In this article, we have covered the highlights of global market news about the Natural Gas, Crude Oil, USD/JPY and USD/CAD.
Natural Gas Futures: The recovery seems to be solid.
When taking into account CME Group’s advanced prints for the natural gas futures markets, open interest increased on Friday by around 11.2K contracts, reversing the prior daily decline. However, volume decreased for the second session in a row, this time by around 25.2K contracts.
Natural gas prices significantly rose on Friday due to growing open interest, which suggests that more gains are anticipated very shortly. In contrast, the commodity may be heading for a peak of almost $9.60 per MMBtu in 2022. (June 8).
Crude Oil Futures: More losses on the way
According to CME Group’s flash statistics for crude oil futures markets, traders increased their open interest holdings by roughly 11K after the previous week, marking the third consecutive daily growth. Instead, volume decreased for the third consecutive session by around 19.5K contracts.
Rising open interest on Friday coincided with prices of the WTI continuing their downward trend, suggesting that the commodity is still likely to suffer significant losses. However, the current level of support is the July low of $90.58 a barrel (July 14).
USD/JPY maintains minor rebound gains around 136.30-35 but lacks follow-through.
During the Asian session on Monday, the USD/JPY pair received some buying at the 136.00 level but could not profit from the move. The pair has retreated a few pips from the daily low and was last seen trading in the 136.30–136.35 range with barely slight intraday gains.
On the opening day of a new week, the US dollar marginally increased along with a little increase in US Treasury bond rates. This, in turn, provided some support for the USD/JPY pair, albeit several variables discouraged bulls from betting aggressively and limited any appreciable upward movement.
The market’s concerns about a global economic slowdown were further increased by the depressing publication of the US and Eurozone flash PMI prints on Friday. As a result, market confidence continued to deteriorate, supporting the safe-haven Japanese yen and capping the USD/JPY pair.
The recent steep decline in US Treasury bond rates results from a worldwide flight to safety and the anticipation that a US recession may compel the Fed to delay its policy tightening. Consequently, the US-Japan rate disparity decreased, which benefited the JPY even more.
However, it is widely anticipated that the US central bank would increase interest rates by 75 basis points, which might continue to support the USD. As a result, Wednesday’s announcement of the results of a two-day FOMC policy meeting will continue to dominate market attention.
USD/CAD rises further from a multi-week low and approaches mid-1.2900s.
The USD/CAD pair gained momentum for the second straight day on Monday, building on Friday’s solidish recovery from the 1.2820 regions, or a nearly four-week low. Several factors supported the trend that drove spot prices to a multi-day high during the first half of trading, closer to the mid-1.2900s.
Investors are nonetheless concerned that major central banks’ continued aggressive tightening would constrain economic activity and hinder global development. Concerns about the fuel consumption forecast have been heightened due to this and the implementation of tight COVID-19 limits in China, which has continued to put pressure on crude oil prices. As a result, the commodity-linked loonie lost value, supporting the USD/CAD pair as some US dollar purchasing started to appear.
Investors’ enthusiasm for deemed riskier assets was curbed by growing recession worries, as seen by a generally softer tone in the equities markets. In addition, a little increase in the rates on US Treasury bonds benefited the safe-haven dollar. Any additional gains for the dollar and the USD/CAD pair may be restrained by concerns that a US economic slowdown would compel the Fed to scale down its aggressive policy tightening course.
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