Latest news with #Eurozone
Yahoo
11 hours ago
- Business
- Yahoo
Crude Oil Price Fall on Concern About Energy Demand
August WTI crude oil (CLQ25) on Tuesday closed down -0.99 (-1.47%), and August RBOB gasoline (RBQ25) closed down -0.0300 (-1.41%). Crude oil and gasoline retreated for a second session Tuesday, with gasoline dropping to a 2-week low. Crude oil prices are being undercut by concern that President Trump's tariff policies will lead to slower global economic growth and reduced energy demand. President Trump recently said that reciprocal tariffs will increase on August 1 for countries that have not clinched trade deals with the US. Tuesday's slide in the dollar index (DXY00) to a 1.5-week low helped to limit losses in crude oil prices. More News from Barchart Nat-Gas Prices Sink on the Outlook for Cooler US Temps and Higher Gas Production Crude Oil Prices Pressured by Concerns of Oversupply Crude Oil Prices Slip on Concerns of a Mounting Global Oil Supply Glut Stop Missing Market Moves: Get the FREE Barchart Brief – your midday dose of stock movers, trending sectors, and actionable trade ideas, delivered right to your inbox. Sign Up Now! Tuesday's global economic news was negative for energy demand and crude prices. The US July Richmond Fed manufacturing index unexpectedly fell -12 points to an 11-month low of -20, weaker than expectations of an increase to -2. Also, the ECB's quarterly Bank Lending Survey stated that loan demand in the Eurozone remained weak in Q2. Weighing on crude is the outlook for Iraq to boost crude exports from its northern Kurdish region through the Iraq-Turkey pipeline, where oil exports have been halted since March 2023. The Iraqi government approved a plan for the semi-autonomous Kurdish region to resume oil exports. Kurdistan expects to supply Iraq's crude market with 230,000 bpd of crude once exports resume. Iraq is the second-largest oil producer in OPEC. Crude prices have carryover support from last Friday when the European Union approved fresh sanctions on Russian oil due to its aggression against Ukraine. The sanctions package includes cutting off 20 more Russian banks from the international payments system SWIFT, as well as restrictions imposed on Russian petroleum refined in other countries. A large oil refinery in India, part-owned by Russia's Rosneft PJSC, was also blacklisted. Additionally, 105 more ships in Russia's shadow fleet were sanctioned, pushing the number of sanctioned ships above 400. Concern about a global oil glut is negative for crude prices. On July 5, OPEC+ agreed to raise its crude production by 548,000 barrels per day (bpd) beginning August 1, exceeding expectations of a 411,000 bpd increase. Saudi Arabia also stated that additional similar-sized increases in crude output could follow, which is viewed as a strategy to reduce oil prices and penalize overproducing OPEC+ members, such as Kazakhstan and Iraq. OPEC+ is boosting output to reverse the 2-year-long production cut, gradually restoring a total of 2.2 million bpd of production by September 2026. On May 31, OPEC+ agreed to a 411,000 bpd increase in crude production for July, following the same 411,000 bpd hike for June. June crude production rose +360,000 bpd to a 1.5-year high of 28.10 million bpd. In a supportive factor for oil prices, Bloomberg reported on July 10 that OPEC+ is discussing a pause in further production increases from October, following its next monthly hike in September of 548,000 barrels. OPEC+ may be concerned about a slowdown in global oil demand in the second half of this year that could lead to a supply glut if the group keeps boosting production. The International Energy Agency said inventories have been accumulating at a rate of 1 million bpd and that the global crude oil market faces a surplus by Q4-2025 equivalent to 1.5% of global crude consumption. A decrease in crude oil held worldwide on tankers is bullish for oil prices. Vortexa reported Monday that crude oil stored on tankers that have been stationary for at least seven days fell by -14% w/w to 66.31 million bbl in the week ended July 18. The consensus is that Wednesday's weekly EIA crude inventories will decrease by 1.5 million barrels, and gasoline supplies will decrease by 200,000 barrels. Last Wednesday's weekly EIA report showed that US crude inventories in the week ended July 11 fell by -3.859 million bbls, the first draw in three weeks. Gasoline inventories rose by +3.399 million bbls, and distillate inventories rose by +4.173 million bbls. The EIA report showed that (1) US crude oil inventories as of July 11 were -8.0% below the seasonal 5-year average, (2) gasoline inventories were -0.1% below the seasonal 5-year average, and (3) distillate inventories were -21.1% below the 5-year seasonal average. US crude oil production in the week ending July 11 fell -0.1% w/w to 13.375 million bpd, modestly below the record high of 13.631 million bpd posted in the week of 12/6/2024. Baker Hughes reported last Friday that the number of active US oil rigs in the week ending July 18 decreased by -2 rigs to a new 3.75-year low of 422 rigs. Over the past 2.5 years, the number of US oil rigs has fallen sharply from the 5.25-year high of 627 rigs reported in December 2022. On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
New York Times
18 hours ago
- Business
- New York Times
As the Dollar Slides, the Euro Is Picking Up Speed
The chaotic rollout of President Trump's tariffs has prompted investors to question long-held assumptions about the safety and stability of the U.S. dollar, which has plunged in value this year. In the hunt for alternatives, many have turned to the euro. The euro has risen more than 11 percent against the dollar since the start of the year, reaching its highest level in four years, at $1.18. The euro has also gained against other major currencies over that period, including the Japanese yen, British pound, Canadian dollar and South Korean won, suggesting that its strength is more than a reflection of the dollar's weakness. Christine Lagarde, the president of the European Central Bank, said this moment was an opportunity for the euro to gain global clout. 'We are witnessing a profound shift in the global order: Open markets and multilateral rules are fracturing, and even the dominant role of the U.S. dollar, the cornerstone of the system, is no longer certain,' she wrote last week. The dollar's role as the world's reserve currency gives the United States an 'exorbitant privilege' — a term coined begrudgingly by a French politician in the 1960s. Because investors, governments and central banks around the world seek the safe, predictable returns of dollar-denominated assets like Treasury bonds, there is a robust, built-in demand for dollars. That makes it easier for the U.S. government to borrow and boosts the spending power of American consumers. The eurozone, which is made up of the 20 countries that use the euro and rivals the United States in terms of size and wealth, has never attracted investors in the same way. The euro ranks a distant second to the dollar in terms of global use. The euro's recent rise is a major reversal from just three years ago, when it dropped to parity with the dollar because investors feared the damage of surging inflation and Russia's invasion of Ukraine. And it is a world away from the eurozone debt crisis last decade, when at times it seemed like the currency union was at risk of crumbling. As welcome as the euro's recovery from those episodes has been — the euro is trading near a record high against the currencies of dozens of major trading partners — it is also possible to have too much of a good thing. The Euro Rises Up Index of the euro's value against a trade-weighted average of 41 currencies used by the eurozone's biggest trading partners. Source: European Central Bank By The New York Times As money flows into the euro and euro-denominated assets like German government bonds, economists and executives warn that the currency's strength could hurt exporters. They are already contending with Mr. Trump's tariffs making their goods more expensive for buyers abroad as well as increased competition from Chinese rivals in key markets. 'Further euro strength is likely to be self-defeating,' said Valentin Marinov, a currency strategist at Crédit Agricole, a French bank. Exports were already likely to weaken and become a drag on the eurozone economy because of U.S. tariffs and European government policies that would encourage more imports. After a surge in energy prices led to years of fighting to bring inflation down, the European Central Bank, which sets interest rates for the eurozone, now faces the prospect that inflation could be too low. The bank forecasts inflation to average 1.6 percent next year, notably below its 2 percent target. That's partly because of the impact of a strong euro, which makes imports cheaper. Some policymakers have said there is a risk of sluggish inflation becoming entrenched, which is a familiar problem for the region. For nearly a decade until 2021, the central bank kept its key interest rates below zero in hopes of spurring faster economic growth and encouraging prices to rise steadily. That, policymakers hoped, would feed through to higher wage growth and better living standards. E.C.B. officials are expected to keep interest rates steady when they meet this week, but analysts are adding to bets they could cut rates again later this year, if the economic outlook darkens or the euro's strength pushes inflation forecasts even lower. Reducing interest rates tends to weaken a currency, but the euro's recent strength has come, notably, as the E.C.B. cut rates eight times in a year. Luis de Guindos, the vice president of the central bank, said that if the euro climbed above $1.20, that 'would be much more complicated.' Some big European companies have warned about the effect of the strong currency on their earnings, especially in export-heavy Germany. SAP, a software firm that recently became Europe's most valuable public company, said that every one-cent increase in the euro-dollar exchange rate results in a 30 million-euro decline in revenues, without currency hedges. Adidas, the sportswear brand, said that a strong euro has 'negative translation effects' on its overseas sales. Daimler, a truck maker, said that fluctuations on the euro-dollar rate 'could significantly impact' its financial performance. Where the euro goes next is hard to predict. It is currently trading at around $1.17, and analysts surveyed by Bloomberg expect it to continuing strengthening, to $1.21 next year. But Mr. Marinov of Crédit Agricole said he believed that traders had gotten ahead of themselves: He expects the euro to fall back toward $1.10 next year. The currency's rally this year does not necessarily mean there will be a lasting shift toward the euro, in which it accounts for a larger share of central banks' reserves or is used in more cross-border payments. Ms. Lagarde of the E.C.B. said that seizing the moment for a 'global euro' would take a concerted effort to bolster the bloc's fragmented economy, streamline its governance and deepen its capital markets, among other things. 'A step towards greater international prominence for our currency will not happen by default: It must be earned,' she said.
Yahoo
18 hours ago
- Business
- Yahoo
Crude Oil Prices Fall on Concern Tariffs Will Slow Growth and Energy Demand
Floating oil rig in ocean by Keri Jackson via Pixabay August WTI crude oil (CLQ25) today is down -1.01 (-1.50%), and August RBOB gasoline (RBQ25) is down -0.0306 (-1.44%). Crude oil and gasoline prices today are falling for a second session, with gasoline dropping to a 2-week low. Crude oil prices are being undercut by concern that President Trump's tariff policies will lead to slower global economic growth and reduced energy demand. President Trump recently said that reciprocal tariffs will increase on August 1 for countries that have not clinched trade deals with the US. Today's weaker dollar is helping to limit losses in crude oil prices. More News from Barchart Today's global economic news was negative for energy demand and crude prices. The US July Richmond Fed manufacturing index unexpectedly fell -12 points to an 11-month low of -20, weaker than expectations of an increase to -2. Also, the ECB's quarterly Bank Lending Survey stated that loan demand in the Eurozone remained weak in Q2. Weighing on crude is the outlook for Iraq to boost crude exports from its northern Kurdish region through the Iraq-Turkey pipeline, where oil exports have been halted since March 2023. The Iraqi government approved a plan for the semi-autonomous Kurdish region to resume oil exports. Kurdistan expects to supply Iraq's crude market with 230,000 bpd of crude once exports resume. Iraq is the second-largest oil producer in OPEC. Crude prices have carryover support from last Friday when the European Union approved fresh sanctions on Russian oil due to its aggression against Ukraine. The sanctions package includes cutting off 20 more Russian banks from the international payments system SWIFT, as well as restrictions imposed on Russian petroleum refined in other countries. A large oil refinery in India, part-owned by Russia's Rosneft PJSC, was also blacklisted. Additionally, 105 more ships in Russia's shadow fleet were sanctioned, pushing the number of sanctioned ships above 400. Concern about a global oil glut is negative for crude prices. On July 5, OPEC+ agreed to raise its crude production by 548,000 barrels per day (bpd) beginning August 1, exceeding expectations of a 411,000 bpd increase. Saudi Arabia also stated that additional similar-sized increases in crude output could follow, which is viewed as a strategy to reduce oil prices and penalize overproducing OPEC+ members, such as Kazakhstan and Iraq. OPEC+ is boosting output to reverse the 2-year-long production cut, gradually restoring a total of 2.2 million bpd of production by September 2026. On May 31, OPEC+ agreed to a 411,000 bpd increase in crude production for July, following the same 411,000 bpd hike for June. June crude production rose +360,000 bpd to a 1.5-year high of 28.10 million bpd.
Wall Street Journal
a day ago
- Business
- Wall Street Journal
Eurozone Bond Yields Edge Up, Reversing Monday's Falls
0638 GMT – Eurozone 10-year government bond yields rise in early trade, reversing Monday's significant falls which had no obvious macro catalyst, says Danske Bank's Frederik Romedahl in a note. 'Low volumes, light issuance this week and ongoing trade uncertainty might have been the factors driving the steady decline during the day,' the chief analyst says. Yields on Italian and French government bonds fell the most on Monday, dropping by 10.5 and 10.6 basis points, respectively, according to Tradeweb data. The 10-year German Bund yield is last up 1.2 basis points at 2.626%; the 10-year French OAT yield rises 1.9 basis points to 3.310%; and the 10-year Italian BTP yield is up 1.6 basis points at 3.494%. ( 0616 GMT – The U.S. Treasury yield curve has steepened recently, but it still isn't steep by historical standards, say LPL Financial's LPLA -3.49%decrease; red down pointing triangle Lawrence Gillum and Adam Turnquist in a note. Historically, the difference between the two- and 10-year Treasury yields is close to 100 basis points, albeit with a lot of variability, the strategists say. 'The 2-year/10-year spread is only at +0.55%, so we think the curve could further steepen throughout the year,' they say. Given this spread but with five times the interest rate risk, 'it doesn't make a lot of sense, in our view, to extend duration within portfolios.' The two-year Treasury yield last is up 1 basis point at 3.861%; the 10-year yield rises 1.3 basis points to 4.381%, according to Tradeweb. (
Yahoo
2 days ago
- Business
- Yahoo
Dollar Falls as Stocks Rally and T-note Yields Decline
The dollar index (DXY00) Monday fell by -0.65% and posted a 1-week low. The dollar retreated on Monday as a rally in the S&P 500 to a new record high has reduced liquidity demand for the dollar. Lower T-note yields on Monday also pressured the dollar. US June leading economic indicators fell 0.3% m/m, right on expectations. More News from Barchart Dollar Slips Due to Strength in Stocks and Lower T-note Yields Markets move fast. Keep up by reading our FREE midday Barchart Brief newsletter for exclusive charts, analysis, and headlines. Federal funds futures prices are discounting the chances for a -25 bp rate cut at 3% at the July 29-30 FOMC meeting and 58% at the following meeting on September 16-17. EUR/USD (^EURUSD) Monday rose by +0.58%. The euro rose on Monday due to the dollar's weakness. Also, expectations that the ECB is closer to the end of its easing cycle than the Federal Reserve are boosting the euro as the ECB has cut interest rates four times this year while the Fed has not cut rates yet this year. Additionally, US trade policies are prompting foreign investors to shift away from dollar-denominated assets and into euro-denominated assets. Gains in the euro are limited due to concerns that President Trump is pushing for a minimum tariff of 15%-20% in any trade deal with the European Union (EU), as Mr. Trump has remained unmoved by the latest EU offer to reduce car tariffs. Higher tariff rates on EU goods could undercut the Eurozone economy, a bearish factor for the euro. Swaps are pricing in a 2% chance of a -25 bp rate cut by the ECB at Thursday's policy meeting. USD/JPY (^USDJPY) Monday fell by -0.99%. The yen rallied against the dollar on Monday after Prime Minister Ishiba said he would carry on as leader despite his ruling LDP coalition losing its majority after Sunday's upper house elections. Monday's moves in the yen may be excessive due to below-average trading, as Japanese markets were closed for the Marine Day holiday. The upside in the yen in the near term may be limited due to concerns that the LDP's loss of its majority in Japan's upper house may lead to fiscal deterioration in Japan's government finances, as the government boosts spending and implements tax cuts. Japan's ruling Liberal Democratic Party (LDP) lost its majority in the upper house after Sunday's elections, with the LDP party winning only 47 seats, below the 50 it needed to win to maintain control. August gold (GCQ25) Monday closed up +48.10 (+1.43%), and September silver (SIU25) closed up +0.870 (+2.26%). Precious metals settled sharply higher on Monday, with gold reaching a 4-week high. Monday's dollar weakness and lower global government bond yields were bullish for precious metals. Also, precious metals have carryover support from last Friday when Fed Governor Waller expressed support for a Fed interest rate cut at the July 29-30 FOMC meeting. In addition, precious metals have safe-haven support from global trade tensions, following President Trump's announcement last Wednesday that he intends to send a tariff letter to more than 150 countries, notifying them that their tariff rates could be 10% or 15%, effective August 1. On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on
