The mood presiding over the oil market is nothing but one stuffed with panic. Investors have been frightened by the Brexit referendum, expecting the world economy to slow and a fall in oil demand. In this situation people start selling up for the pettiest of reasons, as has happened yesterday. Oil reserves in the US according to the EIA were down for the week which was positive for the prices, however they fell less than expected: – 2.223 million barrels. The market expected a fall of 2.250 million and this tiny discrepancy was enough to make Brent crumble from $49.5 to $46.2 per barrel; a low from 11th May. The prices recovered slightly this morning to a $46.8 – $47.0 range. By the end of the day the Baker Hughes weekly report on active oil extraction rigs in the US will play its part in the oil price swings and roundabouts.
The majority of Asian stock markets are trading down this morning. The Nikkei 225 fell by 0.8%. The ASX Australia was up 0.1%. The Shanghai Composite lost 0.8%, and the Hang Seng was down by 1.0%. Futures for the S&P500 were trading at 2089; 0.2% down on the previous trading day.
By the end of June this year, the total remainder of Chinese foreign currency reserves stood at $3.21 trillion, with a MoM increase of $13.43 billion. Such was the data which was published on Thursday by the Chinese central bank. In the recalculation for the SDR (Special Drawing Right – an international reserve asset) by the IMF also saw a rise last month for Chinese currency reserves. The simultaneous growth of these two indicators has taken place.
The USD was trading slightly up against the yuan at 6.6869 (+0.0049 or +0.07%).
The EUR/USD fell yesterday from 1.1100 to 1.1060 and during the Asian session today it recovered to 1.1085. There are important stats out today which the US Fed will have their eyes on as it will set the script for their monetary policy. The data is on the US labour market: NFP and unemployment level. It is expected that unemployment in June has risen to 4.8% in comparison with 4.7% in May, whilst 175k new jobs outside of the agricultural sector are expected to have been created.
Source:: Chinese Forex Reserves Up