Market Analytics and Considerations
Key Notes
- On the assumption that China would reopen, crude oil gained further ground.
- Another geopolitical frontier is where the US and China are currently at odds.
- As currency and Treasuries stall, US CPI waits.
A positive outlook has supported crude oil throughout the Asian session. As China continues to loosen some of its Covid-19 limitations, there is considerable optimism that demand will increase.
Today, Hong Kong ended its three-day observation period for newcomers to the island. While the Brent contract is edging over US$ 79 barrel, the WTI futures contract is hovering around US$ 74 bbl. The recent cold in the northern hemisphere supported energy prices as well.
Due to Wall Street’s good performance on Tuesday, APAC stocks were typically marginally up for the majority of the day. US equities appeared to be anticipating a likely mild US CPI release later today that would boost the mood.
Many analysts expect the headline CPI to increase by 7.3% over the preceding 7.7%. The market may revise its expectations for the Federal Reserve’s monetary policy decision later in the week if there is a significant departure from current predictions.
Another issue in the US-China relationship looks to be intensifying elsewhere.
To limit Beijing’s ability to develop military weapons, Washington has demanded that major semiconductor manufacturers in Japan and the Netherlands stop providing technology to Beijing.
In response, China has officially complained to the World Trade Organization (WTO). The US insists that it is a national security issue.
The technical analysis of WTI crude oil
WTI crude oil increased today following a 12-month low previous Friday at 70.08. When compared to the 66.12 low from December 2021, that level might offer support.
Resistance on the upward could be found at the thresholds of 76.25 and 75.27. The former and the 10-day simple moving average are in agreement (SMA).
Resistance further upward could be found at the 82.63 breakpoint or the most recent tops of 82.72 and 83.34. The 55-day SMA is presently close to that peak of 83.34 as well.
