Global Oil Prices

Global oil prices extended their gains in American trade on Thursday and hit one-week highs while on track to retest four-month highs following strong US growth data.

US GDP Data

• Recent data showed US GDP growth at 3.4% in the fourth quarter of 2023, beating expectations of 3.2%.
• The data bodes well for US demand on fuel, and showcases the resilience of the US economy despite higher interest rates.

Oil Prices

• US crude rose 1.3% to $82.68, a one-week high, while Brent added 1.1% to $80.60 a barrel, with a session-low at $85.52.
• US crude rose 0.5% on Wednesday, while Brent added 0.4% away from recent two-week lows.

US Crude Stocks

• The Energy Information Administration reported a buildup of 3.2 million barrels in US crude stocks last week, while analysts expected a drop of 1.2 million barrels.
• Gasoline stocks rose 1.3 million barrels to 232.1 million barrels, while distillate stocks fell 1.2 million barrels to 117.3 million barrels.

US Crude Production

The EIA also reported no change in US crude production last week at 13.1 million bpd.

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US Dollar's Rise in European Trade

The US dollar rose in European trade on Thursday against a basket of major rivals, extending gains for the third straight session and scaling a six-week high after bullish remarks by Fed member Christopher Waller, which hurt the chances of a June interest rate cut.

Now investors await a series of important US data later today on GDP growth for the fourth quarter.

The Dollar Index

The dollar index rose 0.4% today to 104.33, with a session-low at 104.30.

It closed up 0.1% on Wednesday, the second profit in a row as the US economy continues to prove itself flexible.

Waller's Statements

Federal Reserve member Christopher Waller said on Wednesday that there’s no rush to cut interest rates, and that he wants to see at least two months of low inflation data before cutting rates. He added that recent US data could delay the number of expected US interest rate cuts this year.

US Interest Rates

• Following his remarks, the odds of a 0.25% US interest rate cut in June fell from 72% to 60%.
• Investors are expecting 75 basis points of total US interest rate cuts this year.

US Growth Data

Now investors await a batch of important US data, including GDP growth for the final quarter of 2023, expected at 3.2%, down from 4.9% in the fourth quarter.

• US unemployment claims are expected up slightly to 212 thousand in the week ending March 23 from 210 thousand.
• US pending home sales are expected up 1.4% in February, following a 4.9% drop in January.

Monitoring Market Movements

Stay updated on market developments for informed investment decisions.

Euro declined in European trade on Thursday against a basket of major rivals, sharpening losses for the third straight session against the dollar and plumbing a five-week trough, and moving away from the psychological level of $1.08 amid concerns about the Europe-US interest rate gap. 

Recent remarks by European Central Bank officials bolstered the case for an interest rate cut in June, while remarks by Fed official Christopher Waller hurt the odds of a US rate cut in June.

EUR/USD

EUR/USD fell 0.3% to 1.0893, the lowest since February 21, with a session-high at 1.0892, after losing 0.1% on Wednesday, the second loss in a row.  

Bearish Remarks 

Latvian Central Bank Governor Mārtiņš Kazāks said that inflation has fallen, with June now becoming a prime time to start cutting borrowing costs. 

Italian Central Bank Governor and ECB member Fabio Benita said that the ECB is heading for interest rate cuts as inflation quickly approaches the 2% target. 

ECB Chief Economist Philip Lane said the ECB is increasingly confident that European wage growth is slowing down to normal levels, opening the door for interest rate cuts. 

European Rates

Such remarks boosted the odds of a June interest rate cut by the ECB, with investors now expecting 90 basis points of total interest rate cuts by the ECB this year. 

Waller 

Federal Reserve member Christopher Waller said on Wednesday that there’s no rush to cut interest rates, and that he wants to see at least two months of low inflation data before cutting rates. 

He added that recent US data could delay the number of expected US interest rate cuts this year.

Following his remarks, the odds of a 0.25% US interest rate cut in June fell from 72% to 60%.  

Interest Rate Gap

The eurozone-US interest rate gap currently stands at 100 basis points in favor of the US, however it could increase to 125 basis points in June if the ECB went ahead with cutting rates and the Fed held its ground, which would put the euro in a weak position. 

Gold prices rose on Wednesday as markets await important US data this week while the dollar trades flat against most rivals. 

Markets await US GDP growth data tomorrow for the fourth quarter of 2024, expected to clock in at 3.2%.

Investors also look forward to personal spending data, the Fed’s favorite inflation gauge, on Friday, expected to show a 0.3% increase. 

Otherwise, the dollar index steadied at 104.2 as of 20:47 GMT, with a session-high at 104.4, and a low at 104.2. 

On trading, gold spot prices rose 0.7%, or $16.20 as of 20:47 GMT to $2215.40 an ounce.