OIL: Crude Stronger Ahead Of Fed & US CPI
Oil prices continued rising during APAC trading today ahead of the Fed decision and US CPI data later today. Brent is up 0.4% to $82.27/bbl and has spent most of the session trading above $82. It is close to the intraday high of $82.29. WTI has moved above $78 and is currently around 0.6% higher at $78.35/bbl after a peak of $78.39. The USD index is slightly stronger.
- Bloomberg reported a US crude stock drawdown of 2.4mn barrels last week, according to people familiar with the API data. Gasoline fell 2.5mn but distillate rose 1mn. The official EIA data is out later today.
- Reports on Tuesday showed that OPEC still expects a pickup in crude demand in H2 and a supply shortfall while the US’ EIA revised up its US output projections to a new record high. The global IEA will release its monthly report later today.
- ING expects a large market deficit in Q3 which should support oil prices.
- Later the Fed is expected to hold rates steady but increase its 2024 and 2025 median rate forecast (see Hidden PDF). US May headline CPI is projected to be steady at 3.4% while core should ease 0.1pp to 3.5% (see Hidden PDF).
- The ECB’s Tuominen, Schnabel, Buch, de Guindos and McCaul, and BoC’s Macklem speak. UK April trade and monthly GDP print.
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
MNI EXCLUSIVE: Weaker Yen Could Lead BoJ To Tighten
The weak yen could hasten the BOJ's decision to tighten policy --On MNI Policy MainWire now, for more details please contact sales@marketnews.com.
NEW ZEALAND: Inflation Expectations Moderate Further In Q2
Inflation continued to trend in the right direction with RBNZ 2-year business inflation expectations moderating to 2.3% in Q2 from 2.5%, the lowest since Q3 2021. 1-year out declined by more falling to 2.7% from 3.2%, the lowest in three years. Household inflation expectations have been running higher than business ones and Q2 for this survey will be published on May 20. Research by RBNZ has shown that mean 1-year ahead inflation expectations have had the best relationship with inflation. Both businesses and households are signalling that the CPI is heading to the target band.
New Zealand RBNZ core CPI y/y% vs inflation expectations %
Source: MNI - Market News/Refinitiv
NEW ZEALAND: NZD Down On Easing Inflation Expectations
NZD/USD has faltered post the release of the RBNZ inflation expectations data. The pair is back to around 0.6000, off 0.30% and the weakest performer in the G10 space. This puts us back sub the 50-day EMA (0.6007). Note the 20-day sits further south near 0.5980.
- AUD/NZD has recovered some ground from the 1.0960 region, we last tracked near 1.0990.
- 2yr ahead inflation expectations eased to 2.33% from 2.50% in Q1. This is the softest print for inflation expectations since 2021. It also comes ahead of next week's RBNZ meeting. 1yr ahead inflation expectations eased to 2.73% from 3.22% in Q1.
- In the rate/bond space yields are 1bp richer post the data and now trade about 0.5bps higher on the day, curve is little changed.
