Crude Oil has increased 11.97 USD/Barrel, or 25.72% since the beginning of 2019, according to the negotiation of a contract for difference (CFD) accompanying the reference market for this commodity.
Historically, oil reached a record high of 147.27 in July 2008 and a record low of 9.75 in April 1986. Brent follows an uptrend, valuing approximately 8% this week, quoting 65 USD/Barrel.
But the current context is highly worrying not only for the price stability of this raw material but also for world economic stability.
The yen gather more strength as USD/JPY holds below 108.00 going into European trading.
The Japanese stock market is rising on Thursday after the U.S. Federal Reserve announced its widely expected decision to cut interest rates for the second time this year.
Among oil stocks, Japan Petroleum is gaining almost 2 percent and Inpex is adding 0.6 percent even as crude oil prices extended losses overnight.
Investors now look ahead to the Bank of Japan's monetary policy decision due later today.
EUR/USD is trading above 1.10 as markets gear up for the all-important decision by the Federal Reserve. The world's most popular currency pair is locked in a tight range but may explode when the central bank decides.
The U.S. dollar steadied on Wednesday in Asia ahead of the U.S. Federal Reserve’s two-day policy meeting. The Fed is expected to cut the target range for the Fed funds rate by 25 basis points at this week’s meeting.
Oil exporter currencies held firm while the dollar found broad support as recent attacks on Saudi oil facilities and the threat of military action in the region kept crude prices kept prices elevated.
Attacks on crude facilities in Saudi Arabia on the weekend boosted oil prices by nearly 15% on Monday, with international benchmark Brent logging its biggest jump in over 30 years. On Tuesday, prices pulled back slightly but remained at lofty levels.
The dollar fell while safe-havens and currencies of oil producing countries rallied on Monday, following an attack on Saudi Arabian refining facilities that disrupted global oil supply and heightened Middle East tensions.
Oil prices surged more than 15% following the strikes on two plants, including the world's biggest petroleum processing facility in Abqaiq, knocked out more than 5% of global oil supply.
Yemen's Iran-aligned Houthi group claimed responsibility for the damage, but the U.S. has pointed the finger directly at Iran.
The Canadian dollar rose 0.
The ECB announced a stimulus package, which included a 10 basis point rate cut to -0.5%, and open-ended QE of €20 billion per month starting November 1st. The central bank downgraded its inflation and growth forecast, also introduced a reserve system that would exempt part of bank holdings from negative rates. The EUR/USD plunged to yearly lows, bouncing to a fresh weekly high of 1.1086.
The Sterling traded uneventfully against the greenback, finding mild support on market talks indicating that the EU was preparing to grant the UK another delay to Brexit.
Risk trades are more upbeat on the day as Trump delays tariffs on China by two weeks and China is reportedly considering purchasing US agricultural products as a gesture of goodwill ahead of proposed trade talks in October.
As such, the aussie and kiwi are holding firmer to start the session with the yen lagging on the day as equities and bond yields are higher so far today.
US futures are up by 0.4% and markets are liking the positive headlines so far this week, so expect that to stay the course ahead of the ECB monetary policy decision later today.
The People’s Bank of China (PBoC) set the reference rate for the yuan at 7.0851, compared to Friday’s fix of 7.0855.
Chinese exports fell by 1% in August, defying expectations for a 2% increase. Shipments to the U.S. slowed down sharply as a result of the ongoing trade dispute between the two countries. The new data has led to speculation that Beijing will introduce stimulus measures beyond the cut to banks reserve requirement ratios (RRR) of 50 basis points or 100 basis points for some banks, introduced on Friday.
The U.K. Parliament passed a Brexit delay bill late Wednesday and Prime Minister Boris Johnson called on U.K. lawmakers to back his plan to hold a snap election on Oct. 15.
The House of Commons passed a bill to delay the exit of the U.K. from the European Union 327 to 299.
As rebel/opposition lawmakers continue to inflict defeat upon Boris Johnson, the bill to avoid a no-deal Brexit (delay until 31 January 2020) will now head over to the House of Lords for debate today and possibly over the next few days.
Crude oil prices drop for second day on trade war. A monetary policy announcement from the Bank of Canada is in the spotlight. A change is not expected, with priced-in expectations implied in OIS rates suggesting markets put the probability of stasis at nearly 90 percent. Nevertheless, traders will keenly dissect the accompanying guidance as global headwinds gather and leading indicators suggest domestic growth is set to slow in the second half of 2019.
The US-China dispute continued to fester as Washington and Beijing haggled over resuming negotiations.