OIL: Oil End of Day Summary: Crude Rises
Crude has risen today on improved sentiment after higher-than-expected nonfarm payrolls showed a resilient US labour market, while Navarro said a US-China meeting was likely within a week. Prices faced pressure earlier in the week after reports that Saudi Arabia was seeking further large OPEC+ output hikes.
- WTI JUL 25 up 1.9% at 64.58$/bbl
- Baker Hughes US rig count: Oil: 442 (-19) - down 46 rigs, or 9.4% on the year.
- China's official news agency Xinhua reported that US President Donald Trump and Chinese President Xi Jinping spoke Thursday. Trump acknowledged that the trade relationship had 'gotten off track'.
- Geopolitical concerns over Russian and Iran and tight near-term fundamentals supported by Canadian wildfires have driven upside pressure on oil markets this week.
- The Trump administration is trying to get Senator Lindsey Graham to significantly weaken his Russia-sanctions bill
- The headline oil supply increase of 411k b/d m/m for July by OPEC+ will likely translate into a boost of 225k b/d, according to an FGE note cited by Bloomberg.
- OPEC+ members are expected to agree to two large output hikes for August and September at their next meetings, HSBC research said.
- US President Donald Trump has told reporters in the Oval Office that he will greenlight new sanctions on Russia if he sees a moment "when we're not going to make a deal and this thing won't stop."
- Rain has helped eased Alberta wildfire concerns with oil output within 10km of the fires down to 455kb/d yesterday, although out-of-control fires are back up to 23, AER shows.
- Spain did not import any crude oil from Venezuela in April, ahead of a deadline set by the US.
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Historical bullets
USDJPY TECHS: Trend Needle Points South
- RES 4: 149.28 High Apr 3
- RES 3: 148.27 High Apr 9
- RES 2: 146.33 50-day EMA and key resistance
- RES 1: 145.92 High May 2
- PRICE: 143.40 @ 16:35 BST May 7
- SUP 1: 141.97 Low Apr 29
- SUP 2: 139.79 1.382 proj of the Feb 12 - Mar 11 - 28 price swing
- SUP 3: 138.82 1.500 proj of the Feb 12 - Mar 11 - 28 price swing
- SUP 4: 138.07 Low Jul 28 ‘23
The primary trend direction in USDJPY remains bearish and gains since Apr 22 appear corrective. Resistance at the 50-day EMA, at 146.33, remains intact. A clear break of this average would highlight a possible reversal. Moving average studies are in a bear-mode position and continue to highlight a dominant downtrend. A resumption of the trend would open 139.79 next, a Fibonacci projection. First key support to watch is 141.97, the Apr 29 low.
STIR: Contained Reaction To FOMC Announcement
- Having rallied into the FOMC reaction on tariff headlines, rates reaction is relatively contained following the FOMC statement.
- Fed Funds implied rates are 0.5-3.5bp lower for 2025 meetings.
- That includes levels that imply 82bp of cuts for 2025 as a whole but that still has near enough an entire 25bp cut omitted vs pre ISM mfg levels from Thursday.
- Cumulative cuts from an assumed 4.33% effective: 7.5bp Jun, 24bp Jul, 45bp Sep, 63bp Oct and 82bp Dec.
- SOFR implied yields are up to 3bps lower post-announcement, led by the Mar 2026.
US TSY OPTIONS: Jun'25 10Y Call Sale
- -11,500 TYM5 113 calls, 11 ref 111-16
