Oil expands losses to five-month low on global trade wars
Global oil prices fell in European trade on Tuesday on track for the third straight loss, plumbing five-month lows as trade wars erupted, potentially hurting global growth and subsequently fuel demand.
Prices are also pressured by the OPEC+ decision to enforce scheduled production hikes in April, which could lead to a global supply glut.
Now traders await initial data on US crude stocks later today from the American Petroleum Institute, expected to show a drawdown for the second straight week.
Prices
US crude fell 1.9% today to $67.05 a barrel, the lowest since November 18, with a session-high at $68.42.
Brent declined 1.85% to $70.15 a barrel, the lowest since October 1, with a session-high at $71.61.
On Monday, US crude lost 2.15%, while Brent gave up 2.2% on global trade concerns.
Trump’s Tariffs
Trump imposed 25% tariffs on Canada and Mexico, and a 10% additional tariff on Chinese products, damaging global sentiment.
China quickly responded by imposing 15% tariffs on some US imports, and will limit exports to 15 US companies.
OPEC+
OPEC+ decided on Monday to go ahead with a scheduled production hike amounting to 138 thousand bpd in April, the first such hike since 2022.
It was a surprising decision to the markets, and is likely linked to Donald Trump’s calls for a reduction in oil prices worldwide.
Bitcoin hovers near three-month low on massive Wall Street losses
Bitcoin tumbled on Tuesday for the second session on track for three-month lows, following massive losses on Wall Street.
It comes amid mounting global trade tensions due to reciprocal tariffs between the US and China, while US 25% tariffs on Mexico and Canada went into effect as well.
The Price
Bitcoin fell 4.3% at Bitstamp today to $82,450, with a session-high at $86,727.
On Monday, bitcoin tumbled 8.6%, resuming losses and recovering from three-month lows at $78,197.
Crypto Market Value
The market value of cryptocurrencies fell by $75 billion to a total of $2.825 trillion.
Wall Street
US stock indices expanded their massive losses on Monday amid uncertainty about US monetary policies, and mounting trade tensions.
Dow Jones slid 1.5% to two-month lows, while S&P 500 lost 1.75% to eight-week lows, as NASDAQ slid 2.2% to four-month lows, led by the tech sector.
Trump’s Tariffs
Trump imposed 25% tariffs on Canada and Mexico, and a 10% additional tariff on Chinese products, damaging global sentiment.
China quickly responded by imposing 15% tariffs on some US imports, and will limit exports to 15 US companies.
US dollar tumbles under pressure from treasury yields
The US dollar fell in European trade on Tuesday against a basket of major rivals, extending losses for the second day under pressure from US 10-year treasury yields.
The US implemented its new tariffs against Canada, Mexico, and China, with Beijing responding quickly with tariffs on US commodities as the trade wars erupt.
Now investors await a series of important US labor data this week, expected to provide crucial pricing for the odds of a Fed rate cut this quarter.
The Index
The dollar index fell 0.4% to 106.16, with a session-high at 106.65.
On Monday, the index lost 0.95%, the first loss in four days away from two-week highs at 107.66 on profit-taking.
US Yields
US 10-year treasury yields fell 1.1% today on track for the third loss in a row, plumbing a five-month trough at 4.115% and hurting the dollar’s standing.
The decline comess asd investors prepared for Trump’s 25% tariffs, which officially went into action today against Canada and Mexico.
Otherwise, according to the Fedwatch tool, the odds of a 0.25% Fed interest rate cut in March stood at 9%.
A smaller gap between US and Japanese long-term treasury yields would boost the standing of Japanese bonds and underpin the yen.
Trump’s Tariffs
Trump imposed 25% tariffs on Canada and Mexico, and a 10% additional tariff on Chinese products, damaging global sentiment.
China quickly responded by imposing 15% tariffs on some US imports, and will limit exports to 15 US companies.
Gold gains ground as dollar weakens
Gold prices rose in European trade on Tuesday, trading above $2900 an ounce as the dollar lost ground against major rivals.
Now traders await a batch of important US labor data later today, which would provide important clues on the odds of a Fed rate cut this quarter.
Prices
Gold prices rose 1% today to $2920 an ounce, with a session-low at $2882.
On Monday, gold rose 1.25%, marking the first profit in three days away from three-week lows at $2832.
US Dollar
The dollar index fell 0.35% today against a basket of major rivals, underpinning greenback-denominated gold futures.
Dollar’s decline comes as US 10-year treasury yields dropped to five-month lows amid mounting global trade tensions.
Investors fear deep wounds to the US and global economies due to Donald Trump’s tariffs on global economic partners.
US Rates
According to the Fedwatch tool, the odds of a Mach Fed rate cut stood at just 9%.
Now investors await a batch of important US labor data today, including private sector employment data, unemployment claims, and the payrolls report on Friday.
SPDR
Gold holdings at the SPDR Gold Trust fell 3.45 tons yesterday, the fourth such decline in a row, to a total of 900.93 tons, the lowest since February 20.