US CREDIT RATING: Fitch Revises Hasbro's Outlook to Positive; Affirms 'BBB-'

Oil prices rose sharply on Wednesday driven by a number of coincident supportive factors. The US has announced more sanctions on Russian oil producers following the cancellation of US-Russia talks including between Presidents Trump and Putin. US crude and product inventories fell. Earlier in the day Mint newspaper reported that a US-India trade deal was close with India to gradually reduce Russian oil imports which will increase its demand from other sources. 

• Trump said that it was the right time to increase sanctions after holding back as he believed they would make Russia less likely to negotiate. Following the UK, restrictions will be imposed against Lukoil and state-run Rosneft, two of the largest producers, aimed at reducing revenues for Russia’s war but previous sanctions have had little impact. Lukoil and Rosneft accounted for 2.2mbd in H1, according to Bloomberg.
• Russia’s refusal to agree to keep the Ukraine frontline where it is before talks in Hungary appears to have been the final development showing that it is not serious about a peace deal. US Treasury’s statement demanded an “immediate ceasefire”.
• Brent jumped 4.6% to $64.13/bbl, the highest since 10 October and close to the intraday peak of $64.17 but remains down 2.9% this month. Despite the rally it was unable to breach the 50-day EMA at $65.19.
• WTI rose 3.7% to $59.38/bbl after a high of $59.83, below the 50-day EMA at $61.76. It is still 4.2% lower in October.
• The EIA reported a US crude drawdown of 0.96mn barrels last week but distillate fell 1.5mn and gasoline 2.15mn, the third straight weekly decline. Refinery utilisation rose 2.9 points to 88.6%. 0.82mn barrels were added to the SPR. The administration has announced another million for December/January deliveries.

USD/JPY had a rough 151.50-152.00 range for Wednesday trade and we track near 151.90/95 in early Thursday dealings (little net change was posted for Wednesday). Little has changed from a technical standpoint. The bull trigger is at 153.27, the Oct 10 high. The 50-day EMA is key support, which resides at 149.05. A clear break of it would be bearish.  

• Broader USD trends faltered somewhat as US trade unfolded, with FX market drivers few and far between, with most pointing to some short-term positioning squaring as we approach the US CPI report on Friday.
• Late source reports that the US is considering curbs on exports to China made with US software negatively impacted risk sentiment for a brief time, with equity prices sharply plumbing new lows, however there was little lasting impact on currencies.
• The SPX lost a little over 0.50%, while EU markets also most fell, but like JPY, the likes of AUD and NZD finished Wednesday US trade little changed versus the USD. AUD/JPY is holding above all key EMAs, last near 98.60, with Oct 14 highs around 99.50 the next upside target. NZD/JPY is trying to push above 200-day EMA resistance (87.29), last near 87.20.
• The local data calendar just has weekly offshore investment flows on tap today.
• Note in the option expiry space for NY cut later: Y151.00($434mln), Y152.00($605mln).  

• RES 3: 97.796 - 1.618 proj of the Sep 3 - 12 - 15 price swing
• RES 2: 96.780 - High Jun 26 (cont)
• RES 1: 96.700 - High Sep 12  
• PRICE: 96.640 @ 14:19 BST Oct 22
• SUP 1: 96.280 - Low May 15 (cont.)  
• SUP 2: 95.900 - Low Jan 14 (cont.)
• SUP 3: 95.760 - Low 14 Nov ‘24

Aussie 3-yr futures surged on the resumption of trade after the weekend, returning focus higher despite the break of support last week. Short-term resistance at 96.615, the Sep 12 high, has been broken, with 96.780 is the next upside target. Clearance of this level puts markets at fresh multi-month highs. 96.280 marks next major support - but markets are some way off this mark now.