has achieved so far. Four key things to watch out for at COP27 Good COP, Bad COP: Separating heat from light at the climate summit Slow progress in addressing loss and damage The issue of loss and damage – which refers to how developing countries are suffering disproportionally from climate change while having contributed little to it – has been taking centre stage at COP27 as it appears officially for the first time on the agenda. Developed countries previously agreed to provide $100bn per year by 2020 to help developing countries mitigate climate change but have been falling short of that target (developed countries collectively only financed $83.3bn in 2020). Climate finance provided and mobilised by developed countries OECD   This year at COP27, developed countries such as the US and the UK have announced plans to increase their climate funding to developing countries, but these announcements are likely not going to be enough to reach the $100bn per year target. Moreover, while the UK, for example, pledged to triple climate funding, the money is expected to come from the $13.65mn that the country had already committed to paying, with no extra funding planned. So far, negotiations on the topic have been hindered by disagreements between developing and developed countries. On Monday, the UN published a draft proposing to either launch a two-year process to establish a funding mechanism to compensate for loss and damage or to delay the decision on what the UN’s role would be until 2023. Developing countries including China, however, have requested a loss and damage fund be established at COP27. The geopolitical situation is not helpful either. Although the US and China have resumed bilateral climate talks, which is expected to boost COP27 negotiations in general, the two countries are divided on climate financing. While China is among the group of developing countries requesting funding, the US has expressed concern about putting money in a fund as this could pose a liability to donors in the event that funds turn out to be insufficient. And there are reasons to believe it will, as experts claim that $100bn per year is far from sufficient in the long-term to help developing countries mitigate climate change consequences. A recent UN-backed report shows that roughly $2tn per year of investment will be needed by developing countries by 2030 to fight climate change, and half of it will have to come from external financing. The $100bn per year of funding target from developed countries is therefore only a start; a coordinated mechanism will need to be in place for global climate financing to work. In addition to direct climate aid, the UN’s proposed draft notes that arrangements for funding for loss and damage can also include debt relief, reform of international financial institutions, and humanitarian assistance, among others. These measures can effectively improve the climate financing system and are relatively easier for developed countries to get on board with. Indeed, the IMF and the World Bank have announced at COP27 that countries affected by extreme weather disasters will be able to defer their debt repayments for a maximum of two years. Complications of developing a more mature carbon market Although not as popular as loss and damage, Article 6 is an important discussion point at COP27. Article 6, which was finally agreed upon at the COP26 Glasgow summit, addresses the functioning of international carbon markets and carbon trading and discusses how countries can collaborate across borders to meet their climate goals. Yet several issues remain outstanding for COP27. First, despite the agreed-upon principles regarding additionality and performance to enhance the credibility of carbon credits, detailed rules are needed for the carbon market to function. Second, countries still need to decide whether they can modify their authorisations for carbon credits and how to deal with unauthorised credits. Third, while avoided emissions currently do not qualify under Article 6, it will be up to negotiators to decide whether they will qualify in the future. Discussions on Article 6 have been advancing slowly at COP27, partly because the loss and damage topic is dominating delegates’ attention, and partly because of the complexity of designing an effective global carbon market. Yet we could still expect final decisions to be made on the matter, as Article 6 is not as controversial as some of the other issues at COP27.   We could still expect final decisions to be made on Article 6. Separately, the US has proposed setting up a carbon offset programme – called the Energy Transition Accelerator (ETA) – which would allow private companies to buy a newly created class of carbon credits from projects in developing countries to help cut emissions and accelerate the transition from fossil fuels to renewable energy. Such a programme could transfer large amounts of money from the private sector to developing countries and help with climate financing, but the proposal has encountered resistance. First, without careful design and successful implementation, the programme is not guaranteed to lead to substantial cuts in emissions. For instance, if a renewable project is planned to be built in a developing country anyway, without replacing fossil fuels, the project would not replace emissions but would nevertheless allow credit purchasers to emit more. Additionally, with the current $2bn carbon offset market remaining unregulated, the ETA would likely face challenges on the regulation front as well. The ETA will likely not be included in COP27’s final text, but will likely start to be implemented anyway, led by the US. From a global perspective, there are good reasons to go for one carbon offsetting market, rather than different systems. So it will be curious to see how this plays out. Few new targets and climate plans revealed Another topic being watched at COP27 is whether and how countries will revisit and strengthen their 2030 climate targets to be aligned with the 1.5-degree Celsius Paris Agreement goal. We were not expecting an overflow of government announcements at COP27 amid the global energy crisis and fears of economic recessions. Indeed, only 28 countries have submitted an updated NDC so far. Further efforts are needed to push countries to roll out concrete plans to back their climate targets. Of these countries, India stands out. The world’s third largest emitter is now committed to reducing carbon intensity by 45% below 2005 levels by 2030, up from 33%-35% before. India has also submitted during COP27 its Long-Term Low-Carbon Development Strategy (LTS), which includes plans that range from increasing renewable deployment to electrifying the transport sector to enhancing climate resiliency. However, the submitted LTS appears to be insufficient without specific pathways to achieving its 2030 and 2070 targets. Notably, the document states that India will need coal in the long run. India is proposing to rationalise the use of fossil fuels and close inefficient thermal power. Yet it suggests that although the share of coal-fired power generation will decrease, it will be a gradual process (also discussed later). This is evidence that further efforts are needed to push countries to roll out concrete plans to back their climate targets. Will there be an agreement to phase down all fossil fuels? While Russia’s invasion of Ukraine has led countries to ensure short-term energy security by switching to more coal consumption, it has also prompted them to make more efforts to switch to renewable energy. As such, the International Energy Agency’s (IEA’s) most recent World Energy Outlook suggests for the first time under its Stated Energy Policy Scenario that demand for fossil fuels will see a definitive plateau this decade. Global fossil fuel demand under different scenarios International Energy Agency, ING Research   However, the plateau of fossil fuel demand is not enough. The IEA’s Net Zero Scenario requires a deep decline in fossil fuel consumption, with the demand for coal needing to fall by 90% (unabated coal demand to fall by 98%), oil by 75%, and gas by 55% by 2050. At COP26, almost 200 countries pledged for the first time to phase down the use of unabated coal and end inefficient subsidies on fossil fuels, although these 200 countries notably did not include China and India. At COP27, China expressed that it would need to continue relying on coal production to ensure grid stability; India also stated in its LTS that it needs coal to “guard against a lack of adequate and reliable energy.” Since it remains uncertain how much of the coal production in China and India will be abated, the continuing reluctance of the world’s two largest coal consumers to substantially phase down coal means limited effects of the global coal pledge reached at COP26. India, on the other hand, is pushing to include in the final text of COP27 a phase-down of all kinds of fossil fuels. The EU has stated its support for India’s proposal, but only if this does not weaken any of the commitments already made on coal. But we would expect oil-producing countries – and poor countries in regions such as Africa – to oppose this proposal, which makes the chances of it being included in the final decision uncertain. While it is still subject to change, a first draft of the overarching COP27 decision reportedly did not include phasing down fossil fuels. Corporate sustainability commitments grabbing more attention With a flurry of announcements from corporates to reach net-zero emissions, there is a growing concern about companies making pledges without releasing concrete action plans. During COP27, an UN-backed organisation published a report recommending how corporates can avoid greenwashing based on inaction and inaccurate claims. These recommendations include coupling long-term pledges with short-term science-based targets, addressing Scope 3 emissions, prioritising deep emissions reduction over purchasing carbon credits, increasing climate action transparency and accountability, as well as transitioning from fossil fuels to renewables. The report affirms the mounting trend that companies will increasingly be held accountable – by investors, regulators, and now international organisations – for not only their pledges but also their strategies and actions. Conclusion and what to expect from the final days of COP27 Although discussions have been advancing slowly, which is not completely abnormal at COP conferences, we could still see important agreements made by parties this Friday toward the very end of COP27. On financing for loss and damage, we would expect some final decision to be made, as this is the single most important topic of COP27. The optimistic case is that countries agree to establish a fund and an official entity to manage and oversee funding flows; the less optimistic case is that countries leave the decision to COP28. The longer countries delay climate action, the deeper and faster we will need to cut emissions to reach net-zero emissions by 2050. And while we think that agreements on the details of Article 6 could be reached, we are less confident that countries will, on a large scale, agree to phase down all kinds of fossil fuels, given the global energy crisis. Understandably, most of the above-mentioned issues are complex in nature, and it is hard to get every country on board. But we must keep in mind that the longer countries delay climate action, the deeper and faster we will need to cut emissions to reach net-zero emissions by 2050. Compromises and timely collaboration have become critical to keeping global warming under control.   Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

Oil slips amid easing geopolitical risk and China woes Oil prices are slipping as we move through the week, with easing geopolitical risk and Chinese demand weighing. Prices spiked earlier in the week after missiles landed in Poland, risking a dramatic escalation in the war in Ukraine. Thankfully, those fears have abated and the situation de-escalated, which has seen oil gains unwound. Read next: Many sued in FTX scandal, Elon Musk to reduce his time at Twitter, EU stocks edged higher on Thursday| FXMAG.COM China remains a downside risk for oil in the near term, despite its recent relaxation of certain Covid curbs. A surge in cases in major cities, mass testing, and restrictions will hit economic activity despite recent measures which will weigh on demand in the world’s second-largest economy. Still, Brent remains within its $90-$100 range for now and OPEC+ may continue to ensure that largely remains the case. Gold stalls but the future may be looking bright We’re seeing more risk aversion in the markets today after a strong rebound in recent weeks. Gold has performed well in this period, particularly in the aftermath of the Fed decision and jobs report and then after the inflation data. The PPI numbers further supported the view that inflation is easing and could be sustained which saw gold rally towards $1,780 where it stalled. It is now paring gains for a second day, off around 1%, but still holding onto the bulk of the gains of recent weeks. If the data continues to improve on the inflation side, we could see gold build on recent gains as the dollar eases and yields are pared back. That’s a big “if” after what we’ve seen this year but the data we’ve seen in recent weeks has been very promising. 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. Oil prices fall, gold stalls - MarketPulseMarketPulse

Oil Oil prices are getting punished as crude demand concerns show no signs of easing. ​ The world’s two largest economies are struggling here as China battles COVID and the US is seeing a significant drop in manufacturing activity.  China’s new case total rose above 23,000, which is the highest level since April and is approaching its record high. ​ Fears are growing that the spread won’t ease soon as cases have spread across populous regions of Guangzhou and Chongqing. ​ Some of the geopolitical risk that sent oil higher earlier this week is coming off the table. With no immediate escalation in the war in Ukraine, we could see energy traders fixate on the Russian crude price cap that takes hold early next month. Read next: NVIDIA (NVDA) Q3 earnings results outperformed part of the markets forecasts| FXMAG.COM ​ ​ ​ Inventory levels remain a key concern for the oil market so we might see limited downside from here. Gold Gold prices got beat up after a round of hawkish Fed speak reminded investors that the risks of the Fed taking rates above 5% are clearly there. ​ Fed’s Bullard’s comment that the policy rate is not yet ‘sufficiently restrictive’ is a big reminder that we need to see the labor market weaken significantly before we can price in the end of its tightening cycle. ​ A top has been put in place with gold and prices could soften towards the $1750 level. ​ ​ ​ 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. Oil lower on demand woes, gold slumps - MarketPulseMarketPulse

Summary:  Market sentiment managed to bounce mid-session yesterday in the US and was steady overnight, with the USD back lower but still very range bound and US treasury yields rising off their lows, with a new extreme for the cycle in the yield-curve inversion, suggesting the market remains worried that the Fed’s tightening will lead to recession. The market shrugged off yesterday’s budget statement from UK Chancellor Jeremy Hunt as most of the measures were flagged ahead of his speech.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) S&P 500 futures extended their declines yesterday to the 100-day moving average at around the 3,916 level driven by comments from Fed’s Bullard saying the sufficiently restrictive zone on policy rate was in the range 5-7% spooking markets. It is obvious, that the Fed is out trying to dampen expectations following the rally on the lower than estimated US October inflation print. S&P 500 futures are bounced back after the initial shock but closing lower for the session and this morning they are trading around the 3,950 level. Hong Kong’s Hang Seng (HSIX2) and China’s CSI300 (03188:xhkg) Hang Seng Index snapped a two-day decline and bounced about 0.3% as of writing. China interest stocks led the charge higher following Alibaba reporting earnings beating expectations and adding to its share repurchase programme. The Chinese authorities’ grant of a new round of 70 online game licences to firms including Tencent and NetEase also help the market sentiment. Hang Sent Tech Index climbed 2%. In mainland bourses, healthcare shares gained as new Covid cases surged to above 25,000, a new high since April. Online gaming stocks rose on the new game license approval. Financials however continued to trade weak as investors are troubled by recent incidents of retail investment products losing heavily as bond yields rising in China. CSI 300 gained 0.2%. FX: USD rally eases on risk sentiment bounce of the lows yesterday The US dollar eased lower after a bout of weak risk sentiment was turned mid-session yesterday in New York and despite US treasury yields lifting all along the curve (with a new multi-decade low in the yield curve inversion suggesting the market remains concerned that the Fed’s tightening regime will lead to a recession. After the very sharp move lower off the back of the October CPI data, the USD has traded in a rather tight range in most places, with EURUSD bottled up near the 200-day moving average (currently 1.0414) and GBPUSD still hugging the 1.1900 area after the market shrugged off the autumn budget statement yesterday. Next week has the Thanksgiving holiday in the US, which usually sees light trading from Wednesday through Friday and the first key data is not up until the week after, so upcoming catalysts are not readily evident. Crude oil (CLZ2 & LCOF3) Crude dropped sharply yesterday to multi-week lows, trading as low as 89.53 in January Brent and 81.40 in December WTI. Concerns of weakening demand in China are purportedly behind some of the weakness yesterday, but with a new extreme in the yield curve inversion yesterday, rising market anticipation of an incoming recession is likely weighing on sentiment in oil. For the December WTI contract, the 81.30 level is the last significant pivot low ahead of the 75.70 September low for that contract. For January Brent, the  87.52 level is the last pivot low ahead of the 80.94 September low for that contract. Gold (XAUUSD) Pushed a bit lower yesterday on the rise in US treasury yields, trading above 1,760 this morning after the 1,786 high earlier this week. The 200-day moving average is near the important 1,800+ area. An extension of the recent rally likely requires further declines in yields and the US dollar or some other catalyst that sees a run to safety. US treasuries (TLT, IEF) US yields surged across the entire yield curve with yields rising the most in the front end. The 2-year yield jumped 10bps to 4.45% and the 10-year climbed 8bps to 4.77%. The 2-10 year spread inverted further hitting a new low of minus 71bps. Selling concentrated on the front end as St. Louis Fed President James Bullard referred to the “sufficiently restrictive level” being “5% to 5.25%” and “that’s a minimum”. In addition, Bullard showed a chart that suggested a range of terminal rates from 5% to 7%. Meanwhile, Minneapolis Fed President Kashkari said the Fed is “not there yet” to pause and it is an open question of how far the Fed needs to go. What is going on? Japan’s CPI increased more than expected in October Japan released its national CPI data which came in hotter than expected. Headline CPI grew 3.7% Y/Y (consensus: 3.6%, Sep: 3.0%). CPI excluding Fresh Food was 3.6% higher than last year (consensus: 3.5%, Sep: 3.0%) and CPI excluding Fresh Food and Energy increased 2.5% Y/Y in October (consensus: 2.4%, Sep: 1.8%). UK budget statement sees little market reaction, but huge Gilt issuance set for next year The mix of measures was more or less as anticipated, with many of the specific larger moves well flagged ahead of yesterday’s speech on the budget from UK Chancellor Jeremy Hunt. After a strong surge in UK gilts (sovereign bonds), UK yields rose yesterday, as the Debt Management Office in the UK project that issuance of gilts in the 2023-24 financial year will rise almost 50% to £305 billion, with net issuance at £255 billion, almost double the previous high from 2011. Near term issuance to the end of the current fiscal year to April is expected somewhat lower than prior estimates. China urges local authorities to strike a better balance in pandemic control measures China’s National Health Commission urged local authorities to avoid “irresponsible loosening” of pandemic control measures. In a press briefing, health officials said local authorities “must continue to rectify the practice of excessive measures such as lockdowns and oppose the irresponsibility of evading a solution by loosening up”.The world’s second biggest lithium producer, SQM, sees lithium prices staying higher in 2023.SQM sees the Chinese electric vehicle market showing strong growth, buttressing solid demand for lithium. In its third quarter result, SQM’s income beat analyst estimates, rising by more than 10 times to $1.1 billion. The surge was fueled by the lithium price more than tripling over the past year, and rallying over 1,200% since 2020, amid tight supply and rising demand from EV makers. SQM sees the lithium market staying tight and higher prices for the rest of 2022 and into 2023. BHP (BHP) raised its takeover offer for copper giant, Oz Minerals (OZL) The offer was raised to $6.4 billion as global miners are hungry to boost copper production. Copper is a vital metal in electricity networks, electric vehicles, housing and renewable energy. BHP currently makes about 48.7% of its revenue from iron ore, 26.7% from copper, and 24.6% from thermal coal.What are we watching next? Earnings to watch today: JD.com Today’s earnings calendar is light with only the Chinese e-commerce giant JD.com reporting results. Analysts expect revenue growth of 11% y/y and EPS of $4.46 up 194% y/y on expanding EBITDA margin, but given the results from other Chinese companies we find it a bit unlikely that JD.com can deliver those types of results. Options expiry today in US to hit new record Options expire today on a notional $2.1 trillion in underlying instruments today as this month looks likely to set the record for options volume, with 46 million contracts in daily trading on average, up 12% from last month. Increasingly popular are contracts that expire within 24 hours, a phenomenon that may have driven the extreme volatility around the Thursday October CPI release last week. Economic calendar highlights for today (times GMT) 0830 – ECB President Lagarde to speak 1315 – UK Bank of England’s Catherine Mann to speak 1330 – Canada Oct. Home Price Index 1340 – US Fed’s Collins (non-voter) to speak 1500 – US Oct. Existing Home Sales 1500 – US Oct. Leading Index Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher Source: https://www.home.saxo/content/articles/macro/market-quick-take-nov-18-2022-18112022

Open interest in crude oil futures markets rose by nearly 15K contracts after two daily drops in a row on Thursday, according to preliminary readings from CME Group. In the same line, volume resumed the uptrend and increased by around 340.5K contracts, offsetting the previous daily drop. WTI approaches the key $80.00 mark Prices of the barrel of the WTI extended the leg lower on Thursday and revisited the $82.00 region, adding to Wednesday’s pullback. The move was accompanied by rising open interest and volume and leaves intact the prospect for extra decline in the very near term and with the immediate support at the key $80.00 mark per barrel.  

The commodities complex came under further pressure yesterday from a stronger USD and hawkish comments from Fed officials Energy - weakness persists The oil market sold off aggressively yesterday with ICE Brent falling by more than 3.3% to settle below US$90/bbl - its lowest close since early October. Macro developments continue to weigh on oil with a stronger USD and comments from some US Fed officials pointing towards hawkish policy. However, the sell-off in the oil market is not all macro-driven. There are signs of weakness in the physical oil market despite the looming EU ban on Russian crude oil. Prompt time spreads have also weakened significantly, suggesting that the spot physical market is loosening. The prompt WTI spread is trading at a backwardation of less than US$0.30/bbl, compared to  US$1.18/bbl at the start of the month. Similarly, for Brent, the prompt spread has fallen from US$1.86/bbl at the start of November to just below US$1/bbl currently. The loosening in the market is a surprise, particularly given that we are seeing OPEC+ reducing supply at the moment. However, we still hold a constructive outlook for the market through 2023 on the back of falling Russian supply and OPEC+ cuts. In the US, Henry Hub natural gas settled more than 2.7% higher on the day with colder-than-usual weather expected across large parts of the US in the coming days. In addition, US natural gas inventories increased by 64bcf over the week, which was below market expectations for an increase of around 66bcf. Despite coming in below expectations, this was still a record build for this time of year and compares to a 5-year average draw of 5bcf. Metals – China's alumina market to move to a surplus next year China’s alumina market is expected to move to a surplus of 520kt in 2023 following capacity expansions, compared to a deficit of 490kt this year, according to Antaike. Total alumina capacity is already around 98mt, and China needs only about 100mt over the long term to feed aluminium capacity. Strong Chinese alumina exports (mainly to Russia) are expected to ease as other nations such as India and Indonesia increase shipments. Meanwhile, around 70% of Chinese alumina producers are currently making losses due to surging raw materials costs (primarily coal). Refined copper output in China rose 11% YoY to 953kt in October, according to the latest data from the National Bureau of Statistics (NBS). Zinc output rose 9.4% YoY to 595kt while lead production increased 7.2% YoY to 687kt last month. The global zinc market remained in a deficit of 43kt in the first nine months of 2022, compared to a deficit of 101kt during the same period a year earlier, according to data from the International Lead and Zinc Study Group (ILZSG). Total refined production fell 2.4% YoY to 10.1mt, due to lower output in Europe, while total consumption declined 3% YoY to 10.2mt in Jan’22-Sep’22. As for lead, total production fell 1.6% YoY to 9.1mt, while consumption remained almost flat at 9.2mt in the first nine months of the year. The lead market reported a deficit of 52kt in Jan’22-Sep’22, compared to a surplus of 75kt during the same time last year. Sinter plants in the Tangshan region in China (a major steel-making hub) are cutting production by 30% for 10 days starting from 15th November, according to reports from Mysteel, as low profits continue to discourage domestic steel mills from resuming their full capacity. The group’s latest survey showed that Jiangsu province-based steel plants are also expected to curb crude steel output over the coming days. Meanwhile, the latest data from China Iron & Steel Association (CISA) showed that steel inventories at major Chinese steel mills were up 1.5% in early November from late October. Agriculture – Black Sea Grain deal renewed Grains came under pressure yesterday after Russia agreed to renew the Black Sea grain deal, which will allow the export of Ukrainian agricultural products through Black Sea ports for another 120 days. There were no major changes made to the terms and conditions of the previous deal. While this will come as a relief, it probably is still worth pricing in some form of supply risk when it comes to Black Sea grains, given the risk that Russia could still pull out of the deal. The latest data from the UN shows that Ukraine has shipped over 11mt of wheat, corn, sunflower oil and other goods from three ports located in the Odesa region since exports resumed in August. According to the International Sugar Mills Association (ISMA), India has entered contracts for the export of around 3.5mt of sugar so far for the 2022-23 season. Exports in October totalled around 0.2mt, below the 0.4mt shipped over the same period last year. ISMA also reported that mills have produced 2mt of sugar through until 15 November for the season that started 1 October, slightly lower than the 2.1mt produced over the same period last year. Lower production appears to be due to a number of mills in the West starting operations later this season. Read this article on THINK TagsUSD strength Oil Natural gas Federal Reseve Aluminium Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

Summary:  Today we look through key markets for the technical lay of the land, from the US and German equity markets to gold, US yields. We also note a very heavy crude oil market, with cycle support possibly coming into play in the days ahead. Elsewhere, we dive into some examples of the enormous rise in options trading and note the background risk this brings to the market, regardless of whether today's massive options expiry in the US on over $2 trillion in underlying assets proves a non-event. Today's pod features Saxo Technical Strategist Kim Cramer Larsson, with John J. Hardy hosting and on FX. Listen to today’s podcast - slides are available via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com. Source: https://www.home.saxo/content/articles/podcast/podcast-nov-18-2022-18112022

Brent below $90 ahead of December OPEC+ gathering Oil prices are continuing to retreat against the backdrop of increasingly gloomy economic prospects and surging Covid cases in China which risk further restrictions and lockdowns, threatening demand in the world’s second-largest economy. Brent crude has broken back below $90, testing the mid-October lows and, if sustained, the patience of OPEC+. Read next: Canda's CPI inflation prints didn't surprise, consensus points to a 25bp rate hike, but chances of a greater variant are still there| FXMAG.COM The group was heavily criticized for its two million barrel per day output cut and yet oil prices are now not far from the September lows that preceded the decision. Could OPEC+ go even further if the outlook continues to deteriorate when it meets again in a couple of weeks? Gold holding onto gains Gold is flat on Friday after paring gains over the last couple of days. The yellow metal has recovered strongly over the last month, around 10% from its lows, as risk appetite has improved and interest rate fears abated. It’s not out of the woods yet but its resilience after hitting resistance at $1,780 is encouraging. This is a major obstacle, having been such a substantial level of support from January to July. 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. Oil extends decline, gold steady - MarketPulseMarketPulse

S&P 500 bulls came back, 3,910 support held, and the dollar was unable to hold on to intraday gains really. In the European morning, I doubted the bearish shift materializing later today as the Fed speakers‘ risk-off momentum did wear off already yesterday. Precious metals are indeed leading the charge among real assets, and I‘m still not writing off crude oil. S&P 500 looks likely to conquer the low 4,010s today, which would flip the daily chart distinctly bullish again. Paying off not to panic – the Fed‘s ability to tighten in the face of slowing economy, is correctly being doubted – 4.50% Fed funds rate year end is still a great tightening achievement but stocks are willing to run higher in its face. Keep enjoying the lively Twitter feed serving you all already in, which comes on top of getting the key daily analytics right into your mailbox. Plenty gets addressed there, but the analyses (whether short or long format, depending on market action) over email are the bedrock, so make sure you‘re signed up for the free newsletter and that you have Twitter notifications turned on so as not to miss any tweets or replies intraday. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook Fake breakdown on low volume attracting no sellers – that would be the most likely conclusion after today‘s closing bell. Credit Markets HYG posture is bound to improve further today – the downswing was bought, and white body candle awaits today while TLT more or less erases yesterday‘s decline. Gold, Silver and Miners We haven‘t seen an important precious metals top – the sector will likely hold on to and extend today‘s premarket gains. Silver is still recharging batteries, but will recapture $22 with ease. Crude Oil Oil downswing appears overdone, but unless $82.50 is recaptured and WTIC starts outperforming especially base metals, the short-term outlook is tricky. Oil stocks not joining in the slide, is though positive – so, I‘m not turning bearish.

Executive summary 1)Following the Russian invasion of Ukraine in 2022, European and Polish economies are experiencing a huge energy shock due to record-high prices and the risk of energy supply disruptions. 2)Due to the dependence on energy from Russia and the structure of energy balances, it is mainly a gas problem for the EU and a coal problem for Poland. This applies less to power plants as it does to households and district heating units which rely heavily on imported coal from Russia. The source is not only high prices, but also the risk of natural gas and coal shortages over the coming winter. 3)Higher energy prices on wholesale markets have contributed to a significant increase in producer and consumer prices, but this is not an automatic pass-through. It is stretched over time. Producer prices depend on previous contracts, competitive conditions and the substitutability of energy carriers. 4)The pass-through of higher costs to the end user depends on both demand and fiscal policy. Energy prices for households are largely influenced by the decisions of the government (e.g., the anti-inflation shield) and the regulator (Energy Regulatory Office tariffs). On average, consumer electricity prices increased by about 5% in 2022, following increases of 12% in 2020 and 10% in 2021. 5)Our survey of 300 small and medium-sized companies shows that: •70% of companies are concerned about access to energy in the upcoming heating season. •Companies have generally only partially passed on higher energy costs to buyers and are actively reducing other expenses. •High energy prices are increasing SMEs' interest in investing in energy efficiency and renewable energy sources (RES), especially in industrial companies. •The anti-inflation shield alone is not enough support but should be maintained at least until the end of 2023. •Companies are rather sceptical about the effectiveness of EU policy support. Energy Shock 2022: On the back of an economic rebound following the pandemic in 2021 and thereafter due to Russia's invasion of Ukraine in 2022, the prices of energy carriers in Europe have remained in a clear upward trend and fluctuated strongly. They shot up in the summer of 2022 following the initial threat and again after Nord Stream 1 completely halted gas supplies to Europe. By the end imports to Europe were about threeof September, daily Russian gas quarters lower year Gazprom manipulation from mid2021:onyear. Prices of energy carriers have been on an upward trend since mid2021. Russia's gas manipulations led to a jump in prices later that year, with energy prices rising further after the outbreak of war in Ukraine. Local maximum in midAugust: In midAugust 2 022, energy prices were many times higher than the average in January 2021. Prices for natural gas rose more than 15 times, electricity (wholesale market) by 7 times, coal by almost 5 times, and oil almost twice. The explosion in gas prices was due to volu me restrictions imposed by Gazprom. Shipments through Nord Stream 1 fell to 40% in June 2022, then to 20% in July August preceding the complete suspension of supplies through this pipeline in early September. September correction: When the European Commission and EU member states responded to Russia's gas manipulation, prices fell sharply. The correction in oil prices was largely due to recession fears in the global economy and also driven partly by monetary tightening. In early October, following fluctuati ons due to the Nord Stream leaks and the EU Council's decision to control rising energy costs, price increases were eight times higher for natural gas, almost three times for electrici and 1.5 times for oil. Prices of energy carriers: January 2021 =100 Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

Energy price shock for producers in 2022 Translation of wholesale market prices into Producer Price Index (PPI) and Consumer Price Index (CPI) prices: Producer prices typically respond quickly to changes in wholesale energy market prices, which are driven by global developments. In Europe, they are largely impacted by the EU’s energy and climate policy and the EU’s energy market design. However, for individual companies, price changes are often indexed to market prices and occur with some delay. While stock market transactions are transparent, we have limited insights into bilateral contracts between energy utilities and individual manufacturers. Finally , the transmission of shifts in wholesale and 4 producer prices on consumer prices in Poland is constrained by the Energy Regulatory Office, which is responsible for electricity and gas tariffs to households, as well as government decisions on taxes and bene fits. Energy prices what and what does it depend on? Postrecession rebound 2021 and rising oil prices: The upward pressure on industrial output in 2021 was a rebound from the 2020 pandemic recession steadily. In January 2021, PPI growth was 1% built up quickly and YoY, and by December was already at 14.4%, largely driven by price increases in the coke a nd refined petroleum products While January 2021 saw a 6.9% . YoY decline in this category, while December 2021 price growth was 64.3% YoY. This category accounts for 5.2% of the PPI index basket in 2022. Producer price index (PPI) and its energy categories (%ch YoY) A rapid buildup of cost pressures in 2022 and increases in gas and electricity prices: Throughout 2022, water incre prices in the generation and supply of electricity, gas, steam, and hot ased systematically . Price increases in this category reached 30% January 2022 and accelerated to nearly 80% YoY in YoY in August. This category accounts for .8% 7.5% of the PPI basket in 2022. Increases in energy and other categories moved the PPI index from 14 YoY in January to 25.5% in August At the starting point ( before the energy shock ) , 2022 . energy prices for companies in Poland were generally close to the EU average: for companies (including taxes) average in Poland in the second half of 2021. They the past According to Eurostat data, electricity prices were about a quarter lower than the EU27 have increased by a total of about 25% over four years (between the second half of 2021 and of 2018). The price of natural gas for companies saw a total increase of 30% in four years, close to the EU average . Electricity prices for companies in the EU in second half of 2021 Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

Offsetting higher energy costs Given that around 95% of companies decided to increase the prices of their products or services, we asked a follow-up question on the extent to which they compensated for higher energy prices. Compensating for the increase in costs by passing them on to consumers appears to be an easier option than the search for cheaper production substitutes. When raising prices of own products or services, most companies tried to compensate themselves for at least half of the higher energy costs (as noted by 60% of companies that have raised prices). On the other hand, this means that still there is a large room for price adjustments in the future. To what extent did the companies compensate for higher energy prices by price hikes of own products or services? We also asked a similar question about offsetting higher energy costs to 77% of entrepreneurs looking for cheaper materials and services. Around 60% of companies that take such steps could only compensate themselves for energy price increases "to a very small extent," and 34% of companies for less than half. Limited substitution possibilities could result from supply constraints due to disruptions in global value chains amid the pandemic. To what extent did the compensate for higher energy prices by looking for cheaper materials and services Green investments For most companies interested in green investments, solutions aimed at saving energy or building their own RES installations are only in the planning stages. A relatively large number of companies are also in the process of modernising production lines or thermal modernisation of buildings. While investment in renewable energy sources has slowed down (with few currently in the pipeline), one in three companies interested in such investments have found a solution, appreciated its advantages and plans to expand investments in their own RES. Reasons for lack of green investments More than half of the companies that do not plan to invest in thermal modernisation have taken care of this beforehand. One in three companies that are not in the process of investing in their own energy sources are waiting for the availability of funds for this purpose. They also expect better solutions at the state level (e.g., the possibility of building windmills, increasing the profitability of setting up PV panels). However, more than 40% of companies currently not investing in renewable energy sources say they may consider doing so in the future. More than half of all industrial companies would be ready to modernise production lines if there were funds to do so, with 30% currently waiting for funding from EU sources (e.g., from the National Recovery Fund). Pressure to use energy-efficient and low-carbon solutions In the context of the climate crisis, we also asked companies about external pressure to go green. Generally, the pressure felt by companies to use energy-saving and low- carbon solutions is low, with just one in five companies noting its effect. Greater pressure is felt by larger companies and industrial firms. This stems mainly from national and EU regulations and policies, and secondarily from local governments and residents in the vicinity of the company's headquarters. Only one in four of those perceiving pressure see it from contractors; one in four from consumers; and one in ten from banks. Pressure to act in response to the climate crisis appears to be lower in the SME sector than in large companies. This conclusion is supported by our other research at both global and national levels. Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

The quantitative survey was conducted by GFK Polonia on behalf of ING Bank Slaski in August 2022, using the Computer Assisted Telephone Interviewing (CATI) method. The sample consisted of 300 small and medium enterprises (SME). Research questions In the survey, we searched for responses to the following questions: 1) How are companies coping in times of an energy shock, mainly for natural gas? How does expensive energy affect their business? Do companies have problems with access to energy? Are they worried about energy access problems in the coming year? 2) How have they responded so far? What are their plans for investing in energy- efficient technologies or perhaps their own sources like photovoltaics, windmill, heat pump, and energy storage? 3) Does the anti-inflation shield (including the reduction of VAT and excise taxes on energy) help them? 4) Given the context of the current climate crisis, do they feel pressure/identify a need to switch to clean energy in the near future? 5) Are they aware of EU climate policy and opportunities to support clean energy and energy efficiency? Types of energy used One in five companies has its own power generator, and 17% of companies say they have their own sources of electricity. Own boilers/furnaces as heat sources are used by almost half of the companies - that's as often as heat from the grid. 10% of companies declare using electric-powered vehicles, although this result is likely inflated. According to local automotive associations PZPM and PSPA there are only about 50,000 pure electric and plug-in hybrid cars in Poland. Natural gas is twice as popular as electricity in company vehicles. Share of energy in total costs About two-thirds of all companies indicate a share of energy (all carriers, including transport fuels) making up more than 10% in company costs. Larger companies declare a larger share of energy in their costs, most often between 10% and 30% (for more than half of the companies over PLN 10 million in turnover last year). About half of the companies with higher turnover are industrial companies, which are generally more energy-intensive than the service or construction industries. Average share of energy costs in the company's costs Perception of the energy situation Companies perceive energy and fuel price increases differently. Most (26%) believe that prices have already risen between 50% and 80%. Perception of past increases in fuel and energy costs - by how much? (%) Expectations for future increases are slightly more consistent, with 32% of companies predicting that prices will still rise between 30% and 50% further. Predicting further increases in fuel and energy costs - by how much? (%) The vast majority of companies (nearly 70%) are concerned about problems with access to energy and fuels. Concerns about access to fuel and Energy Responses to increased energy and fuel costs Almost all companies have reacted to rising energy and fuel costs by increasing the price of products or services. Only 5% have avoided this so far. The second most common way to cope with the situation is looking for cheaper materials and suppliers (recorded by 77% of companies), followed by cutting other costs (60%) and halting R&D investments (41%). More than one in three companies intend to invest in solutions that will help save energy in the future. Responses to increased energy and fuel costs Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

This section summarises the responses to the key research questions of our survey. How are companies coping in times of an energy shock, mainly gas? How does expensive energy affect their business? Do companies have problems with access to energy? Are they worried about energy access problems in the coming year? • SMEs have been hit hard by the war in Ukraine due to higher energy prices, which account for a more significant share of total costs. • 70% of companies are concerned about access to energy in the upcoming heating season. • Companies have generally only partially passed on higher energy costs to buyers and are actively reducing other expenses, including development. How have they responded so far, and what are their plans regarding energy-saving technologies or perhaps their own sources like photovoltaics, windmill, heat pump, and energy storage? • Companies expect further increases in energy prices for the coming year, although slightly lower than in the past 12 months. • High energy prices are increasing interest from SMEs in investments in energy efficiency and RES, especially in industrial companies in towns with less than 100,000 residents. • Companies are mainly focused on ad hoc measures with quick effects - increasing prices, looking for substitutes and cutting costs, including developmental ones. Does the anti-inflation shield (including reductions in VAT and excise taxes on energy) help them? • Most companies see the positive effects of the energy tax cuts. • For two-thirds of all companies, the anti-inflation shield is not enough support. For 15%, the shield does not help at all. • Nevertheless, the majority (60%) of companies believe it should be maintained at least until the end of 2023.Do companies feel pressure/identify a need to switch to clean energy in the near future? • Just 1 in 5 companies feel pr