Financial Analyst/Content Writer, RADEX MARKETS
Lawrence J. came from a strong technical and engineering background before pivoting into a more financial role later on in his career. Always interested in international finance, Lawrence is experienced in both traditional markets as well as the emerging crypto markets. He now serves as the financial writer for RADEX MARKETS.
CHIA SẺ
Financial markets have not had much to say for themselves over the past couple of days, as traders and investors eagerly await the latest CPI report scheduled for publication later today. The question on everyone’s mind is whether the US rate of inflation will continue to show signs of slowing down, following on from the surprise drop observed in June. The crash in crude oil earlier in the summer dragged consumer prices down along with it, but the resumption of hostilities spiked the Brent benchmark back up to $100 per barrel in July, albeit briefly. Economists are predicting another drop in the headline figure last month, although only a marginal one, from 3.5% to 3.4%, while the core inflation rate is expected to drop from 2.6% to 2.5%. Last week’s jobs stats did not exactly paint the kindest picture of the US labour market, lowering expectations that the Federal Reserve will enact a rate hike during next month’s meeting; should today’s inflation print point to less aggressive price increases, the Fed will have yet another excuse to hold steady.
Markets have been unwilling to commit to one direction or another so far this week, preferring instead to wait on clearer macroeconomic signals. A drop in inflation would likely weaken the dollar and embolden risk-on sentiment, but such boldness is absent for the time being and positioning ahead of the publication remains dullishly neutral. The Dow and S&P 500 quietly simmered below record highs yesterday, while currencies displayed a remarkable level of stability throughout the session. Precious metals were somewhat subdued, with gold and silver falling 0.50% and 1.6% respectively, while Bitcoin also receded to under $64,000 per coin. Markets are in the waiting room, ready to be called in; not long now.
Crude oil prices were on the rise earlier in the week, as diplomatic progress on the Iran front advanced at a glacial pace. Nothing of real substance has emerged as of yet, and attacks on shipping vessels resumed over the last couple of days, although the parties involved have so far not seen a collapse in negotiations. Brent Crude toyed with $90 per barrel yesterday and is on the front foot again this morning, while WTI contracts sit at around $84. Meanwhile, US crude oil inventories reported a surprise rise of 9 million barrels last week, complementing the 3 million barrels added the week prior. The Strategic Petroleum Reserve now boasts around 300 million barrels stored in its underground vaults, meaning the caverns are now roughly 40% full. The surprise rise in reserves suggests that the physical US market is absorbing the supply shock better than headlines imply.
About the Author
Lawrence J. came from a strong technical and engineering background before pivoting into a more financial role later on in his career. Always interested in international finance, Lawrence is experienced in both traditional markets as well as the emerging crypto markets. He now serves as the financial writer for RADEX MARKETS.
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