Thanks to the incredible advancements in horizontal drilling and fracking technology, the United States has experienced a mind-blowing shale revolution. They've become the heavyweight champion of crude oil production, leaving Saudi Arabia and Russia in the dust. They even turned the tables and became net exporters of refined petroleum products in 2011.
Morning brief for March 28
2019-11-11 • Updated
Last week, Trump’s collaborators failed to garner enough support to a piece of legislation aimed at repealing the Affordable Care Act (Obamacare act) even with a Republican-controlled Congress. It raised fears among the investors over Trump’s inability to enact pro-growth policies. The US 10-year bond yield hit its month low on Monday. The US equities experienced a massive selloff. In the Tokyo morning the investors’ anxiety over President Trump’s setback on Obamacare reform gave away; their confidence in Trump’s administration has returned.
The euro spiked to its highest point since November overnight (1.0905) as we got upbeat German Ifo Survey for March. The survey was the strongest since 2011; the headline Business Climate Index printed at 112.3. Overall, German economy grew1.9% last year that is stronger than 1.6% in 2015. ECB Chief Economist Peter Praet has recently noted that Eurozone deflation risk has almost gone. He also said that at the present moment it is premature to talk about a QE exit as ECB policymakers still didn’t achieved the expected effects from their loosening policies (some of the most indebted countries use QE for more spending rather that for shrinking their debt). The economic calendar for EUR/USD is light today with US Consumer Confidence and Fed’s speaker.
Aussie is still hovering around 0.7615. A pullback below 0.7600 towards the immediate support at 0.7555 will tell us about the restoration of the downtrend. On the upside, the nearest resistance can be found at around 0.7700. In the early hours of Tokyo morning, we heard Guy Debelle, the RBA Deputy Governor speaking of the FX code of conduct. There were no comments on the Australian economy, no mention of the RBA monetary measures.
NZD/USD is trading below the key resistance at 38.2% Fibo level (0.7050) traced from last year low. There is a chance of the uptrend restoration. A successful test of 0.7090 will tell us about the uptrend recovery. The economic calendar is empty.
GBP/USD spiked to 1.2617 overnight. In the Asian session, the British pound slid to 1.2555 as we approach the day X – a day of the formal trigger of Article 50 leading to the Britain’s withdrawal from the EU.
USD/CAD gained some additional points in today’s session. The quotes rose to 1.3386. BoC Governor Poloz is speaking tonight at Durham College. We don’t expect him dropping some subtle clues on the bank’s future monetary policies. So, the speech might be a non-event for USD/CAD.
In commodities, the relative weakness of the US dollar has helped oil prices to recover from their earlier losses (to $51.12). But there is a little scope for the uptrend recovery as concerns over the output cut deal are still present.
The belly is not filled with fair words, but we bet you’ve already had your breakfast
Oil prices rebounded slightly on Friday but are still expected to show losses for the week due to concerns about slowing growth in the US and China. US crude futures rose 2.7% to $70.41 per barrel, while the Brent contract increased by 2.5% to $74.33 per barrel.
China's economy is rocketing. On the other hand OPEC+ countries take the decision to cut the production. What will be the impact on the oil price?
Get ready for some suspense as the Bank of Canada faces a tough decision on whether to raise interest rates or keep them on hold. The resilient Canadian economy and the goal of curbing inflation further are at the heart of this dilemma. While some money markets and economists predict another rate hike, others believe the central bank should exercise caution and wait, hinting at a possible increase later in the summer.
Let's take a closer look at Australia's recent economic performance. Brace yourselves for some interesting developments. The country's economy experienced its slowest growth since late 2021 in the first quarter, raising doubts about the Reserve Bank of Australia's rapid interest rate increases. Despite the bank's record-breaking 12 rate hikes in the last 13 months, the resource-rich economy only grew by a modest 0.2% in the quarter, falling short of economists' expectations.
Let's dive into the latest developments shaping the global economic landscape. Good news first: the threat of an unprecedented US debt crisis has receded, as US lawmakers passed a bill to raise the debt ceiling and avoid a catastrophic default. Phew! But don't pop the champagne just yet, because storm clouds are still looming. High inflation, rising interest rates, and sluggish growth are challenges that have yet to disappear.