OIL: Three Straight Days of Gains for Oil
Apr-15 04:31
- With ongoing discussions between the US and Iran whilst OPEC cut their forecasts for 2025 and 2026, oil has had a lot to digest.
- OPEC forecasts an increase of 1.3m barrels a day, a reduction of 100k a day as trade war uncertainty weighs on global growth prospects.
- WTI opened at US$61.58, and delivered a third straight day of gains, rising to $61.68
- Brent opened at $64.86, and has rallied to $65.02.
- The global oil market faces “large surpluses” this year and next as the trade war weighs on crude demand growth and OPEC+ eases supply curbs, according to Goldman Sachs. (source BBG)
- JPMorgan has lowered their year end price forecast with Brent to $66 bbl and WTI to $62 bbl
- UBS cut theirs also with Brent to $68
- Hedge funds slashed net-long Brent positions by the most on record in the week to April 8 following the tariff chaos (source BBG)
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FED: March Economic Projections: Higher Inflation, Weaker Growth, Same Rates
Mar-14 21:28
The MNI Markets Team’s expectations for the updated Economic Projections in the March SEP are below.
- The unemployment rate is likely to rise slightly for 2025 alongside a downgrade in GDP growth, while the 2025 core and headline PCE inflation projections are set to rise again. Changes to later years will likely be limited, however.
- More detail on the shift in Fed funds rate medians is in our meeting preview - we will add more color next week.
FED: Market Pricing Nearly 3 2025 Cuts As Conditions Tighten
Mar-14 21:25
Amid rising government policy uncertainty, sentiment among businesses and consumers has fallen sharply since the start of the year, while equities and the dollar have reversed their post-election rise. Overall, financial conditions have tightened, even if stress is not yet mounting, e.g. no major widening of credit spreads (the accompanying chart shows the Fed’s financial conditions impulse index but only through January).
- Combined with growth fears, this has affected expectations for the Fed’s rate path, with around 18bp more cuts expected in 2025 compared with what was seen after the January FOMC. 65bp of cuts are priced for the year as a whole. 2025 cut pricing reached 71bp before the February inflation data and 76bp before the February payrolls report.
- A rate cut is seen with near zero probability for March’s meeting, but the first full cut is just about priced for June, with a second nearly priced by September.
- Chair Powell has no reason to endorse or refute these expectations – he’s likely to be happy with a press conference that ends with little discernable change in pricing.
CANADA'S CARNEY ANNOUNCES ELIMINATION OF THE CONSUMER CARBON TAX
Mar-14 21:17
- CANADA'S CARNEY ANNOUNCES ELIMINATION OF THE CONSUMER CARBON TAX
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