MARKET UPDATE

Oil rebounds after hitting 2022 lows, demand concerns cap gains

Oil prices rebounded in Asian trade on Thursday after slumping to their lowest level this year in the previous session, though concerns of economic slowdowns weakening fuel demand continued to cap gains.

Brent crude futures were up 70 cents or 0.9% at $77.87 per barrel by 0500 GMT, while U.S. West Texas Intermediate (WTI) crude futures gained 74 cents or 1.0% to $72.75 per barrel.

Brent had settled on Wednesday below the year’s previous closing low touched on the first day of 2022, while U.S. West Texas Intermediate crude had fallen to a fresh yearly low.

U.S. crude production rose to 12.2 million barrels per day last week, its highest level since August, the Energy Information Administration said on Wednesday. [EIA/S]

While U.S. crude stocks fell last week, gasoline and distillate inventories surged, adding to concerns about easing demand.

 

Asia stocks sink, Hong Kong rallies on reopening hopes

Most Asian stock markets sank on Thursday as mixed economic signals from Japan and fears of a U.S. recession dented sentiment, although the Hang Seng index rallied on reports that Hong Kong plans to further relax COVID curbs

The Hang Seng index surged nearly 3% as a local media outlet said that the local government plans to follow China in relaxing more COVID curbs.

China on Wednesday announced the further relaxation of movement curbs and testing mandates in most major cities, its biggest yet loosening of anti-COVID measures.

The move indicated that Beijing plans to further scale back its strict zero-COVID policy, which could bode well for local markets that were battered by weakening economic trends this year. Some of the optimism that had driven the rally is being put to the test,” said Shane Oliver, head of investment strategy at Australia’s AMP (OTC:AMLTF)

 

Dollar tries to find footing as recession worries simmer

The U.S. dollar clawed back some of the previous day’s declines on Thursday as investors weighed the outlook for Federal Reserve policy amid simmering fears that high interest rates could spur a recession.

With Japan’s own long-term yields pegged near zero by the central bank, the yen slid as long-term U.S. Treasury yields clambored off three-month lows.

Meanwhile, the yuan hovered close to an almost three-month high after China revealed a loosening of stifling COVID restrictions.

The U.S. dollar index – which gauges the greenback versus six counterparts – ticked up 0.19% to 105.33 in the Asian session, bouncing after a 0.42% slide overnight, its first decline since Friday.

While investors have been anticipating the Fed will soon slow its tightening pace, recent upbeat U.S. employment, services and factory data have added to investor uncertainty over the policy outlook.

Money markets price 91% odds that the policy-setting Federal Open Market Committee will raise rates by half a point on Dec. 14, with just 9% probability for another 75-basis point increase. Rates are now seen peaking at just below 5% in May.

Fed policy makers will have the benefit of seeing the latest consumer inflation data a day before the decision.

 

 

 

 

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