KBC Market Research Desk
KBC Bank
Crude
The oil price was only little changed yesterday and the front-month contract on Brent thus again settled above 66 USD/bbl. Regarding news, the market more or less ignores news that Saudi Arabia may call a truce in specific areas in Yemen as well as reports about a possible closure of a port in Libya.
Clearly, market focuses mainly on the situation in the US, namely on the evolution of crude oil inventories. Though the official data is to be released tomorrow, the API will release its own report later today; expectations are set for a relatively modest (in comparison with previous months) increase in crude oil inventories. Figures from the latest ICE Commitment of Traders report suggest that - in spite of a record-high net speculative position in Brent futures (see the chart below) – room may still exist for further increase in the oil price should the inventories growth disappoint as number of traders betting on a decline in prices remain quite high (it, in fact, did not change last week).
Metals
Today in early trading, the copper price falls from a 4-1/2 month high hit on Friday, probably in a response to the weaker than expected data from China. Yesterday, the HSBC China manufacturing PMI was revised lower from a preliminary reading of 49.2 to 48.9, signalling an ongoing loss of momentum in the sector (recall that the LME was closed due to a holiday yesterday so that the reaction is delayed).
On the other hand, news about lower copper production of mining division of Glencore could at least partially offset negative data from China.
Chart of the day:
Net speculative positions in Brent futures hit yet-another all-time high last week.
This non-exhaustive information is based on short-term forecasts for expected developments on the financial markets. KBC Bank cannot guarantee that these forecasts will materialize and cannot be held liable in any way for direct or consequential loss arising from any use of this document or its content. The document is not intended as personalized investment advice and does not constitute a recommendation to buy, sell or hold investments described herein. Although information has been obtained from and is based upon sources KBC believes to be reliable, KBC does not guarantee the accuracy of this information, which may be incomplete or condensed. All opinions and estimates constitute a KBC judgment as of the data of the report and are subject to change without notice.
Recommended Content
Editors’ Picks
EUR/USD edges lower toward 1.0700 post-US PCE
EUR/USD stays under modest bearish pressure but manages to hold above 1.0700 in the American session on Friday. The US Dollar (USD) gathers strength against its rivals after the stronger-than-forecast PCE inflation data, not allowing the pair to gain traction.
GBP/USD retreats to 1.2500 on renewed USD strength
GBP/USD lost its traction and turned negative on the day near 1.2500. Following the stronger-than-expected PCE inflation readings from the US, the USD stays resilient and makes it difficult for the pair to gather recovery momentum.
Gold struggles to hold above $2,350 following US inflation
Gold turned south and declined toward $2,340, erasing a large portion of its daily gains, as the USD benefited from PCE inflation data. The benchmark 10-year US yield, however, stays in negative territory and helps XAU/USD limit its losses.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
Week ahead – Hawkish risk as Fed and NFP on tap, Eurozone data eyed too
Fed meets on Wednesday as US inflation stays elevated. Will Friday’s jobs report bring relief or more angst for the markets? Eurozone flash GDP and CPI numbers in focus for the Euro.