- The number of oil rigs in the US increases by two to 591 (gas rigs up 2 to 161)
- Gold below $2,000 as rates fall, 10-year Treasury yields fall 8.1 bps to 3.439%
- Bitcoin falls 1% to $29,344
Oil
Sales on the oil market got out of control. Technical selling wasn’t supposed to end until they filled the gap from the OPEC+ production cut announcement earlier this month. The pulse of the US economy isn’t too bad if you ask the Atlanta Fed, and if the US economy comes close to growing 1.7% in the second quarter, oil prices will likely be much higher.
After hearing from Exxon and Chevron, it’s hard not to be short-term bullish on oil prices. Exxon CEO Woods was constructive on the demand outlook, adding that gasoline demand is reasonable and demand for jet fuel is on the rise. As for China, Chevron’s Wirth noted that jet demand is increasing and travel is up to nearly 90% of pre-Covid levels.
Crude oil prices should have no problem rising above the $80 per barrel level if China’s weekend PMI data shows that recovery is picking up.
Gold
Gold prices falter as some warm wages data is likely to keep pressure on the Fed. Wall Street is convinced the Fed will raise interest rates next week, but it appears this latest inflationary pressure may not allow them to signal they are ready for a break. The latest key data points leading up to the Fed may suggest that the services sector remains healthy and that manufacturing activity is stabilizing.
The banking crisis is not over, but it appears that it will not lead to a systemic problem that will cripple the US economy. Gold is unlikely to benefit as much from safe haven flows on bank uros, but it should rise if the Fed is comfortable enough to signal that they are reading to keep rates on hold for a while. Monetary policy is restrictive, and as it filters through the system, we will begin to see larger parts of the economy enter slowdown mode.
Cryptos
The crypto market is struggling for a new catalyst as the banking crisis looks set to end with First Republic Bank. The Fed wants to protect the banks, and that should mean the recent trend of crypto strength on banking problems is coming to an end. Bitcoin is not getting a boost despite an upbeat mood on Wall Street as many traders remain in wait-and-see mode over US crypto regulation.
Consensus 2023, a key gathering of crypto insiders, drew attention to the need for coordinated regulatory clarity with crypto.
The content is for general information only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors’; not necessarily OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you wish to reproduce or redistribute any of the content found on MarketPulse, an award-winning currency, commodity and global index analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@ marketpulse.com. Visit to find out more about the pace of the global markets. © 2023 OANDA Business Information & Services Inc.
With more than 20 years of trading experience, Ed Moya is a senior market analyst at OANDA, producing up-to-date intermarket analysis, coverage of geopolitical events, central bank policy and market reactions to corporate news. His particular expertise lies across a wide range of asset classes, including currencies, commodities, fixed income, equities and cryptocurrencies. During his career, Ed has worked with some of the leading forex brokers, research teams and news departments on Wall Street, including Global Forex Trading, FX Solutions and Trading Advantage. Most recently, he worked with TradeTheNews.com, where he provided market analysis on financial data and corporate news. Based in New York, Ed is a regular guest on several major financial television networks, including CNBC, Bloomberg TV, Yahoo! Finance Live, Fox Business and Sky TV. His views are trusted by the world’s most respected global news outlets, including Reuters, Bloomberg and the Associated Press, and he is regularly quoted in leading publications such as MSN, MarketWatch, Forbes, Breitbart, The New York Times and The Wall Street Journal. Ed holds a BA in Economics from Rutgers University.
