- Oil is sliding further - fresh catalysts elusive
- Oil falling sharply, CL futures under $105.50
- ICYMI: Switzerland imported Russian gold in May for first time since Ukraine invasion
- It's a packed agenda of Federal Reserve speakers on Wednesday 22 June 2022
- Japanese government official says dramatic forex moves are not ideal
- PBOC sets USD/ CNY central rate at 6.7109 (vs. estimate at 6.7060)
- Forecast for the RBA to raise its cash rate by 50bps in July
- Most economists surveyed say the Federal Reserve to hike by 75bps in July (Reuters poll)
- US President Biden is speaking on Wednesday, 22 June 2022 - re gasoline tax
- BOJ April minutes confirm the Bank will ease further if necessary, without hesitation
- White House is relying on 'wiggle room' to stop economy from recession
- Gold - "losses could have been even greater."
- UK reports says Brexit deal will see a £470 real terms cut in worker pay every year
- New Zealand data - May trade balance +263mn NZD (prior 440mn)
- Yellen says most economists don't believe the US will have a recession
- AUD/USD forecast to around 0.73 by the end of 2022
- Markets looking ahead to Wednesday US time and Fed Chair Powell speaking
- Fed's Barkin - says a 75bp rate hike seems sensible
- White House economist says optimistic a recession can be avoided
- Forexlive Americas FX news wrap: JPY continues its slide as it remains the lone soldier
- Trade ideas thread - - Wednesday, 22 June 2022
- Goldman Sachs maintains a bearish bias on GBP
- US stocks close with gains. Gains of greater than 2% for the major indices.
Oil moved sharply lower during Asian hours, both Brent and WTI futures fell to lows not seen in around a month. Driving the move was … well, no fresh catalysts were evident. The usual suspects were all cited but none of these are particularly fresh:
- recession fears (and thus demand destruction)
- China demand still languishing as the country addresses COVID in its very strict manner
- Discussions are proceeding on capping the price of Russian oil
- OPEC to increase production beyond the 400K-odd bbls per day
- US President Biden is to meet with oil producers, but, again, this is nothing really new. Biden is also scheduled to speak on Wednesday at 2pm Eastern time US, where he is expected to announce a cut to gasoline tax. If anything this is bullish (the transmission mechanism on this goes something like: lower cost to drive → more driving → more demand → higher oil price).
Added ... while there were no fresh news catalysts these are not always needed to move markets. Oil's move today seems more about taking out some longs, decent size longs. The arguments for higher oil have been around for a while too and longs have been richly rewarded. Sometimes though its time to take out some stops and for the bidders to shut their wallets for better rates.
CAD lost ground as oil dropped.
We heard, again, from Federal Reserve Bank of Richmond President Thomas Barkin. Barkin had spoken earlier on Tuesday during US time and spoke again during the Asian morning. He continued his theme of flagging a 75bp rate rise from the FOMC at the July meeting.
Also on the central bank front were the minutes of the Bank of Japan April meeting published today. As I noted in the posts (and do so every day when BOJ minutes are scheduled) the minutes are very, very stale, being preceded by the BOJ ‘Summary of Opinions’ from the meeting by around 6 weeks! Links to the Summary in the bullets above. USD/JPY lost ground during the session, retracing some of Tuesday’s big gain.
Elsewhere the USD was on the bid side. EUR, GBP, AUD, NZD have all dropped away during the session.
Chart shows hourly candles for WTI futures. Today's downmove carries on its trend of the past week or so:
