The firm notes that:
“The oil price required to trigger sufficient demand erosion appears higher than we estimated. Hence, we raise our Brent forecast to $100/bbl by 3Q, up from ~$90/bbl before.”
Archives of “Uncategorized” category
rssDollar pares post-FOMC decline for the most part
Dollar holds slight gains ahead of European trading
The greenback is sitting slightly higher as we look towards the session ahead, with EUR/USD dribbling lower in the past few hours in a fall from 1.1600 to 1.1583 currently.
Buyers did try for a push above the key hourly moving averages during the initial reaction to the Fed but has since given back control to sellers. That said, any major downside is still hard to come by as price action continues to consolidate after Friday’s drop.
It will take a push below the October lows of 1.1525-29 to really solidify any further downside momentum in the pair at this point.
Elsewhere, GBP/USD is also down 0.2% to 1.3655 and erasing its post-FOMC jump. Meanwhile, USD/CAD is up slightly to 1.2405 and just shy of pre-FOMC levels around 1.2415-20, and AUD/USD is down 0.2% to 0.7430 nearing its pre-FOMC levels at 0.7420-25.
A single $TSLA share in 2030.
Here’s what is coming up this week for troubled China property giant Evergrande.
Late last week the property developer made an agreement with domestic bond holders on a yuan-denominated bond.
On Thursday (last week) a US$83.5m coupon payment (on a US42bn offshore bond) became due. I posted on this at length so won’t do so again, suffice to say there is a 30-day ‘grace’ period in which to make payment. What this means is that if payment is made within this time window there is no ‘default’ registered.
Coming up this week is another payment due, $US47.5m. Again, there is the 30 day grace period. Its likely there will be no payment until this period expires … if at all is the bigger question.
Per Financial Times, there are enough empty properties in China to house 90m people
Dollar holds slightly firmer in European morning trade
USD/JPY inches up to five-week highs
The dollar sits in a good spot to start the day as it continues the more solid momentum from last week, with the US jobs report on Friday providing a springboard for the greenback to push higher against the rest of the major currencies bloc.
In particular, the rise in 10-year Treasury yields above 1.30% (currently near 1.37%) is helping to bolster USD/JPY to fresh highs in five weeks at 110.75. The pair will be looking towards the 111.00 handle next after pushing past the 14 July high @ 110.70.
Elsewhere, EUR/USD continues to linger at the year’s lows, testing support @ 1.1704-11. GBP/USD is also down 0.2% to 1.3815 and heading for a fourth straight down day, while AUD/USD is down 0.3% to 0.7325 near its lowest levels in two weeks.
Chip shortage worsens – more than 20 week wait for deliveries
The ‘chip lead time’, which is the time from ordering a semiconductor to taking delivery, increased 8 days in July from June.
- Now more than 20 weeks
The shortages are constraining production of autos, industrial equipment, IT devices, amongst others.
Data comes from Susquehanna Financial Group, reported here (link).
The shortages are not evenly spread across types of chips, some waits are longer than others. More at that link.
The US is considering a major rollback in Iran sanctions to revive nuke deal
Washington Post with the report that the Biden administration is considering a near wholesale rollback of some of the most stringent Trump-era sanctions imposed on Iran
- in a bid to get the Islamic Republic to return to compliance with a landmark 2015 nuclear accord
WaPo citing “according to current and former U.S. officials and others familiar with the matter”
—
Talks are rolling on this week in Vienna re resuscitating the nuclear deal.
Wyckoff – ‘Fourteen Methods Of Operating In The Stock Market’ – 1925
Nikkei 225 closes higher by 0.72% at 29,751.61
A slightly better day for Asian equities
That said, the signals are more mixed with some retreat seen towards the latter stages. Japanese stocks fared better with the Topix also closing up 0.2%.
The Hang Seng is up 0.6% but mainland Chinese equities are down, with the Shanghai Composite shedding 0.5% after holding gains earlier in the day.
The sluggish mood in US futures isn’t helping as Treasury yields keep higher ahead of European morning trade. 10-year yields are up nearly 3 bps to 1.694% with S&P 500 futures and Nasdaq futures seen down 0.1% and 0.2% respectively.