Notícias do Mercado
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23:42
US and UK tighten sanctions on Russian oil industry
The United States (USD) and the United Kingdom (UK) administration imposed tougher sanctions against Russia's oil industry, targeting nearly 200 vessels of the so-called "shadow fleet," major oil companies, and associated entities, the Office of Foreign Assets Control (OFAC) said on Friday.
The measures also target two of Russia's major oil producers, Gazprom Neft and Surgutneftegaz, along with dozens of their subsidiaries, per the BBC.
US Treasury Secretary Janet Yellen "The United States is taking sweeping action against Russia's key source of revenue for funding its brutal and illegal war against Ukraine.”Market reaction
At the time of writing, the WTI pair is trading 1.57% higher on the day to trade at $77.10.
WTI Oil FAQs
WTI Oil is a type of Crude Oil sold on international markets. The WTI stands for West Texas Intermediate, one of three major types including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” because of its relatively low gravity and sulfur content respectively. It is considered a high quality Oil that is easily refined. It is sourced in the United States and distributed via the Cushing hub, which is considered “The Pipeline Crossroads of the World”. It is a benchmark for the Oil market and WTI price is frequently quoted in the media.
Like all assets, supply and demand are the key drivers of WTI Oil price. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of WTI Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa.
The weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of WTI Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. API’s report is published every Tuesday and EIA’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency.
OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 Oil-producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact WTI Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia.
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23:21
Canadian PM Trudeau says has counter-tariffs ready If Trump launches a trade war
Canadian Prime Minister Justin Trudeau said on Sunday that Canada is ready to respond with counter-tariffs against the United States if President-elect Donald Trump follows through on his threat to start a trade war in North America, per Bloomberg.
Key quotes
“As we did last time, we are ready to respond with tariffs as necessary.”
“We are the number one export partner of about 35 different US states and anything that thickens the border between us ends up costing American citizens and American jobs.”
“Less than 1% of the illegal migrants, less than 1% of the fentanyl that comes into the United States, comes from Canada. So we’re not a problem,”
“We’ve actually responded to his request for us to do more with billions of dollars worth of investments to even further strengthen the security of our borders.”Market reaction
The USD/CAD pair is trading 0.08% lower on the day at 1.4418, as of writing.
Canadian Dollar FAQs
The key factors driving the Canadian Dollar (CAD) are the level of interest rates set by the Bank of Canada (BoC), the price of Oil, Canada’s largest export, the health of its economy, inflation and the Trade Balance, which is the difference between the value of Canada’s exports versus its imports. Other factors include market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – with risk-on being CAD-positive. As its largest trading partner, the health of the US economy is also a key factor influencing the Canadian Dollar.
The Bank of Canada (BoC) has a significant influence on the Canadian Dollar by setting the level of interest rates that banks can lend to one another. This influences the level of interest rates for everyone. The main goal of the BoC is to maintain inflation at 1-3% by adjusting interest rates up or down. Relatively higher interest rates tend to be positive for the CAD. The Bank of Canada can also use quantitative easing and tightening to influence credit conditions, with the former CAD-negative and the latter CAD-positive.
The price of Oil is a key factor impacting the value of the Canadian Dollar. Petroleum is Canada’s biggest export, so Oil price tends to have an immediate impact on the CAD value. Generally, if Oil price rises CAD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Oil falls. Higher Oil prices also tend to result in a greater likelihood of a positive Trade Balance, which is also supportive of the CAD.
While inflation had always traditionally been thought of as a negative factor for a currency since it lowers the value of money, the opposite has actually been the case in modern times with the relaxation of cross-border capital controls. Higher inflation tends to lead central banks to put up interest rates which attracts more capital inflows from global investors seeking a lucrative place to keep their money. This increases demand for the local currency, which in Canada’s case is the Canadian Dollar.
Macroeconomic data releases gauge the health of the economy and can have an impact on the Canadian Dollar. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the CAD. A strong economy is good for the Canadian Dollar. Not only does it attract more foreign investment but it may encourage the Bank of Canada to put up interest rates, leading to a stronger currency. If economic data is weak, however, the CAD is likely to fall.
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23:12
AUD/USD holds below 0.6150 on bullish US Dollar, stronger US NFP report
- AUD/USD softens to near 0.6145 in Monday’s early Asian session.
- The US Nonfarm Payrolls grew by 256K in December; Unemployment Rate fell to 4.1%.
- The concerns about China’s economic downturn weigh on the Aussie.
The AUD/USD pair remains on the defensive around 0.6145 during the early Asian session on Monday. The US job growth came in stronger than expected in December, supporting the US Dollar (USD) broadly.
Data released by the US Bureau of Labor Statistics (BLS) on Friday showed that the Nonfarm Payrolls (NFP) rose by 256K in December, compared to a 212K increase (revised from 227K) seen in November. This reading surpassed the market expectation of 160K by a wide margin.
Meanwhile, the Unemployment Rate ticked lower to 4.1% in December from 4.2% in November. Finally, annual wage inflation, as measured by the change in the Average Hourly Earnings, dropped to 3.9% in December from 4% in the previous reading.
The upbeat US labor market data for December is likely to convince the US Federal Reserve (Fed) to keep interest rates unchanged this month, which underpins the Greenback against the Australian Dollar (AUD). According to the CME FedWatch tool, financial markets expect the US central bank to keep its benchmark overnight interest rate unchanged in the 4.25%-4.50% range at its January 28-29 meeting. "It would take a very bad set of jobs reports to get the Fed easing again by March, and, so, we now see the next cut in June followed by a final one in September," said Michael Feroli, chief U.S. economist at JPMorgan.
On the other hand, the Aussie remains under selling pressure against the USD, lowest level since April 2020. The slower growth and deflationary risks in China continue to undermine the China-proxy AUD. The Citi economists said that the final quarter of last year was expected to be the seventh in a row in which China’s GDP deflator was negative.Australian Dollar FAQs
One of the most significant factors for the Australian Dollar (AUD) is the level of interest rates set by the Reserve Bank of Australia (RBA). Because Australia is a resource-rich country another key driver is the price of its biggest export, Iron Ore. The health of the Chinese economy, its largest trading partner, is a factor, as well as inflation in Australia, its growth rate and Trade Balance. Market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – is also a factor, with risk-on positive for AUD.
The Reserve Bank of Australia (RBA) influences the Australian Dollar (AUD) by setting the level of interest rates that Australian banks can lend to each other. This influences the level of interest rates in the economy as a whole. The main goal of the RBA is to maintain a stable inflation rate of 2-3% by adjusting interest rates up or down. Relatively high interest rates compared to other major central banks support the AUD, and the opposite for relatively low. The RBA can also use quantitative easing and tightening to influence credit conditions, with the former AUD-negative and the latter AUD-positive.
China is Australia’s largest trading partner so the health of the Chinese economy is a major influence on the value of the Australian Dollar (AUD). When the Chinese economy is doing well it purchases more raw materials, goods and services from Australia, lifting demand for the AUD, and pushing up its value. The opposite is the case when the Chinese economy is not growing as fast as expected. Positive or negative surprises in Chinese growth data, therefore, often have a direct impact on the Australian Dollar and its pairs.
Iron Ore is Australia’s largest export, accounting for $118 billion a year according to data from 2021, with China as its primary destination. The price of Iron Ore, therefore, can be a driver of the Australian Dollar. Generally, if the price of Iron Ore rises, AUD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Iron Ore falls. Higher Iron Ore prices also tend to result in a greater likelihood of a positive Trade Balance for Australia, which is also positive of the AUD.
The Trade Balance, which is the difference between what a country earns from its exports versus what it pays for its imports, is another factor that can influence the value of the Australian Dollar. If Australia produces highly sought after exports, then its currency will gain in value purely from the surplus demand created from foreign buyers seeking to purchase its exports versus what it spends to purchase imports. Therefore, a positive net Trade Balance strengthens the AUD, with the opposite effect if the Trade Balance is negative.
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