Crude oil recovers on China concerns, hurricane fears during dull markets

After a risk-averse ‘actual’ start of the week, markets become cautious as mixed signals from China join anxiety ahead of Federal Reserve Chairman Jerome Powell’s key testimony. Even so, the US dollar’s latest sluggish performance and the latest pause to the Fed rate hike allowed Oil prices to better concentrate on fears of tropical storm Bret which is likely turning into a hurricane and rushing towards the Gulf. Additionally favoring the Oil price could be the headlines from China suggesting more stimulus.

On a different page, AUDUSD bears the burden of the market’s indecision and fears of the US-China tussle while USDJPY traces upbeat US Treasury bond yields. Further, GBPUSD fails to cheer strong UK inflation numbers and the EURUSD also remains dicey as traders await Fed Chair Powell.

Elsewhere, Gold Price remains depressed as sellers prod the key support around $1,930 whereas most stocks in the Asia-Pacific zone closed in the red.

Talking about the cryptos, BTCUSD and ETHUSD remain firmer as Singapore eyes to facilitate the use of top-tier cryptocurrencies.

Following are the latest moves of the key assets:

• Brent oil rises 1.0% to regain $76.00, to $76.20 by the press time.
• Gold price drops for the fourth consecutive day to $1,934 at the latest.
• USD Index remains dicey at around 102.65 during four-day winning streak.
• Wall Street closed in the red whereas Asia-Pacific shares and the equities in the UK and Europe edge lower as we write.
• BTCUSD and ETHUSD rise for the third day in a row to around $28,900 and $1,810 in that order.

Oil rises amid mixed markets

Crude Oil rises nearly 1.0% while printing the first daily gains of the week, so far, as geopolitical fears join OPEC+ supply cuts and hopes of increasing energy demand from China, due to the latest stimulus measures. Also likely to have favored the Oil price could be the depleting US Strategic Petroleum Reserve (SPR) and expectations of the government’s crude buying to refill the stock.

It should be noted, however, that the fears of slower economic growth and higher rates prod the commodities and Antipodeans amid a light calendar in Asia. Even so, the risk-barometer USDJPY rises due to the firmer yields and hopes of prolonged easy-money policy at the BoJ. On the different page, EURUSD and GBPUSD stay sluggish as ECB and BoE clues keep suggesting higher rates despite looming economic fears whereas the Fed doves find it tough to stay on the table with the recently firmer US data and optimism at the US central bank.

Gold Price remains depressed as the US Dollar grinds higher and China’s physical demand dropped for the second consecutive month.

Cryptocurrencies cheer hopes of more demand from Singapore and more applications for the crypto ETFs. In doing so, the BTCUSD and ETHUSD ignore fears from the US SEC.

• Strong buy: USDCAD
• Strong sell: ETHUSD, GBPUSD, Gold
• Buy: USD Index, Nasdaq, USDJPY
• Sell: DAX, FTSE 100, BTCUSD, AUDUSD, EURUSD

All eyes on Fed Chair Powell

While the second-tier central bank decision-makers from the UK and Europe are also scheduled for speeches, market players are all waiting for Fed Chair Powell’s bi-annual testimony to confirm the looming policy pivot fears. That said, the latest signals from the US central bank have been hawkish and hence upbeat statements from Powell won’t hesitate to weigh on the price of Gold and propel the US Dollar.

May the trading luck be with you!