Diagnosed the eyes of investors in financial markets on report American jobs It is expected to be released later on Friday, while it jumped oil prices Backed by bets that The “OPEC +” alliance Production cuts will be discussed at a meeting next Monday, although prices are still on the verge of recording the worst weekly decline in 4 weeks due to fears of imposing restrictions to combat Corona in China and weak global demand growth.
By 01:17 GMT, the price of a barrel of Brent crude futures increased by $ 1.2, or 1.3 percent, to $ 93.56, and West Texas Intermediate crude futures increased by $ 1.16, or 1.3 percent, to $ 87.77, according to “Archyde.com” data.
The two contracts fell 3% in the previous session to the lowest level in two weeks, while Brent crude is heading towards a weekly decline of about 8%, and West Texas Intermediate crude is heading towards falling by about 6% during the week.
It is expected that “OPEC +”, which includes the Organization of the Petroleum Exporting Countries (OPEC) and its allies, will meet on September 5, against the backdrop of declining oil prices and lower demand, although Saudi Arabia says that supplies remain limited.
Asian stock exchanges suffer again despite the positives
Today, Friday, Asian markets struggled again, and continued to be volatile, although there are some positives.
Tokyo, Hong Kong, Sydney, Wellington and Taipei all retreated, while Shanghai, Seoul, Manila and Jakarta advanced.
The near-term outlook is not positive, Mira Pandit of JPMorgan Asset Management told Bloomberg TV, “We don’t have a lot of reason to be optimistic in this kind of environment over the next two weeks and months.”
Markets bet on US interest
The dollar held onto gains as interest rate hike expectations grew, as traders now focus on the key US jobs report.
Good readings of US factory activity, unemployment claims and private job creation indicate that the world’s top economy has remained strong despite high interest rates and high inflation for four decades.
But analysts said the numbers are a case of “good news in bad news” because they will give the US Federal Reserve more room to continue tightening monetary policy, with officials lined up to commit to hitting inflation even if it causes a recession.
Bets are increasing on the third consecutive increase of 75 basis points, at the current September meeting.
In context, OANDA’s Edward Moya warned that Fed officials may start considering an increase through to 2023, with inflation data growing in importance later this month.
“If the economy remains resilient over the next few months, the Fed Funds futures market may believe that the Fed will not tighten at the end of the year,” he wrote in a commentary.
He added, “Markets may start pricing in rate hikes in February as well, if pricing pressures do not show further signs of easing with the September 13 inflation report.”
Gains in “Wall Street” and decline in Europe
And “Wall Street” ended Thursday’s trading with a late rise, with the “Dow Jones” industrial index and the “Standard & Poor’s 500” index falling for 4 days, despite the extension of the “Nasdaq” index, which was dominated by technology stocks, its series of consecutive losses.
Yesterday, European markets fell again after record inflation figures raised expectations that the European Central Bank would announce a significant increase in costs next Thursday.
The dollar’s rise, supported by the continued interest rate hike
With US interest rates expected to continue to rise, the dollar rose to high levels not seen in decades, including against the British pound and the euro, and on Thursday it broke the 140 yen barrier for the first time since 1998.
Expectations are that it may strengthen as the Bank of Japan keeps interest rates too low to kick-start the economy, while analysts have said an intervention to support the yen is unlikely as the effects will be short.
The dollar’s rally added downward pressure on oil, which is priced in dollars, while demand hopes were hit hard on Thursday by news that China has effectively shut down about 20 million people in Chengdu to combat the coronavirus outbreak.
The closure of the tech manufacturing hub follows a similar shutdown in Shanghai, which sent shock waves through the economy and dashed hopes of recovery in the world’s second-largest economy.
“Mass shutdowns/tests continue to hamper stimulus efforts to revive the economy, and the announced stimulus so far is unlikely to gain much traction if the zero-coronavirus policy continues,” said Tapas Strickland of the National Australian Bank.