Oil prices attempt recovery as the US plans to refill strategic reserve
Global oil prices rose in American trade on Tuesday away from recent four-week lows, amid active short-covering, and as the US government plans to refill the strategic reserve.
It comes ahead of initial data on US crude stocks later today, expected to show another inventory buildup last week.
Prices
US crude rose 0.75% today to $68.48 a barrel, with a session-low at $67.22.
Brent rose 1.1% today to $72.58 a barrel, with a session-low at $71.22.
On Monday, US crude lost 5.2%, the heftiest loss since May 2023, plumbing four-week lows at $66.94 a barrel, while Brent shed 5% to $71.16 a barrel, the lowest since October 1.
The heaviest daily loss in 2024 came after Israel launched a limited strike on Iran that avoided major oil infrastructure.
Strategic Reserve
The US said on Monday that it’s seeking to acquire upwards of 3 million barrels of oil to refill the strategic reserve, but it’s dependent on lawmakers approving the funds.
Analysts believe the US plan has helped stabilize and bolster oil prices today.
US Stocks
Later today, initial data from the American Petroleum Institute will be released on US crude stocks, expected to show a buildup, while tomorrow, the official EIA report will be released.
Bitcoin surpasses $70,000 for first time since June
Bitcoin rose on Tuesday on track for the fourth straight session, passing the barrier of $70,000 for the first time since June, and hitting four-month highs, and approaching fresh record highs on increasing odds of a Trump win in the US presidential elections.
The Federal Reserve is also increasingly likely to cut interest rates by 25 basis points at both the November and December policy meetings.
Prices
Bitcoin rose 2.4% at Bitstamp today to $71,614, the highest since June, with a session-low at $69,716.
On Monday, bitcoin rallied 2.9%, the third profit in a row after a recent patch of opinion polls on the US presidential election.
Crypto Market Value
The market value of cryptocurrencies rose by over $70 billion on Tuesday to a total of $2.520 trillion, the highest since June, as both bitcoin and ethereum rallied.
Trump
The latest US presidential election opinion polls showed Donald Trump has an edge over his opponent Kamala Harris.
Trump is viewed as more supportive of cryptocurrencies and more relaxed with their regulations.
US Rates
According to the Fedwatch tool, the odds of a 0.25% Fed interest rate cut in November stood at 95%, while the odds of no changes in interest rates stood at 5%.
Now investors await a batch of US labor data, including job opportunities, private sector employment, and unemployment claims data, in addition to the all-important US payrolls report on Friday.
US dollar approaches three-month high ahead of decisive data
The US dollar rose in European trade on Tuesday against a basket of major rivals, resuming the gains and approaching three-month highs as US 10-year treasury yields rallied.
It comes ahead of decisive US data later today, which would provide evidence on upcoming Fed interest rate cuts this year.
The Index
The dollar index rose 0.1% to 104.37, with a session-low at 104.21.
The index lost 0.1% yesterday on profit-taking, away from three-month highs at 104.57.
US Yields
US 10-year treasury yields rose 0.65% on Tuesday on track for the third profit in a row, hitting a 3-⅕ month high at 4.312%.
US Rates
According to the Fedwatch tool, the odds of a 0.25% Fed interest rate cut stood at 97% in November.
Now investors await a batch of important US data later today that would provide important signals on the future of the US economy.
US housing prices are expected up 4.9% in August, slowing down from 5.9% in July.
The CB consumer confidence index is expected up to 99.5 in October from 98.7 in September.
The JOLTS job opportunities survey is expected to show 7.98 million new vacancies in September, down from 8.04 million in August.
Yen tries to recover after pledge by Japan's finance minister
The Japanese yen rose in Asian trade on Tuesday against a basket of major rivals, while trying to recover from three-month lows against the dollar, on active short-covering after recent losses, while Japan’s finance minister vowed to monitor forex movements.
The gains are also boosted by a stall in US 10-year treasury yields, as investors shun risks ahead of crucial US data later this week.
The Price
The USD/JPY fell 0.3% today to 152.85 yen per dollar, with a session-high at 153.36.
The yen lost 0.7% yesterday against the dollar, hitting three-month lows at 153.88.
As the Japanese governing coalition lost its majority in the Diet, it sparked a state of uncertainty in the markets.
Japan is facing a period of political maneuvering in order to form a new coalition, after the LDP party and its partners won 215 seats in the Diet, below the 233-seat majority.
Japan’s finance minister Katsunobo Kato said on Tuesday that authorities will be cautious when dealing with forex movements, including trades made by speculators.
He asserted that authorities are keeping a close eye, in what could be a hint at intervention once more if the yen went out of control.
The yen tumbled sharply once again amid the political chaos in Japan, which might hamper efforts to tighten monetary policies in upcoming months.
Kato added that the government will organize a new economic package to prop up the economy and support the fundamentals.
US Yields
US 10-year treasury yields fell 0.5% on Tuesday away from three-month highs at 4.300%, on track for the first loss in three sessions amid active profit-taking.
The developments came ahead of important US housing prices, consumer confidence, and job opportunities data later today.
The data will showcase the flexibility of the US economy and will likely change upcoming odds of US interest rate decisions in November and December.
According to the Fedwatch tool, the odds of a 0.25% Fed interest rate cut stood at 97% in November.
A smaller long-term yield gap between Japan and the US would serve to boost the appeal of Japanese bonds and underpin the yen eventually.